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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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To the initial question.

No, I don’t see liquidity chasing commodities here.

Not even certain that all the kings horses and men can spin enough liquidity for the task at hand.

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Honored Advisor

Re: One might think that a 35% decline in GDP would ....

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sd.......I'll waste a few electrons...

You describe with such hatred the country in the world to which ALL of the flight money is fleeing too.....something to consider.

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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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BA's got a special goin' on flags.

The senior currency always rises in a deflationary shock.

Repeating myself, Adam Smith did not say that there is an unlimited amount of ruin in a nation. Faux patriotism and religosity, and slogans as a substitution for sound economic thinking won't get us out of this.

But to the original point, yes, our late stage financialized capitalism is sick.

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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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But Ken, don't throw your Very Serious Person hat out of the dress up closet just yet.

You may need it for lectures on the evils of government debt if the D's win in the Fall.

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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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On the one hand it is always very difficult for Fed action to trickle down to main street- particularly here when Main Street is shuttered. I do assume that if the Fed ends up owning a substantial portion of the stock and corporate bond markets* they will own it forever- like Govt's and MBS** they could never unload them. 

I've never fully been able to wrap my head around whether that matters- if they create money out of thin air to buy stuff, what is the ultimate impact?

The larger problem is really on the fiscal side. But this is like the last time a Republican Admin was playing Captain Hazeltine and drove the Exxon Valdez onto the rocks- things happen fast and it is almost impossible to roll out wise policy quickly enough. And there rally aren't a lot of legal pathways open- Congress and the President could open some but they'd have to have some wisdom and agree, so don't hold your breath.

Even if People Who Matter get bailed out, tens of millions of Americans are going to set back for a decade or more. I doubt there are enough luxury goods out there to offset the general drag on consumption.

That will probably be seen in the demand for higher cost food items such as meats and milk. Other than providing immediate assistance to produce and specialty producers who need it now, the most urgent farm program might be a sharp temporary expansion of SNAP.

*a problem in that they're mostly buying investment grade- credit spreads are widening and the immediate problems will most all come in the junk category.

** they did unload a fair bit of the mortgage backs, Treasuries not so much.

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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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Barring heavy government intervention, ABC correction in wave 4 likely over. Heading for wave 5 down, a more tradeable low.

Although I strongly doubt it will be the final low.

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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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Calling Sean Spicer to clean the market puke off Grandpa Ranty's Gucci's.

Red Alert.

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Senior Contributor

Re: One might think that a 35% decline in GDP would ....

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They must have known something was up couple years ago when they changed the bankruptcy laws.

 

Floyd M I’d look for someone else to quote.👎🏻

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Senior Advisor

Re: One might think that a 35% decline in GDP would ....

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A poke above yesterday's highs in the indices would have a nice completed look to it.

Come to Papa.......

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