The Economy and The Markets (where are we, where are we heading, and what does it mean for the QC...)

[videtur quam contuor]

I was in D. C. in 2008 and visited the Air and Space Museum. The Mall museums are free but request donations. At Air and Space there was a three foot high plinth with a plexiglass box atop and a slot to put your cash donation. I noticed that there was currency from numerous other countries, including a 100,000,000$ bill from Zimbabwe which at that time was worth less than nothing. Thus it was a trash receptacle for Zim$

10 minutes ago, urbanlover568 said:

pump and dump. the fact the fed is basically buying almost all the debt should ring alarm bells. i dont see how they keep inflation in check at this point. Zimbabwe 2.0 economy coming. 

I was in D. C. in 2008 and went to the Air and Space Museum. Mall museums are free but request donations. In the grand hall was a three foot high plinth with a plexiglass box atop for donations. I noticed there was currency from numerous nations, including a 100,000,000$ bill from Zimbabwe, which was worth less than nothing. It was a trash receptacle for Zim$

[kermit]

2 hours ago, cltheel.sdl said:

Where do you guys think we're headed?  The markets have had an astounding rebound this week....feels like we are on our way to recovery but what do I know.  These unemployment numbers are horrible but it seems like the government will continue to print money to backstop the economy.  

Not an expert but...

I see one of two likely scenarios. First is the miracle strategy, warmer weather, good enough social distancing and dramatically increased testing allows us to reopen most of the economy while keeping contagion low. The sooner the miracle happens, the better the economy will be able to bounce back (equity markets appear to be betting on a miracle scenario occurring in the next couple of weeks).

The other possibility is social distancing works just well-enough that the economy is able to reopen sometime in May. However our current lack of testing (Which is showing zero sign of getting better) leads to bounceback contamination that is worse than now — leading to the crippling of the economy for at least another year.

Since it will be impossible to have a China-style lockdown of areas of the country where there are hotspots I don’t see much middle ground. Having said that, I am not confident enough in either of these outcomes to make big bets on them.

2 hours ago, urbanlover568 said:

pump and dump. the fact the fed is basically buying almost all the debt should ring alarm bells. i dont see how they keep inflation in check at this point. Zimbabwe 2.0 economy coming. 

So how was Japan able to avoid the Zimbabwe scenario after a quarter century of massive QE?

[urbanlover568]

12 minutes ago, kermit said:

So how was Japan able to avoid the Zimbabwe scenario after a quarter century of massive QE?

Their economy will never be what it was before. 

[Tyrone Wiggum]

21 minutes ago, kermit said:

So how was Japan able to avoid the Zimbabwe scenario after a quarter century of massive QE?

Japan issues debt.  The vast majority of that debt is bought by the Japanese.  For now, getting the equivalent of 2% has kept investors relatively happy, so yields have remained, um, low?

But, twenty years from now, the interest on Japanese debt will be more than Japan's tax receipts, and long before then, crap's gonna hit the fan.  

Markets can stay irrational longer than we can remain solvent....

[kermit]

25 minutes ago, Tyrone Wiggum said:

...But, twenty years from now, the interest on Japanese debt will be more than Japan's tax receipts, and long before then, crap's gonna hit the fan.  

Interesting timeline to disaster. Most boomers will be dead and most millennials assume the earth will be a cinder by then. Perhaps the prospect of runaway inflation is completely irrelevant to the majority of the world’s population?

”in the long-run we are all dead...”

(massive inflation is also a handy way to wipe out student loan debt)

Edited April 9, 2020 by kermit

[cltheel.sdl]

It boggles my mind that the market is up so much this week.  It seems like all the steps being taken in DC right now are geared towards Trump's reelection hopes.  

[Matthew.Brendan]

16 million unemployed and growing every week. 1/3 of renters did not pay April rent on time, the first month into this. How's next month going to fare? and the next? The markets are completely detached from reality. 

[cltheel.sdl]

40 minutes ago, Matthew.Brendan said:

16 million unemployed and growing every week. 1/3 of renters did not pay April rent on time, the first month into this. How's next month going to fare? and the next? The markets are completely detached from reality. 

I agree - that's what it seems like.  So, do the markets ever get back in touch with reality and crater again?  Or are they just going to disregard and keep going up?  That is the question.  

[gman430]

How many more people are going to have to lose their jobs before we realize it’s just not worth having everything closed to stop the virus? What’s the limit? The country just can’t continue to add to the deficit day in and day out. It’s not sustainable. Something has to give. 

