Credit deflation and the reflation cycle to come (part 2)

[Loki]

Sounds like this just got very real

[leonardratso]

just stripped the profit out of fundsmith,  its the only thing left in profit, the rest can go hang until its all blown over(or blown out).

[NogintheNog]

1 hour ago, Noallegiance said:

1 hour ago, Talking Monkey said:

How comes the DOW doesn't like it I thought this is what the markets were looking for

Perhaps the game is up. It looks like a panic move. So panic!

I concur. 1% cut not enough, $700 billion QE not enough.

Sure, the virus will pass. The pin effect it has on the 'bubble of everything' economy will last far longer.

Prepare to choose your portfolio weapons of mass wealth destruction/creation.....

[sancho panza]

 

1 hour ago, DurhamBorn said:

Crazy,i think our angle here in the UK is the right one.My dad is self isolating now.He isnt happy but accepts it.Like he says the over 70s all get a pension,so they dont have to go to work.He walks the dog on a morning but isnt going to the shops,club,anything now.Im doing his shopping etc.I phone him 4 times a day though,chat about the markets etc.

Governments telling pubs to close,who is going to pay the bills?,nuts.

It ticks a lot of boxes for me.A lot easier to keep the vulnerable athome-and a lot are generally at home more anyway-than restrict the movements of 65mn people,shut schools etc.

Me and Mrs P had a chat last night,if they shut the nurseries/schools I'll come off work to do the childcare as she earns a fair bit more than I do.A lot of the kneejerk reactions in Spain/China/Italy will be counter productive societally,economically and most importantly in terms of healthcare

1 hour ago, onlyme said:

If in Europe they control the virus with lockdowns then within a few weeks they may be able to restart with a full monitoring program.

In the UK if the plan is to have 7.9M hospitalisations over the next year in a conveniently "planned" pandemic I'm wondering what the first digit in the FTSE will be tomorrow.

Most people who get it won't need hospitalisation.Current 111 policy is not to even test but just self isolate if you've got a fever and a cough

 

[Democorruptcy]

29 minutes ago, NogintheNog said:

I concur. 1% cut not enough, $700 billion QE not enough.

Sure, the virus will pass. The pin effect it has on the 'bubble of everything' economy will last far longer.

Prepare to choose your portfolio weapons of mass wealth destruction/creation.....

$700bn isn't in the same ball park as I expected this weekend, it's laughably small. It isn't even their GFC inflation adjusted. They aren't behind the curve it's run off into the distance.

[sancho panza]

1 hour ago, Alifelessbinary said:

I’m not sure if any of you have seen this but my friend forwarded me the message from Goldman Sachs Investee call. Fear has taken a grip of the markets and banks are now stress testing multiple scenario.

As DB said earlier take this with a pinch of salt, as this could just as much be Goldmam stoking fear to force their clients to sell so they can get in cheap (nothing would surprise me on the grubby side of investment banking).

All I know is that the market is spooked and the market hates uncertainty. While everyone knew that a correction was coming the speed and ferocity has caught most people on the hop.

Personally this looks like a worse case scenario, however if this is doing the rounds in WhatsApp groups then it will be playing on people’s minds as the trade and strategise.

personally I’m just going to ladder in as I have no idea whether this is the bottom or top. All I know is this will pass and at some point things will recover. Diversification is key.
 

Goldman Sachs Investee call where 1500 of their investee companies dialed in. The key takeaways were:

- Over the next 6-8 weeks we are going to see a global health based and economic collapse.

- 50% of Americans will contract it (150M people)

- 70% of Germany will contract it (58M people)

- Of those impacted 80% will be early stage, 15% mid stage and 5% critical stage.

- Mortality rate of an average of 2% and hence do the math on the lives it will take in the above markets. It’s in millions...

- Europe is pretty screwed and so is the US. Need both of them to effectively control the pandemic (like several Asian countries like Taiwan and Singapore) to ensure that the global economy does not collapse further. However they don’t seem well equipped at all.

- China’s economy will be largely impacted and all exports, imports to and fro China will be hit impacting raw material and the global supply chain.

- Global GDP growth rate will be the lowest in 30 years under 2%

- S&P 500’will see a negative growth rate of -15 to -20%

- Stock markets will collapse only to hopefully recover in the 2nd half of the year

- Social Distancing for the right period of time is the only way to control this and if it’s for too short a period there can be a relapse

Really really depressing call.

a lot of these predictions in terms of infection rates don't bear a great deal of scrutiny if you compare it to the China rates which was the first country to get it.

I suspect the final figure for the year will be a lot lower than 58mn in Germany,150mn in USA.

