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DrStool

Social Unrest, Pandemic, Depression, Threat of Martial Law - Bullish! May 36, 2020

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Just ran the withholding taxes and surprise surprise, it supported the small rebound in the jobs number.  

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5 day cycle projection of 3200 done. 

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1 hour ago, DrStool said:

Just ran the withholding taxes and surprise surprise, it supported the small rebound in the jobs number.  

could that be because of PPP and other bailout programs? otherwise the great shutdown was really a martial law expansion :blink2:

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There's also been a tiny uptick in bill rates this week. Not meaningful yet, but could be if it keeps up. 

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25 minutes ago, potatohead said:

could that be because of PPP and other bailout programs? otherwise the great shutdown was really a martial law expansion :blink2:

Important to keep the size of the rebound in perspective. The jobs chart is pretty clear on that. It's meaningless in the big picture. 

LEE'S FREE THINKING

Jobs- Big Picture and Good News/Bad News Market Reaction in Stocks and Bonds

by Lee Adler •  • 0 Comments

Nonfarm Payrolls- Not Seasonally Adjusted - May 2020

Total nonfarm payrolls as reported by the Trump Regime Bureau of Liar Statistics rose 2.25 million on a not seasonally adjusted basis, before downward revisions for March and April. This is based on a comparison of the year to year change for May vs. the year to year change for April.

Hidden beneath the headlines was a lot of bad news.

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Fed unveiled that in the coming week it would purchase "only" $4BN per day, or a total of $20BN for the week

If Market keeps going up then Fed will be stop buying.

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I don't think we can conclude that the lockdowns were an expansion of martial law. They saved countless lives, and now that they've been lifted, the 3 largest states, CA, TX, and FL are seeing new cases trend to new highs. Deaths will follow, although even without a vaccine, the doctors are figuring out ways to keep some victims alive. 

In states where the lockdowns were extended the longest, the case numbers have continued to decline.  

Croatia had a very tough lockdown. It worked. Croatia hasn't had any new cases to speak of for about 10 days now. Same in most of eastern and central Europe. 

Sweden, on the other hand, is an ongoing catastrophe. 

Whether it be in the US, or anywhere else in the world. The earliest, toughest lockdowns worked, as the epidemiologists predicted. 

sweden.png

 

den.png

 

swedeath.png
4,562 Dead

 

dendeath.png

582 Dead

 

Norway and Finland had even better comps.  

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7 minutes ago, jp6 said:

Fed unveiled that in the coming week it would purchase "only" $4BN per day, or a total of $20BN for the week

If Market keeps going up then Fed will be stop buying.

The Fed's problem is the bond market, not stocks. 

We’ve watched this bizarre scene unfold where the Fed is gradually reducing QE, the Treasury keeps pounding the market with new supply and stock prices keep rising. Here’s how they did it, and what changes ahead will force a change in the outlook.

Subscribers, click here to download the report

Not a subscriber yet?

Get this report and access to all past and future reports risk free for 90 days! 

 

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What I meant by martial law expansion was simply referring to the so called job market expansion during a time of lock downs. Questioning how in the hell can there be massive job creation while jobless claims continued to grow.  Either the job losses are for real or the stories of businesses folding and mass layoffs occurring were a joke according to this last jobs report. 

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I do believe that government has the right to protect public welfare and save lives. Protecting the public from pandemics and death is a legitimate function of government. The Trump Regime has failed spectacularly in that regard. Other authoritarian regimes also failed spectacularly. Russia, Brazil, Turkey are examples. Central European hybrid regimes, and Scandinavian democracies, all with tough lockdowns did well, and they are getting their economies up and running again.

The US will have a difficult time recovering if a significant percentage of the population is living in fear, afraid to leave their homes. 

We've had pandemics before, and we know what to do to minimize their economic effects.

We failed miserably this time.  

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5 minutes ago, potatohead said:

What I meant by martial law expansion was simply referring to the so called job market expansion during a time of lock downs. Questioning how in the hell can there be massive job creation while jobless claims continued to grow.  Either the job losses are for real or the stories of businesses folding and mass layoffs occurring were a joke according to this last jobs report. 

Some people did go back to work in May. The tax collections support that. But again, the numbers are tiny in comparison to the total job losses. At this point, it could be either the beginning of stabilization at Depression levels, or it could be just a dead cat bounce, with another leg down ahead. 

But either way I think that most of the jobs that were going to disappear, already have. There may be some recovery ahead, or at least there will be fewer job losses. 

All of which is irrelevant to the financial markets. The belief in a recovery, with investors selling bonds is a catastrophic notion for the financial system. Report coming shortly. 

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37 minutes ago, DrStool said:

The Fed's problem is the bond market, not stocks. 

We’ve watched this bizarre scene unfold where the Fed is gradually reducing QE, the Treasury keeps pounding the market with new supply and stock prices keep rising. Here’s how they did it, and what changes ahead will force a change in the outlook.

Subscribers, click here to download the report

Not a subscriber yet?

Get this report and access to all past and future reports risk free for 90 days! 

 

I just don't think so. 

Bond selloff was on the card, They have fixed long term bond

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35 minutes ago, DrStool said:

Some people did go back to work in May. The tax collections support that. But again, the numbers are tiny in comparison to the total job losses. At this point, it could be either the beginning of stabilization at Depression levels, or it could be just a dead cat bounce, with another leg down ahead. 

But either way I think that most of the jobs that were going to disappear, already have. There may be some recovery ahead, or at least there will be fewer job losses. 

All of which is irrelevant to the financial markets. The belief in a recovery, with investors selling bonds is a catastrophic notion for the financial system. Report coming shortly. 

I agree with you. In a financially overleveraged economy dependent on zero/low rates, a true move up in interest rates will put a lot of pressure on the real estate and construction sector which has been the main driver in many local economies.  

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32 minutes ago, jp6 said:

I just don't think so. 

Bond selloff was on the card, They have fixed long term bond

The Primary Dealers are overloaded with bond inventory with record high leverage and record low hedging. Their mispositioning in 2008 is what caused the crash that September. 

This is the crux of my research.  I have an obligation to make everyone here aware of the facts. Whether you choose to partake of them or not is your prerogative.  

To the degree that it’s true, the idea that the US economy is recovering is a catastrophic notion for the financial markets.

Surprisingly, the withholding tax data supports the idea that a small number of jobs did come back in May. The problem is that the bond market reacted as if a big recovery is on the way. Investors and traders, made a mountain out of a molehill.  Bond prices plunged and yields soared. This is exactly the opposite of what the Fed and dealers wanted and needed. If it’s not reversed immediately, to say that it will be problematic would be an understatement.

Here’s what you need to know.

Subscribers, click here to download the report.

Get this report and access to past reports.  Read Lee Adler’s Liquidity Trader risk free for 90 days!

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Stopped in to thank Doc for patching me up...good as new.

Picked up positions on the short side(primarily SH, keeping it simple for now), and going long gold for a short term trade...

I'll be dropping in from time to time as long as the doors are open...😁

Have a GREAT weekend...

The CoinGuy

 

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