The Trump recession

[Phil1111 910]

US stock futures hit 'limit down' after Fed cuts interest rate to zero

Investors were unassuaged by news that the Federal Reserve is cutting interest rates to zero. US stock futures dropped 5% Sunday evening, hitting the "limit down," meaning they can't fall any further.

Dow (INDU) futures plummeted and were last down 1,041 points, or about 4.5%. S&P 500 (SPX) futures were down about 4.8% , while Nasdaq (COMP) futures were down 4.5%...

"I don't think [the Fed] would have done this unless they felt the financial markets were at significant risk of freezing up tomorrow. They're very concerned the financial markets won't work. So I don't know how the markets take solace in this." Mark Zandi, chief economist of Moody's Analytics, told CNN Business."

It appears as if trump is doing his best to get investors the best buys on low stock prices as possible. Sale prices in effect all next week.

Investors have been advised not to walk on the sidewalks in the Wall street area. Not because of Coronavirus. But instead brokers working for under-capitalized firms and failures to meet margin calls. Could result in jumping broker syndrome.

[gowlerk 1,905]

On a Sunday, the US Federal Reserve slashed interest rates to appease the Dear Leader. This foolish move will be a signal to the world that they can't trust the Fed any longer. Just watch the carnage now.

[airdvr 197]

T-minus 13 minutes.  Let's see what fun is in store for today.

[Phil1111 910]

3 minutes ago, gowlerk said:

On a Sunday, the US Federal Reserve slashed interest rates to appease the Dear Leader. This foolish move will be a signal to the world that they can't trust the Fed any longer. Just watch the carnage now.

I disagree. Obviously trump gets off on Fed bashing. He threatened to remove the FED chairman last week. If he did that there would be a couple percent drop in US markets immediately.

The actions by the FED are necessary because there are liquidity issues in US markets. Every asset is being dumped from bonds, stocks, to gold. All to raise cash either for margin, debt, or fear. Investors, institutions and corporations are having cash flow issues because of reduced share prices. 

Its important for the FED to look ahead in crisis even though they traditionally have a look behind reaction to economic numbers. I doubt the Chairman is in the least bit intimidated by the orange idiot. As soon as he's out of a job his salary will triple with any of the big banks or Wall Street investment firms.

[gowlerk 1,905]

3 minutes ago, Phil1111 said:

I disagree. Obviously trump gets off on Fed bashing. He threatened to remove the FED chairman last week.

 

3 minutes ago, Phil1111 said:

I doubt the Chairman is in the least bit intimidated by the orange idiot.

You are probably right, but remember the Chairman only has one vote. When the POTUS makes demands and they are almost instantly met over the weekend the world is going to take notice. The credit markets are going to be very difficult to manage as you say.

[Phil1111 910]

2 minutes ago, gowlerk said:

 

You are probably right, but remember the Chairman only has one vote. When the POTUS makes demands and they are almost instantly met over the weekend the world is going to take notice. The credit markets are going to be very difficult to manage as you say.

Technically the Fed chairman can only be fired "for cause". Many people believe that the FED actions a week ago and yesterday are all QE. Thats not true, QE is only about 20% of everything thats been announced. His actions did stabilize 10 and 30 year US bonds last week.

Another factor was the release of China's 2020 numbers Saturday:

"China suffered an even deeper slump than analysts feared at the start of the year as the coronavirus shuttered factories, shops and restaurants across the nation, underscoring the economic fallout now facing the global economy as the virus spreads around the world.

Industrial output plunged 13.5 per cent in January and February from a year earlier, versus a median estimate for a three per cent contraction. Retail sales fell 20.5 per cent in the period, compared to a projected four per cent fall. Fixed-asset investment dropped 24.5 per cent, versus a forecast two per cent decline. The unemployment rate jumped to 6.2 per cent, the highest on record."

