Author Topic: The largest stock market bubble ever seen is finally Ko'd by Covid-19 (Read 57339 times)

conman · « **on:** March 9, 2020, 02:09:29 pm »

Sadly, the writing has been on the wall for a number of years. The virus isn't the cause of this, it is merely the accelerant.

Stock market trading halted almost immediately at the opening of the market.

The Dow is down almost 2,000 points within 5 minutes of opening. Jesus.

Trading in US shares has been suspended as sharp falls led to an automatic halt in the selling and buying of stocks.

The main US stock exchange, the S&P 500, fell 7% before being suspended.

The move follows dramatic falls globally with shares facing the worst day since the 2008 financial crisis.

A row between Russia and Saudi Arabia saw oil prices plunge by more than a fifth, hitting markets already reeling from fears of the impact of the coronavirus as cases continue to rise.

The day has been dubbed "Black Monday" by analysts who described the market reaction as "utter carnage".

https://www.bbc.com/news/business-51796806

conman · « **Reply #1 on:** March 9, 2020, 02:11:27 pm »

Just so we are clear:

A recession usually leads to a 30% to 40% fall in equities,
a big recession usually has a 40% to 60% fall
and a depression is 60% to 80%.

There is a long way to go, but this is going to get very ugly.

WhereAngelsPlay · « **Reply #2 on:** March 9, 2020, 03:25:25 pm »

Good for the consukers (was a typo but fits perfectly) though.

He's talking about lower gas prices whilst ignoring (through ignorance) the tiny little fact that said prices will put thousands of Americans who work in oil and gas out of a job and the producers out of business with crippling debts.

conman · « **Reply #3 on:** March 9, 2020, 03:31:13 pm »

OMG, there's always a tweet.

WhereAngelsPlay · « **Reply #4 on:** March 9, 2020, 03:39:05 pm »

Quote from: conman on March 9, 2020, 03:31:13 pm

OMG, there's always a tweet.

He's patient zero for the evolution of stupid.

ShakaHislop · « **Reply #5 on:** March 9, 2020, 03:42:27 pm »

Quote from: WhereAngelsPlay on March 9, 2020, 03:25:25 pm

Good for the consukers (was a typo but fits perfectly) though.

He's talking about lower gas prices whilst ignoring (through ignorance) the tiny little fact that said prices will put thousands of Americans who work in oil and gas out of a job and the producers out of business with crippling debts.

That's not a real Tweet (sadly)

https://www.reuters.com/article/uk-factcheck-trump-dowjones-tweet-idUSKBN20P340

https://www.snopes.com/fact-check/trump-dow-jones-tweet/

WhereAngelsPlay · « **Reply #6 on:** March 9, 2020, 04:04:48 pm »

Quote from: ShakaHislop on March 9, 2020, 03:42:27 pm

That's not a real Tweet (sadly)

https://www.reuters.com/article/uk-factcheck-trump-dowjones-tweet-idUSKBN20P340

https://www.snopes.com/fact-check/trump-dow-jones-tweet/

He has spouted so much shit that it's hard to separate the real from the fake.

Gnurglan · « **Reply #7 on:** March 9, 2020, 07:18:40 pm »

Quote from: conman on March 9, 2020, 02:11:27 pm

Just so we are clear:

A recession usually leads to a 30% to 40% fall in equities,
a big recession usually has a 40% to 60% fall
and a depression is 60% to 80%.

There is a long way to go, but this is going to get very ugly.

Yes, it certainly looks bad. It's not just the stock market. The bond market is not healthy and then we have the whole repo crisis.

conman · « **Reply #8 on:** March 9, 2020, 08:52:09 pm »

Quote from: Gnurglan on March 9, 2020, 07:18:40 pm

Yes, it certainly looks bad. It's not just the stock market. The bond market is not healthy and then we have the whole repo crisis.

Yep, it's because of too much credit in the market for years. So many things are fucked.

I saved thread in the summer, as I thought it was so so important.

https://twitter.com/RaoulGMI/status/1147878009870983169

July 2019....

