Economic implications of a SARS/Coronavirus outbreak

[Dona Ferentes]

and for some, less than predictable change:

COVID-19 is speeding up our shift towards a cashless future

The COVID-19 pandemic is accelerating Australia's shift towards buy now, pay later and other digital payment methods – at the expense of physical cash. But not everyone is happy about moving too quickly to a cashless society.

www.abc.net.au

 

[over9k]

Screaming start to the year, nothing to report other than the normal SNAFU.

About the only thing to keep an eye on is whether this gap:



Continues to widen or actually starts narrowing finally.

 

[over9k]

Oh and you know how there's an etf for everything now?

Well there's a new one just for inflation:



Investors looking to bet on rising inflation have a new exchange-traded fund with a ticker to match: PPI.

The AXS Astoria Inflation Sensitive ETF invests in a mix of stocks, ETFs, TIPS and commodities that historically have reacted to inflation. About 90% of the fund’s holdings are equities -- with oil and gas, banking, and iron and steel the top industry groups -- and roughly 59% are in U.S. assets.

The fund’s ticker symbol was aptly named after the producer price index, a popular inflation metric. It is the first ETF issued issued by AXS Investments and will be actively managed by Astoria Advisors founder and CIO John Davi.

Find it here: https://www.axsinvestments.com/axs-astoria-inflation-sensitive-etf/

 

[over9k]

There is of course absolutely nothing to glean from the fact that an entire ETF now exists literally just to hedge against/bet on inflation. Nothing to that at all. Move along.

 

[wayneL]

Significant move in bonds overnight... the next few days will be interesting. Will JP ride in to the rescue?

 

[qldfrog]

and for some, less than predictable change:

COVID-19 is speeding up our shift towards a cashless future

The COVID-19 pandemic is accelerating Australia's shift towards buy now, pay later and other digital payment methods – at the expense of physical cash. But not everyone is happy about moving too quickly to a cashless society.

www.abc.net.au

less predictable change was ironic DF?
Indeed Reset 101 as per fully public WEC policies..just conspiracies...

 

[over9k]

Significant move in bonds overnight... the next few days will be interesting. Will JP ride in to the rescue?

Correct:



And so today we see crypto do this:



But it's the yield curve we need to focus on as that tells us how much the market does or doesn't believe this "transitory" inflation narrative.

Once longer term yields bounce, i.e the whole curve moves upwards (flatter or not), then it's showtime.

I post (pay attention to) the 10 year for a reason

 

[over9k]

And on cue:



And just a few minutes later, it's even worse:



Alright gang, another post to put your thinking caps on with, what can we glean from these screencaps?

I've posted LOTS of hints in this thread already so this should be an easy one

 

[divs4ever]

COVID-19 loss of $44 billion is 3rd largest catastrophe cost to insurers - Howden

https://www.investing.com/news/econ...-catastrophe-cost-to-insurers--howden-2729811

QBE and SUN are on my top-up list but i doubt the price will slide far enough to attract me ( but i have been wrong before ESPECIALLY on insurers )

DYOR

 

[over9k]

COVID-19 loss of $44 billion is 3rd largest catastrophe cost to insurers - Howden

https://www.investing.com/news/econ...-catastrophe-cost-to-insurers--howden-2729811

QBE and SUN are on my top-up list but i doubt the price will slide far enough to attract me ( but i have been wrong before ESPECIALLY on insurers )

DYOR

Lots of legal BS to go on with on this I suspect. No shortage of "what defines a disaster" or whatever type cases I'm sure.

Also the exact kind of stimulus/bonds that get bought in this type of situation too so I suspect the money printers might come to the rescue here but that would also obviously depend on the legal case(s).

 

[over9k]

And we are on the MOVE ladies & gentlemen:

 

[over9k]

In case anyone's wondering what's happened, the fed minutes that were just released show that they're going to bring everything forward sooner than planned, a tacit admission that they think they've overcooked things/are worried.

So both inflation expectations and confidence in the people steering the ship both take a massive hit and thus so do markets.

