How Far Will The Market Fall?

[PZ99]

Raise the tax free threshold to $22,000 or even $25,000. That will give some relief to those on low incomes, part-time and casual workers and those who reluctantly participate in the "gig economy".

Yep, that works for me.

On another note about the market fall > ASIC Puts Brakes On High Frequency Trading

https://www.sharecafe.com.au/2020/03/16/asic-puts-brakes-on-high-frequency-trading/

 

[Smurf1976]

the issue is office works has run out of gear, the mining companies are running out of gear, shops are running out of gear.

I’m sitting in a supermarket car park right now, third one I’ve been to this evening.

I’m not hoarding, just trying to do the shopping.

A degree of substitution is necessary due to lack of stock. I’ve replaced frozen peas with corn chips and I’ve replaced fish with turkey. Such is life.

 

[gartley]

Looks like another big one setting up tonight in the US S&P Futures. This one might be the final thrust down before a rally finally sets up

 

[tech/a]

I agree I think we a very close to a period of consolidation
Close to a bottom
May spike a little lower at sometime.

 

[HelloU]

I’m sitting in a supermarket car park right now, third one I’ve been to this evening.

I’m not hoarding, just trying to do the shopping.

A degree of substitution is necessary due to lack of stock. I’ve replaced frozen peas with corn chips and I’ve replaced fish with turkey. Such is life.

Crazy times indeed. They ran out of frozen peas before running out of corn chips ? Oh dear.

 

[aus_trader]

Thanks aust_trader. It all starts from one line.... But as we can see even fake markets give us clues

By the way your support level is holding and market up today:


Not sure how far it'll rally...

 

[aus_trader]

Also despite tourism and airlines and education getting hit, Iron ore prices are still at 90+USD, in fact up from 80+usd in Feb when china was first hit and had lockdown. Hasnt crashed at all unlike oil prices.

It's not because Fe Ore is some magical commodity. Here is the reason, for those who are interested:


https://www.sharecafe.com.au/2020/0...-provides-new-warning-on-iron-ore-production/

 

[aus_trader]

Yes some of the suggested changes, would look pretty scary at the moment, but that is history.
Imagine if there had been $50billion poured into stimulus, in the last two years as the media have been screaming for.
How many of the companies would be geared up and no materials, while they wait to see if they have a workforce or not, it certainly would be interesting. IMO
But it is all speculation and the Government does have the money, they didn't spend, to spend now when a real crisis has hit. More luck than good judgement though.
Also IMO the handouts make everyone feel good, but in reality wont do much, people are buying plenty of medicine and food.
I don't think they will go out to a restaurant or buy a t.v or go buy clothes. I think they will put it in the draw in case they need it.
Just my opinion.

Maybe it's good the Govt held off doing a spending spree earlier. As you guys have said it would have gone to a waste spending spree or to inflating markets that were already having hot air in them. I think the stimuli they are providing now is not a bad idea as some people in our community really need it:

https://www.msn.com/en-au/news/aust...aussie-industries/ar-BB11iN0J?ocid=spartanntp

 

[OmegaTrader]

I, along with so many others, I thought that the can was just kicked along the road from 2008.

Supposing they managed to kick the can even further down the road this time - I'm sceptical that they can actually do it but who knows, they just might do it again - what then?

An even bigger financial crisis somewhere further down the track?

If gov debt to GDP can be around 40% to GDP why can't it be 100% or 200% with QE and low/neg interest rates. Stimulus Stimulus Stimulus

There is no where to go in my opinion. How can the government help?

Interest rates can't be dropped anymore, most countries including most of Europe and the USA are running large deficits.

Marginal businesses will go broke. There is no way to save them.
The financial system will be heavily stressed, banks will have runs, it's not going to be pretty.

Trump want almost .8-1 trillion stimulus democrats want stimulus .7 trillion stimulus also. If something goes through. Again if gov debt is 100% why cant it go higher to 200%. Central bank can monetise the debt. Don't need to pay it back today just keep the economy going.

Can the political process pump out enough stimulus at the right time is the question?

Yes some of the suggested changes, would look pretty scary at the moment, but that is history.
Imagine if there had been $50billion poured into stimulus, in the last two years as the media have been screaming for.
How many of the companies would be geared up and no materials, while they wait to see if they have a workforce or not, it certainly would be interesting. IMO
But it is all speculation and the Government does have the money, they didn't spend, to spend now when a real crisis has hit. More luck than good judgement though.
Also IMO the handouts make everyone feel good, but in reality wont do much, people are buying plenty of medicine and food.
I don't think they will go out to a restaurant or buy a t.v or go buy clothes. I think they will put it in the draw in case they need it.
Just my opinion.

50 billion stimulus, another 50 stimulus, how about another 50 stimulus they can go all day, loans or spending or tax cuts. A second stimulus should be coming after this 17 b approx one. They can go all day if the political will is there and RBA mates are there also to monetise debt and provide liquidity if needed.

