stock market was up today...

[TheDeeble]

If it's its own component, even if it's a computer or control unit, it will need to be replaced or updated eventually even if it needs a software update.

This sounds more like a program that was built into an existing flight control computer software or something that tells the plane how to handle. If true I get what he means when he says it's not something to train on.

But then I would think it's not something that could be turned on or off. I'd need to know more about how it works. They probably should make flight crews or maintenance manuals available with the information.

 

[Thunder Good-Oil]

That is where the flaw in your comparison is. You are comparing an industry to one incompetent/negligent company. The proper comparison would have been to compare Boeing to an equally flawed mining company.

And really, that wouldn't even be a fair comparison because mining and aerospace have different risks.

I'm comparing investments. You're virtue signaling about the evils of BA while having said that I have a "sick love affair" with Boeing because I've mentioned it too often for you to tolerate in a thread about investing. You say that you hate them because of lives that were lost, yet you are a never ending proponent of precious metals. More people have been harmed in your beloved industry, but that doesn't stop you from promoting it. So maybe you ought to consider dismounting off of that high horse or at least avoid the snarky comments.

 

[05_never_again]

If it's its own component, even if it's a computer or control unit, it will need to be replaced or updated eventually even if it needs a software update.

This sounds more like a program that was built into an existing flight control computer software or something that tells the plane how to handle. If true I get what he means when he says it's not something to train on.

But then I would think it's not something that could be turned on or off. I'd need to know more about how it works.

Maybe they could have updated it when other components needed a software update. It was hardly the only piece of software on the plane. Boeing's CEO himself has said that the pilots weren't told it was on the plane. I agree that if MCAS ultimately is a piece of code embedded into the flight control system, that ultimately that isn't something you could "train" on, but the pilots weren't even told it was there.

Also, the MCAS reportedly could be turned off somehow. The Ethiopian Air pilots did it, but it was too late to save the plane.

Ethiopian Air pilots turned off 737 MAX anti-stall system. Then it turned on again

 

[85SugarVol]

???

What's doomed 737 Max is commonly described as a software problem. Won't the plane work fine once the computers are fixed?

 

[Velo Vol]

I'm comparing investments. You're virtue signaling about the evils of BA while having said that I have a "sick love affair" with Boeing because I've mentioned it too often for you to tolerate in a thread about investing. You say that you hate them because of lives that were lost, yet you are a never ending proponent of precious metals. More people have been harmed in your beloved industry, but that doesn't stop you from promoting it. So maybe you ought to consider dismounting off of that high horse or at least avoid the snarky comments.

Diamonds are OK, right?

 

[Velo Vol]

Well, it fell 37% peak to trough, so that's significant too. Fastest 30%+ fall from a high of all-time, even faster than the Great Depression, 1987 crash, or 2008-09 financial crisis. Ultimately I don't know. Markets don't go down in a straight line, and the most powerful rallies occur in bear markets. There were gigantic rallies during the Great Depression and 2008 financial crisis too. Go take a look at the Dow's biggest percentage gains of all time...about half of the top 20 occurred from October 1929-1933, which were probably the worst 3+ years in the US economy's history. It's impossible to know exactly when, but panic selling inevitably gets exhausted, there's no supply for a period of time, so prices rise to a level where supply appears again.

Personally I would take it as a positive at this point that the market bottomed several days before Trump's lockdown extension, and when he extended it until 4/30 the market has actually continued to bounce. It other words it didn't fall further on new "bad" information. That tells me that the move lower that bottomed on 3/23 likely fully priced in the impact of the global economy being shut down through April. If it hadn't fully priced that in, we'd probably be trading lower than those levels already. If you're bullish, you'd always rather the market just go ahead and fully price in negative news and get it over with, and then you can rally if things turn out to be not quite as bad as you thought.

I think we could retest the low on some of the economic data coming in worse than expected, or perhaps for purely technical reasons of dip buyers losing interest (and short covering getting exhausted) and then needing to see that low retested and hold to truly confirm that there are buyers there. Other people will tell you we probably won't bottom until we peak in new virus cases.

I have no model, or really anything more than a gut feeling informed by prior bear markets, but it really seems like a sub 2000 S&P is in the cards. Sounds like you may be in that camp, too, if for different reasons.

