OT - Dow plunges 1,175 - worst point decline in history

[Tony T]

Originally Posted by Tony T

The problem though, IMO, is that Powell responds to it. The Fed was raising rates until potus tweeted he wanted rates lower (Dec 2018], and then Powell started lowering rates. Trump tweets he’s unhappy with Powell again (and again) and the Fed does a surprise 50 basis pt cut last week. Next week the Fed will be taking us to 0 Internet, and will start buying bond again.
This will not end well.

Originally Posted by Miller76

*FEDERAL RESERVE CHANGES FED FUNDS RANGE TO 0.00% TO 0.25%*

*BREAKING: Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program*

*FED WILL PURCHASE $500 BILLION IN TREASURY SECURITIES*

*FED WILL PURCHASE $200 BILLION IN MORTGAGE-BACKED SECURITIES*

*FED: 'IS PREPARED TO USE ITS FULL RANGE OF TOOLS TO SUPPORT THE FLOW OF CREDIT TO HOUSEHOLDS AND BUSINESSES'*

FED, REGULATORS PREPARE STEPS TO ENCOURAGE BANKS TO KEEP LENDING, PEOPLE SAY

*FED, REGULATORS MAY ANNOUNCE STEPS ON CREDIT AS SOON AS MONDAY, PEOPLE SAY*

Too soon. Will POTUS get his Neg Int Rates next?
This will not end well.

[Tony T]

At a news conference on Sunday afternoon, President Trump congratulated the Federal Reserve for its slashing rates to nearly zero.

“It makes me very happy,” he said.

[verticaldoug]

The FED had no choice. Mitch McConnell refused to have the senate in session over the weekend to work on the fiscal spending for this. So the only card left to play was monetary.

There is another saying 'Markets stop panicking , when GOV start panicking.'

The problem is this is a dangerous play, because FED just played most of their hand.

[Tony T]

S&P Futures down 5% (limit down)

“It makes me very happy,” Trump said Sunday evening from a press conference on the coronavirus at the White House. “I want to congratulate the Federal Reserve...They did it in one step...
I think that people in the markets should be very thrilled.”
.

[cloudguy]

Since when did the Fed's mandate become propping up the stock market?

[mtechnica]

The smell of desperation is in the air...

[Burnette]

Originally Posted by mtechnica

The smell of desperation is in the air...

Warren Buffet, 1986:

He added: “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors.”


He added: “Fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

[Rueda Tropical]

Stock futures are all limit down. The Fed's panic has completely freaked out the stock market. I'm guessing this was the opposite effect that they were going for.

[MattTuck]

Jesus. This is the monetary policy equivalent of hoarding toilet paper. Misguided and counter-productive.

[dustyrider]

.

[verticaldoug]

Originally Posted by Tony T

S&P Dn 7%, trading halted for 15 minutes (next circuit breaker after re-open is dn 13%)

The first circuit breaker is a floor in the overnight session.. After the market opens for regular trading tomorrow from 9:30, the market will be halted for 15 minutes then can trade down to second breaker. We have never triggered the second circuit breaker since it was set after 1987. The third circuit breaker is 20% which time market closes for remainder of the day.

I'll say again, this is the senate missing in action. The market would like fiscal not monetary.

[Tony T]

Are we “Thrilled”?

[Tony T]

Originally Posted by verticaldoug

The first circuit breaker is a floor in the overnight session.. After the market opens for regular trading tomorrow from 9:30, the market will be halted for 15 minutes then can trade down to second breaker. We have never triggered the second circuit breaker since it was set after 1987. The third circuit breaker is 20% which time market closes for remainder of the day.

I'll say again, this is the senate missing in action. The market would like fiscal not monetary.

Not what happened (twice) last week. Market opened, traded for about 5 or 10 minutes, S&P hit 7% dn and trading halted

In 1987 the circuit breakers were point based, later changed to % based

[cloudguy]

Economic data for China just came out. We are in for a world of hurt. This is economic armageddon. And the Fed just used all its bullets. But the monster didn't even flinch.

[verticaldoug]

Originally Posted by Tony T

Not what happened (twice) last week. Market opened, traded for about 5 or 10 minutes, S&P hit 7% dn and trading halted

In 1987 the circuit breakers were point based, later changed to % based

Yes once the regular opened at 9:30. The futures also hit circuit breakers in the over night session. There is only the first circuit breaker over night. It cannot trade below until regular market hours.