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

[Majorpain]

22 minutes ago, BearyBear said:

NZD is also down from 1.0% to 0.25% unexpectedly... this is not a global pandemic, it's a global panic!

Service sector is 80% of UK GDP, its very similar across all developed economies.  In a worst case scenario that goes down to billy basic food/shelter/utilities (50% of usual GDP is being generous....), its absolute kryptonite for a highly leveraged debt based economy heavily reliant on consumer spending.  I can see them printing the "lost" GDP to make sure the debt numbers still stack up on top of everything else.

The Euro with half the continent locked down is looking very vulnerable ATM, worst of all they cant hide how screwed they are like China.  The politicians are jumping out of the frying pan into the fire by doing their best to kill off the economy with panic measures....

[Yellow_Reduced_Sticker]

17 minutes ago, DurhamBorn said:

The Fed also cut reserve requirement ratios for thousands of banks to zero. In addition, in a global coordinated move by centrals banks, the Fed said the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank took action to enhance dollar liquidity around the world through existing dollar swap arrangements.

So the world is now getting flooded with $s.

 

YEP ...no wonder the DOW shot up near on 2,000 points at the close on Friday!

 

An announcement was coming

 

Warren Buffett has been scrimping & hoarding cash for the past few years, (wonder if he does the reduced sticker vulturing...)

 

The canny old fox has got $128 billion in spare cash to slash out on cheap stocks as the stock market collapses!

 

Is it any wonder that the 89 yr old Buffett looks so THRILLED in this video on 10 March! Bet hes started to BUY!

 

[DurhamBorn]

7 minutes ago, Majorpain said:

Service sector is 80% of UK GDP, its very similar across all developed economies.  In a worst case scenario that goes down to billy basic food/shelter/utilities (50% of usual GDP is being generous....), its absolute kryptonite for a highly leveraged debt based economy heavily reliant on consumer spending.  I can see them printing the "lost" GDP to make sure the debt numbers still stack up on top of everything else.

The Euro with half the continent locked down is looking very vulnerable ATM, worst of all they cant hide how screwed they are like China.  The politicians are jumping out of the frying pan into the fire by doing their best to kill off the economy with panic measures....

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.

[Yellow_Reduced_Sticker]

2 hours ago, kibuc said:

JNUG exploded on Friday.

JNUG is a triple-leveraged bet on junior gold mining. Absolute insanity, and it went down 66% (!) on the day. Since it holds a lot of GDXJ, when JNUG got panic sold, so did the GDXJ, and that cascaded down to individual stocks. 

 

I'd like to put a monkey in this for a speculative punt, i can't find it on HL?

Anyone know if it is? Cheers!

 

 

 

[onlyme]

11 minutes ago, Majorpain said:

Service sector is 80% of UK GDP, its very similar across all developed economies.  In a worst case scenario that goes down to billy basic food/shelter/utilities (50% of usual GDP is being generous....), its absolute kryptonite for a highly leveraged debt based economy heavily reliant on consumer spending.  I can see them printing the "lost" GDP to make sure the debt numbers still stack up on top of everything else.

The Euro with half the continent locked down is looking very vulnerable ATM, worst of all they cant hide how screwed they are like China.  The politicians are jumping out of the frying pan into the fire by doing their best to kill off the economy with panic measures....

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.

[Majorpain]

6 minutes 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.

Hes very lucky, i need to look into how many at risk elderly don't have any children living within easy travelling distance for shopping.  I suspect there will be a need for home deliveries to quite a lot of very unlucky folk.

Then there is the mental isolation side of being inside for weeks as you say, which is IMO the harder one to address.....

[BearyBear]

5 minutes ago, Yellow_Reduced_Sticker said:

 

I'd like to put a monkey in this for a speculative punt, i can't find it on HL?

Anyone know if it is? Cheers!

