iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,622 Blog Posts

EUROPE SUFFERS WORST DROP IN HISTORY; US MARKETS ARE GETTING DESTROYED

Italy was down more than 16%, Spain nearly -15%. The Germans lost 12.2%, making it the worst single day drop ever. Here in the state we have a confluence of events transpiring that’s so severe — it could only end badly.

Let’s go thru the danger signs.

LEVERAGED LOANS via SRLN off by nearly 5%. That’s a standard deviation blowout.
Pancake House, DIN — off by 27%.
Another casual dining giant — EAT, off by 30%.
Spirits Airlines, SAVE -30%
Life insurance giant, LNC -24%
Royal Caribbean, RCL -24%
Macy’s, M -23%
Six Flags Great Adventure, SIX -17%

I can go on. The point I am making here is this. You have a giant pyramid scheme, which is normal of course. Business rely upon foot traffic and people buying stuff. People are not doing that anymore and these companies are GIANT. We don’t have small mom and pop stores anymore. These chains are enormous with wide ranging overhead and employee counts. They cannot handle the downtime, in so quick a fashion.

All of the sports leagues have been canceled. Italy is shut down. This virus scare is so pervasive, so severe, it’s only a matter of time until Disney shuts down.

The resolution cannot be made at the Fed. The government either lends EVERYONE money for free or they will go bust and markets will be forced to close until this passes. If they do not freeze and close the exchanges — EVERYTHING will go to zero.

BA is down 53% the past month.

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28 comments

  1. numbersgame

    What happens if today’s FED move doesn’t work…?

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  2. irma vep

    Is this more “Atlas Shrugged” or “Zombieland”?

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  3. og

    DIS seems like the no brainer airlines / cruise play now. Already down 40% from highs.

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  4. cheesefries

    They could shut down the market until the virus passes. Massive squeeze potentially

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    • numbersgame

      “Until the virus passes”?

      What if things move from unknown to even worse? Market tanks in the backgroun while pensioners, retail investors, and 401k drain out,. Wall Street banks will be trading futures on other markets, one way or another.

      Ever seen a 20% down day? Do you want to?

      The potential goes both ways.

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  5. numbersgame

    Who knows how to fix the problems? Nobody, that’s who.

    I’m not even sure what the problem is, except that I can gurantee that overleveraged finacial firms are the lynchpin yet agin.

    You don’t start rebuildign the house while its still on fire.

    Instead of a corporate bailout plan, why not a shock-and-awe plan addressing the trigger: COVID-19.

    Cancel schools, cancel churches, cancel anything with more than 200 people. Get whatever the hell South Korea has, and starts testign with THAT, so we actually know how big the problem is. Even if the results aren’t as good, we nee QUICK results for now.

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  6. bountyhunter1

    The 500Bil repo pump faded just as fast as the 50 basis intraday cut ….very bad.

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  7. flea

    If the past is any indicator, we may be here a while …

    Looking at the 1929 crash:

    1. Peak to trough (-89%) took almost three years
    2. The DOW lost 48% in the first leg down which took 2 months
    3. There were seven major legs down and seven corresponding partial recoveries
    4. The recoveries would gain back 25-50% of what was lost on that leg down
    5. The first recovery lasted 5 months after that first 48% down (everyone thought they were out of the woods)

    Looking at the 2000 Nasdaq:

    1. Peak to trough (-78%) took 2 years 7 months
    2. Lost 37% in first 2 months; recovered more than half in next 2 months, before resuming

    The difference so far is the speed of this drop.

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  8. purdy

    Will “safe-haven”ers throughout the world continue to loan our government lots of cheap long-term money so that they can prop-up otherwise bankrupt companies and keep the option self-granters and bonus self-rewarding happy? Bah.

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    • tjnyt

      How much you need to just live? Stock& bonds, in the age of affluence, to soak up the fiat you don’t find any current need for. Idle folks constantly complaining about FED creating too much fiat – that’s where it all ends up. Fiat=Electricity, from ground to + to ground again. Just need a steady hand to prevent brownouts, blackouts or occasional sparks.

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  9. cancel19

    Come up with the gd cure to this shit already! I bet Chiners has the cure and is waiting for Trump to cry uncle!

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    • soupbone

      I figure, keep on sipping. Never know maybe the virus doesn’t like IPA’s.

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  10. alty

    Bailed on TLT. Would rather have the cash at the moment

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  11. bambam

    Putin wins. Plan to bring the US to a halt and hit up where it hurts. The economy.

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  12. flea

    What we are witnessing is fiat in it’s natural final throws of life. It’s thrashing about on it’s death bed. The hubris with which the elite claimed it for their own purposes is now exploding in everyone’s face.

    The only surprise is that it lasted 107 years.

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    • soupbone

      the dreaded reset button, the end of the debt supercycle? maybe not but it’ll be tested hard this time. anycase we’re talking multiyear event now.

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    • tjnyt

      It’s only electricity, makes merry go round. The medium of exchange, no longer storehouse of value

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  13. edge

    Well that ended my 15 day winning streak. Made 5 trades, 1 winner.
    Lost 0.25%. No big thing.

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    • narcist

      I liked today. Played it safe and went with the still-winning hedge, i.e., long /NQ short /RTY.

      The only caveat is that every now and then a big tech name will crash but the Russell 2000 companies are beyond fucked this year.

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      • edge

        Might look into that. The chop keeps getting me stopped out.
        Then again, 15 up days in a row is good. But sometimes things just quit working

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  14. narcist

    ELBOW ‘EM BY THE PUSSY 2020

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  15. edge

    I’ve read a few places where the Fed planned to go all in and put the ball in the legislative and executive branches where it belongs.
    Judging from today’s action the Fed is, indeed, all in.

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  16. tjnyt

    While the hysteria reaches a crescendo, the virus has already moved through a susceptible population and pandemic is on a decline. Plan your moves accordingly. You heard it hear first.

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