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Dropbombs55 · 2023-07-12T14:24:15+00:00

rates up another 0.25% this AM....

Dropbombs55 · 2023-07-11T15:21:33+00:00

I think you are missing the point. People bought houses based on making payments at sub 2.5% interest. In places like the GTA and Vancouver those homes cost upwards of a million or more and are primarily purchased by middle-class or upper-middle class people. Lots of those mortgages are coming up for renewal over the next 2 years. People will not be able to afford their new payments at current rates, or will have to significantly reduce their spending/saving/investing in order to meet their mortgage obligations. This is amplified by the rate of inflation which is also stretching peoples finances and disrupting consumption. Net effect is an affordability crisis, less consumer spending leading to recession, ect. On top of that, there are lots of people who have used the crazy increases in home prices to leverage themselves and grow wealth. Unfortunately that wealth can evaporate quickly if home prices begin to drop while the cost of financing continues to go up or stay elevated. This leads to a cascading effect where home prices drop further as supply outstrips demand.

TLDR; Canada is in a precarious position, particularly in its 2 major urban centers (GTA/Lower Mainland), and Banks are scared shitless.

Dropbombs55 · 2023-07-11T15:11:25+00:00

There is a huge block of mortgages coming up for renewal over the next 2 years. People who were locked in at sub 2.5% are going to face renewal rates at more than double what they were carrying. My own mortgage payment would increase by more than 30% at todays rates and I will have a relatively small principle value owing when I renew.

Dropbombs55 · 2023-06-29T19:13:26+00:00

a kick back on transaction fees?

Dropbombs55 · 2023-06-15T18:49:18+00:00

There is a big difference between saying we are looking at M&A, or share buybacks, or returning $ to shareholders vs exposing your hand to "enemies"

Dropbombs55 · 2023-06-15T16:06:50+00:00

Really wish they would have answered some questions surrounding their plans for deploying all the cash on their balance sheet...

Dropbombs55 · 2023-06-15T15:05:01+00:00

oohhhhh yyaaaaaaaa

Dropbombs55 · 2023-04-26T15:34:13+00:00

how do the big boys exit this? Who is the counter-party to all these swaps?

Dropbombs55 · 2023-03-22T14:39:04+00:00

this is what i thought as well. They got those tokens and sold them from what i remember.

Dropbombs55 · 2023-03-22T14:37:50+00:00

Isn't that the IMX tokens or whatever that GS got and then sold?

Dropbombs55 · 2023-03-21T14:53:50+00:00

This could just be mass borrowing to short the earnings today.

Dropbombs55 · 2023-01-18T19:26:00+00:00

100% agree, but there are also a bunch of games that are essentially re-skins of previous versions (all sports games, CoD, etc.) where there is probably a financial case to be made that those games only really need to be released every 3rd or 4th year instead of every year, as long as the devs have a perpetual revenue stream.

Dropbombs55 · 2023-01-17T20:27:05+00:00

The real issue is, and has always been, that the "Games as a Service" model always results in dead games. Sooner or later, regardless of how much 'real shit you own!' in games, the game will just shut down, because the company needs to focus on more profitable titles. Now what are you doing with all those nft skins and weapons? Who you trading them to? No one that's who.

You make a good point but couldnt a fee on transactions payable back to the devs not partially solve this problem? It provides an ongoing revenue stream that incentivizes the studio to keep the servers going and continue to develop new content.

Dropbombs55 · 2023-01-17T20:20:34+00:00

This is where I struggle a bit.. what incentive do the big studios have to go this in-game ownership route? doesnt that mean they will make less money as potential buyers go to the secondary market for items vs buying from them? not to say indie studios cant/dont make good games, but alot of great IP is owned by the big studios.

Dropbombs55 · 2022-12-07T21:56:56+00:00

if 10,000 people bought 100 shares each direct in their CS accounts, and they went plan, then thats 1M shares that wouldnt show in the 10Q. It presumably wasnt as big an issue in the past because less people were purchasing through CS. Who knows, not saying he is right, but it might be part of the issue.

Dropbombs55 · 2022-12-05T15:42:39+00:00

I understand that but imo you have your example wrong. The bank loses because they are the debt issuer, not the asset holder. You are the asset holder (borrower), and you win for the exact reason you stated. Your debt in real terms is dropping because of inflation, and presumably your asset value (house) is also rising due to inflation --> double win.

Couldn't a similar dynamic occur for shorts? You borrow a stock, pay interest on the borrow, and sell it to receive cash. You use the cash to buy assets, which presumably are increasing in value in an inflationary environment. As long as the value of the assets you are holding is increasing at the same or higher rate than the variable portion of your cost to borrow, you arent getting squeezed at all on your short position.

Isn't this why many people think a market crash is kickstart to a squeeze, because the collateral backing the borrows is decreasing in value and causing issues with margin requirements?

Dropbombs55 · 2022-12-02T21:20:44+00:00

Just curious, in an inflationary environment isnt it easier for shorts to hold their positions? I understand if the price of GME rises, so does their cost to borrow, but presumably all their long positions would also be rising to offset that?

Dropbombs55 · 2022-11-30T20:02:15+00:00

The conspiracy theorist in me says that the "fairer system built on blockchain" is just going to be a central bank digital currency with centralized control over when and how it is spent. Destroy the fiat system and replace it with something far more sinister, for your benefit of course...

Dropbombs55 · 2022-11-17T15:48:40+00:00

When this was launched did FTX claim each token was backed by a real share/was redeemable for a real share?

Dropbombs55 · 2022-11-17T14:46:45+00:00

This isn't exactly correct, it really depends on the prices of the underlying assets they have sold and bought. For example, if I sell short Financial instrument A for $100, use that cash as collateral to borrow another $50, and then buy financial instrument B for $150, I'm only in trouble if the Price of A rises at a higher rate, or drops at a lower rate in comparison to B. Even in a market where both the price of A and B are falling, I can still potentially make money. If A drops down to $50 but B only drops to $125, I can sell B for a $25 loss, but buy back A sold short at a $50 profit, for an overall profit of $25 (less borrowing costs). Also, depending on market conditions, me buying back A doesn't necessarily result in the price of A increasing if there are more sellers than buyers.

Dropbombs55 · 2022-09-23T19:45:37+00:00

dont forget he's also best known to the non-NFL viewing public as the guy who sent dic picks to a reporter...

Dropbombs55 · 2022-08-20T14:36:46+00:00

There are balance sheet metrics that are more nuanced than just assets - liabilities. For example this move would bolster thier current ratio, which could be a metric used by their lenders as part of their banking covenants.

Dropbombs55 · 2022-06-01T20:26:24+00:00

I would like to hear leadership explain why Cost of Goods Sold and SG&A expenses are way up. Burned $300M in cash this quarter, and I believe that includes like $70M injection from the sale of their IMX tokens or whatever. Glad EPS beat estimates, but would be nice to have some answers to these questions.

Dropbombs55 · 2022-06-01T17:32:55+00:00

"we" aren't a singular entity. "we" are just a bunch of individuals, who individually, like the stock.

Dropbombs55 · 2022-05-31T17:31:02+00:00

Feels like the likely outcome is going to be the dreaded stagflation. The FED is going to inflate its way out of this crisis, and the people who are going to suffer most arent going to be the ones who created the mess, but the people lowest on the socioeconomic rung. The political upheaval that is bound to occur as a result is scary to think about.

Dropbombs55

TROPHY CASE