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

[verticaldoug]

Originally Posted by echappist

I'm a bit slow, could you explain the joke? Are we (the citizens of the U.S.) the audience?

Yes, we have a winner.
Even funnier since Ford was a fallen angel who's debt we just backstopped. Again

They don't even pretend to be concerned about moral hazard anymore. That ship sailed long ago.

We are all in for maintaining solvency everywhere now, which leads to two outcomes: 1. We become prisoners to debt and rates must remain low forever. 2. We get bad inflation from US dollar crashing.

Option 1 sucks see Japan for details, Option 2 really sucks see emerging markets for details.

Technically, we are now 1/2 a socialist country with socialized losses. Whether we still privatized gains, well, you know we do.

[CNY rider]

Originally Posted by Tony T

S&P now at 2,809

Long IWM May puts.
Starter position.

[mg2ride]

Originally Posted by mtechnica

Can anyone explain why the stock market seems to be sustaining this rebound? Do people think things are going to go back to normal soon? I’m assuming “they” are trying to keep things looking good until/by November, but what is the likelihood of this?

Because the professional analyst have it all completely wrong. This was a once in a lifetime driver for this "Crash" and terms like earnings and guidance will have nothing to do with it's rebound. We will likely see another "big" drop (otherwise known as the last, best buying opportunity) but it won't go lower than we have already seen. It will rebound back to within 10% of it's February high by elections and take another small surge after that. By this time next year our 401Ks will be back to all time highs (assuming you didn't panic out and miss the rebound) and those of us that threw some chump change into the market over the last month will EASILY see 100% returns on it.

You read it here 1st.

I have a reminder set for 1 year from now and I will reply to this thread so everyone can tell me how smart I am!

[Clean39T]

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[mg2ride]

Originally Posted by Clean39T

Bulls on Parade.

Someone has to rage against the Machine

[Clean39T]

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[mtechnica]

Originally Posted by mg2ride

Because the professional analyst have it all completely wrong. This was a once in a lifetime driver for this "Crash" and terms like earnings and guidance will have nothing to do with it's rebound. We will likely see another "big" drop (otherwise knowing as the last, best buying opportunity) but it won't go lower than we have already seen. It will rebound back to within 10% of it's February high by elections and take another small surge after that. By this time next year our 401Ks will be back to all time highs (assuming you didn't panic out and miss the rebound) and those of us that threw some chump change into the market over the last month will EASILY see 100% returns on it.

You read it here 1st.

I have a reminder set for 1 year from now and I will reply to this thread so everyone can tell me how smart I am!

I mean... maybe... but places of work have only recently shut down, and people are still losing jobs at astronomical rates. There was an article somewhere saying that 50% of people will have depleted their savings by May. If we have a consumer and service based economy (?) with 15-20% unemployment how will it bounce back so quickly short of some miracle cure that opens the economy back up this summer?

[HenryA]

Originally Posted by mtechnica

I mean... maybe... but places of work have only recently shut down, and people are still losing jobs at astronomical rates. There was an article somewhere saying that 50% of people will have depleted their savings by May. If we have a consumer and service based economy (?) with 15-20% unemployment how will it bounce back so quickly short of some miracle cure that opens the economy back up this summer?

That's whats the $2 trillion and the next trillion or two is supposed to solve. Pour enough gas on a wet blanket and it'll burn (until you run out of gas). But that's the short term solution.

[Ozz]

Originally Posted by mtechnica

I mean... maybe... but places of work have only recently shut down, and people are still losing jobs at astronomical rates. There was an article somewhere saying that 50% of people will have depleted their savings by May. If we have a consumer and service based economy (?) with 15-20% unemployment how will it bounce back so quickly short of some miracle cure that opens the economy back up this summer?

Head over to the "What do you miss most?" thread....there will be a lot of pent up demand once COVID is under control....people who didn't burn thru their savings are going to want to take vacations and go out to dinner. The people who use the "services" will have money to spend...the 15-20% unemployed are going to need to fill those jobs.

I'll be interested to see how many folks continue with the grocery delivery and pre-order/pick up model. This has a lot of appeal to me....wandering the store while my wife "shops"....is the 4th circle of hell for me.

[Clean39T]

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[HenryA]

Originally Posted by Ozz

Head over to the "What do you miss most?" thread....there will be a lot of pent up demand once COVID is under control....people who didn't burn thru their savings are going to want to take vacations and go out to dinner. The people who use the "services" will have money to spend...the 15-20% unemployed are going to need to fill those jobs.

I'll be interested to see how many folks continue with the grocery delivery and pre-order/pick up model. This has a lot of appeal to me....wandering the store while my wife "shops"....is the 4th circle of hell for me.

I have been getting a number of emails selling adventure/outdoor trips for this fall. More than usual and none of the last minute cancellation at a discount offers. Seems they have written off the near future and planning on getting it going later in the year. Of course now/soon is when you'll pay your deposit.

