They've been ratcheting up fear all weekend, making the worst-case scenarios seem like the most-likely scenarios.
It's the same playbook they rant in 2009 to demand bailouts on casino capitalism's terms.
Eff 'em. I hope opponents to yet another corporate bailout hold the line.
Let their bondholders takeover Boeing and United and the rest of them.
Let there be markets.
Let there be capitalism.
Policy makers are clueless that Covid19 is not the cause of the crisis. It's just the catalyst that triggered the end of the 25 year credit bubble that was inevitable anyway. Had not the system been at the maximum fragility as a result of blowing the bubble to its actual limit, this crash would not have happened. Covid19 would have been a blip in the big scheme of things.
No. This crash is the end of bubble dynamics. It changes the way all of us think about the world.
And the first people to wake up to the change and react to it were the first leveraged long traders who started selling way back in September when repo funding rates went through the roof.
Then gradually more of the smart guys caught on. The trickle of selling became a wave, and the wave became a tsunami.
Collapsing asset values now destroy money faster than the Fed can replace it. Absolutely nobody wants credit for speculation any more. All they want to do now is liquididate and deleverage.
The Old Time religion is coming home after Greenspan and Bernanke kicked it out into the wilderness. They allowed, promoted, and enabled moral hazard to grow far beyond anything the normal human mind could imagine.
Finally in September we hit the limit. The system was no longer able to support the growth of the game. Everybody was margined to the hilt. And people started to go in reverse.
There's no turning back now. The big leveraged players who drove this have been destroyed. They are no more than smouldering piles of ash now. The smart money that got out first will now sit and wait, but there is too little to restart the game. We'll all be dead and gone for decades when the next game comes.
After this, people will be risk averse for two generations. There's a playbook for this. It's called the 1929 Crash and the Great Depression.
The tsunami will recede in a few weeks, and the destruction left behind will be generational.
Jimi, Sandy et. al.
I'm so grateful and proud that you guys have come back and made such valued contributions to the discussion. I hope you stick around this time when the bull comes back, but if not, thank you anyway from the bottom of my heart.
Jimi- I'm really glad to hear that you and your family got that ordeal!
Now on with the show!
There's a huge difference between now and 2009. The Fed started direct QE in March 2009. It worked immediately.
It started direct QE this time in late September. It worked for a while but the bubble had become so brittle that it collapsed anyway.
That was at the end of a 30 month bear market. Psychologically the players were ready..
This on just started.
This one faces trillions in new Federal Debt. All other nations area also issuing massive amounts of debt to fund stimulus.
So there's QE, and maybe it's starting to work on a delayed basis.
Or maybe this is just another countertrend bear market rally, and this is October 30 1929, not March 1933.
Which came AFTER the bank holiday.
I don't know if this is the bottom or not, but I doubt it.
"What concerns me most right now is how fast we can increase the number of ventilators and Extracorporeal membrane oxygenation devices (ECMO) in the next couple of months. A clinician is going to be less worried if the patient is dying of X than if the patient isn't able to breath and they can't do anything about it. We need oxygen. My second concern is PPE personal protective equipment for medical workers. If we have those two things ready I care a whole lot less about testing in term of immediate impact. "
I think SIP didn‘t realize that those links which we see in his post were not copied into the Stool Board. It is 6:50 a.m. in Europe right now. Guess once he woke up and logs into the Stool he will fix that. 🙂
btw Sandy, I like your insightfull very much. Thanks a lot! 🙂✌🏻
Not only "professionals". Also all those bloggers and "financial freedom with 30"nutcases, all those "Frugalists", Hipsters and all that other crap. They are all a sign of all 10 year long relentless bull market, which only saw minor downmove which were all corrected quickly by CB intervention. They are all playing moral hazard although they say only others do so. No. Every blogger who say that you only should buy the MSCI World every month with a fixed contribution plays moral hazard. No one on earth would have come up with such an idea in 1980 or 1981.
What we would need is a 10 year long relentless bear market to cure all that crap out. So that Schumpeter comes into play.
Problem is: we won't get a 10 year long bear market.
I said last Friday or something that they would shut down the country over the weekend. Because they had no choice. I was wrong. It is mind-blowing that the administration and some governors are letting this continue to run amok.
This first wave has been "localized" to the largest American cities. Now watch this video:
Look at the bright lights in Atlanta - as spring breakers pass through its airport hub. Tell me the South isn't going to be engulfed in 2-4 weeks. Tell me that having first hammered 10 of the country's largest cities, that in 2-4 weeks, the next 90 largest cities are somehow not going to be hammered.
Texas Governor issues executive order for quarantine of new arrivals from tri-state region & New Orleans:
This sets the precedent - states are going to start limiting traffic between them... because the Federal government has told states to take care of the pandemic themselves, and because some states are letting the pandemic spread & spread, thereby threatening all the others.