There is a lot going on in Europe that feels like it's coming to a head soon... probably by the end of the summer. The EU economy is in mild recession...

But it is unlikely to deteriorate further for a month or two until the CESI up-cycle finishes around the end of the summer

But inflation expectation are collapsing (5yr shown) and show no signs of abating..

And we know that the ECB is only driven by ONE mandate - inflation. Therefore, they HAVE TO ease policy. Problem is that they have few levers to pull, so first it'll be lower rates. 2 yrs can go back to below -1%....

And bund yields will keep falling too...using a regression channel, it would suggest that -1.6% is the objective...

That's all well and good, but it's killing the banks, which are correlated with falling yields...(cause vs effect? Im not sure. Probably a bit of both). Chart is of EU Banks sector vs 10 yr bunds...

We are all well aware that $DB is a total shit show and is something I have been talking about for the last few years. The news out this weekend of a restructuring and loss of 20,000 jobs simply can not be achieved fast enough and all the senior leaders are bolting for the exits

They've tried mergers. Fail. They are trying bad bank. Not sure it will get done yet. And now they are trying restructuring. Too late/no time. Meanwhile, the ECB will push yields lower, putting $DB closer to the End Game. How else can they fight a recession? They cant use fiscal

But, this is NOT a DB problem, it is a STRUCTURAL EU/Swiss problem, on a scale not understood by most. UBS is about to break support and head to zero...

Credit Suisse is arguably worse...that support is the life/death line.

And in France, Soc Gen is also in free fall, with its own Cliff of Death approaching..

In Spain, all the banks look terrible, as I have been shouting from the roof tops for a while. BBVA is right at the Cliff of Death

And even Barclays in the UK looks bad too

So, the knock on effects are all lining up to push one bank after another of the Cliff of Death...and there ain't a thing the ECB can do about it, as they have only one mandate - inflation. They HAVE TO cut rates. And this is why Christine Lagarde has been brought in...
Raoul Pal

The ECB is going to need to become political. It is going to have to rescue an EU-wide banking system and put the banks into state hands and buy the extra gov debt and they are going to need to force fiscal reforms and massive fiscal stimulus. They will use the situation to force

through tighter EU fiscal consolidation, maybe even leaving some nations behind. Lagarde is perfect for this. It's what the IMF does. She is also a lawyer and a politician. The problem is, this stuff takes time. The ECB will buy any credit instrument to avoid capital

markets seizing up but shareholders are going to sense an equity wipeout over the debt holders, so equities bear the brunt of it (and bunds go more negative). The dollar will get bid as the $ funding crisis can not easily be solved by the ECB and lending at the margin tightens

And a strong dollar would destroy the banks and the global economy. It's all very circular and there are very few circuit breakers. Throw in heightened trade wars between EU/US (highly likely) and China/EU/US and you have a very big issue. And my problem with all of this

It's that the probability is much much higher than I'd like. And that is the reason to own bonds, dollars, bitcoin and gold. The former two are the beneficiaries of current needs, and the latter two are the high-gamma options on this escalating into an extreme policy event.

This all needs to be watched very closely. I am concerned that the summer will end with a building sense of crisis. You can already see the signs as liquidity issues come to the fore.. (Woodford, H20). None of this is a certain but the odds are exploding.

End.

conman · « **Reply #9 on:** March 9, 2020, 08:54:28 pm »

Raoul Pal updated that cliff of death topic today..

The Cliff of Death in Euro banks has now broken. It is something I have repeatedly warned about. The ECB are going to have their hands full soon and will have to step in or the member states will end up nationalising the banking system. I doubt the Euro can continue to perform like this. It will weaken over time as the ECB has to print a LOT.

These are really troubling times and this crisis is rapidly turning int THE crisis. Be careful. Its still early days so Im just highlighting the potential risks.

And Japan..

The Japanese banks are about to have a reality shock, just as the Europeans are. There is going to have to be a large package from the BOJ at some point in the next 6 months or less....

