Financial Markets Meltdown

[KinAlberta]

Great old article:


”Until sometime after World War II, all substantial economic downturns, ....were referred to as "depressions." ”

When Does a Depression or a Recession End?
RICHARD A. POSNER
AUGUST 1, 2009

A recession is when your neighbor loses his job; a depression is when you lose your job. ...

Until sometime after World War II, all substantial economic downturns, of which there had been many, were referred to as "depressions." The 1930s depression was the gravest, at least in modern times, and so came to be called the Great Depression. Oddly, when that happened, lesser depressions, past and future, became labeled (or relabeled, in the case of the earlier depressions) "recessions.

...

What is more interesting and important is how the media and the economics profession define a recession. (There is no accepted definition of a depression any more, except "comparable to the Great Depression.") The media define it as...

https://www.theatlantic.com/business...ion-end/22544/

[KinAlberta]

Originally Posted by pikeman06

Really gotta feel for the folks about to retire or just starting retirement. Property in some areas is not selling and if it is the sellers are taking a hit. Rrsp are beat down to almost half in some cases. I suppose if one was to try to pull it out they would nail you with the tax? That money has already been taxed to death. I have some employer Rrsp and pension that are down 40 percent this month. Glad I pulled out when I did and now sittin on a nice stack of cash but certainly not gloating about it. I've lost before too that's what makes a guy a little gun shy. Hope it all works out but not looking overly promising.

Good on you for being in cash. The world needs more people having more intelligence than greed. A couple years ago we handed most of our savings over to the fund managers so some day we’ll have to check to see what’s happened. Literally we haven’t looked in weeks. It is what it is and we’ll ride it out.

We did though have an amazing 10 year run. So a dip was inevitable. The virus will create all kinds of pent up demand for stuff and the economy will recover. Cheap oil will put billions of dollars into the hands of those most likely to spend it vs invest it. That’s a good thing because a whole lot of the gains over the past decade have been captured by the very wealthy.

As an aside, I’ve long said that it seems banks and markets blow up about every ten years. We’re a couple years behind so we’ll see how this shakeup impacts the banking world.

[Buckhead]

Originally Posted by KinAlberta

As an aside, I’ve long said that it seems banks and markets blow up about every ten years. We’re a couple years behind so we’ll see how this shakeup impacts the banking world.

That is the unknown part. Governments may print so much money out of thin air, apply QE and lower interest rates into negative territory in an effort to contain a massive banking failure that they trigger hyperinflation.
If that happens - all bets are off. Even cash will become worthless.

There is some other agenda at play here aside from the Coronavirus. We are getting awfully close to that tipping point. It will be interesting to see how this plays out.

[fishtank]

All this cheap money... gold and silver platinum are way down. Folks need to get ready for some big inflations in the near future.
Tvix spike 50% I think they have enter panic mode .

[Justfishin73]

Have a feeling today may be the worst yet. Limit down within minutes I'm guessing.

[fishtank]

Butterflies in my stomach waiting for market opening ...tvix up 56% premarket

[bdub]

Originally Posted by fishtank

Butterflies in my stomach waiting for market opening ...tvix up 56% premarket

Index Etfs are indicating around -10% at open.

[Justfishin73]

Limits tripping all day, Dow will be down 2000 or more I'm thinking, bloodbath will be an understatement....

[Jim Blake]

Originally Posted by Justfishin73

Have a feeling today may be the worst yet. Limit down within minutes I'm guessing.

I guess the way the Overseas Markets are behaving would be a good clue as to what we are going to see today.

[fishtank]

Originally Posted by bdub

Index Etfs are indicating around -10% at open.

Tvix the ticker for TVIX - VelocityShares Daily 2x VIX Short-Term ETN

[bdub]

Originally Posted by fishtank

Tvix the ticker for TVIX - VelocityShares Daily 2x VIX Short-Term ETN

Thanks FT. I should have indicated stock index etf's on the SP500.

[elkhunter11]

Originally Posted by Justfishin73

Limits tripping all day, Dow will be down 2000 or more I'm thinking, bloodbath will be an understatement....

The moves by the feds will likely do exactly the opposite of what they intended.

[fishtank]

Originally Posted by elkhunter11

The moves by the feds will likely do exactly the opposite of what they intended.

They over compensated, led to more speculation and panic on what’s next , what do they have now for ammo.

Like a deer the market. They had 3 ammos they took all 3 shots ,while the deers was moving a missed completely it spook the deers now going to be a while before it calms down. Should have at least saved 1 ammo .

[fishtank]

Market halted ... might as well shut it down completely and pull the plug . Yesterday praying didn’t work.
Dow down 2790 open. Might break below the 20000

[elkhunter11]

The feds need to resist the temptation to interfere, and stop adding to the panick.

[Buckhead]

The markets discount the future. The Fed is making preemptive strikes.
Regardless of their logic, it is a futile gesture. It does nothing to help Joe consumer at this point. All it does is increase bank profits.

[fishtank]

Originally Posted by Buckhead

The markets discount the future. The Fed is making preemptive strikes.
Regardless of their logic, it is a futile gesture. It does nothing to help Joe consumer at this point. All it does is increase bank profits.

And making sure the big companies debt get paid and service and access to cheap liquidity , last thing it needs is defaults and let that bubble pop . See chinas situation lots more defaults on debt by big builders .

[fishtank]

At current oil price Saudi Aramco need 2.5 billion barrel to paid its dividend of $75 billion.

