How Far Will The Market Fall?
- Thread starter IFocus
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Do suggest @wayneL and @OmegaTrader and anyone else who thinks the Fed or other CBs are printing or the alphabet soup programs they are undertaking means anything, or that markets are rallying because of technical action from the Fed, takes 20 mins out of their day to listen to the latest MacroVoices All Stars with Jeffrey Snider for a quick primer on why that isn't the case!
For those with time, I do suggest going through the back catalogue and listening to every Jeff Snider appearance on the show, especially including the old Eurodollar University series.
I make his blog at Alhambra Partners where he is Chief Economist https://alhambrapartners.com/commentaryanalysis/ part of my daily schedule.
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Hi @peter2 We are getting close to 5600 .... I look forward to know which of the shares are under your radar to re-enter?
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wayneL
VIVA LA LIBERTAD, CARAJO!
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I did actually see that video, very interesting, and very credible, but a couple of things didn't really ring true to me, even if most of it made perfect sense. Contradicts many other voices too.
Have to admit it's all beyond my pay grade really.
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It is just a 20 minute "update" segment, he goes into extreme in depth on the blog, previous full length interviews and in Eurodollar University series .
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It would seem that you support (advocate) this chap's position. Now I have only quickly skimmed 4 of the articles re.: Bond Kings etc. I wasn't impressed. The reason that I wasn't impressed is that he is critical of the 'Bond Kings', which is always easy if they are unable to respond and light on explanation. It is possible as I had to read it quickly that I missed the central point.
This is a topic that interests me. If you are willing to summarise the argument, I will respond (Federal Reserve and FOMC actions/alphabet soups/Repo.) I will re-read them later when I have additional time.
jog on
duc
Garpal Gumnut
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wayneL
VIVA LA LIBERTAD, CARAJO!
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Perhaps unknown unknowns of known knowns?
The playbook is the same, but a crapper load more dangerous now.
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Grok this for a super contrarian visionary view of the next few months through the next few decades.
Melt up from here - gold over $2,000 USD, S&P500 new highs over 4000 by Labor Day (Sept 7 2020), Oil $40-45
Then second leg down of the 'deflationary bust'. Rapid. Gold cut in half, S&P500 to lose 80% from the top. Oil 10 bucks again. Won't take long, rapid like the first leg.
Recovery off the bottom - Gold to reach $10,000+ USD, Silver $300, Oil $300
Commodities boom during industrial driven hyper-inflationary recovery phase fuelled by massive money creation. Gold stocks like dotcom boom of the 90's. All before 2030.
Fed balance sheet 20-30 trillion. Boom rolls over by 2027-2030. Interest rates way up like in 1981 (I was getting like 18% on a bank term deposit in early 1980's).
Then it all falls apart for the final time by 2030, all the cracks wrenched apart with the hyperinflation and massive debt build-up, Central banks have shot their bolt - because more money creation, more intolerable inflation.
Then utter gloom - deflationary depression lasting couple of decades starting late 2020's - 2030.
https://palisaderadio.com/david-hunter-gold-and-silver-miners-to-be-the-next-dot-com-bubble/
Melt up from here - gold over $2,000 USD, S&P500 new highs over 4000 by Labor Day (Sept 7 2020), Oil $40-45
Then second leg down of the 'deflationary bust'. Rapid. Gold cut in half, S&P500 to lose 80% from the top. Oil 10 bucks again. Won't take long, rapid like the first leg.
Recovery off the bottom - Gold to reach $10,000+ USD, Silver $300, Oil $300
Commodities boom during industrial driven hyper-inflationary recovery phase fuelled by massive money creation. Gold stocks like dotcom boom of the 90's. All before 2030.
Fed balance sheet 20-30 trillion. Boom rolls over by 2027-2030. Interest rates way up like in 1981 (I was getting like 18% on a bank term deposit in early 1980's).
Then it all falls apart for the final time by 2030, all the cracks wrenched apart with the hyperinflation and massive debt build-up, Central banks have shot their bolt - because more money creation, more intolerable inflation.
Then utter gloom - deflationary depression lasting couple of decades starting late 2020's - 2030.
https://palisaderadio.com/david-hunter-gold-and-silver-miners-to-be-the-next-dot-com-bubble/
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Very interesting finicky. So much volatility to be expected. Not sure if that scenario will play out but will have to be prepared either way I guess.
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He's changed my mind, I'm going to slavishly follow his roadmap unless I find more persuasive reasoning. So going by that we won't see the March lows again on our market until we first see new all time highs - that's making the easy assumption that our ASX follows the S&P500. So that vindicates whoever said on this thread a V shaped reversal due to the scale of intervention - someone did (waterbottle?).
Our gold miners are going to take off with gold going to over $2,000 USD by early September, so I'll be trimming goldies then in anticipation of the second part of the crash. I'll also be trimming my general stocks then so I'll have something to spend when the second crash takes the market down 80%. Might even put something into BBOZ then. Meanwhile I might even buy a few stocks.
By the way, David Hunter interacts with people on twitter @DaveHcontrarian
Our gold miners are going to take off with gold going to over $2,000 USD by early September, so I'll be trimming goldies then in anticipation of the second part of the crash. I'll also be trimming my general stocks then so I'll have something to spend when the second crash takes the market down 80%. Might even put something into BBOZ then. Meanwhile I might even buy a few stocks.
By the way, David Hunter interacts with people on twitter @DaveHcontrarian
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The argument made does seem to be a considered one, it's not over the top "end of the world" stuff and so on but a reasoned argument.
