Market Bubbles: How Many Boats are We On?

[errolanderson]

How a market bubble happens:

Ted: Look, a boat.
Sarah: Wow, a boat!
Kyle: It sails at 2pm.
Peter: We can ride it?
Emma: I bought a ticket.
Julie: Me too!
Karen: Boat, bad idea.
Chad: I'm inviting Trevor, Chloe, and Abby.
Ashley: I will literally do anything for a ticket.
Lucas: I traded my iPhone for a ticket.
Jeremy: I started a YouTube channel on how to get tickets.
Amy: Tickets for what?
Xander: I got a parking ticket.
Nicole: Me too!
Dylan: I need a parking ticket, how can I get one?

Emma: This boat ride is awesome.
Peter: 360 degree water views.
Michelle: Shoreline on the horizon.
Trevor: Cold Coors beer in hand.

Lucas: Rat? Where?
Ashley: Omg, there's rats on here?
Chad: Rat infestation, abandon ship.
Captain: Why is everyone panicking?
Jeremy: Captain said don't panic.
Chloe: Ship must be sinking, everyone jump!
Peter: Jump!
Abby: This water is cold, now what?
Dry Captain: What just happened?

Markets are now scanning the scenery and drinking a cold one right now (IMO) . . . .

[bucket]

Gamestop????????

[HITTGrapevine]

Golden rules of boat rides
1 Choose your boats carefully. Make sure they float
2 Know when to get on and off. Board and deboard quickly.
3 Don't fall asleep during the boat ride
4 Wear a life jacket if you can find one

I agree that there is probably a correction coming
But how big and when?
This week? This month? This year?
Free ticket for a boat ride if you can answer that.

[ajl]

About the only hope we have for a medium to long term future is that interest rates continue to rise and our idiotic government goes broke soon. There will be no lockdowns and green new steal then.

[bucket]

Well farmers as a whole , no matter the size could be hurt hard if grain prices tank and the indexed market of machinery and land stay in place..

Credit Foncier owned alot of land for a very long time before they could once again sell at a profit.

[jazz]

There is no place to get off errol. Every asset class is in the bubble now, some will just be affected more than others. Better to be on piece of farmland when it happens and holding very little cash.

I see a mini repeat of the 70s and early 80s in the cards. How the fed raises rates to combat it this time now that we have a million times the debt is going to be an interesting show. If they do raise rates, they will make the bond market insolvent as these govts will never be able to pay anyone back in any time frame. Who is the person buying 30 yr treasuries?

[Rareearth]

Higher Interest rates are not a cure, nor are low interest rates,
Same for commodity markets, capital markets, unemployment, etc

The only cure is time, and time usually heals everything.

[AlbertaFarmer5]

Higher Interest rates are not a cure, nor are low interest rates,
Same for commodity markets, capital markets, unemployment, etc

The only cure is time, and time usually heals everything.

Enough time and inflation could potentially make the current debt levels go away. The problem is, it will probably require even more debt just to create the inflation, to make the debt servicable.

[SASKFARMER]

Errol where will canola be in June?

Just let us in on the plan.

Yes we speculators having a hay day.

Bins will be empty and no way in a million years with the western Canadian sub soil level at its lowest level we won’t get to 19 MMT.

Never will happen.

So again yea it’s a drop but reality no charts are broken.

[iceman]

Credit Foncier owned.

What was the story with them? Remember seeing the name but how did they become such a big ag lender

Iceman

[poorboy]

Errol you have been running around saying the crash is coming every time the markets have climbed the last 10 years. As long as you are consistent, you might be right some day. I think you are a pessimist by nature or very conservative which certainly clouds your view.

What I think you are missing is the amount of money printed. Todays $7-8 wheat is the same as $6 wheat 5 years ago and $4 wheat 15 years ago. Just like todays $700,000 tractor is the same as a $350,000 tractor 15 years ago.

With costs up on everything else there is no reason to not think these 20% higher prices are not the new normal. Crops like canola are up way more than 20%, so they will probably correct back to the new normal of $13.50-14.50/bus, but no reason to fall below that.

In my opinion fall grain prices are ok, but not record breaking when compared to historic numbers.

[redleaf]

Canola has a bit of a run up in price, goes from 11 or12 dollars......everyone thinks farmers are rolling in cash.
A sheet of beaver puke (OSB) goes from 12dollars to 60 ....there’s no inflation.

[15444]

Markets haven't even come close to peaking yet. The huge number of people in US that are going to invest their $1400 in the market, won't come around till the end of the month. Have small positions in lots of meme, bitcoin and tech stocks that are going to be the big playpen in the next month. Novice traders don't play in ETF's and Indexes. Also lots of Redditors are waiting for GME to drop back to the $40 range to pile back into it - it will be a yo-yo stock for the considerable future. Guys who don't get greedy on the high side of the gamble have done very well with it.

[fcr]

Back in the eighties they owned alot of land in saskatchewan.Then the prov. govt brought in a law against foreign ownership so they had to disperse their holdings.We were leasing 8 qrts from them for many years, they were great to deal with.Neighbour and two sons were expanding at any cost and bought it for way more than its value.They borrowed from FCC , made a few payments then ran out of money.Went to the Farm Arbitration Board , had the loans wrote down then bought back from FCC for less than half of what they paid.Sold that land to investors 6 years ago for a couple million.It was all hush/hush at the time as the local MLA who was a family friend was involved. Still pisses me off to this day.

[macdon02]

For everyone arguing about the amount of money printed, let's look at the inverse, taxes and cost of goods and soon interest rates, and the amount put towards credit or mortgage debt. Now how much disposable income is left for investing. Yes there's been a tremendous amount of debt taken on by govt but between job destruction and everything else, how much is actually left to invest with? Poor people don't invest only the rich do and their confidence is broken, because they believe they will be robbed thru taxes.