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

[kermit]

2 minutes ago, cltheel.sdl said:

@A2., where do you suggest we put our money?

I am in the process of converting my retirement portfolio into growlers full of HopDrop and pork shoulder.

#NotanExpert

[A2.]

19 minutes ago, cltheel.sdl said:

@A2., where do you suggest we put our money?

Under your mattress, lol

but seriously, it depends truly on what your risk tolerance is, your time until you retire, or even simply your lifestyle.

the best plan that ANYONE can have is to reduce their debt burdens. If your a longer term investor, perhaps just easing back on the equity side of the equation a bit. A person looking to retire in the next five to ten years might have to take more drastic measures, like hide out in cash for a season. 
 

I am personally in a lot of various things from precious metals, to government bonds (which I’m currently lightening up on a wee bit after monster gains), and plain old cash. I also have some “fun money” in the crypto space (but trust me, if volatility ain’t your bag, then buyer beware. The crypto markets are ten times more volatile than equity markets )

If your really adventurous, you could have made a killing shorting the market, but not advised if your not a seasoned trader.

In the end, you can control what you can control, and can’t control what you can’t. Accept that. And move on. Don’t let circumstances that you can’t control, control you. We are all going through this together.
 

Above all find some mental and emotional clarity. Focus on an enjoyable hobby, or learn something you’ve never done (like learn a new language), and just get back to living life for the simple things. The truth is that sometimes people find themselves when they lose it all. 
 

 We as a society are way to materialistic and stuck on money. Take the bad, and turn it into your good. 
 

We will survive this, and in the end be a better people for having realized their is a lot more to life than money. 
 

A2

Edited March 16, 2020 by A2.

[a2theb]

16 minutes ago, A2. said:

Under your mattress, lol

but seriously, it depends truly on what your risk tolerance is, your time until you retire, or even simply your lifestyle.

the best plan that ANYONE can have is to reduce their debt burdens. If your a longer term investor, perhaps just easing back on the equity side of the equation a bit. A person looking to retire in the next five to ten years might have to take more drastic measures, like hide out in cash for a season. 
 

I am personally in a lot of various things from precious metals, to government bonds (which I’m currently lightening up on a wee bit after monster gains), and plain old cash. I also have some “fun money” in the crypto space (but trust me, if volatility ain’t your bag, then buyer beware. The crypto markets are ten times more volatile than equity markets )

If your really adventurous, you could have made a killing shorting the market, but not advised if your not a seasoned trader.

In the end, you can control what you can control, and can’t control what you can’t. Accept that. And move on. Don’t let circumstances that you can’t control, control you. We are all going through this together.
 

Above all find some mental and emotional clarity. Focus on an enjoyable hobby, or learn something you’ve never done (like learn a new language), and just get back to living life for the simple things. The truth is that sometimes people find themselves when they lose it all. 
 

 We as a society are way to materialistic and stuck on money. Take the bad, and turn it into your good. 
 

We will survive this, and in the end be a better people for having realized their is a lot more to life than money. 
 

A2

writing naked calls, got it.

Edited March 16, 2020 by a2theb

[urbanlover568]

On 3/14/2020 at 10:23 PM, A2. said:

I wish I was wrong brother. Trust me, I believe we are in for a really rough go of things. I also believe that it will be something we tell our grandkids about. The main thing is to keep a level head. Remain calm, and realize that even in a Depression, the Phoenix will rise from the ashes.

The real tricky part will be to see what rally materializes in the very short term. I’m actually wanting to see how the behavior and technicals of the market behave in the next five or so trading sessions. 

If we do get a large rally, and the talking heads signal the all clear, just remember A2, said not so fast. If we get a sizable bounce like Friday, use it to get out. If you are a longer term investor, I would understand if your insisting on leaving some skin in the game. Just keep in mind that your investment might take a while to materialize in your favor. (Like years)

The second leg down will be the real bruiser. I anticipate the second leg down to take us to somewhere just under 20k (and possibly as low as 18300 on the DOW). Then rinse and repeat. It will rally, give false hope, and then plunge lower that the above figures. 
 

