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DrStool

The Crash is Here 3/6/20

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Suppose the Fed announced it was buying coupons but nobody sold.

At any rate looks like the last desperate attempt to defend 2900.

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What is FRAOIS? Sounds like some kind of German dish.

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Not a good week for me, but still smiling because of Doc's descriptive tour de force yesterday:  

"But back to the ES fucutures, clearing 3100 today would be a breakout from the channel. But if it did not extend from there, I’d give it another day to prove it wasn’t a breakout fakeout.
If 3090 proves impenetrable, look out for cow diarrhea.  We’d see 2980 fast. If that breaks, then back to 2850 we go."

[emphasis added.] 

https://wallstreetexaminer.com/2020/03/brown-pants-syndrome-day/

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16 minutes ago, DrStool said:

What is FRAOIS? Sounds like some kind of German dish.

The chart is the spread between overnight index swaps (OIS), considered the “risk-free” rate tied to the federal funds rate, and forward rate agreements (FRA), which are tied to Libor.

 

This shows the stress in the system.

 

Enough for the Fed to start talk about buying stocks

https://www.zerohedge.com/markets/boston-feds-rosengren-says-fed-may-soon-have-buy-stocks

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1 hour ago, potatohead said:

Enough for the Fed to start talk about buying stocks

ZH link

No ZH here please. An original purveyor of modern disinformation.  "Well, thanks to experiments conducted in a Chinese P-4 biolab,"  My ass. 

The Boston Fed Presidents trial balloon was on market news tickers and the front page of the NY Times two hours ago and I mentioned it at the time..  No need to drag those evil fokers at ZH into it.

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Hardly. Stay tuned for more cow diarrhea next week. 

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Remember Trump's fascination  with the stock market.....this is ironic

Top 8 largest declines in Dow Jones in history

1Trump: -1191   2-27-20

2Trump: -1175   2-5-18

3Trump: -1032   2-8-18

4Trump: -1031   2-24-20

5Trump: -879   2-25-20

6Trump: -831  10-10-18

7Trump: -800   8-14-19

8Trump: -799   12-4-18

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Here in the Bay Area, my children are home 'cause their school was closed for the virus. And I am trying to negotiate loving care for my +90 year old parents nearby, whose senior living place is contemplating lock-down... which means suspending contact between the former & the latter.

Because while I assume that my parents - and the majority of their senior living facility cohabitants - will be killed by this virus within a year, I don't want my kids to be the ones who transmitted it to them. So, they don't get to come to dinner at our home a couple times a week as they have for the past 7 years.

In the third week of January, I almost canceled an annual trip to Vegas for the Superbowl. This has been on my radar since at least January 21st. It was clear to me where this was headed back then... although, it helps that I was studying bioterrorism before 9.11.01.  And as a thought experiment, if this is or isn't a virus that "escaped" from the containment facility in Wuhan isn't really "important": our national response shows that we evidently aren't prepared to deal with any biological contingencies... despite enormous sums of money having been spent in what was clearly a pretend-effort.

That state & local governments - but especially the federal government - did little to nothing to prepare for what was obvious to me weeks ago is an epic lapse that has consigned a lot of people to die.

Everyone is canceling everything here - millions of microdecisions will leave local cash-short businesses bust quickly.  I've been watching local businesses try to manage escalating commercial rents - the Fed's largesse will always find its way to inflate one or another asset even if it doesn't register in the CPI - and I don't believe for a moment that many can manage the revenue shortfalls that are kicking in right now. Gonna be a bloodbath.

Because we work from home, we will likely pull our kids indefinitely from school Monday - simply not send them back and let the rest of the region catch up. Schools should have been closed weeks ago.  They'll all be closed soon enough. Mark my words.

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Humans are in plague proportions and we're living way too close together so nature will naturally step in and sort out the problem.  If we had any common sense we'd have lowered our birthrate decades ago. 

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My fear is:

this is only due to a major hedge fund blew up and that led to major imbalances in the market. Some kind of LTCM thing. The implications of the blew up of the later one were after all quite minor.
What happened in the last 2 weeks? Market started to price-in a rollback of globalization. That’s wishful thinking. The rust belt will be the rust belt even in 100 years, the jobs from the 1950s will never come back. Of course China business is quite dead right now, but will that also he the case in 2021?

 

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11 hours ago, potatohead said:

Remember Trump's fascination  with the stock market.....this is ironic

Top 8 largest declines in Dow Jones in history

1Trump: -1191   2-27-20

2Trump: -1175   2-5-18

3Trump: -1032   2-8-18

4Trump: -1031   2-24-20

5Trump: -879   2-25-20

6Trump: -831  10-10-18

7Trump: -800   8-14-19

8Trump: -799   12-4-18

😁 Even though I hate Trump as you know, that's not fair. The Dow has been in the 25,000-30,000 range. These declines are nowhere near the largest in history relative to the price level. By that standard, the 1987 and 1929 crashes wouldn't even be on the list of big declines. 

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11 hours ago, Jimi said:

Here in the Bay Area, my children are home 'cause their school was closed for the virus. And I am trying to negotiate loving care for my +90 year old parents nearby, whose senior living place is contemplating lock-down... which means suspending contact between the former & the latter.

Because while I assume that my parents - and the majority of their senior living facility cohabitants - will be killed by this virus within a year, I don't want my kids to be the ones who transmitted it to them. So, they don't get to come to dinner at our home a couple times a week as they have for the past 7 years.

In the third week of January, I almost canceled an annual trip to Vegas for the Superbowl. This has been on my radar since at least January 21st. It was clear to me where this was headed back then... although, it helps that I was studying bioterrorism before 9.11.01.  And as a thought experiment, if this is or isn't a virus that "escaped" from the containment facility in Wuhan isn't really "important": our national response shows that we evidently aren't prepared to deal with any biological contingencies... despite enormous sums of money having been spent in what was clearly a pretend-effort.

That state & local governments - but especially the federal government - did little to nothing to prepare for what was obvious to me weeks ago is an epic lapse that has consigned a lot of people to die.

Everyone is canceling everything here - millions of microdecisions will leave local cash-short businesses bust quickly.  I've been watching local businesses try to manage escalating commercial rents - the Fed's largesse will always find its way to inflate one or another asset even if it doesn't register in the CPI - and I don't believe for a moment that many can manage the revenue shortfalls that are kicking in right now. Gonna be a bloodbath.

Because we work from home, we will likely pull our kids indefinitely from school Monday - simply not send them back and let the rest of the region catch up. Schools should have been closed weeks ago.  They'll all be closed soon enough. Mark my words.

HI JImi! Great to see you. 

I hope you don't mind if I repost this on WSE. Great post! 

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47 minutes ago, fxfox said:

My fear is:

this is only due to a major hedge fund blew up and that led to major imbalances in the market. Some kind of LTCM thing. The implications of the blew up of the later one were after all quite minor

 

I think more than one. Anybody who was short Treasury futures. They're wiped out, and they've taken their lenders with them. That's my guess.  

The Fed will cut the FFR to zero and announce a big increase in Not QE.  But I won't stick my neck out and say for sure that the market will respond positively. The leverage in the system is, I think, too great to get our minds around, and this time, it may even be too much for the Fed to manage. We'll have to let the market render its verdict as judge and jury. 

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