Financial topics

[aeden]

Agree Vin the snowflake Nation in action.
https://www.marklevinshow.com/2020/03/11/march-11-2020/

They will file insolvency and a taxpayer bailout is taxpayer stupid on taxpayer stupid for the taxpayer entitled stupid.

China and financial repression of the taxpayer was theft also.
In effect, financial repression via controlled
interest rates, directed credit and persistent, positive inflation rates is still an effective
way of reducing domestic government debts in the world’s second largest economy--China.
Thats right you been subsidizing them also all along.

Carmen M. Reinhart and M. Belen Sbrancia (March 2011)
"The Liquidation of Government Debt" National Bureau of Economic Research working paper No. 16893

The village idiots may start to figure out Trump was actually interested in us.
The only think he was done incorrect is to not have shot these thieving uniparty useful idiots.
As we noted correctly we said we will be lucky if we go sideways.

Did the 10 year crack.
No.

The Beast knows you and its a feature these dumb asses called Democrats that covet.

"Everything we do will seem alarmist. Everything we do after will seem inadequate" Sun Mar 08, 2020 11:50 am

[Higgenbotham]

The only reason companies are going to be looking for capital is to cover negative cash flow and the market is not going to look kindly on that.

Yesterday I opened my stock account and looked at the list of stocks I was trading over a year ago. At that time and previous, I was buying individual stocks on a short term basis and "smashing the bots", reporting the results here.

Yesterday every stock on my list (about 50 stocks) was down and the typical loss on the stocks on my list for just yesterday was 7 to 9 percent (more than the averages, in other words). I wondered why that was. The huge stocks that comprise the largest percentage of the indices like Apple have held up relatively well. I looked at the individual S&P 500 components and all but about 5 were down yesterday.

Back to the point of this post. During the downturn in the 4th quarter of 2018, with the S&P down 20% that quarter, I was still able to selectively buy stocks and "smash the bots". I looked at the intraday charts of several stocks I used to trade and focused on the area since the downtrend started last month. It would have been literally impossible to make any money trading these stocks. And many of the stocks were down 30 to 50 percent. This speaks to concepts John has mentioned many times - Generational Panic and Maximum Ruin. That is what I feel is happening now. Stock portfolios that people have spent decades amassing for retirement or whatever have been substantially ruined in one month.

[Higgenbotham]

Tonight the situation is even worse. The typical stock I'm looking at on my list is down 10 to 14 percent.

FedEx down 12.62%
IBM down 12.85%

These are typical. Any person with a 401K who is in buy and hold for retirement mode "for the long run" and owns "great American companies" like FedEx and IBM lost about 1/8 of their life savings just today. And this is typical, some are up a bit more and some down a bit more.

What I'm saying is the stock averages are masking how bad this really is under the surface.

[Higgenbotham]

So Fed says they will do another $500 billion in repo. This got back about 1/4th of the days loss, as of now anyway.
Seems like this means they need to print about $2 trillion per day to save the market. If they do that you can bet
gold would go up.

I heard an estimate today that the Fed would have to do $4.5 trillion in "asset purchases" just to stabilize the market.

Going back to what I posted about the BOJ now being under water on their ETF purchases, what is the Fed going to do if they purchase stocks and the stock prices fall below where they purchased. I would have to wonder, given the situation that the BOJ finds themselves in, as to whether the Fed would really go through with some idiotic plan like that. I think they would because I said years ago that Bernanke wouldn't be stupid enough to do QE at the scale that was actually done, but he went through with it anyway. Full speed ahead like Captain Ahab taking down the Pequod.

[John]

** 12-Mar-2020 World View: Fantasy untethered stock prices

> The only reason companies are going to be looking for capital is
> to cover negative cash flow and the market is not going to look
> kindly on that.

> Yesterday I opened my stock account and looked at the list of
> stocks I was trading over a year ago. At that time and previous,
> I was buying individual stocks on a short term basis and "smashing
> the bots", reporting the results here.

> Yesterday every stock on my list (about 50 stocks) was down and
> the typical loss on the stocks on my list for just yesterday was 7
> to 9 percent (more than the averages, in other words). I wondered
> why that was. The huge stocks that comprise the largest
> percentage of the indices like Apple have held up relatively well.
> I looked at the individual S&P 500 components and all but about 5
> were down yesterday.

> Back to the point of this post. During the downturn in the 4th
> quarter of 2018, with the S&P down 20% that quarter, I was still
> able to selectively buy stocks and "smash the bots". I looked at
> the intraday charts of several stocks I used to trade and focused
> on the area since the downtrend started last month. It would have
> been literally impossible to make any money trading these stocks.
> And many of the stocks were down 30 to 50 percent. This speaks to
> concepts John has mentioned many times - Generational Panic and
> Maximum Ruin. That is what I feel is happening now. Stock
> portfolios that people have spent decades amassing for retirement
> or whatever have been substantially ruined in one month.

> Tonight the situation is even worse. The typical stock I'm
> looking at on my list is down 10 to 14 percent.

> FedEx down 12.62% IBM down 12.85%

> These are typical. Any person with a 401K who is in buy and hold
> for retirement mode "for the long run" and owns "great American
> companies" like FedEx and IBM lost about 1/8 of their life savings
> just today. And this is typical, some are up a bit more and some
> down a bit more.

> What I'm saying is the stock averages are masking how bad this
> really is under the surface.

This is truly a remarkable time. I heard an analyst complain that
stock prices have become "completely untethered" from earnings,
because the only thing affecting stock prices now is the latest news
headline.

I would argue that stock prices have been "untethered" from earnings
for a long time. As you know, I focus on price/earnings ratio, to
keep things simple. Prior to the 1990s, the core value of a stock was
considered to be "tethered" to the P/E ratio, what today we would call
P/E based on "trailing earnings."