[veloduffer]

Originally Posted by Ozz

Head over to the "What do you miss most?" thread....there will be a lot of pent up demand once COVID is under control....people who didn't burn thru their savings are going to want to take vacations and go out to dinner. The people who use the "services" will have money to spend...the 15-20% unemployed are going to need to fill those jobs.

I'll be interested to see how many folks continue with the grocery delivery and pre-order/pick up model. This has a lot of appeal to me....wandering the store while my wife "shops"....is the 4th circle of hell for me.

"once COVID is under control" may take quite a while. To me, it means that hospitals will be readily able to admit new COVID patients with ventilators, testing and vaccine at their disposal.

I think folks will be reluctant to resume their normal level of activity, in large part due to interacting with folks who have pre-existing medical conditions (e.g. your parents, many folks have diabetes or cancer survivors).

Another issue is whether employment will come back. 57% of the US labor force were hourly workers, which is why the unemployment claims for the past 3 weeks were records. Some 7.7 million are now officially unemployed (collecting benefits) and this week there were 6.6 million in new claims. Within the next week, unemployment levels will exceed those in the Financial Crisis and may reach Great Depression levels (24%).

Not all those jobs will come back, especially if activity is muted. Most jobs are in service industries, where there is alot of people contact. It is likely that unemployment may hover near 10% for the next year or two, which is the Financial Crisis level.

And this time, more folks have less savings (only 50% of US households have savings) and more debt than the Financial Crisis. And companies have more debt as well. All downturns expose folks and companies that are leveraged and spending will be dampened as the focus will be reducing debt.

Note, pandemics often occur in waves, so there may be a 2nd wave this fall.

[mg2ride]

Originally Posted by mtechnica

I mean... maybe... but places of work have only recently shut down, and people are still losing jobs at astronomical rates. There was an article somewhere saying that 50% of people will have depleted their savings by May. If we have a consumer and service based economy (?) with 15-20% unemployment how will it bounce back so quickly short of some miracle cure that opens the economy back up this summer?

My methodology of evaluating the stock market is referred to as the G.I.Joe with the Kungfu grip methodology, so take it with a grain of salt. Pork Bellies are going up!

From late Feb to Mid March the Dow saw a 37% drop in just a tad over a month.
In that month there was real loss of jobs, income, etc but we already know that it is mostly only temporary. Maybe 2 months, 6 months or even a year. But still temporary. The infrastructure and work force are all still in place.

Clearly not everything is coming back and I don't want to down play the struggles that this will present for countless people. But our will to live AND prosper is strong. Some very large percentage is going to be right back to work and play, very quickly.

Is anyone really surprised that the previous and next quarters earning/profit/unemployment/whatever reports are going to be the horrific.

I have no Fn clue what actually drives the market but it is not metrics. The market drives the metrics, not vice versa.

P.S. I have been VERY wrong about almost every aspect of the Corona event in the last 2 month. I may very well be again.

[Ozz]

Originally Posted by Clean39T

Maybe, but I also see huge demand destruction in tourism, air travel, business conferences, sporting events, etc. and ad nauseum. The hit to government coffers is huge too - all of the unemployment checks going out, lack of sales taxes flowing in.

I mean, let's stay hopeful - but the reality is the "real" economy is in shambles right now.

I think overseas travel is really going to take a hit....people will still be cautious and maybe do more domestic trips.....time to buy Disney? That also keeps the $$ at home.

State and local govt - Federal Reserve established a $500 billion Municipal Liquidity Facility to provide funding to state and local governments. Sounds similar to PPP and Main Street Lending programs already put in place.

I also see the powers that be mortgaging the the country as much as they can to show economic growth before November...that is what worries me.

Comment earlier about the audience buying the car for Oprah resonated with me...

[HTupolev]

Originally Posted by veloduffer

"once COVID is under control" may take quite a while. To me, it means that hospitals will be readily able to admit new COVID patients with ventilators, testing and vaccine at their disposal.

I think folks will be reluctant to resume their normal level of activity, in large part due to interacting with folks who have pre-existing medical conditions (e.g. your parents, many folks have diabetes or cancer survivors).

Yep.

A lot of people seem to be visualizing that, once we "flatten the curve" with this wave of shutdowns, we've beaten COVID. But that's not how this works: all these shutdowns are doing is reversing the damage we did by waiting so long before adopting distancing measures, and getting to where we can start to catch up on testing/tracking. The virus will still be out there, and nearly 100% of the population will still lack immunity. If we go fully back to normal, new hotspots will appear and we'll quickly be back to where we were in early March.

Until an existing widely-available low-risk treatment shows extreme efficacy in controlled studies, or a vaccine is developed and distributed, the only obvious exit strategy to return fully to normal is to just give up and let COVID run a natural course (i.e. potentially several million deaths).