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DrStool

Your Account Has Been Suspended 4/3/20

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1 hour ago, DrStool said:

By the way. I have another website. It's called the Wall Street Examiner. It has some good articles. 

Obviously this time is very, very different from the past dozen years. We had the greatest crash in history and it came from the very top, not a second wave, as is historically the norm. 

The banking system is wiped out. There's no resiliency because the bubble expanded too far. Its surface became brittle. The surface collapsed instantly. There's no internal structure to hold anything together, so great was the leverage. All of the net capital in the world has been utterly destroyed. There's no capital. The system is insolvent. It is now taking 300-400 billion a week of cash injections into primary dealers, and countless billions of other support operations by the Fed and other central banks to keep the system barely functioning at all. 

We are in final and total systemic collapse. We may be starting a cyclical bull market, but I doubt that it will retrace even 50% of the first leg down. I believe that this is November 1929. The market will be higher this summer, but much lower by this time next year.  

Oh hell is that all! For a while there I was worried! 

 

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2 hours ago, SiP said:

But this is the case if you believe in total reset. I heard this story too many times to believe. I still think they will handle that, maybe from lower levels. Their ammo is unlimited. For me, Japan is the front runner. They have like 240 % debt to gdp ratio and still manage to keep their economy afloat. So what will happen to Japan will happen to eveyone in the end. US has low debt to GDP levels when compared to Japan. Actually Im more affraid about Italy and other south countries. After changes to policies ECB has room to print till 2023. There was a problem with CB capital (hit limit on germna debt), but they change the limit last month. So they could print an buy italian debt till 2023.

What happened with Japan the past 20 years (i.e., running up to 240%/GDP without seemingly any crisis) was supported, arguably, only by the commercial expansion of China and the greater recourse to leverage in the U.S to buy all its crap... an exquisite dysfunctional commercial relationship. The whole world got to play the game of allowing Americans to run deficits and accumulate debt which supported China's industrialization and all the commercial benefit that adhered to other G7 economies from that (as capex purchases).  And let's not forget that a whole lotta exuberance in the form of debt formation in mainland China the past 10 years also helped all parties to pretend their way through a vast circle-jerk of permanent prosperity delusion. Is the policy solution really going to be the Fed monetizing ever-escalating quantities of public debt, which the Treasury turns around and hands out in one way or another? 

This crisis is so freaking different. In 2008/09, they had to backstop the largest Wall Street banks, insurers, and automobile companies to limit down-stream collapse... and mop up foreclosures over multiple months.  It was morally repugnant ("No banker left behind"), but it was easy to administer.  The overnight shattering-from-below of the national small business ecosystem is not so easily repaired. 10 million out of work in only the first two weeks draws into question in my mind whether Federal "loans-to-grants" or anything else they may dream up has any chance at "fixing" this in a short term the down only 30% seems presently to discount. There are just too many incremental customers lost.  So, 90-day forbearance of commercial leases and mortgages and rent, and whatever else, only postpones the reckoning... it implicitly assumes that if we can just sort of cobble stuff for a quarter, then... what? Come July 1st, we will all come out of quarantine and fill the bars, restaurants, airports & hotels? I don't think so. 

How many freaking mortgages are headed for default & foreclosure in the next six months?

How much commercial retail is going to shutter without near-term hope for some new enterprise to move in?

We're going to monetize debt as a solution to years of leveraged excess?

I don't believe in miracles.

 

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12 hours ago, DrStool said:

Dr. Doom and Gloom Stool 

When does one officially stop being a Florida man?

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Market is short usd

Data in this report cover up to Tuesday Mar31 & were released Friday April 3

dxf.PNG

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A lot of people compare current market sell-off to GFC, but I think there is fundamental difference here. GFC was about constant betting (and failing) on bottoms in economic activity. This time we know exactly where will be the bottom - it will be lockdowns lift-off.

So obviously it's still betting, we don't know for sure when it happens, but a different one. Medical rather than economical, and we all know the exact trigger.

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In Italy, Going Back to Work May Depend on Having the Right Antibodies

Weighing an idea that might once have been relegated to science fiction, Italy once again finds itself in the unfortunate vanguard of Western democracies grappling with the coronavirus

https://www.nytimes.com/2020/04/04/world/europe/italy-coronavirus-antibodies.html#click=https://t.co/W1wyC38NSY.

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1 hour ago, SiP said:

A lot of people compare current market sell-off to GFC, but I think there is fundamental difference here. GFC was about constant betting (and failing) on bottoms in economic activity. This time we know exactly where will be the bottom - it will be lockdowns lift-off.

So obviously it's still betting, we don't know for sure when it happens, but a different one. Medical rather than economical, and we all know the exact trigger.

What you express is that what THEY want us to believe: That there will be a certain point when everything starts to get normal quickly. That is Trump propaganda. It won‘t happen. It will gradually start, very slowly. Nobody knows how deep the disruptions will be. From the folks I know for example in automotive supply it is a absolute catastrophe. See, tbe Trump story is, that everything was fine/excellent/brilliant in the economy and then came Corona. So when we erase Corona everything will be brilliant again. That is a total hoax. It wasn‘t the case that everything was brilliant.

When I said on Thursday that THE Corona low is already in I meant the low for this cycle in winter/early spring 2019/20. but I am absolutely sure that a much lower low will be seen in the next 12 months. That‘s what I think, I don‘t know it. It is my plan so to say. I sold everything in the last week of February and I am completely flat since then. I will stay completely out of the market till I get signals to go back in. That could be years from now. I trade based on monthly charts. 

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From the article above:

“As in all economic crises, the unforeseen is often the most devastating. Over the past decade, euphoric demand for debt in a yield-starved world has encouraged extreme financial engineering. The question now: How does that machinery react to an extreme shock?“

That‘s it. That is the question.

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1 hour ago, SiP said:

In Italy, Going Back to Work May Depend on Having the Right Antibodies

Weighing an idea that might once have been relegated to science fiction, Italy once again finds itself in the unfortunate vanguard of Western democracies grappling with the coronavirus

https://www.nytimes.com/2020/04/04/world/europe/italy-coronavirus-antibodies.html#click=https://t.co/W1wyC38NSY.

A lot of these tests are 90% accurate. So they will still leave a lot of infected people in the workforce. N95 masks are what they really need to be using. 

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