I know there's relief rallies in bear markets but I haven't seen any news that would have justified +15%.

 

[05_never_again]

I have no model, or really anything more than a gut feeling informed by prior bear markets, but it really seems like a sub 2000 S&P is in the cards. Sounds like you may be in that camp, too, if for different reasons.

I know there's relief rallies in bear markets but I haven't seen any news that would have justified +15%.

There's very rarely any news that justifies it. You do have monetary and fiscal stimulus being thrown at the problem to the tune of several trillion dollars - that's going to cause a bounce at some point. The Fed is in there directly buying corporate bonds now, which has really calmed down the credit market for the time being. Check out LQD/HYG/JNK and credit spreads over the last several days.

Even if the news is bad, you just can't keep selling day after day after day. Eventually sellers completely run out of supply, albeit temporarily, and it's like a rubber band. If you stretch is really far in one direction and let it go, it'll snap back the other direction. If there's very little supply at certain overhead price levels, then prices are going to rise very rapidly, especially when dip buyers and people covering shorts show up.

 

[Thunder Good-Oil]

Diamonds are OK, right?

I'll consider investing in nearly anything. I sold out years ago since I've worked for companies that will accept business from about anybody (and let the top salesmen get away with all but kill ing someone... even then if they have the right lawyer though...). But who knows with Rasputinvich? I do think that non-industrial diamonds are stupid, but when they're selling I'd have had no issues with buying Tiffany (if they weren't being bought out) or the other retailer(s). I think Kroger is into jewelry.

Pretty much need to check your morality at the door. Most everybody is up to something disagreeable or controversial.

 

[Thunder Good-Oil]

It's a global reset. And everybody wants to own that zero yielding US debt. The US economy will be relatively stronger (than most every other economy) after C19 is under control. I can't think of any other top 25 or so economy that will make up any ground on the US. Maybe South Korea.

 

[FLVOL_79]

If it's its own component, even if it's a computer or control unit, it will need to be replaced or updated eventually even if it needs a software update.

This sounds more like a program that was built into an existing flight control computer software or something that tells the plane how to handle. If true I get what he means when he says it's not something to train on.

But then I would think it's not something that could be turned on or off. I'd need to know more about how it works. They probably should make flight crews or maintenance manuals available with the information.

you can turn everything off in an aircraft. We get s lot of accidents where people turn off things like autopilot..or their engines midflight..and crash.

 

[Velo Vol]

There's very rarely any news that justifies it. You do have monetary and fiscal stimulus being thrown at the problem to the tune of several trillion dollars - that's going to cause a bounce at some point.up.

Do you expect legit inflation in the months ahead?

Pretty much need to check your morality at the door. Most everybody is up to something disagreeable or controversial.

Yeah, I was being facetious about goldbug @Rasputin_Vol's moral qualms with Boeing.

 

[05_never_again]

Do you expect legit inflation in the months ahead?

Not in general prices, no. I do (eventually) in asset prices...equities, bonds, real estate.

 

[Thunder Good-Oil]

Inflation is a different animal in the 2020s. Oil and energy used to be huge parts of household spending. Not so much right now. But cars and trucks are going to get expensive with production shutting down and cheap loans driving up demand (for those that can get approved). Housing might be the big question. Cheap mortgages, but lenders might not approve as easily. Supply and demand of the housing stock seems like it will be they key factor with inflation for the next year or 3.

 

[TheDeeble]

you can turn everything off in an aircraft. We get s lot of accidents where people turn off things like autopilot..or their engines midflight..and crash.

I was meaning it sounded like it might be a software rule that was built into the plane's fcc or something.

For people that don't have some kind of aviation background as an example: I was wondering if this is something like Toyota adjusting the shift points for my generation truck when under cruise control. At x rpm at x speed it will upshift or downshift. It's not something I have control over, but I can turn off cruise control if I want. It's not something they would really notify people of because cruise control was already there, they just adjusted when it would change gears. At first I was thinking MCAS was it's own system with a computer/components or control unit but it doesn't sound like that.

 

[Matt2496]

???

What's doomed 737 Max is commonly described as a software problem. Won't the plane work fine once the computers are fixed?