Edited April 9, 2020 by gman430

[DMann]

Something will give!

 

[Niner National]

34 minutes ago, gman430 said:

How many more people are going to have to lose their jobs before we realize it’s just not worth having everything closed to stop the virus? What’s the limit? The country just can’t continue to add to the deficit day in and day out. It’s not sustainable. Something has to give. 

I give it  2-3 more weeks before public unrest begins to grow.

I think more people are also starting to realize that shelter in place is only slowing the spread, it isn't designed to actually eliminate the virus from society...meaning this will go on indefinitely until a vaccine is created. That simply cannot happen.

[urbanlover568]

6 minutes ago, Niner National said:

I give it  2-3 more weeks before public unrest begins to grow.

I think more people are also starting to realize that shelter in place is only slowing the spread, it isn't designed to actually eliminate the virus from society...meaning this will go on indefinitely until a vaccine is created. That simply cannot happen.

What are you talking about? in 2-3 weeks the stay at home order is expired and cooper said he probably wont extend it. 

[NYtoCLT]

14 minutes ago, urbanlover568 said:

What are you talking about? in 2-3 weeks the stay at home order is expired and cooper said he probably wont extend it. 

There is almost no chance this ends in 2-3 weeks.  Governor Cooper has seen the below graphic and based on the below he can't reasonably lift the order.

 

[urbanlover568]

44 minutes ago, NYtoCLT said:

There is almost no chance this ends in 2-3 weeks.  Governor Cooper has seen the below graphic and based on the below he can't reasonably lift the order.

 

Probably looking at this graphic...

[A2.]

On 4/9/2020 at 3:59 PM, cltheel.sdl said:

I agree - that's what it seems like.  So, do the markets ever get back in touch with reality and crater again?  Or are they just going to disregard and keep going up?  That is the question.  

Merry Christmas early. Still on UP vacation for a while, but you guys need this to navigate the pump, then dump. The lines represent where the pump dies based on some Fibonacci retrace levels. We were rejected the other day at the 50% level, BUT it could go all the way up to .618, which is roughly 2930-2950  area on the SP500. If it does get there consider it a gift to lighten up on risk, if not, well.....So plan accordingly. 
Ps—not Financial advice 

 

 

[gman430]

You need to short sell and buy oil stocks.

[a2theb]

8 hours ago, A2. said:

Merry Christmas early. Still on UP vacation for a while, but you guys need this to navigate the pump, then dump. The lines represent where the pump dies based on some Fibonacci retrace levels. We were rejected the other day at the 50% level, BUT it could go all the way up to .618, which is roughly 2930-2950  area on the SP500. If it does get there consider it a gift to lighten up on risk, if not, well.....So plan accordingly. 
Ps—not Financial advice 

 

 

bagholder rally!

[Tyrone Wiggum]

[Dale]

In three weeks, our National Soft House Arrest Program has wiped out 70% of a decade’s job growth. Initial jobs lost has doubled total jobs lost during the Great Recession, peak to trough. Silver lining: reports of miles long food lines appear to be bogus. The six-foot rule is artificially extending food line length. 

[urbanlover568]

3 minutes ago, Dale said:

In three weeks, our National Soft House Arrest Program has wiped out 70% of a decade’s job growth. Initial jobs lost has doubled total jobs lost during the Great Recession, peak to trough. Silver lining: reports of miles long food lines appear to be bogus. The six-foot rule is artificially extending food line length. 

[Newton]

So many people lost their jobs, so many businesses under the threat of stuh-downs and looking for a ways to stay afloat. I'm actually so afraid of what is going on in the world's economics right now, but seem's like the nature comes to norn, sort of

[urbanlover568]

JC Penny and AMC to file for bankruptcy 

[gman430]

Free money for everybody: https://www.wspa.com/news/national/americans-would-receive-2000-each-month-through-covid-19-crisis-under-proposed-legislation/?utm_medium=social&utm_source=facebook_WSPA_7News

[urbanlover568]

8 minutes ago, gman430 said:

Free money for everybody: https://www.wspa.com/news/national/americans-would-receive-2000-each-month-through-covid-19-crisis-under-proposed-legislation/?utm_medium=social&utm_source=facebook_WSPA_7News

I know renters who got laid off will appreciate this. The cost to break a lease in a major metro is astronomical. Canada is giving every Canadian $1,400/month  for the next 4 months. 

[urbanlover568]

Frontier Communications Files for Chapter 11 Bankruptcy
 

https://www.wsj.com/articles/frontier-communications-files-for-chapter-11-bankruptcy-11586955706