Those are very serious numbers for China which previously had been powering ahead at +6% GDP growth. Slightly over twice US growth. China had a very robust financial stimulus plan in effect.

[kallend 1,623]

https://www.npr.org/2020/03/16/816382835/stocks-shudder-despite-emergency-measures

Has anyone noticed a pattern in stock market crashes?

Hoover (R)

Reagan (R)

GWB (R)

Trump (R)

[airdvr 197]

And yet when the markets are good under an R you think it was a Dem thing.

[kallend 1,623]

Great "buy" opportunity for stocks, right?  Just like it was last week.

[kallend 1,623]

1 minute ago, airdvr said:

And yet when the markets are good under an R you think it was a Dem thing.

Clinton and Obama were better for stocks than GWB or Trump.

And, of course, R's give lip service to the national debt but the greatest % increases have been under R administration.

[headoverheels 291]

9 minutes ago, kallend said:

Great "buy" opportunity for stocks, right?  Just like it was last week.

We are still above where we were last Thursday, and climbing, but I don't expect that to last long.

[JoeWeber 2,297]

On 3/14/2020 at 12:24 PM, airdvr said:

Not going to get into a values argument with you.  When this covid-19 scare has crashed the world's economies and you've nothing to haul in your truck I hope you can eat your values.

You are hilarious. What are you going to eat when no one bids on your listings?

[gowlerk 1,905]

14 minutes ago, headoverheels said:

We are still above where we were last Thursday, and climbing, but I don't expect that to last long.

I'm guessing that there will be much volatility but that the bottom reached last week will be close to the floor. This event will be disruptive, but not world shattering and hiding in gold is never a good long term strategy. Where else is there to invest in the long run that is better than the world's strongest economy? Especially with a change to competent leadership in the cards.

[airdvr 197]

1 minute ago, JoeWeber said:

You are hilarious. What are you going to eat when no one bids on your listings?

Exactly my fear.  I was on a conference video call with Gary Keller (Keller Williams) this morning. He predicts it won't be as bad as 2009-10 if it doesn't drag on for more than 4 weeks...who knows.

[gowlerk 1,905]

2 minutes ago, airdvr said:

Exactly my fear.  I was on a conference video call with Gary Keller (Keller Williams) this morning. He predicts it won't be as bad as 2009-10 if it doesn't drag on for more than 4 weeks...who knows.

The pandemic will drag on for many months. The economy will adapt much sooner than that. In the end just what you said. Who knows?

Edited March 16, 2020 by gowlerk

[airdvr 197]

Just now, gowlerk said:

The pandemic will drag on for many months. The economy will adapt much sooner than that. In the just what you said. Who knows?

He's referring to the closing of retail establishments.  Small biz is going to take it in the pooper...just a question of how deep.

[SkyDekker 1,121]

5 minutes ago, airdvr said:

Exactly my fear.  I was on a conference video call with Gary Keller (Keller Williams) this morning. He predicts it won't be as bad as 2009-10 if it doesn't drag on for more than 4 weeks...who knows.

If we successfully flatten the curve, we purposely lengthen the duration of the pandemic.

[Phil1111 910]

2 minutes ago, airdvr said:

Exactly my fear.  I was on a conference video call with Gary Keller (Keller Williams) this morning. He predicts it won't be as bad as 2009-10 if it doesn't drag on for more than 4 weeks...who knows.

People make the largest investment in their lives when they are confident in their personal and regional economic safety. Numerous optimistic guesses have a vaccine available in 18 months. So 24 months for confidence that this pandemic is history.

A relative phoned me today about how to get out of a listing agreement.

[airdvr 197]

Just now, Phil1111 said:

People make the largest investment in their lives when they are confident in their personal and regional economic safety. Numerous optimistic guesses have a vaccine available in 18 months. So 24 months for confidence that this pandemic is history.

A relative phoned me today about how to get out of a listing agreement.