If you feel like markets are crashing, think again. We are only down -6% YoY%, we are miles away from recession levels. This is only the beginning, we are still at warm-up stage. Covid-19 spread is accelerating worlwide, the next 2 weeks are going to be wild.

Something Worse · « **Reply #10 on:** March 9, 2020, 09:34:40 pm »

Does Brexit insulate the UK or make things worse at all? Or does it not matter?

conman · « **Reply #11 on:** March 9, 2020, 09:38:14 pm »

Quote from: Something Worse on March 9, 2020, 09:34:40 pm

Does Brexit insulate the UK or make things worse at all? Or does it not matter?

I don't personally see any real positives from Brexit.

But if I'm to hazard a guess, it will leave the UK more stranded than should it have been in the EU.
On the plus side, you've always retained the Sterling, so you can print money if/when you need it. But that's not necessarily a good thing.

Gnurglan · « **Reply #12 on:** March 9, 2020, 10:24:30 pm »

Raoul Pal knows how to cheer you up, doesn't he?

Seriously, his series about pensions from last year is a must watch.

Quote from: Something Worse on March 9, 2020, 09:34:40 pm

Does Brexit insulate the UK or make things worse at all? Or does it not matter?

I'm no expert, but Brexit is not a topic of discussion I see among the people I follow. The concerns seem to be mainly around the global debt. It affects everyone. To make it worse big banks like Deutsche Bank are falling to pieces and HSBC seem to be in the danger zone because of its dependence on Hong Kong. To quote one that I follow, ”it's SDT” (stiff drink time).

Giono · « **Reply #13 on:** March 10, 2020, 01:15:55 am »

Quote from: Gnurglan on March 9, 2020, 07:18:40 pm

Yes, it certainly looks bad. It's not just the stock market. The bond market is not healthy and then we have the whole repo crisis.

Fixed income....without the income.

Gnurglan · « **Reply #14 on:** March 10, 2020, 06:24:15 am »

Quote from: Giono on March 10, 2020, 01:15:55 am

Fixed income....without the income.

Yes. Everything is upside down.

conman · « **Reply #15 on:** March 12, 2020, 08:09:57 am »

There are reports coming out now of serious stress in the US Treasury Market right now.

Let that sink in a minute.

Red Beret · « **Reply #16 on:** March 12, 2020, 01:47:37 pm »

How serious is this? Are we looking at a global economic collapse? Are there some reputable sources I can link to?

I mean, I see a lot of graphs but ultimately this is only the opinion of one guy on Twitter. Is there anything to corroborate this?

ToneLa · « **Reply #17 on:** March 12, 2020, 02:26:52 pm »

Why don't we just pause the economy for a bit?

Kekule · « **Reply #18 on:** March 12, 2020, 02:28:28 pm »

If trading on the FTSE stopped now it would be the worst single day drop since black Monday in 1987.

That's bad, isn't it?

conman · « **Reply #19 on:** March 12, 2020, 02:55:47 pm »

Quote from: Red Berry on March 12, 2020, 01:47:37 pm

How serious is this? Are we looking at a global economic collapse? Are there some reputable sources I can link to?

I mean, I see a lot of graphs but ultimately this is only the opinion of one guy on Twitter. Is there anything to corroborate this?

The graphs represent the data.

And this "fella" is about as credible an opinion as you can find.

He introduces himself at the beginning of the 2nd video, so you can understand why he might know what he's talking about

Feb 2020

<a href="https://www.youtube.com/v/V7zEXiqiiqA" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/V7zEXiqiiqA</a>

Auguest 2019

<a href="https://www.youtube.com/v/LGR8VmW6p8c" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/LGR8VmW6p8c</a>

conman · « **Reply #20 on:** March 12, 2020, 02:59:03 pm »

<a href="https://www.youtube.com/v/U9QcQw343-8" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/U9QcQw343-8</a>

Red Beret · « **Reply #21 on:** March 12, 2020, 03:42:52 pm »

Quote from: conman on March 12, 2020, 02:55:47 pm

The graphs represent the data.

And this "fella" is about as credible an opinion as you can find.