I am going to show you a chart that any person with two brain cells can’t deny are scary. The main thing that we have been conditioned to, is that regardless of how bad the Bear is, we always bounce back. This time we won’t. I know that is a humbling and scary thought, but I’m just here to keep you guys level headed and give you a chance to take out your own road map as to how to navigate the months and possible years ahead. Much Love to All!

And now for the chart:

(today the blue is actually lower, as it was drawn earlier last week. We are, in reality, closer to the smaller pop in the bottom red chart of 1929. That rallied back nearly 50%, and then failed. I see a eerily similar set up for us.) 

PS——I pray to God above that I am 100% Wrong! I would welcome that egg on my face, with a breakfast of Crow. And I will even buy the next round of donuts. So all that to say, Please let me be wrong. 

 

You nailed it. Drop today was bigger than the great depression. Thanks for your valuable input.

[cltheel.sdl]

@A2., do you see markets rebounding somewhat tomorrow before additional drops during the week?

[A2.]

53 minutes ago, cltheel.sdl said:

@A2., do you see markets rebounding somewhat tomorrow before additional drops during the week?

Yes. I actually expect a melt up any day. (Futures are already up as I type)

Personally I didn’t think it would have dropped so harshly today. That said, Bear markets are notorious for extreme rallies that would make you believe the coast is clear. Its not. 
 
Now if there was one level I was watching, it would be around 17800 on the DOW. another minor level is the low we made today. If that holds we could see that bounce. 
 

If by some miracle we could hold that (17800), it might make me more constructive on the possibility we have bought ourselves more time. 

For what it’s worth I would rather be bullish.  I promise you guys, I don’t like being the bearer of bad news. I don’t win some kind of award. We all suffer. Let’s hope maybe I’m wrong. ;-)

[A2.]

Futures are “limit up”. Get ready for a rip your face off Bear market rally. Should make many here happy, even if it’s temporary. Take what you can get! :-)

A2

[hokiehigh]

8 hours ago, A2. said:

Futures are “limit up”. Get ready for a rip your face off Bear market rally. Should make many here happy, even if it’s temporary. Take what you can get! :-)

A2

There always seems to be a bounce during the sharp downturns.    I assume we shouldn't really predict too much until we know how much damage will be done.   I still question how much we will go back to normal once virus risk diminishes.   I don't think the virus will just go away, so there will probably still be some type of social distancing.

[urbanlover568]

$500 billion dollar FED injection into the market and the DOW is only 100 points up as of this post. Really shows how critical the situation is right now. 

[Hushpuppy321]

11 hours ago, A2. said:

Futures are “limit up”. Get ready for a rip your face off Bear market rally. Should make many here happy, even if it’s temporary. Take what you can get! :-)

A2

CNN reporting that the Federal Reserve has unfrozen the Commercial Paper Funding Facility so small businesses can continue to borrow during this financial crisis similar to what they did in 2008.  Seems like this country is in a deepening debt/money printing hole like you were mentioning before.

[urbanlover568]

JUST IN: Marriott says it will begin furloughing tens of thousands of employees, who will not be paid but will receive health benefits, amid drop in demand due to coronavirus. (via @seemacnbc) 

[Dale]

So long as this blows through, in weeks time, I foresee pent-up demand, the opposite of panic, taking hold. 

FYI: this is coming from a person who just got laid off.
 

 

[gman430]

Congress for you: https://www.cnbc.com/2020/03/17/mcconnell-says-senate-wont-pass-coronavirus-bill-without-bold-new-steps.html

[davidclt]

3 minutes ago, gman430 said:

Congress for you: https://www.cnbc.com/2020/03/17/mcconnell-says-senate-wont-pass-coronavirus-bill-without-bold-new-steps.html

Which part are you complaining about, because it's implied that you're unhappy with some aspect of the Legislative branch? Is it the part the House negotiated with the Executive Branch and sent to the Senate or the fact the Senate is doing nothing other that fiddling while Rome burns?

