stock market was up today...

[NorthDallas40]

Surprised nobody has talked about the today's Fed actions yet.

They can now buy munis bonds for the first time as well as corporates that have lost an investment grade credit rating. There are some estimates out there that their balance sheet could hit $10 trillion by the end of this year...that's almost 50% of GDP. Pretty unbelievable. At some point, I don't think anything is going to be truly off limits for them to buy, even equities (particularly if done via futures).

It should scare the hell out of anybody who thinks fiscal responsibility should be considered and nationalization of private industry is a bad thing. Basically the lending arm of the federal government holds the note on municipalities and private industry. Pretty damn scary stuff.

 

[Thunder Good-Oil]

Yeah, testing would be they to everything, it would seem. But, we seem to have leadership right now that thinks that the raw number of tests is all that counts, regardless of the size of the population.

The number of tests is important. We started out at zero. Unfortunately previous administrations ignored our supply chains becoming China dependant and without enough inventory there's a bottleneck.

Good thing that we have a POTUS that's cutting red tape, addressing producers sending needed supplies off shore, and getting important companies to focus on the effort.

 

[05_never_again]

It should scare the hell out of anybody who thinks fiscal responsibility should be considered and nationalization of private industry is a bad thing. Basically the lending arm of the federal government holds the note on municipalities and private industry. Pretty damn scary stuff.

It isn't nationalization as much as it is eventual currency debasement. The Fed banks themselves are privately owned and have no interest in running businesses. The problem is that I don't know how they unwind all of this.

 

[NorthDallas40]

It isn't nationalization as much as it is eventual currency debasement. The Fed banks themselves are privately owned and have no interest in running businesses. The problem is that I don't know how they unwind all of this.

Valid point. This goes beyond 2009. I don’t see how we emerge from this without our currency taking a hit. Only way would be if all of Europe does the same thing.

 

[05_never_again]

Valid point. This goes beyond 2009. I don’t see how we emerge from this without our currency taking a hit. Only way would be if all of Europe does the same thing.

Your last sentence is why it won't. Europe is an even bigger mess, and remember they never recapped their banks after 2008.

Currency valuations are all relative to another currency...it isn't like stocks or bonds. You can print and debase, for some period of time, without consequence if you're the world's reserve currency and the rest of the world is an even bigger mess than you.

 

[TheDeeble]

It isn't nationalization as much as it is eventual currency debasement. The Fed banks themselves are privately owned and have no interest in running businesses. The problem is that I don't know how they unwind all of this.

I don't see how they will without some negative effect. Everything done will have some effect. But rather than let the market play out with the losses and negatives, they're spending money to avoid the negatives and everything negative is just being piled into the "debt" column and largely ignored by all.

I'd think it should be painfully obvious for everyone that there is zero intention of ever addressing the govt spending problems and debt. We've seen how it goes now. Anytime a crisis pops up business will look to the govt and the fed to bail them out. And the govt will look to the fed to bail them out. Rather than have long term plans with balanced budgets and good fiscal policy the US has decided it will just do whatever it wants till some crisis pops up and then address it with insane amounts of debt.

 

[Velo Vol]

 

[Velo Vol]

The number of tests is important. We started out at zero. Unfortunately previous administrations ignored our supply chains becoming China dependant and without enough inventory there's a bottleneck.

 

[Thunder Good-Oil]

Medical equipment is included. Things like the da Vinci multi-million dollar surgical robots and Medtronic's high dollar devices are made here and then exported to the rest of the world which can skew the pretty graph. Big Pharma can be dependant on China to supply a 25 cent material that goes into a $100 dosage that they then export the final product from here or from a facility in Ireland or Germany. But if China doesn't hold up their end of the supply chain, then production can come to a halt. The shortage of cotton swabs was a bottleneck in the highly sophisticated process of testing for COVID-19. Just because the value of what we export is far greater than what we import, that doesn't mean that we're still highly dependant on Chi-Com for critical supplies and components.

 

[Rasputin_Vol]

Slash Oil Output Or Else! Senate Bill Would Remove US Troops From Saudi Arabia In 30 Days

 

[VolStrom]

Slash Oil Output Or Else! Senate Bill Would Remove US Troops From Saudi Arabia In 30 Days

The communists over at the house would poo poo it unless we give China $2 trillion in aid.

 

[Velo Vol]

Peter Tuchman, on his COVID-19 ordeal.

 

[Mick]

Slash Oil Output Or Else! Senate Bill Would Remove US Troops From Saudi Arabia In 30 Days

So the government is trying to prop up the American Oil industry by trying to force the world to cut supply. If the goal is economic recovery, cheap gas for the consumers is imperative.