He introduces himself at the beginning of the 2nd video, so you can understand why he might know what he's talking about

Feb 2020

Auguest 2019

Dont misunderstand. My point is that, no matter how credible the source, it is still only a single source. And it is only his opinion based on the data.

I would like to see other, equally reputable experts' opinions before drawing any conclusions

cdav · « **Reply #22 on:** March 12, 2020, 04:53:19 pm »

Quote from: Red Berry on March 12, 2020, 03:42:52 pm

Dont misunderstand. My point is that, no matter how credible the source, it is still only a single source. And it is only his opinion based on the data.

I would like to see other, equally reputable experts' opinions before drawing any conclusions

Markets don't know what is going to happen so are responding accordingly.

Potentially we are in a situation with a shutdown where companies generate no revenue for a period of a few weeks- that could push a number over the edge in small profit margin industries or companies suffering cash flow issues.

conman · « **Reply #23 on:** March 12, 2020, 04:53:33 pm »

Quote from: Red Berry on March 12, 2020, 03:42:52 pm

Dont misunderstand. My point is that, no matter how credible the source, it is still only a single source. And it is only his opinion based on the data.

I would like to see other, equally reputable experts' opinions before drawing any conclusions

Aknowledged.

You're more than welcome to use Google, It's not up to me to convince you. However, if i find further material that's useful, I'll ofcourse be adding here.

Make no mistake, this meltdown is here, without or without the virus.

conman · « **Reply #24 on:** March 12, 2020, 05:17:10 pm »

An explanation of what's happening

Ten minute video & article.

https://pomp.substack.com/p/the-liquidity-crisis-will-drive-monetary

Elmo! · « **Reply #25 on:** March 12, 2020, 05:38:52 pm »

Quote from: conman on March 12, 2020, 02:59:03 pm

You need to remove the watch/ from the Youtube URL to get them to embed btw.

Code: [Select]

[flash=500,420]https://www.youtube.com/v/U9QcQw343-8[/flash]

<a href="https://www.youtube.com/v/U9QcQw343-8" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">https://www.youtube.com/v/U9QcQw343-8</a>

Alf · « **Reply #26 on:** March 12, 2020, 05:44:21 pm »

Quote from: Kekule on March 12, 2020, 02:28:28 pm

If trading on the FTSE stopped now it would be the worst single day drop since black Monday in 1987.

That's bad, isn't it?

Any period where the market closes during business hours is bad for business, I saw the Dow Jones open after 9/11, 6 days later and it was like a fire sale.

conman · « **Reply #27 on:** March 12, 2020, 05:44:35 pm »

Thanks man. It's been quite a while since i was embedding vids.

Red Beret · « **Reply #28 on:** March 12, 2020, 05:47:30 pm »

Quote from: conman on March 12, 2020, 04:53:33 pm

Aknowledged.

You're more than welcome to use Google, It's not up to me to convince you. However, if i find further material that's useful, I'll ofcourse be adding here.

Make no mistake, this meltdown is here, without or without the virus.

That's fine. I just want to avoid accusations of scaremongering if I pass this information on when it's only a single source and I have limited experience interpreting the data.

OOS · « **Reply #29 on:** March 12, 2020, 06:21:09 pm »

What a clusterfuck of a week and we still have tomorrow.

Not that Gareth · « **Reply #30 on:** March 12, 2020, 07:16:34 pm »

It's amazing how quickly they found 1.5tr to pump the market, the bear shrugged of the first 500b like it was a flea.

Imagine if they cared about people as much as their bank balance.

conman · « **Reply #31 on:** March 12, 2020, 07:55:24 pm »

Quote from: OOS on March 12, 2020, 06:21:09 pm

What a clusterfuck of a week and we still have tomorrow.

conman · « **Reply #32 on:** March 12, 2020, 08:01:29 pm »

Quote from: Red Berry on March 12, 2020, 05:47:30 pm

That's fine. I just want to avoid accusations of scaremongering if I pass this information on when it's only a single source and I have limited experience interpreting the data.

