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DrStool

On Today's Program- Mahler's Funeral March 3/13/20

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21 minutes ago, fxfox said:

Jimi,

you spoke about „ICU Roulette“. Do you mean by that, that is complicated to get a bed in ICU when you really need it? 

Exactly.

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Who believes that todays last hour moon shot will stick? 
I think it will get completely reversed monday.

But I have a hard time getting a grip on the impact of the injections which were made and will be made by the NY FED. Normally this should give stocks some support... hm... 🙄🧐

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Aha. Missed this. THe Fed bought $33 billion in Treasury coupons today.  

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13 minutes ago, DrStool said:

Aha. Missed this. THe Fed bought $33 billion in Treasury coupons today.  

This means? Which impact has this on stocks? 

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Good Read:

 

  • The coronavirus is coming to you.
  • It’s coming at an exponential speed: gradually, and then suddenly.
  • It’s a matter of days. Maybe a week or two.
  • When it does, your healthcare system will be overwhelmed.
  • Your fellow citizens will be treated in the hallways.
  • Exhausted healthcare workers will break down. Some will die.
  • They will have to decide which patient gets the oxygen and which one dies.
  • The only way to prevent this is social distancing today. Not tomorrow. Today.
  • That means keeping as many people home as possible, starting now.

https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca

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Barrons:

The last time the S&P 500 had back to back 9% moves was the three days ending October 30, 1929.

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As an antidote to 231 million dead by October model I linked to earlier.  Here is an article that says things are going back to normal in China.  True?  Sort of true? Got me.  I don't understand how it can be true unless most people have gotten it and recovered, and are now immune. The model says China's saturation should be, sub 1% now. So how is it possible it is in retreat. I'm agnostic, Could be. Hope so. 

https://asiatimes.com/2020/03/as-viruss-grip-weakens-focus-shifts-to-economy/

Forget about the vast spending on projects of all kinds, That's another story.

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21 minutes ago, Jorma said:

As an antidote to 231 million dead by October model I linked to earlier.  Here is an article that says things are going back to normal in China.  True?  Sort of true? Got me.  I don't understand how it can be true unless most people have gotten it and recovered, and are now immune. The model says China's saturation should be, sub 1% now. So how is it possible it is in retreat. I'm agnostic, Could be. Hope so. 

https://asiatimes.com/2020/03/as-viruss-grip-weakens-focus-shifts-to-economy/

Forget about the vast spending on projects of all kinds, That's another story.

Nice like. Lets see if China would get back COVID19. They also introduced quarantine for travelers.

 

Nice stimulus

Total investments announced by about 15 provinces throughout the nation since the end of February have increased to 25 trillion yuan (US$3,6 trillion). To put that figure in perspective, Beijing embarked on an investment spree of about 4 trillion yuan (US$572 billion)  back in 2008 to stave off the spillover from the global market meltdown."

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13 hours ago, fxfox said:

This means? Which impact has this on stocks? 

As a single day purchase it is on a par with some of the early days of QE1. In this case however, it was unannounced before today. 

And they've said nothing about increasing the approximately $80 billion in monthly purchase. Although that will go up as the refi wave works its way through the Fed's MBS holdings. As they drop preciptiously the Fed's replacement purchases of Treasuries would rise anyway. However, they're not going to be $33 billion every day, that's for sure. 

So we saw what depositing $33 billion in cash into dealer accounts will do in a sold out market. And we know from the past two weeks what not injecting $33 billion per day does. 

What we don't know yet is what the Fed will do about a program of increased POMO. The TOMO repos, won't work, for the reasons that I discussed in my WSE post yesterday. That's for sure. Regular POMO QE, apparently still works on a shot by shot basis. 

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Here is that chart I tried to post yesterday but it was in an odd file format so converted it to jpeg. 

It is the run of a simple model made sometime before mid Feb by somebody, and posted on some oil market website. It's a model built upon simple static infection and mortality rates. As should be known, simple models aren't worth much except to establish a crude estimate. The total infections and deaths on the 3/21 line have already been exceeded.  

The absolute crucial thing is the rate of infection. I think the 2.5 is the rate one person infects others. Leading to exponential growth.  That almost for sure isn't happening in China, S Korea or Singapore. Why new infections are shrinking there with people out and about again I have zero clue but it is very very good news.  Everyone in the world will not have caught it by October, obviously so please take this under strong advisement, about the limits of models.

 

corona model.jpg

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Only days after a rare emergency rate cut, the Fed is expected at its regularly scheduled meeting next Wednesday to slash its target rate another 75 to 100 basis points to near zero, according to the CME FedWatch website.

 

The U.S. central bank also may announce measures to ensure sufficient liquidity and lending or to purchase assets by restarting the quantitative easing that the Fed employed during the financial crisis

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To restart QE in earnest after a 20% downmove on a weekly closing basis would be outright idiotic, insane and plainly dumb. FED will not do it. Not now at least.

Trump will loose office, either thru the electorate or by assassination.

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I highly recommend you following this doctor. Great videos, published on a daily basis.

In his last episode, the doctor point out to the difference in handling the epidemic by UK,US vs WHO recommendation (and what other countries are doing).

As I understand UK and US want to infect the whole country. Amazing. You gonna have thousands of dead bodies.

If China didnt do social distancing, there would be 7,7 milions of infected people, 350k dead already! 

  

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