Just horrifying what's been allowed to unfurl... that continues to do so.
Taken together, the programs are considerably more aggressive and have been done in quicker fashion than what happened during the 2008-09 financial crisis.
By the time it finishes, the Fed could take its balance sheet to as high as $10 trillion, one anal cyst estimates.
We've been tracking the mutation is minute detail and you can see the information here:
Technically each branch could be termed a "strain" or clade or haplotype. We are seeing about a mutation per week per strain. So maybe 17 or 18 mutations so far for each branch. That's in a genome of about 30K nucleotides. We would predict based on what we know about this class of virus that most of these mutations will not change the activity of the virus at all. Only rarely will a mutation actually cause a change in virulence. So at this point I think we can reasonably assume we don't have strains yet that have different levels of virulence. Now give this virus a year or more? Yes by than we may see a strain emerge that has augmented functions or even less fatal properties. But we'll be looking for key mutations effecting certain sections of the genome such as changes to the binding site of the S Protein and if we see that we can compare them to the original strain on a wet bench and actually measure how much the difference these changes make using ELSA. But I doubt we have any strain yet that is any different than any other strain functionally.
The second point about reinfection - we've followed these cases closely and for good reason. But at this point it is very possible that the cases of reinfection were actually more likely cases were we had a false positive test and the person appeared to be negative but were actually positive. So it appeared they were reinfected. And this seems to be backed up by the fact that people are building a good immunity to this virus and that the virus sticks around a lot longer than we first suspected - close to a month. Now as it mutates over a longer period of time say one to three years we might get another strain that our acquired immunity (antibodies) won't recognize. In that case our immunity may not work anymore and worse our immunity might actually make the infection much worse the second time around because it may suppress our immune response. We see that with dengue fever for example. And this would be extremely dangerous.
Dropped off a few care packages today - some fresh food, baked goods, periodicals, potted flowers,, etc. to the at risk we know. Keep them engaged. Isolation can cause permanent psychological damage. So let's not do that - give them a call if you can.
XO XO XO
I'd betchya the closest COVID-19 case is a lot closer than 600km away from you.
They're simply gonna have to shut the country down this weekend. Trump administration's incompetent feckless delays have left no alternative.
Hard times. Dead ahead.
Macy's should offer to convert its national retail floor space to giant hospital wards. US Army could move all the inventory out and stash it somewhere - anywhere. Macys have receiving docks for equipment. They are located in urban areas that will be hit, and they are often attached to malls that have food courts, that could support the medical community on site supporting the sick. And the B&M anchor retailers are all broke anyway - pay 'em for the service.
I want to show my 13 year old how to access executive compensation data, and have him start a non-stop Twitter feed documenting every MFer by name & trailing 10-year compensation.
Start with the airlines.
Then the cruiselines.
Then the banks.
Rudy Havenstein, a stoolie at heart, is on a roll lately (generally too) on twitter. That guy cracks me up. He is hilarious.
Today he answered to something El Erian (the ExCEO of PIMCO) wrote:
“You know what, Mohamed - the virus is the pin that's popping this bubble, and it's tragic, and you make some good points, but we wouldn't be in this ridiculous divisive, precarious, debt-bloated GINI-ratio'd situation if people like you had spoken out against how 2008 was handled“.
Bravo Rudy, bravo! 👏
I'm fine, thanks for asking! Living 50/60 miles south of Frankfurt in a very nice city which was a huge base of the US Army till the early 2000s. Good health system in Germany, especially in my city. Working remotely from home right now. Commuting every day to Frankfurt normally. Yesterday had been there, the city was half empty... We already made a stress test last week if system don't collapse if everyone would work remotely. from home. It worked. The ECB did the same on Monday this week, 3000 people worked from home.
Sure, everyone knows that. Closing longs in funding currency. Most of them were located in bonds and stocks
Im talking about something different. Im talking about big moves in EM FX. I dont see them. Take a look at USDPLN USDHUF. Some build up in USDMXN USDZAR but nothing amazing and panic.
Have ever seen this?
With oil down almost 9% today after this OPEC meeting, here's the dividend yields for major oil companies: BP 8%, Exxon 7.3%, Total 6.9%, ENI 8.1%, Chevron 5.4% and, if you're really feeling bold, Occidental at 11.4%.
Russian Energy Minister Alexander Novak says OPEC+ countries are free to pump-at-will from April 1
Are we seeing the end of the petro dollar regime….Now that we are the biggest oil producing country according to Trump, Seems the rest of the world is using our old tricks against us. Killing the price and our industry while China is using their currency to buy oil from the other largest suppliers.
Sadly lost in the ether, like our old Reo Speedwagon quotes, Bareister's diatribes with Machinehead, and some of the old Mark2Market classics like "Holeshot" and "The Supermodels"... those were the daze!