  My policy on that is if you want out it's no problem.  One thing Keller stressed is even in 2009-2010 there were still over 4 million residential transactions each year.  In 2019 I sold over 6 million dollars...I doubt I'll do that this year.

[Phil1111 910]

13 minutes ago, airdvr said:

  My policy on that is if you want out it's no problem.  One thing Keller stressed is even in 2009-2010 there were still over 4 million residential transactions each year.  In 2019 I sold over 6 million dollars...I doubt I'll do that this year.

Well clearly this is a marketing opportunity for you. In you next client mailout of your newsletter, pens, notepads,crap etc. You include a offer of free delivery of necessities for self-quarantining clients. Because the health and safety of your clients is all that matters in times like this.

That explains the headache. Some client probably asked you to cut a $1,000,000 listing commission from 7% to 6%. Assholes!

[billvon 2,395]

1 hour ago, airdvr said:

And yet when the markets are good under an R you think it was a Dem thing.

It will be interesting to see how the Trump supporters spin this.  For years we've been hearing "the bottom line is the stock market is doing well, and therefore Trump is a success.  End of story."  Trump has already tried to blame Obama for the failed pandemic response and resulting stock market crash; I expect we will see a lot of that.

[yoink 321]

1 hour ago, airdvr said:

He's referring to the closing of retail establishments.  Small biz is going to take it in the pooper...just a question of how deep.

My boss is already talking about 25% paycuts across the board.

[kallend 1,623]

7 minutes ago, billvon said:

It will be interesting to see how the Trump supporters spin this.  For years we've been hearing "the bottom line is the stock market is doing well, and therefore Trump is a success.  End of story."  Trump has already tried to blame Obama for the failed pandemic response and resulting stock market crash; I expect we will see a lot of that.

Natixis Investment Managers has the numbers since 1976. It found that the average annualised return under Democratic presidents has been 14.3 per cent, against 10.8 per cent under Republicans. A compounding of the parties’ market performance shows that a continuously held Democratic portfolio outperforms a continuously held Republican portfolio by even more: the Carter-Clinton-Obama Democratic presidencies produced an average annualised return of 14.9 per cent, against 4.9 per cent for the Republican Reagan-Bush Snr-Bush Jr-Trump presidencies.

[Phil1111 910]

4 hours ago, kallend said:

Natixis Investment Managers has the numbers since 1976. It found that the average annualised return under Democratic presidents has been 14.3 per cent, against 10.8 per cent under Republicans. A compounding of the parties’ market performance shows that a continuously held Democratic portfolio outperforms a continuously held Republican portfolio by even more: the Carter-Clinton-Obama Democratic presidencies produced an average annualised return of 14.9 per cent, against 4.9 per cent for the Republican Reagan-Bush Snr-Bush Jr-Trump presidencies.

The Dow closed at 19,827.25 on trump's Inauguration Day, Jan. 20, 2017. Its 20,188.52 today so up 361.27. That would be a second or two of trading tomorrow to wipe out his "achievements".

There is no point in speculating on how much more he can drive the economy down til Jan 20, 2021.

[headoverheels 291]

33 minutes ago, Phil1111 said:

The Dow closed at 19,827.25 on trump's Inauguration Day, Jan. 20, 2017. Its 20,188.52 today so up 361.27. That would be a second or two of trading tomorrow to wipe out his "achievements".

There is no point in speculating on how much more he can drive the economy down til Jan 20, 2021.

With the Bay Area shelter in place order that came out today, to last 3 weeks, I think that the market is in for another 20% drop.  My wife happened to stop by the grocery store on the way back from a doctor appt, and it was a madhouse.  She sent a photo -- no garlic/onions/whatever, line 2/3 of the way across the store.  After that, she went to CVS (pharmacy), but nowhere to park in the entire lot.

And panic ensues

We were planning to go to her ski condo (to snowshoe -- lifts are closed) tomorrow, but may try to get out before the midnight cutoff tonight.  Maybe shopping will be better up there.