Well it took the flu to get us back down to zero, in between a little hand wringing by Trump for the past 3 years. All of that really hard work of extricating the US out of deflation and into normalized rates is gone.
In an unprecedented move, the Fed, getting in before Asian trade, slashed rates from 1.00-1.25% to fucking zero. That is 100bps and on top of that — $700b in fantasy cash to buy into treasuries and MBS.
The quantitative easing will take the form of $500 billion of Treasurys and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment.
The rationale for treasuries and MBS is to provide a counter-party to all of the companies who are now LIQUIDATING in order to shore up capital. The Fed will now serve as a bag holder for all of the people needing to sell. It’s worth noting, this is the last major bullet in the Fed’s chamber and this is being used to buy us time — the markets that is. I suspect this will serve as a sugar rush and people with a modicum of sophistication will know this is a SELL THE NEWS type of release.
Reason being: unlike 2008-2009 where all we needed was to paper over stuff and instill confidence, today you cannot go to Disney if you wanted to — because it’s fucking closed. There is now a social stigma attached to people who do not go outside with a hazmat suit and anyone discussing vacation plans is equal to Hitler.
Since the news in Italy, Spain, and France is only getting worse, with cases and deaths going parabolic day over day, one could only begin to imagine how long Americans will be holed up inside of their homes, corporations ripping thru capital reserves — ebbing quickly towards insolvency.
I will sell the rip or the dip — makes no difference to me.
NOTE: GS is estimating Q2 GDP will come in at -5%.
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Ah new thread.
Thank you Fly.
Do you think that countries on lockdown just stay locked down longer?
Let’s watch progress in Italy and Spain for now.
Apparently the space aliens already won. Everyone is fucked except the Chinese.
The Fed had no choice but to fire away more bullets.
Otherwise, we would more than likely repeat Black Monday (Oct. 28, 1929)–not that it can’t still happen.
Powell Roulette! Agree on the sell the rip should it occur…thanks as always.
Sold DGAZ and doubled down on NUGT @ 7.60. We shall see what $700B QE brings…
Though as you noted with JNUG – maybe the gold bugs also continue to be exterminated with impunity via margin airstrikes – “Repeat! Drop all remaining ordnance on my pod!”
If you have a chance to help a fellow out next week. Take it.
Peace and Washed Hands,
monkeybot
Trump melted Powell’s spine with some voodoo shit.
Did Powell have a spine?
Well, this is just disrespectful. The sellers are ignoring the Fed altogether.
Yeah. But gold went up.
The whole metal space decided to retrace some. I enjoyed watching Palladium log the greatest weekly drop last week in all of the trading history of the metals.
Welp, limited down already. GG. LMAO.
Limit down already.
Good for my 20% short positioning if that holds overnight. Now what to do with the other 80%.
Still early in this brand new bear market for the safe hedge trades.
This was a smart move by JP. Now the ball is back in Congress and our great leader’s court.
Nope, there’s no 3D chess going on. He just didn’t want to be the fall guy. But he will still be a fall guy of a long list of fall guys.
Damn E*TRADE lagged out in the last 5 min on Friday and I was only able to sell half of my AAPL or I’d be all out…
Fly, who are the companies selling these treasuries to shore up capital and why are they selling? Asking for educational purposes.
Looking backwards:
“I fully expect the FED to bail out everyone by buying (30-yr) bonds…The FED Board led by Powell doesn’t have the stomach for painful long-term solutions – just look at their rate hike about-face….I’m looking forward to sellign my bonds to the FED in a year or two. ”
– Numbersgame, April 12, 2019
Going forward:
“Best news for the bears: no more fear of intervention to stop the carnage. First of all, if they try again ***they will look even more desperate and scared.*** Secondly, the market saw waht happenned this time and now sell-the-f***ing-upswing (STFU) has taken over from BTFD as the prevelant attitude.”
– Numbersgame, Marc 3, 2020 (after 0.50 rate cut)
Market reaction to cut
Pre-cut:
-900pts on Dow (gambling site)
“Black flag sailing”
Initial reaction:
+300pts on Dow (gambling site).
“Yay!”
Current:
-900 pts on Dow.
“Wait…they cut 0.5 points last week… theye are cutting a FULL point now – and can’t even wait until their meeting Wednesday? What do they know that I don’t?”
S T F U
They will still come up with some new shit to patch things up. Bernanke was very good at those things. Trump may very well make him the chair again.
They will buy stocks eventually (as i’ve mentioned before).
“They” could mean the FED or the Treasury. Unfortuenatel for Bulls, I am almost certain that this would take an act of Congress either way.
Hey, the BOJ has been buying Japanese ETFs for more than a decade.
It’s just unseemly and ineffective.
I’m listening to this Powell briefing on Bloomberg. He just said no to buying stocks.
right…because he *can’t*
“would take an act of Congress “
Not his stated reason. He says there are “better liquidity tools” to *help* the economy. I’m sure the BOJ experience is also very well noted.
There it is, confirmed. He said no. That means they’ve been doing for some time. We don’t need no stinkin congress.
Make up any numbers you like. It’s the law. No reporting needed.*
* Must be a national security issue – what isn’t?
FASAB Statement 56
https://constitution.solari.com/fasab-statement-56-understanding-new-government-financial-accounting-loopholes/
Hey.. but Flynn is getting a pardon. So we got that going for us.
Here’s something that isn’t going down: VIX futures, up 14%
Don’t short VIX if the financial system is showign cracks.
https://ibankcoin.com/flyblog/2020/03/13/collapse-vix-next/#comment-567491
Nikkei futures haven’t limited down. Was down more than 6% just a few minutes ago.