Nasdaq closed 3.34% in the red. Largest one day drop since the snowstorm back in march of last year. Two solid red days in a row has my trigger finger itchy.

 

[over9k]

Rates still screaming:



Crypto's busted correlation over the past week or so but energy & banks have not:




Famous last words but I'm not seeing anything slowing this down yet, omicron is still causing supply chain hell and things like oil, microchips etc still have massive supply problems:

 

[wayneL]

Where do ya reckon rates have to go before everything blows the @#£& up?

....and where do y'all thing the Aussie peso is heading? Of particular interest to me at the moment, especially against GBP.

Most pundits are pretty bearish and that plays in my favour of true, but most pundits are always fracking wrong.

 

[Knobby22]

Its substantially to do with China.
Severe lockdowns trying to suppress the spread. Leadership unable to reset. This will cause severe shortages of goods and an inflation spike (bigger than now).

Something will have to give over there. It will be interesting to watch over the next couple of months. Hopefully China wakes up by then.

Once the dam bursts expect short term deflation and a stock market boom over a number of months as capacity ramps back.

China’s zero-COVID policy tests Xi’s iron grip and threatens the global economy

Beijing’s use of lockdowns to tackle coronavirus is hitting the Chinese economy hard and could fuel inflation around the world

www.theage.com.au

 

[over9k]

Where do ya reckon rates have to go before everything blows the @#£& up?

....and where do y'all thing the Aussie peso is heading? Of particular interest to me at the moment, especially against GBP.

Most pundits are pretty bearish and that plays in my favour of true, but most pundits are always fracking wrong.

Everything where?

 

[over9k]

Alright so yesterday we had our inflation, and today we have our stagnation:



And we're not even over the hump of winter yet.

 

[Smurf1976]

Everything where?

Everywhere.

The extent of the upwards move in markets without a decent correction combined with so much automated trading and public participation is such that in my opinion the correction when it arrives will be hard and fast and with basically everything caught up in it.

Timing I won't pretend to know but when it arrives it'll be a panic "sell everything" moment is my expectation with many good assets dumped along with the froth. This will be a buying opportunity for those prepared.

Just my crystal ball gazing. (Be warned it's a cheap one and is actually acrylic not crystal.... )

 

[over9k]

Everywhere.

The extent of the upwards move in markets without a decent correction combined with so much automated trading and public participation is such that in my opinion the correction when it arrives will be hard and fast and with basically everything caught up in it.

Timing I won't pretend to know but when it arrives it'll be a panic "sell everything" moment is my expectation with many good assets dumped along with the froth. This will be a buying opportunity for those prepared.

Just my crystal ball gazing. (Be warned it's a cheap one and is actually acrylic not crystal.... )

Mmmm I'm not so sure smurf, the stimulus et al is going sooner than expected but we have both winter and omicron at the moment too.

Seasonality makes a big difference here, same as once everyone's fought the omicron variant off. If we were looking at this situation at the start of october or something I'd be absolutely bricking it but there IS some light at the end of this particular tunnel.

Downside protection could (should) have simply been some LEAP puts before the end of the year but it's worth thinking about what the cause of the downside will be, which I think I've made it pretty obvious to be inflation.

Point is, even if you don't trade options, I've made quite a point of noting the energy and banking ETF's and now even the inflation themed ETF you can use to hedge with.

The other big one to think about is what data (inputs) is actually pooled to calculate inflation, which at its fundamental level is largely just commodities, hence the chart I posted a while back showing the big difference between the PPI and CPI.


Bottom line is that I think I've made it pretty obvious that I'm confident that the largest and most likely cause of any bear market is going to be inflation, so if you know how to make an inflation play (I should hope I've done an at least ok job showing everyone how to do that) then you'll be fine

 

[over9k]

On that topic, if anyone has any questions reference how to make an inflation play (if I've confused you over the past couple of pages or whatever) or why doing XYZ is how to do it then don't hesitate to ask, we're all here to make money after all