[robfraser]

Originally Posted by fishtank

At current oil price Saudi Aramco need 2.5 billion barrel to paid its dividend of $75 billion.

The Saudis will be making a killing on their shorts.

[ganderblaster]

Originally Posted by Buckhead

That is the unknown part. Governments may print so much money out of thin air, apply QE and lower interest rates into negative territory in an effort to contain a massive banking failure that they trigger hyperinflation.
If that happens - all bets are off. Even cash will become worthless.

There is some other agenda at play here aside from the Coronavirus. We are getting awfully close to that tipping point. It will be interesting to see how this plays out.

I agree.

[Buckhead]

Originally Posted by fishtank

And making sure the big companies debt get paid and service and access to cheap liquidity , last thing it needs is defaults and let that bubble pop . See chinas situation lots more defaults on debt by big builders .

As long as we are having this trainwreck I wouldn't mind seeing a few defaults and some companies go under. They have had access to cheap liquidity for a decade and have done nothing but engage in share buybacks. That's not a good long term business model.
That is not generating any wealth for the future - just propping up the share price.

[Twisted Canuck]

Well, if interests rates head into the negative, just think how much a person could leverage getting back into the game with all that cheap, accessible $....markets are going to be low low low, you know the temptation is going to be dangling there for many.

What could possibly go wrong?

[Buckhead]

Originally Posted by Twisted Canuck

Well, if interests rates head into the negative, just think how much a person could leverage getting back into the game with all that cheap, accessible $....markets are going to be low low low, you know the temptation is going to be dangling there for many.

What could possibly go wrong?

I'm not sure how that scenario would end. But if that's the scenario that plays out I will probably be one of the first in. One more roll of the dice before I am done.. No one gets to take it with them, in any event.

[fishtank]

Originally Posted by Buckhead

As long as we are having this trainwreck I wouldn't mind seeing a few defaults and some companies go under. They have had access to cheap liquidity for a decade and have done nothing but engage in share buybacks. That's not a good long term business model.
That is not generating any wealth for the future - just propping up the share price.

Well it’s sort like paying off a credit card with another credit card , there going to be a problem if you ran out of credit card, lender will take what ever it can get with all this free money .. kind of like this hi would you like to refinance your 8% debt (plus interests) in to our new 7% ... so on til as long as the bank still make a profit and milk them dry and have to renegotiate .

[raab]

Well I bought back in. Im betting on humanity, and Remdesivir. We'll see what happens. I also think the world governments are going to come out with helicopter money to help people get through the dip here as things are shut down. Also plan on holding long term. This is what I bought this morning for anyone interested TRP 40%, XOM 40%, KEY10%. We'll see what happens, could have been to early, but I think 10 years from now these are companies Im happy with. The percentages are based on what I had in cash and not my portfolio as a whole. I also have a major stake in GILD.

[Twisted Canuck]

Originally Posted by Buckhead

I'm not sure how that scenario would end. But if that's the scenario that plays out I will probably be one of the first in. One more roll of the dice before I am done.. No one gets to take it with them, in any event.

True....but I always feel more comfortable playing with my own money, not somebody else's money.....I only have two knees to break, and I need them for walking.

But it is tempting.

[raab]

Originally Posted by Twisted Canuck

True....but I always feel more comfortable playing with my own money, not somebody else's money.....I only have two knees to break, and I need them for walking.

But it is tempting.

You sleep a lot better at night when you don't have to worry about paying back a loan. Ive met a lot of 70 year olds working because they've borrowed to invest, then lost it. If your going to leverage against anything it should be things you control like your house, or a small business. In saying that if you can get those paid off quickly and be totally debt free. Thats what most of the guru's recommend. People like Warren Buffett, Mark Cuban, Dave Ramsey, etc...

[Justfishin73]

Originally Posted by raab

Well I bought back in. Im betting on humanity, and Remdesivir. We'll see what happens. I also think the world governments are going to come out with helicopter money to help people get through the dip here as things are shut down. Also plan on holding long term. This is what I bought this morning for anyone interested TRP 40%, XOM 40%, KEY10%. We'll see what happens, could have been to early, but I think 10 years from now these are companies Im happy with. The percentages are based on what I had in cash and not my portfolio as a whole. I also have a major stake in GILD.

That's a helluva bet, I'm not even thinking of getting back in yet

[ward]

Originally Posted by raab

Well I bought back in. Im betting on humanity, and Remdesivir. We'll see what happens. I also think the world governments are going to come out with helicopter money to help people get through the dip here as things are shut down. Also plan on holding long term. This is what I bought this morning for anyone interested TRP 40%, XOM 40%, KEY10%. We'll see what happens, could have been to early, but I think 10 years from now these are companies Im happy with. The percentages are based on what I had in cash and not my portfolio as a whole. I also have a major stake in GILD.

It does my heart good to finally see an optimist. Good luck.

[raab]

Originally Posted by Justfishin73

That's a helluva bet, I'm not even thinking of getting back in yet

Long term, I don't see anyway oil prices haven't recovered. And I feel TRP is a relatively safe bet. Canadian Oil and Gas will be some of the cheapest in the world, and so I think TRP will be relatively busy. XOM will be selling to the help restock the SRP. Keyera was the one Im most worried about, but I took a small stake in them just to see what happens. Also worth noting I get paid dividends from all these companies while I wait for things to turn around.