[sancho panza]

I think there's a growing chance that we're heading for a double dip.Corona driven first,then second debt deflation

 

[sancho panza]

4 hours ago, Cattle Prod said:

Do I think this virus is small in comparison to some of the shocks of the last 70 years? Absolutely. We nearly got nuked more than once! But this is a personal view, the oil industry has understandably turned bearish. I said a few weeks ago "that I'd be happier investing more if I heard the redundancy talk in the pub again." Well, that's happening now, so I invested full allocation. If I'm wrong, so be it. I just work longer, possibly not in the same job.

 

 

CP,Interested in this point you made.Remember you saying this a few weeks back.Has it been all of a sudden or something that's gradually got worse?

[M.C. UK]

.

18 minutes ago, sancho panza said:

 

[King Penda]

10 hours ago, TheCountOfNowhere said:

Lets see if i can call it right 4 days in a row... Big leg down Monday and Tuesday 

That’s a given

[BearyBear]

So funny to see that  

[kibuc]

 

[BearyBear]

11 minutes ago, kibuc said:

 

Personally I don't understand why people are looking at this gold/silver ratio, these are two different commodities to me. Looking behind doesn't make sense either as silver is not that important as it used to be (photography) and it was obtained using different methods.

[kibuc]

8 minutes ago, BearyBear said:

Personally I don't understand why people are looking at this gold/silver ratio, these are two different commodities to me. Looking behind doesn't make sense either as silver is not that important as it used to be (photography) and it was obtained using different methods.

Apologies @BearyBear but I'm too hazy to answer today, not enough sleep.

[BearyBear]

ftse100 below 5k

voda hit 100.5

shell- below 10

crude 30.50

silver 14.05

[BearyBear]

wizzair -45%...!

[dgul]

Not quite sure what'll help the markets at this stage.  They've allowed a market rout to turn into a liquidity event.  It'll take even more cash injection to turn around the (now accelerating in the wrong direction) supertanker.

[Iamcynical]

I've made a grand before breakfast on shorts this morning, but my shares are getting slaughtered.  So, I've made money for today and lost more of my 'future' money as we stand.  Obviously my shares are for the long haul though.  Still a painful screen of red though 

[BearyBear]

Just now, dgul said:

Not quite sure what'll help the markets at this stage.  They've allowed a market rout to turn into a liquidity event.  It'll take even more cash injection to turn around the (now accelerating in the wrong direction) supertanker.

This is a huge margin call on a global scale... imagine what is currently happening at hedge funds offices, they are all rushing for exit.

[Yellow_Reduced_Sticker]

While financial markets are CRASHING Worldwide...

 

"Coronavirus 'may increase UK property sales' as prices hit Record HIGH!"

 

YOU just couldn't make this up if ya tried!

[kibuc]

Just now, Yellow_Reduced_Sticker said:

While financial markets are CRASHING Worldwide...

 

"Coronavirus 'may increase UK property sales' as prices hit Record HIGH!"

 

YOU just couldn't make this up if ya tried!

The govt will buy all the failing BTLs to convert into hospitals?

[Democorruptcy]

7 minutes ago, BearyBear said:

ftse100 below 5k

voda hit 100.5

shell- below 10

crude 30.50

silver 14.05

Aye, I definitely went back in too early last week which is annoying when I've been a virus watcher and it was me who posted the chart with two FTSE dips below 4000 as a warning! For obvious reasons it's sad DTY is looking better than RDSB at the moment.

So far, I'm resisting NS&I money to a share account, not tax wrapped. 

Don't forget third party risk people! 

 

[Iamcynical]

1 minute ago, Yellow_Reduced_Sticker said:

While financial markets are CRASHING Worldwide...

 

"Coronavirus 'may increase UK property sales' as prices hit Record HIGH!"

 

YOU just couldn't make this up if ya tried!

I read that also.  That cries of desperation !! Trying to hook the last fool before it turns to shit..

[Cosmic]

1 minute ago, Democorruptcy said:

Aye, I definitely went back in too early last week which is annoying when I've been a virus watcher and it was me who posted the chart with two FTSE dips below 4000 as a warning! For obvious reasons it's sad DTY is looking better than RDSB at the moment.

So far, I'm resisting NS&I money to a share account, not tax wrapped. 

Don't forget third party risk people! 

 

Its probably fortunate that I've used up my ISA allowance already... 

[Iamcynical]

3 minutes ago, Democorruptcy said:

Aye, I definitely went back in too early last week which is annoying when I've been a virus watcher and it was me who posted the chart with two FTSE dips below 4000 as a warning! For obvious reasons it's sad DTY is looking better than RDSB at the moment.

So far, I'm resisting NS&I money to a share account, not tax wrapped. 

Don't forget third party risk people! 

 

As did I !! I've got more buying to do though.