90% of you are new here to WSB within the past year. And most of you newbies have not ever traded in a bear market. You subconsciously believe 100% runups in 15 months is fairly normal.
Evergrande is not a fucking joke we should sit across the globe from and laugh about. Evergrande is the tip of the iceberg, and the housing market in China will collapse. In China, housing is 33% of GDP. In the U.S., it's 6.2%. You can't put 2 and 2 together? Tens, maybe hundreds of millions of workers in China will lose their jobs as the economy tries to adapt to the fact that housing is worth half of what they thought. Those with capital in the property market (90% of the pop) will realize their paper wealth is (again) worth half of what they thought, and stop spending as much on their iPhones and French designer apparel and Model S's, causing a global recession. Those who lent to certain Chinese corporations, probably aren't getting their money back, they are fucked too. Contagion is real.
Assuming they don't pay their offshore bond payment, Evergrande will be in default on October 23 (9 days). Probably mid-next week the media will finally start talking about it again. Fear will finally kick in in the markets and we will see more blood.
Why isn't the market pricing this in yet? Guess what, this same thing happened in the 2008 housing crash. Half of the smart money kept the price up while they slowly dumped their bags and even shorted the housing market. Just watch the Big Short again, there is a substantial period where swaps are not priced properly even as defaults skyrocket, as various investment banks try to get ahead of the crisis and "head for the exit in a crowded theater."
IMO, the people who are going to hurt the most are the thetards who have been selling naked puts and making bank for the past year and don't realize how exposed they really are. Are you fucking kidding me? Retail selling options in masse is a recipe for disaster. I hope they at least used spreads. Volatility is way undervalued given all the near-term concerns and it's entirely possible for some of the big ticker names out there to drop 50% over the next 3-12 months. Margin calls will fuel the downward spiral. This time, the public isn't going as supportive of JPOW's money printer because they'll be sick of inflation.
Let me put this in a way for you to understand.
SeptemBEAR. OctoBEAR. NovemBEAR. DecemBEAR.
Some of my positions:
PUTS on HSBC, ARKK, TSLA, SPX
CALLS on YANG and COIN
Long PFE, DISCK, XOM, FB
Coming to you on a green day. In a bear market there's a saying, short the rip.
This is not financial advice and I could be wrong. Godspeed.