How Far Will The Market Fall?

qldfrog · 16 May 2020

aus_trader said:
Good question mate. I think these Govt subsidies are unsustainable for the long term...
View attachment 103503
https://www.afr.com/policy/economy/jobkeeper-costs-130k-per-job-20200515-p54t8y

how can it cost $130k per job saved? 3k a month: after a year around $35k ;
with $130k we can "save" a job for nearly 4y......or has our public service become so inefficient that we need to spend $130k to distribute 35k to a tax payer
after we can argue it will make no difference and that ultimately no job will be saved...

aus_trader · 16 May 2020

qldfrog said:
how can it cost $130k per job saved? 3k a month: after a year around $35k ;
with $130k we can "save" a job for nearly 4y......or has our public service become so inefficient that we need to spend $130k to distribute 35k to a tax payer
after we can argue it will make no difference and that ultimately no job will be saved...

I had doubts about that figure as well. I think the figure is not correct. Even if you take tax revenue that will be lost to the Govt due to the job loss it should be marginally higher than $35k per annum as you mentioned. Don't know if there is some other fudge factor involved such as loss of revenue due to the business not making money as well (that is why the business owner or employer can pass on the 'Job Keeper'). Still the figure is far too big !

Please Explain, AFR who published the article ?

aus_trader · 17 May 2020

Looks like the handouts will be cut back...

https://www.msn.com/en-au/news/coro...-jobkeeper-scheme/ar-BB144eft?ocid=spartanntp

gartley · 18 May 2020

Market has followed on the projected pattern of trend as per the following post some weeks back:
https://www.aussiestockforums.com/posts/1065137/ post # 448
All that is left now is the final thrust up out of the triangle wave b pattern. If it does happen the measured move is to approx: 5762 and that should be it for the rally for some time.
Weekly cycles still projected upward (see excel file attached). The 10 week nominal cycle has a projection of 6040-6239 however this can be invalidated with a crossing of price back below 2 offsett lines.

PZ99 · 18 May 2020

qldfrog said:
how can it cost $130k per job saved? 3k a month: after a year around $35k ;
with $130k we can "save" a job for nearly 4y......or has our public service become so inefficient that we need to spend $130k to distribute 35k to a tax payer
after we can argue it will make no difference and that ultimately no job will be saved...

If it costs $130b to save a million jobs it's $130k per job.

qldfrog · 18 May 2020

PZ99 said:
If it costs $130b to save a million jobs it's $130k per job.

And that conflict with the quick calculation..so it is either BS and it does not cost 130b or we are using fancy data aka
If these guys were paid by the employer and both employer employee were paying taxes etc etc
Jobkeeper is 35k per annum, 1 million employees could be paid a whole year with jobkeeper for 35billions
Where the hell are the extra 100 billions gone? PR and PS hires to manage the scheme?

Smurf1976 · 19 May 2020

qldfrog said:
Where the hell are the extra 100 billions gone?

In the absence of any proper explanation I'm assuming it's the usual trick of outright lies by someone (whoever) with a political motive.

That sort of thing has happened quite a few times in the past especially where "subsidies" are involved. Rubbish figures but they get published without question it seems.

I'll stand corrected if there's a legitimate explanation but that's what it looks like to me.

PZ99 · 19 May 2020

Guys.. the 1 million "saved" jobs is the difference between having jobkeeper and not having it.

With jobkeeper > say 6 million people are stood down and in 6 months maybe 5.5 million might return to work.

Without jobkeeper > say 6 million people are stood down and in 6 months only 4.5 million might return to work.

So the jobkeeper difference is 1 million more people get their jobs back and the program is budgeted to cost $130b overall as per the (possibly scant) treasury figures.

Therefore $130b / 1 million = $130k per job plus or minus the error tolerances...

However.... this shady underground figure with dark glasses suspects a cost blowout hence the Govts recent narrative of partial windbacks or other such evil adjustments

PS... Looks like a big day coming up today.

aus_trader · 19 May 2020

PZ99 said:
PS... Looks like a big day coming up today.

Yes, finished strong today...

sptrawler · 19 May 2020

qldfrog said:
And that conflict with the quick calculation..so it is either BS and it does not cost 130b or we are using fancy data aka
If these guys were paid by the employer and both employer employee were paying taxes etc etc
Jobkeeper is 35k per annum, 1 million employees could be paid a whole year with jobkeeper for 35billions
Where the hell are the extra 100 billions gone? PR and PS hires to manage the scheme?