[gman430]

16 minutes ago, davidclt said:

Which part are you complaining about, because it's implied that you're unhappy with some aspect of the Legislative branch? Is it the part the House negotiated with the Executive Branch and sent to the Senate or the fact the Senate is doing nothing other that fiddling while Rome burns?

I’m just showing that Congress can’t get along even through a supposedly national crisis. 

[gman430]

Under pressure from the White House and business groups, House Democrats agreed to further water down paid sick and family leave provisions in the coronavirus emergency bill currently awaiting a Senate vote: https://www.yahoo.com/huffpost/paid-sick-leave-in-coronavirus-bill-watered-down-even-more-163426912.html

Paid family leave would only be available to parents who are home with kids due to school closure. The extended leave wouldn’t be available for people who are sick with COVID-19. Those workers would only be able to take 10 days of paid sick leave ― and only if they work at a company with less than 500 employees. What’s more: Companies with fewer than 50 workers can apply for hardship relief and get out of providing both sick and family leave.

Edited March 17, 2020 by gman430

[cltheel.sdl]

@A2., we have about 30 minutes before markets close.  I haven't made any moves yet...where do you see things heading tomorrow?

[gman430]

The White House is seeking a stimulus package worth anywhere from $850 billion to over $1 trillion as the Trump administration looks to battle the economic impact from the coronavirus pandemic, according to a source familiar with the matter.

An administration official said the package could include:

• $500 billion to $550 in direct payments or tax cuts
• $200 billion to $300 billion in small business assistance 
• $50 billion to $100 billion in airline and industry relief

[cltheel.sdl]

@A2., what website do you use to monitor futures?  Curious to see how things are looking for tomorrow.

[Dale]

The reason I know it’s not going to be so bad: Jim Rogers says it’s going to be really bad.

[A2.]

4 hours ago, cltheel.sdl said:

@A2., what website do you use to monitor futures?  Curious to see how things are looking for tomorrow.

Hey cltheel. As to your question. Down and down big! The bounces are opportunities to sell. Dips are NOT meant to buy. This market is absolutely going to shock everyone on here how low it will go. I’m going to repeat again that CV is just a scapegoat to blame on what was inevitable. I would put all caps on, but I hate that. We are going to witness the greatest crash in stocks since the Great Depression. Period. There will be the occasional bounce, but the direction is down, down , down. 
 Debt deflation is the reality. The government wouldn’t be offering up money drops if things were great. 
The reality is even the bounces are literally a third up from the prior days drop. Down 3, up 1. It will continue and people haven’t even begun to see panic. Supply chains are locked up and the next shoe to fall is massive in employment for many. My sister just called and told me she lost her job today. Truly sad as she was there for nearly 20 years!!!  She was a director at a large child care facility. These business owners can’t make payroll for 50 people when they have NO INCOME! These state shut downs have made it so small businesses are doomed. I personally believe it’s almost as if it was by design. This quarantine will bankrupt millions. Mom and pops aren’t BankofAmerica. They can’t work when everything is locked down. 

 She is just a microcosm of what will continue to happen as industry after industry collapses. 
 

(Warning, I’m about to do what I hate, caps):

 

GET OUT NOW!!!!

 

A2

4 hours ago, cltheel.sdl said:

@A2., what website do you use to monitor futures?  Curious to see how things are looking for tomorrow.

Any popular site will do. I typically use a site that is Institutional and not public. But you can go here to always check:

https://www.cnbc.com/pre-markets/

Edited March 18, 2020 by A2.