 

[Velo Vol]

So the government is trying to prop up the American Oil industry by trying to force the world to cut supply. If the goal is economic recovery, cheap gas for the consumers is imperative.

Follow the money, probably.

 

[Rasputin_Vol]

So the government is trying to prop up the American Oil industry by trying to force the world to cut supply. If the goal is economic recovery, cheap gas for the consumers is imperative.

I think you missed the second elephant in the room. WTF does removing troops in Saudi Arabia have to do with any of this?

 

[Mick]

I think you missed the elephant in the room. WTF does removing troops in Saudi Arabia have to do with any of this?

We're guarding their oil with our troops. Did you really have to ask?

 

[Rasputin_Vol]

We're guarding their oil with our troops. Did you really have to ask?

Now you would think that if the Saudis needed US protection, they would not bite the hand that is feeding them and fully expect repercussions for attempting to kill the American oil industry. So it is very odd that the KSA would risk a US pullout.

That makes me wonder if the troops were mainly there to protect Saudi interests... or are the troops mainly there to protect American interests?

 

[Velo Vol]

They must be fighting "terrorism."

 

[05_never_again]

Another guy who doesn't understand that markets discount information, and that they don't go down in a straight line.

Did he miss the 35% peak-to-trough decline from late February until mid-March? Faster than 2008, 1987 crash, even 1929? Why does he suppose that happened?

Scahill should stick to what he knows better, which is criticizing US foreign policy.

 

[Velo Vol]

Another guy who doesn't understand that markets discount information, and that they don't go down in a straight line.

I'm still looking for the "good," forward looking information (profit-wise). Sure, this one makes sense, but others?

 

[05_never_again]

I'm still looking for the "good," forward looking information (profit-wise). Sure, this one makes sense, but others?

All I can tell you is that markets don't go down in a straight line. Look at a chart of the 1929 crash, after 9/11, or the financial crisis. After downdrafts, there were these huge rallies that recouped large portions of the losses. They all eventually turned back lower. After dramatic declines like that, it doesn't take good or even OK data in order to rally...it just takes "less than apocalyptic" information. We've gotten a stream of that kind of information over the last couple weeks. Combine that with the unprecedented Fed stimulus, and you have the recipe for a bounce. If the economy does not begin to slowly re-open sometime in early May, I bet we do turn back lower.

Travel industry stocks are still absolutely decimated and have given up the entirety of their bounce. The banks have bounced, but are still 35% off the February highs. Despite the bounce, the S&P is still down 20% from the high as of this morning. By Scahill's tweet, you're left with the impression that the economy is still awful but the markets have totally recovered, like they are in excess of the old high, and that's isn't the case. I get it - he's trying to make a political point, but he doesn't understand markets.

 

[Thunder Good-Oil]

I'm not seeing why the US government would create any stimulus benefits for the cruise industry. I haven't taken a hard look, but aren't they foreign domiciled, mainly employing foreign workers, not building their ships in the US, and they avoid US taxes? Maybe as compensation for cooperating by shutting down -or- they stimulate ancillary US based business activity and port employment?

 

[NorthDallas40]

I'm not seeing why the US government would create any stimulus benefits for the cruise industry. I haven't taken a hard look, but aren't they foreign domiciled, mainly employ foreign workers, not building their ships in the US, and they avoid US taxes? Maybe as compensation for cooperating by shutting down -or- they stimulate ancillary US based business activity and port employment?

Correct. They made a choice to move out of the US for profit reasons. And now they need to reap the rewards of those choices.

 

[05_never_again]

I'm not seeing why the US government would create any stimulus benefits for the cruise industry. I haven't taken a hard look, but aren't they foreign domiciled, mainly employing foreign workers, not building their ships in the US, and they avoid US taxes? Maybe as compensation for cooperating by shutting down -or- they stimulate ancillary US based business activity and port employment?

Yep. The only actual ties those companies have to the US is that they have their physical HQs here, and pick up mostly American tourists at ports of call in the United States. All of that is fine...have no problem with it, but makes it harder to justify a bailout. That, plus they're a freaking cruise line.

 

[NorthDallas40]

Yep. The only actual ties those companies have to the US is that they have their physical HQs here, and pick up mostly American tourists at ports of call in the United States. All of that is fine...have no problem with it, but makes it harder to justify a bailout. That, plus they're a freaking cruise line.

If their ship assets showed up on some strategic reserve asset list I think you can make a case. Outside of that they made their choice and need to live with the consequences I say.