Starting with the 1990s tech bubble, that P/E ratio was producing
results that stock salesmen disliked, so they started using "forward
earnings" or "operating earnings." But unlike trailing earnings,
which are solid values backed up by audited financial statements,
forward and operating earnings are fantasy earnings, not backed by
financial statements, but backed by wishful thinking from public
relations departments.

An example of the fantasy is something that I hear frequently.
Someone will say that stock X has a p/e ratio of 80, and stock Y has a
p/e ratio of 40, and therefore stock Y is better. This is about as
meaningless as you can get.

This has given rise to complete doublespeak. Analysts will talk about
a historic average p/e ratio of 14, and say that if a stock's p/e
ratio is less than 20, then it's close to the historic average.
Actually, 14 is the historic average p/e ratio with trailing earnings.
I've estimated that the historic average p/e ratio with forward
earnings is around 8. So a stock with a p/e ratio of 20 is
astronomically overpriced.

So stock prices have been untethered to trailing earnings since the
1990s, and in the last few weeks they've even become untethered to
fantasy forward earnings. We might also say that they've become
untethered to sanity, and now, as prices fall, investors are literally
paying the price for have depended on fantasy forward earnings.

By the way, Vince, I just have to suggest that you be very careful
about the gold price. Nothing has changed from the past. Gold is
still in a huge bubble, with a trend value of around $500, and when
there's a crash, it will overshoot to $300-400. Just beware.

[John]

** 12-Mar-2020 World View: Asian stock prices

Watching Bloomberg TV, stock prices are crashing in Asia, with circuit
breakers already triggered in several Asian countries. (I believe
they mentioned Australia, Philippines, Hong Kong, South Korea, but I
could have that wrong.)

[vincecate]

By the way, Vince, I just have to suggest that you be very careful
about the gold price. Nothing has changed from the past. Gold is
still in a huge bubble, with a trend value of around $500, and when
there's a crash, it will overshoot to $300-400. Just beware.

John you think they could print trillions and it would not matter. The Fed is now going to perform the experiment, so we will soon see. I think there will come a point when the value of the dollar starts to go down. Then people getting really low interest rates on 30 year bonds will flee those bonds. From 1980 till now interest rates have been going down which makes bond prices go up and now people think it will always be so. However, after hitting zero interest rates really have nowhere to go but up, so bond prices will go down. I think this will be a shock and cause a generational change in attitude. Then the fed, who needs to keep interest rates down or the federal government will be bankrupt, will buy those 30 year bonds as people flee. But this will further devalue the dollar, causing more people to flee. I think we will get a feedback loop and panic that causes the value of the dollar crash (hyperinflation). I think we are getting close. I will be amazed if it takes more than 2 more years to start getting serious inflation (though I must admit I was surprised they got through the last 10 without more inflation). Anyway, if we get hyperinflation then gold will do very well. Time will tell.

Bitcoin has had a very bad day. Gold ended about the same. It was a amazingly good day for S&P puts. On net I am doing fine so far. I think the next couple weeks will still be very good for S&P puts. I hope I can get more Bitcoin while it is low. After May 12 ("the halving") I expect Bitcoin to have a good uptrend for a couple years.

[aeden]

https://www.zerohedge.com/markets/south ... ck-markets

puts are leaving a mark

guess who broke it

https://www.zerohedge.com/news/2019-06- ... atastrophe

If you read autocallables and dont understand it, and are willing to say you dont understand it,
then you are smarter than the majority of the derivative traders that play in this area.

cash puts warrants

premium payments to morg and other Houses as to save both asses is leaving a mark

the fed has no choice

[richard5za]

By the way, Vince, I just have to suggest that you be very careful
about the gold price. Nothing has changed from the past. Gold is
still in a huge bubble, with a trend value of around $500, and when
there's a crash, it will overshoot to $300-400. Just beware.

John you think they could print trillions and it would not matter. The Fed is now going to perform the experiment, so we will soon see. I think there will come a point when the value of the dollar starts to go down. Then people getting really low interest rates on 30 year bonds will flee those bonds. From 1980 till now interest rates have been going down which makes bond prices go up and now people think it will always be so. However, after hitting zero interest rates really have nowhere to go but up, so bond prices will go down. I think this will be a shock and cause a generational change in attitude. Then the fed, who needs to keep interest rates down or the federal government will be bankrupt, will buy those 30 year bonds as people flee. But this will further devalue the dollar, causing more people to flee. I think we will get a feedback loop and panic that causes the value of the dollar crash (hyperinflation). I think we are getting close. I will be amazed if it takes more than 2 more years to start getting serious inflation (though I must admit I was surprised they got through the last 10 without more inflation). Anyway, if we get hyperinflation then gold will do very well. Time will tell.

Bitcoin has had a very bad day. Gold ended about the same. It was a amazingly good day for S&P puts. On net I am doing fine so far. I think the next couple weeks will still be very good for S&P puts. I hope I can get more Bitcoin while it is low. After May 12 ("the halving") I expect Bitcoin to have a good uptrend for a couple years.

"The bulls walk up the stairs but the bears jump out of the window". Old and true trading wisdom. Problem is that the bears don't go straight down all the way but leap up again like hitting trampolines on the way down. Thus far its been a classic crash trajectory.
So I'm now anticipating the possibility of a SP 500 leg up before the next journey down. I don't know how far up. Lets see.
I would think that a lot of structural damage has been done with the current journey from peak 3385 to 2480 so that the real journey down a long, long way is almost a certainty. Final bottom could be what? Maybe 500 to 700?

[aeden]

https://www.youtube.com/watch?v=NpnB4fg ... e=emb_logo

weaponized borders