 

 

ig.com  

[Chewing Grass]

Just now, Majorpain said:

Hes very lucky, i need to look into how many at risk elderly don't have any children living within easy travelling distance for shopping.  I suspect there will be a need for home deliveries to quite a lot of very unlucky folk.

Then there is the mental isolation side of being inside for weeks as you say, which is IMO the harder one to address.....

Even shitter if you live in a flat.

[Noallegiance]

Look out. Dow doesn't like it.

[BearyBear]

US Stock Market futures down... Gold&Silver up!

[Majorpain]

8 minutes 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.

It spreads too easily, after two weeks all it takes is one super spreader from poor healthcare Africa/Asia and it will flare up again.  You cant keep locking the population down each time.....

[Talking Monkey]

3 minutes ago, Noallegiance said:

Look out. Dow doesn't like it.

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

[Yellow_Reduced_Sticker]

4 minutes ago, BearyBear said:

US Stock Market futures down... Gold up!

WOW, Maybe...I'd better hold my powder dry for a bit, otherwise I'll be joining the soup kitchen queue!

[Noallegiance]

3 minutes 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!

[onlyme]

1 minute ago, Majorpain said:

It spreads too easily, after two weeks all it takes is one super spreader from poor healthcare Africa/Asia and it will flare up again.  You cant keep locking the population down each time.....

Don't know that, only know that if you leave it to fester it will collapse your healthcare system in one or more locations, burn out your medical staff and increase the mortality rate, possible;y very significantly. All countries control their area, quarantine in and out.

You also don't know what your economy is gong to do faced with the prospect of knowing the above.

It is not just me saying this, some virologists share the same view and think the idea insane.

 

[dgul]

4 minutes ago, Talking Monkey said:

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

Market wants more.

[The Idiocrat]

Can't believe they've all shot their load so early. Should've waited until peak CV had been reached in the US, which they're nowhere near. Businesses and households aren't going to take on (even more) debt if they're worried about staying alive and can't go out, no matter how cheap it is. 

[DurhamBorn]

Just now, The Idiocrat said:

Can't believe they've all shot their load so early. Should've waited until peak CV had been reached in the US, which they're nowhere near. Businesses and households aren't going to take on (even more) debt if they're worried about staying alive and can't go out, no matter how cheap it is. 

Qe just starting,be $20 trillion by the end i expect.

[Noallegiance]

1 minute ago, DurhamBorn said:

Qe just starting,be $20 trillion by the end i expect.

So, Thursday....

Does limit down apply to futures?! If so it took 16 minutes.

[Talking Monkey]

4 minutes ago, DurhamBorn said:

Qe just starting,be $20 trillion by the end i expect.

What timeframe do you see to get to 20trillion DB

[dgul]

8 minutes ago, The Idiocrat said:

Can't believe they've all shot their load so early. Should've waited until peak CV had been reached in the US, which they're nowhere near. Businesses and households aren't going to take on (even more) debt if they're worried about staying alive and can't go out, no matter how cheap it is. 

There's no 'shot their load' -- their ability to print money is limitless*.

[* albeit there might be consequences...]

[DurhamBorn]

6 minutes ago, Talking Monkey said:

What timeframe do you see to get to 20trillion DB

Couple of years i expect,less if they print more over the next few months.

[Alifelessbinary]

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.

[The Idiocrat]

2 minutes ago, dgul said:

There's no 'shot their load' -- their ability to print money is limitless*.

[* albeit there might be consequences...]

Well, I'd say 0% interest rates is shooting their load. Going negative would be the same as fucking a HIV- and syphilis-riddled whore up the arse without protection, repeatedly. We all know it's coming/cumming. 

[Talking Monkey]

2 minutes ago, The Idiocrat said:

Well, I'd say 0% interest rates is shooting their load. Going negative would be the same as fucking a HIV- and syphilis-riddled whore up the arse without protection, repeatedly. We all know it's coming/cumming. 

Outstanding imagery there