We haven’t even had a lower-low-lower-close candle on the daily VIX since this run up started. Not a single sign of a crack in the VIX. I said before and repeat VIX probably wont collapse until it has been on this ramp for about 3 weeks. It may run again after that.
Wish I was all in with FAZ.
GG LOL
I’m pretty sure going limit down in 15 minutes is a new record. Finna go back to the 2008 tape to confirm.
BEAR MARKET!
I can’t help but wonder how much longer this house of cards would have gone on had it not been for this virus?
I couldn’t believe it just kept going. That was a tough bull.
The most hated bull market in history. I wonder if they’ll miss it.
Also the Germans are talking about nationalizing some shit. That’s always a friendly headline.
https://www.reuters.com/article/us-health-coronavirus-germany-pharmaceut/germany-would-like-to-localize-supply-chains-nationalization-possible-minister-says-idUSKBN2101BH
Welcome to the March
Happy March Sadness!
Calculated Risk says, “my view is the US economy in now in a recession”. That guy doesn’t make such statements lightly.
I thought that a month ago. Unavoidable.
Short sale ban and banking holiday are not off the table. Overnight positions are a bad idea now.
Good point. And it was just getting fun.
Alright, who is it?
Who forgot to notify the futures market about the rate cut & QE?
My grandpa told me about the time back in 2008? when the Fly went from bullish to short in a matter of hours, with good results he said.
2008? He does that at least once a month.
I’ll give him credit, though, at being able to go both ways, much more nimbly (sometimes wrongly) than most. With my long-term fundamental view, I jump of bullish trends early (like in 2019).
Chin jsut released numbers. To quote the Bloomberg guy “Oh my God…multiples timws what expected”
Something like -20% retails sales for Jan-Feb Y2Y
CHAD still sad, though. V-shaped recovery is priced into Shanghai market level. US markets were ignorign China problems for a whiel, now it is the other way around.
If the banks don’t want to buy their stocks at these levels – down more than 40% on Thursday – why would anyone else?
https://www.zerohedge.com/markets/jpmorgan-suspends-stock-buybacks
Indeed, “Last week it was the oil and energy companies. This week it will be the banks.” Who’s next for suspending its stock repurchases?
What we need is a WAR on CORONAVIRUS!
Following up our amazing successes in the war on poverty, the war on drugs and the war on terror; how can we possibly fail?
When you put it like that, my cough starts to sound worse…
i should have listened to my soothsayer who told me beware the Ides of March two weeks ago.
While Italy is still not showing any sign of peak COVID, “capitalism” continues to bleed away capital fast–but all the mayhem could have been avoided not by the free market but the public sector:
https://www.jacobinmag.com/2020/02/coronavirus-outbreak-free-market-pharmaceutical-industry
https://www.nbcnews.com/health/health-care/scientists-were-close-coronavirus-vaccine-years-ago-then-money-dried-n1150091
Ahh yes, Comrades we’ve been basking in the free markets for far too long. You know, like the freewheeling pharma industry. US drugs are 20x the cost of those in Spain. Why doesn’t Spain sell some of those here in the Free markets?
Central controllers know best!
Central planning or otherwise, the gist of the argument is that profit incentive alone is not sufficient to solve all the worldly problems/crises–may that be investments in environmental protection, public health, and so on.
I for one hope that the governments would leave the free market alone and let it figure out what to do with the coronavirus while it continues its killing spree.
And if the free market was indeed as perfect and powerful as some right-wingers think it is, some venture capital firm would have already come up with a cure by now and got paid handsomely for having been duly induced by said potential profit incentive.
More on our free markets from Martin Armstrong:
2018 Lobbying
#1 US Chamber of Commerce $94,800,000
National Association of Realtors $72,808,648
The Open Society Policy Center, George Soros $31,520,000
Pharmaceutical Research & Manufrs of Amer $27,989,250
American Hospital Association $23,927,842
Blue Cross $23,604,221
Alphabet $21,740,000
American Medical Association $20,417,000
AT&T $18,529,000
Boeing $15,120,000
National Association of Broadcasters $14,170,000
Thanks for the stats from Armstrong, convicted felon and the blogger who posts answers to his own questions. Dude is a hack.
If that’s true. Ok.
The real question: Are the facts correct?
Lobbying is an essential part of our constitutional right to petition the government for a redress of grievances. Not all lobbyists are Jack Abramoff although many congressmen can be bribed. Term limits are the answer.
There’s no such thing as a coronavirus vccine, and never will be, just liek there is no such thing as a universal flu vaccine (scientifically speaking).
New Flu vaccinesa are developed evey year. What leads anyone to beleive that an untested SARS vaccine would work against COVID-19?
Also, the NIH gives out $6B in grants to private industry to study infectious disease. Apparently, that money was spent devloping scientific models, because now we are very good at predicting how many will die once we have enoguh data. $2B in grants to develop vaccines.
So many of Pharma’s products were devloped from taxpayer grant money…
https://www.nih.gov/about-nih/what-we-do/budget
“Budget and Spending — funding for grants and contracts”
Premature adulation.
How many minutes after the open until we hit the circuit breakers again?
Pre-market is already well-ahead of futures: SPY sold at 52-wk low.
…and, of course, 10-yr and 30yr interest rates are creeping… up.
SVXY, down 15%
TVIX at…holy shit..just look for yourself: https://finance.yahoo.com/quote/tvix?ltr=1
Looks like short VIX is getting is gettign HOT ROLLED AND STEELED for the 4th consecutive week.
My late January recommendation of “Sell everything and buy TVIX at 38 to 48” was
the BEST recommendation of all time here.
By anybody, Fly included.
I actually bought TVIX below that…but sold it.
Profitable trades require closing transactions. Are you are telling me that you bought at 38-48 and are still holidng?