BTW, It's been dubbed the "everything bubble", so if you want to find out about it, you can go read many of those articles.
Cheap credit from QE and low/negative interest rates are a big part of this.

conman · « **Reply #33 on:** March 12, 2020, 08:10:23 pm »

Massive Distribution at end of day, no signs of Accumulation anywhere despite promise of #Fed to inject $1.5 TRILLION into Repo and #NotQE...

$1.5 TRILLION is the equivalent of spending a Dollar every SECOND for the next 47,465 YEARS...

This is sign of big liquidations and they are likely to get really bad tomorrow...

#ButHeyItIsFriday13th

https://twitter.com/MarkYusko/status/1238194353765482497

Red Beret · « **Reply #34 on:** March 12, 2020, 08:54:49 pm »

Quote from: conman on March 12, 2020, 08:01:29 pm

BTW, It's been dubbed the "everything bubble", so if you want to find out about it, you can go read many of those articles.
Cheap credit from QE and low/negative interest rates are a big part of this.

Thanks

Ashburton · « **Reply #35 on:** March 12, 2020, 08:57:01 pm »

Something tells me this is going to run and run.

Can someone 'in the know' point to a source as to why nationalising Deutche is the only solution to fix this?

Gnurglan · « **Reply #36 on:** March 12, 2020, 09:04:46 pm »

Quote from: conman on March 12, 2020, 08:01:29 pm

BTW, It's been dubbed the "everything bubble", so if you want to find out about it, you can go read many of those articles.
Cheap credit from QE and low/negative interest rates are a big part of this.

Yes, it's bad. I mean very, very, very bad. And they will of course try the same trick again and again. Low interest rates have encouraged borrowing. Companies have avoided investments, instead they have borrowed money to buy back their own shares.

I am still trying to understand the fundamentals in this, but literally no-one is optimistic. The most optimistic view I have come across is one who thinks the bond market will tank and big capital will be forced to go to the stock market. But then we are talking fear, a lack of trust in government and what follows.

Have you checked out George Gammon?

conman · « **Reply #37 on:** March 12, 2020, 09:13:11 pm »

Quote from: Ashburton on March 12, 2020, 08:57:01 pm

Something tells me this is going to run and run.

Can someone 'in the know' point to a source as to why nationalising Deutche is the only solution to fix this?

It's on its knees and has been for some time.

Last year they announced 30,000 job losses.

conman · « **Reply #38 on:** March 12, 2020, 09:16:22 pm »

Quote from: Gnurglan on March 12, 2020, 09:04:46 pm

Yes, it's bad. I mean very, very, very bad. And they will of course try the same trick again and again. Low interest rates have encouraged borrowing. Companies have avoided investments, instead they have borrowed money to buy back their own shares.

I am still trying to understand the fundamentals in this, but literally no-one is optimistic. The most optimistic view I have come across is one who thinks the bond market will tank and big capital will be forced to go to the stock market. But then we are talking fear, a lack of trust in government and what follows.

Have you checked out George Gammon?

I dont see that happening with the bond market, but I'm not a person that would know.

I think it has to break this time. Last time they propped everything up and exasperated the problem with cheap credit.

Unfortunately, rate cuts and quantitative easing are less effective than they originally were.

Like a crack addict needs more crack over time, inflated economies need more stimulus.

I'll check out George Gammon now.

Gnurglan · « **Reply #39 on:** March 12, 2020, 09:18:43 pm »

Quote from: Ashburton on March 12, 2020, 08:57:01 pm

Something tells me this is going to run and run.

Can someone 'in the know' point to a source as to why nationalising Deutche is the only solution to fix this?

Not pretending to he in the know, but Deutsche Bank seems to be a disaster waiting to happen. It's the biggest systemic risk out there. I am not sure nationalising it will save anything.

If you want information on DB, the link below is a place to begin. There are more references to other articles.

https://wallstreetonparade.com/2019/09/the-repo-loan-crisis-dead-bankers-and-deutsche-bank-timeline-of-events/

Or try this
https://youtu.be/MFhQNugglXk