-Will stimulus be enough and how much will it counteract the downside and spillover multiplier?
-We don't have mass Corona spread by local population yet, confidence is bad now, what will happen to confidence when it actually does?
-Who/ what organisations is going to spew up and sell assets because they need liquidity further driving falls?
-How many will spew if asx 4800 is pushed or 2300-2400 sp500

 

[JJADV]

The real bottom will be just after company reporting.. Right now its panic and speculation, once the numbers are in, and down, the real bottom will show itself..

 

[moXJO]

-How many will spew if asx 4800 is pushed or 2300-2400 sp500

Personally I'm hoping we break 4800 this week (sympathize with you poor bastard with losses though).

Hearing about the stupidity going on in the real world; I think everyone here is still too sensible. No real panic . So we must be due to test those limits and drop down again.
When you guys start crying for your mummy, then I might consider that we hit the bottom.

I haven't really looked at a chart since my last call though. I'll also probably buy all the way down on stocks I want.

 

[wayneL]

On the money IMO. I wonder if our nation wakes up.

 

[OmegaTrader]

On the money IMO. I wonder if our nation wakes up.

Can you please explain to me how the economy is over?

 

[UMike]

Maybe it's good the Govt held off doing a spending spree earlier. As you guys have said it would have gone to a waste spending spree or to inflating markets that were already having hot air in them. I think the stimuli they are providing now is not a bad idea as some people in our community really need it:
View attachment 101431
https://www.msn.com/en-au/news/aust...aussie-industries/ar-BB11iN0J?ocid=spartanntp

As a Restaurant owner prices have at times more than doubled. Customers halved. Not many will survive.

 

[wayneL]

Can you please explain to me how the economy is over?

He said was the economy *as we know it*

What I interpret this to mean is that business as usual after this event will most likely not possible. There will be changes. Exactly what shape they will take I cannot predict, but there are several views from different economists out there.

I couldn't even tell you whether those changes will be positive or negative, we shall just have to see, but I am certain it will be different.

 

[rederob]

The real bottom will be just after company reporting.. Right now its panic and speculation, once the numbers are in, and down, the real bottom will show itself..

Hmmmmmmmmm
You know company reports are usually the odd month or more behind. So whatever is reported will be comparatively good, because we are a very long way from the bottom.
If Hawke (RIP) were PM he would be convening a national industry forum to get the best possible solutions from the parties being most affected, and not relying on bureaucrats who won't lose their jobs in the downturn and have little to no idea what running a business is like in the real world.
What needs to be maintained is basic-level consumerism, so any stimulus which aims higher is going to money wasted. For example, small business tax write-offs need to be substituted for debt relief so they can try to trade through these lean times.
As I wrote very early in one of these threads, it's time to make Newstart a livable benefit for the unemployed, and it's also essential that the rules to its eligibility be dramatically revised so that those now flowing into the labour market immediately qualify and get to spend on basic living costs.
The government has been reluctant to use "recession" in their language, yet many economists have already worked out that unless the current global lockdown succeeds, as it did for China, then the medication we will be lining up for will relate to relieving depression.

 

[bluekelah]

It's not because Fe Ore is some magical commodity. Here is the reason, for those who are interested:

View attachment 101430
https://www.sharecafe.com.au/2020/0...-provides-new-warning-on-iron-ore-production/

well there you go.

Another big reason why gov is SO reluctant to do a shutdown. If miners stop mining, the mining ATM disappears and we are truly farked economically

 

[aus_trader]

On the money IMO. I wonder if our nation wakes up.

I think a more resilient one would be one that is not purely weighted to the banks and the couple of miners would create a diversified Australian Stock Market.

 

[aus_trader]

As a Restaurant owner prices have at times more than doubled. Customers halved. Not many will survive.

I think only the businesses with good margins would be able to weather the storm.

I just noticed today Woolies have pushed the prices up on quite a lot of everyday items. Not blaming them because I don't know if their suppliers have done it, and Woolies is just passing them on... Either way it is putting more stress on family budgets and other smaller businesses with thin margins that rely on them.

 

[OmegaTrader]

He said was the economy *as we know it*

What I interpret this to mean is that business as usual after this event will most likely not possible. There will be changes. Exactly what shape they will take I cannot predict, but there are several views from different economists out there.

I couldn't even tell you whether those changes will be positive or negative, we shall just have to see, but I am certain it will be different.

hahaha
That is a great political answer.

But people have to make decisions.
Every decision in life is a bet.
big decisions =big bet small decision =small bet.
Financial decisions have a big impact and sometimes require big bets.
Sitting in cash is a bet that has killed real returns.If you borrow up to the hilt to buy a property that is a big bet. If you invest a large portion of your wealth in etf passively that is still a bet. Both are socially acceptable bets. But are still bets.

If you wait for your price and put a large portion in the market that is a bet on a recovery. Recovery of confidence, earnings and stimulus

We cannot just give up and say I don't know.

No one knows because the future decisions have not been made yet.


I think what people have to decide : is this the one? Is this 1929?


1)Not the one, then buy the bargains and catch the recovery push along the debt cycle.

2)If this is the one everything that is structurally long goes down, property, stocks , money in the bank by bail in/bail out, private businesses. What use is debt if the interest is not paid back and no one wants to buy the debt.