[urbanlover568]

22 minutes ago, A2. said:

Hey cltheel. As to your question. Down and down big! The bounces are opportunities to sell. Dips are NOT meant to buy. This market is absolutely going to shock everyone on here how low it will go. I’m going to repeat again that CV is just a scapegoat to blame on what was inevitable. I would put all caps on, but I hate that. We are going to witness the greatest crash in stocks since the Great Depression. Period. There will be the occasional bounce, but the direction is down, down , down. 
 Debt deflation is the reality. The government wouldn’t be offering up money drops if things were great. 
The reality is even the bounces are literally a third up from the prior days drop. Down 3, up 1. It will continue and people haven’t even begun to see panic. Supply chains are locked up and the next shoe to fall is massive in employment for many. My sister just called and told me she lost her job today. Truly sad as she was there for nearly 20 years!!!  She was a director at a large child care facility. These business owners can’t make payroll for 50 people when they have NO INCOME! These states have made it so small businesses are doomed. This quarantine will bankrupt millions. Mom and pops aren’t BankofAmerica. They can’t work when everything is locked down. 

 She is just a microcosm if what will continue to happen as industry after industry collapses. 
 

(Warning, I’m about to do what I hate, caps):

 

GET OUT NOW!!!!

 

A2

Any popular site will do. I typically use a site that is Institutional and not public. But you can go here to always check:

https://www.cnbc.com/pre-markets/

The treasury secretary mentioned possibly 20% unemployment also. There will be food lines similar to the great depression. Crime and homelessness will skyrocket. Income inequality will go haywire. The vaccine is many months away also. At some point busines will have to open again and that will give the virus ability to spread. We are just buying time for the inevitable.

Edited March 18, 2020 by urbanlover568

[cltheel.sdl]

@A2., I put in trade orders tonight...will they trade at open tomorrow morning?  Just curious as to the timing mechanics of how it works.  Hoping I wasn't too late to catch today's up.

[gman430]

24 minutes ago, urbanlover568 said:

The treasury secretary mentioned possibly 20% unemployment also. There will be food lines similar to the great depression. Crime and homelessness will skyrocket. Income inequality will go haywire. The vaccine is many months away also. At some point busines will have to open again and that will give the virus ability to spread. We are just buying time for the inevitable.

Don’t forget about the current under construction highrises stalling too.  

[cltheel.sdl]

My cousin works for BofA and forwarded the below message from an analyst who attended a Goldman Sachs update call.  The main takeaway is that this is a temporary issue and not systemic.  @A2., I assume you think this is BS - where's the disconnect?  

 

Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in.
The key economic takeaways were:

50% of Americans will contract the virus (150m people) as it's very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.

70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be effected.

Peak-virus is expected over the next eight weeks, declining thereafter.

The virus appears to be concentrated in a band between 30-50 degrees north latitude, meaning that like the common cold and flu, it prefers cold weather. The coming summer in the northern hemisphere should help. This is to say that the virus is likely seasonal.

Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like the flu; these are stay at home for two weeks and rest. 5% will be critical and highly weighted towards the elderly.

Mortality rate on average of up to 2%, heavily weight towards the elderly and immunocompromised; meaning up to 3m people (150m*.02). In the US about 3m/yr die mostly due to old age and disease, those two being highly correlated (as a percent very few from accidents). There will be significant overlap, so this does not mean 3m new deaths from the virus, it means elderly people dying sooner due to respiratory issues. This may however stress the healthcare system.

There is a debate as to how to address the virus pre-vaccine. The US is tending towards quarantine. The UK is tending towards allowing it to spread so that the population can develop a natural immunity. Quarantine is likely to be ineffective and result in significant economic damage but will slow the rate of transmission giving the healthcare system more time to deal with the case load.

China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.

Global GDP growth rate will be the lowest in 30 years at around 2%.

S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.

There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.

In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.

Technically the market generally has been looking for a reason to reset after the longest bull market in history.

There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like ‪9/11 than it does like 2008.