The software had to be implemented in the first place due to a design flaw on the airframe itself. IIRC, the placement of the newer engines caused the center of gravity to shift, causing the plane to want to pitch up. So, they implemented a system to force the nose down once that occured.

However, the MCAS system only took input from one sensor. The MCAS, thinking that the aircraft was stalling based on that one sensor, forced the nose down right after takeoff, killing hundreds.

This lack of redundancy on an aircraft like this is inexcusable.

 

[Velo Vol]

Supply and demand of the housing stock seems like it will be they key factor with inflation for the next year or 3.

Granted, housing is a significant component of the economy, but why is it so important for inflation.

 

[Velo Vol]

Not in general prices, no. I do (eventually) in asset prices...equities, bonds, real estate.

I know there wasn't after '08, but this is a multiple of that in money being flushed into the system.

 

[Thunder Good-Oil]

Granted, housing is a significant component of the economy, but why is it so important for inflation.

It seems like housing has the most potential to cost more. Whether or not it's included in the CPI (I don't know if it's in the formula or not), the components are. Cheap energy might keep some pieces from getting too expensive though.

 

[NorthDallas40]

Not in general prices, no. I do (eventually) in asset prices...equities, bonds, real estate.

What do you mean by inflation in asset prices? Wouldn’t we just call that over valuation of the market?

The prices of actual goods and services were the only place I think inflation has any real meaning. With regards to assets and commodities that’s just investment poker isn’t it?

 

[05_never_again]

I know there wasn't after '08, but this is a multiple of that in money being flushed into the system.

Yes, but the deflationary pressures on the economy at the moment are absolutely immense. In order to get inflation into general asset prices, money has to have velocity. Even as the economy recovered after '08, banks continued to hold trillions and trillions of dollars in excess reserves. They weren't lending it out because they didn't see what they considered good opportunities or there simply wasn't demand for it.

However, the liquidity in the system that the Fed pumps out does leak its way into asset markets, particularly higher-yielding ones since interest rates are so low (high yield credit, equities, real estate).

 

[05_never_again]

What do you mean by inflation in asset prices? Wouldn’t we just call that over valuation of the market?

The prices of actual goods and services were the only place I think inflation has any real meaning. With regards to assets and commodities that’s just investment poker isn’t it?

I mean inflation in financial assets. Stocks, bonds, real estate.

I disagree that prices of actual goods are where inflation has any real meaning. People own financial assets, and when they increase/decrease in value it affects consumer behavior. Trump heavily touted stock market gains for a reason.

 

[Velo Vol]

Yes, but the deflationary pressures on the economy at the moment are absolutely immense. In order to get inflation into general asset prices, money has to have velocity. Even as the economy recovered after '08, banks continued to hold trillions and trillions of dollars in excess reserves. They weren't lending it out because they didn't see what they considered good opportunities or there simply wasn't demand for it.

However, the liquidity in the system that the Fed pumps out does leak its way into asset markets, particularly higher-yielding ones since interest rates are so low (high yield credit, equities, real estate).

That makes sense. It assumes global demand for US safe assets will remain strong, but at this point there's no reason to think that won't continue.

 

[NorthDallas40]

I mean inflation in financial assets. Stocks, bonds, real estate.

I disagree that prices of actual goods are where inflation has any real meaning. People own financial assets, and when they increase/decrease in value it affects consumer behavior. Trump heavily touted stock market gains for a reason.

I don’t disagree that asset prices impact consumer behavior. We damn sure are trimming back with the current market.

I just think it’s a tad fast and loose with the term “inflation” as tied to assets and commodities that’s all. I think “valuation” is just a more technically correct term

 

[05_never_again]

I don’t disagree that asset prices impact consumer behavior. We damn sure are trimming back with the current market.

I just think it’s a tad fast and loose with the term “inflation” as tied to assets and commodities that’s all. I think “valuation” is just a more technically correct term

That's why I specifically said inflation in asset prices. I don't expect inflation any time soon in general prices.

 

[Thunder Good-Oil]

That's why I specifically said inflation in asset prices. I don't expect inflation any time soon in general prices.

Maybe if China were cut off, but that won't happen.