Prices not going down??

[CarinaPDX]

Originally Posted by geoleo

Bet you are a real dismalist.

I have had a lifelong interest in economics if that is what you mean. And like others here I moved to a mostly cash position some time ago because a contraction was inevitable, so you could call me a pessimist. OTOH when I reinvest and then watch the market recover I promise not to be dismal...

Greg

[alansmith]

Where did all of prosperity that was built up go? Wealthy corporations and astute traders who shorted the market. If you don’t know markets .. or care about such things... you should. If you are a working stiff your 401k /403 is now worth 30% less than it was before this epic virus hit. That loss of value didn’t just vaporize. Your money just disappeared into another fella’s pocket through options or futures traders taking the opposite of the coin than your investment in things like Mutual Funds. It is a fundamental of the free worlds’s financial trading practices.

Up until recently I was only required about 800 dollars equity in my trading account to make trades in the E-mini S&P. It is at 9000 dollars per round trade for that contract now. I have never seen such volatility since I began in 1987. I have seen thousand point moves in 10 minutes on the Dow. Unbelievable movements of money. This doesn’t just feel like a correction due to the Covid. This feels like something more sinister. All trends come to an end. All.

We have a saying in the markets “ don’t try and catch a falling knife.” For those of you trying to time reentry through timing ( one fella was espousing this) be forewarned. Yes, Tesla might look like a value at upper 300’s now... but what if we have entered a true recession for the next 2-5 years?

During the big bust back in the late 90’s my coworker was heavily invested in the Nasdq. I’m a chartist. I kept telling him to get the F out. He said ‘ it is just a correction I will be okay.” I showed him the head and shoulders formation which is bearish as heck. He lost over 300 K in 3 months. I think it took over 15 years for the Deck to regain it’s losses. It required him to keep working many years past his planned retirement. It was quite sad to see his stubbornness.

I am not a doomsayer type of guy. But this volume of trading. This ferocity of trading. These insane movements of cash. This is different than any “correction” I have ever seen since the 80’s. Protect yourself now and sit on the side lines.

I will give you one more pearl of wisdom taught to me by a very good investor. He asked me... what is the number one rule to be a successful trader? I replied to make smart investments? He said.. partially correct. I then said buy low and sell high. He said partially correct. I said okay, what? He said the number one quality of a successful investor is ‘ Capitol Preservation’. I said, huh? He explained how some traders do well in sideways markets playing with oscillator tools that work quite well in such markets. Some traders are excellent in bearish conditions. Some are great bull traders. But he said the market is a perfect mechanism. It has a way to find “EVERYONES” chink in their Armour. If you are in the market and you are losing money hand over fist how long before you are wiped out? Can you play markets if you have been seriously damaged because you forgot about Capitol preservation?

I am not anyone’s financial advisor. I am just telling you fellas and gals... this feels different. That’s all I am saying.

[dwedeking2]

Originally Posted by Lake-Effect

Once upon a time, one could refer to a sitting President without everyone screaming "politics!".

Anyway, The One Who Cannot Be Named is having thoughts about the lockdown.

Truth be told, so am I. I remain convinced that it's necessary, and the better we all comply with it, the less people will be infected and the sooner we can start getting back to normal. But I also think that the authorities need to do better than to impose something, with no end in sight. If they could give some idea of a duration - eg end of April, then starting to ease after that, then people and businesses can plan, and there would be greater likelihood of cooperation over that time.

Even if it's a bullsh1t end date, it would still seem like they're in control. Just imposing and tightening lockdowns, with no expressed confidence in an end date kind of feels like they're just flying by the seat of their pants. Maybe they are... but I'd be happier if I thought they had a handle on it.

this. I sat down with the owner of our company today. we are a supplier to restaurants and bars. items that you only buy when you set up a new place or every few years (so something you can put on hold for a bit) we went from booming business to dead in 10 days. running scenarios of down for x days vs x weeks vs x months - it was all a guess.