That doesn't mean he's right, but it's worth listening to.
Garpal Gumnut
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It is very dangerous now @wayneL .
The marks are being set up to maintain liquidity. Then the mother of all lows.
gg
I had previously wondered why China and Korea's numbers couldn't be replicated around the world but it looks like now western countries are adopting their mass testing and tracing strategies for later in the year when secondary waves may occur. I think that level of supression will limit the down side and see the March lows as the lows of this cycle globally. Australia has a bit of an extra risk with our Winter coming sooner than the U.S and Europe though.
There will be industries that take longer to recover. Banks have effectively a 6 month delay because of distressed loans being put off for this period of government intervention. International tourism and education may be the last businesses to recover as they require a full coordinated recovery.
There will be industries that take longer to recover. Banks have effectively a 6 month delay because of distressed loans being put off for this period of government intervention. International tourism and education may be the last businesses to recover as they require a full coordinated recovery.
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I'm struggling to see where an economic recovery is going to come from.
Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers
We can be 100% certain that international tourism, air travel and therefore international business travel will be slashed. There are serious risks to supply lines for products which will be wild cards.
The US administration is ramping up anti Chinese activity which can only undermine trade and economic activity.
We havn't even started to see the current effects of the economic contraction on financial institutions. We already have sovereign debt defaults and these can only expand as countries economies crack.
And yet commentators are talking about recoveries?
Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers
We can be 100% certain that international tourism, air travel and therefore international business travel will be slashed. There are serious risks to supply lines for products which will be wild cards.
The US administration is ramping up anti Chinese activity which can only undermine trade and economic activity.
We havn't even started to see the current effects of the economic contraction on financial institutions. We already have sovereign debt defaults and these can only expand as countries economies crack.
And yet commentators are talking about recoveries?
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I'm struggling to see where an economic recovery is going to come from.
Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers
We can be 100% certain that international tourism, air travel and therefore international business travel will be slashed. There are serious risks to supply lines for products which will be wild cards.
The US administration is ramping up anti Chinese activity which can only undermine trade and economic activity.
We havn't even started to see the current effects of the economic contraction on financial institutions. We already have sovereign debt defaults and these can only expand as countries economies crack.
And yet commentators are talking about recoveries?
It won't happen overnight , but it will happen.
People will still need our agricultural products and our minerals, but tourism and education will be smashed for a while, unless uni courses can go online and more Australians travel domestically.
I think we will change the way we live, but humans are pretty adaptable and we will find other ways of doing things.
Maybe governments will have to earn their keep instead of relying on the panacea of immigration, a Ponzi scheme if ever there was one, designed to let real estate agents and property investors get fat at the expense of ordinary home buyers.
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It won't happen overnight , but it will happen.
People will still need our agricultural products and our minerals, but tourism and education will be smashed for a while, unless uni courses can go online and more Australians travel domestically.
I think we will change the way we live, but humans are pretty adaptable and we will find other ways of doing things.
Maybe governments will have to earn their keep instead of relying on the panacea of immigration, a Ponzi scheme if ever there was one, designed to let real estate agents and property investors get fat at the expense of ordinary home buyers.
What I'm said Rumpy is that we havn't even started to see the consequences of this crisis. The slow motion crash is still happening. The extent. of the damage is still uncertain. And we already have passengers wanting to open their safety belts..
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The world downturn may well last as long as the the 1929 depression. This only really bottomed in 1932 and then a gradual recovery before being plunged into war.I'm struggling to see where an economic recovery is going to come from.
Each and every country around the world is facing a severe to catastrophic economic contraction. As well as that the march of illness and death across businesses is inhibiting any sustained economic recovery.
There is no certainty that any country will be able to successfuly reopen for business without risking more dramatic illnesses and death numbers
We can be 100% certain that international tourism, air travel and therefore international business travel will be slashed. There are serious risks to supply lines for products which will be wild cards.
The US administration is ramping up anti Chinese activity which can only undermine trade and economic activity.
We havn't even started to see the current effects of the economic contraction on financial institutions. We already have sovereign debt defaults and these can only expand as countries economies crack.
And yet commentators are talking about recoveries?
This situation isn't any different so it will probably be 2023 before a recovery really starts. France refused to pay its debt in 1930-32 and the sum has never been repaid. https://en.wikipedia.org/wiki/Mellon–Berenger_Agreement
Dona Ferentes
Abrió la caja, vio al gatito, y sonrió
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every Power That Is, is treating this as a liquidity crisis.
And when it morphs into a solvency crisis?
In Aust, in a better position than many, "Conventional policy, the short-term interest rate, was set at effective-zero in March by the RBA. Forward guidance assured financial markets that this would stay for the duration. Nothing more to do here. The March package had two more objectives. First, to encourage the banking sector to play a shock-absorber role by funding the cash-flow consequences of business hibernation and recession. Second, to ensure that the government could fund the huge deficit in prospect."
https://www.rba.gov.au/speeches/2020/sp-gov-2020-04-21.html
but that is a bit of wishful thinking. Sure we're in "accelerated opening up"; but
- behaviours are going to lead to a second wave. Too many people don't get 'physical distancing'.
- whole sectors are non-functioning and will for a long time
- the pinch time is Sept.
Let’s see how this works out over time. It would be unfortunate if the RBA extends its yield-curve management to the long end of the curve, as this commitment could be difficult to unwind when interest rates need to return to normality.
The message of the statement is that the RBA, in its March measures, has done all it can sensibly do to help bridge the downturn. The heavy lifting has to be done with fiscal policy. And that's Government, and I can't see them doing it.