How much of this money, will go back to the Government, in direct and indirect tax?
As we said earlier, it appears to be a very narrow band of the economy, that is getting hammered.
The actual costs, will be really interesting IMO.

aus_trader · 19 May 2020

sptrawler said:
As we said earlier, it appears to be a very narrow band of the economy, that is getting hammered.

Do we expect any flow on effects from the sectors that are affected or would everything else go back to normal ?

sptrawler · 19 May 2020

aus_trader said:
Do we expect any flow on effects from the sectors that are affected or would everything else go back to normal ?

That is going to be the interesting part, seeing what the flow on effect is and where it is felt.
Fuel, tourism, entertainment, and discretionary spending has been thumped, but consumer staples are up, mining is up, agriculture? Dividends in general are stopped, even if companies haven't recorded a loss
A lot of the losses appear to be on the Governments books, not on the employers books, I really can't get my head around where the massive losses are going to come from yet, but I'm no economist just wondering where the losses are going to be felt. Obviously the banks and companies like Westfield, Stockland, Qantas, Flight Centre, Hoyts etc.
But service providers don't seem to be affected, I just haven't seen anything like this style of stimulus applied before and am interested in seeing what sort of shock absorber it provides.

aus_trader · 23 May 2020

They got the numbers wrong, so we were right ASF'ers for suspecting those Job Keeper numbers reported:

https://www.msn.com/en-au/news/aust...-stimulus-program/ar-BB14ryx1?ocid=spartanntp

IFocus · 23 May 2020

Good pickup guys.....legends

InsvestoBoy · 28 May 2020

As of last nights NYSE close,

MSCI Australia Index (EWA on NYSE) and FTSE RAFI US 1000 (QUS on the ASX or PRF on NYSE) are outperforming SPX and NASDAQ-100 ETF (SPY and QQQ respectively) off the March bottom

Cyclicals kicking ass. EWA outperforming QQQ by just under 9%!

I hold VAS and QUS.

moXJO · 28 May 2020

I don't get the rally.
Not complaining as I held a bunch of afterpay by accident.
But I was not expecting it to come back as hard as it did.

sptrawler · 28 May 2020

moXJO said:
I don't get the rally.
Not complaining as I held a bunch of afterpay by accident.
But I was not expecting it to come back as hard as it did.

I can't help but wonder if the insto's data is showing most of the solid companies, have dodged a bullet and the recovery is going to be faster than first thought.
As investo boy stated credit card spending is up, medium and large sized companies not attached to financials, tourism, hospitality or discretionary spending have hardly felt a blip, on their bottom line.
Those that have felt a hit have stopped dividends and spending to retain capital, so some sectors will have a slow recovery, but most may not have been affected e.g mining, agriculture, non discretionary spending, consumer staples.
Just my thoughts, but I think the Government has taken the hit, not the economy. That might come later.
Of course that could be all BS and we are just having a dead cat bounce, before the second dip.

InsvestoBoy · 28 May 2020

moXJO said:
I don't get the rally.
Not complaining as I held a bunch of afterpay by accident.
But I was not expecting it to come back as hard as it did.

Maybe you don't get the rally because you don't get the crash?

It doesn't appear the crash was a fundamental re-pricing of risk, but rather a liquidity crisis deep in the bowels of the financial system.

So the rally could simply be the cessation of immediate liquidity problems (I say immediate because there are still indications in bid/ask spreads and stuff that liquidity is still low).

If everyone who needed to sell has finished selling then the market can easily rally on short covering, put exercises and retail sentiment, especially if liquidity is low (see seasonal rallies in Dec).

basilio · 28 May 2020

Well why not follow the leader ? If we all believe that the market must know what it is doing then surely now is the time to pile in and beat the rush..

Surely there couldn't be a massive disconnect between the biggest gambling school in the world and economies where companies have to pay their bills, people have to have jobs and real products are made and sold...

sptrawler · 28 May 2020

basilio said:
Well why not follow the leader ? If we all believe that the market must know what it is doing then surely now is the time to pile in and beat the rush..
.

Did that on 10 and 24 March. One lot too early, the next too late. the story of my life.

How Far Will The Market Fall?

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