[longjonsilver]

Prices will drop in the marine industry. Its just a matter of time. People hang on hoping that things will get better until they are finally forced to sell.

[Island Time O25]

Originally Posted by redneckrob

We haven't "lost" anything. We've had 47 recessions in the U.S. since the founding, there was a period in the 1800s when they were coming every few years. If anything they're significantly milder then they were in the 1800s and early 1900s when we routinely had high -20% and low -30% GDP contraction (https://en.wikipedia.org/wiki/List_o..._United_States)

We have lost the ability to accept those 20-30% swings as normal part of economic life. We start defecating if the growth is less than 2-3%. Never mind a 20-30% contraction.

[Island Time O25]

Originally Posted by CarinaPDX

I have had a lifelong interest in economics if that is what you mean. And like others here I moved to a mostly cash position some time ago because a contraction was inevitable, so you could call me a pessimist. OTOH when I reinvest and then watch the market recover I promise not to be dismal...

Greg

The biggest problem in the past how many years was the unwillingness of even the economically learned individuals to apply the fundamentals to the market analysis.

The last crash became inevitable not in 2008 or 2007 but a few years back, in 2004-2005. I was a lone voice on some forums trying to point out the fundamentals and the 99% of the users were laughing at me. Until 2008 happened.

Same now. The numbers have not worked since a few years back. They only worked in 1-2% interest rate environment. Which is unsustainable in a 1-2% inflationary world. The whole market became one sick cheap money drug addict unable to function without free money injections by the Fed. What did you expect to happen? Virus is just a side show distraction.

[CarinaPDX]

Yep - things that can't go up forever - don't. But the virus is a whole lot more than a "side show distraction", although I suppose you just mean economically. Considering how fast the real economy has contracted - a new record - a record-breaking crash was in the cards, which coincided with the end of the record-breaking boom. In the real world the suffering and deaths are anything but a side show, and if this isn't damped down soon the deaths could easily be in the millions. That may happen in Africa anyway. This is not a happy time for anyone paying attention.

Greg

Greg

[geoleo]

Originally Posted by alansmith

Where did all of prosperity that was built up go? Wealthy corporations and astute traders who shorted the market. If you don’t know markets .. or care about such things... you should. If you are a working stiff your 401k /403 is now worth 30% less than it was before this epic virus hit. That loss of value didn’t just vaporize. Your money just disappeared into another fella’s pocket through options or futures traders taking the opposite of the coin than your investment in things like Mutual Funds. It is a fundamental of the free worlds’s financial trading practices.

Up until recently I was only required about 800 dollars equity in my trading account to make trades in the E-mini S&P. It is at 9000 dollars per round trade for that contract now. I have never seen such volatility since I began in 1987. I have seen thousand point moves in 10 minutes on the Dow. Unbelievable movements of money. This doesn’t just feel like a correction due to the Covid. This feels like something more sinister. All trends come to an end. All.

We have a saying in the markets “ don’t try and catch a falling knife.” For those of you trying to time reentry through timing ( one fella was espousing this) be forewarned. Yes, Tesla might look like a value at upper 300’s now... but what if we have entered a true recession for the next 2-5 years?

During the big bust back in the late 90’s my coworker was heavily invested in the Nasdq. I’m a chartist. I kept telling him to get the F out. He said ‘ it is just a correction I will be okay.” I showed him the head and shoulders formation which is bearish as heck. He lost over 300 K in 3 months. I think it took over 15 years for the Deck to regain it’s losses. It required him to keep working many years past his planned retirement. It was quite sad to see his stubbornness.

I am not a doomsayer type of guy. But this volume of trading. This ferocity of trading. These insane movements of cash. This is different than any “correction” I have ever seen since the 80’s. Protect yourself now and sit on the side lines.

I will give you one more pearl of wisdom taught to me by a very good investor. He asked me... what is the number one rule to be a successful trader? I replied to make smart investments? He said.. partially correct. I then said buy low and sell high. He said partially correct. I said okay, what? He said the number one quality of a successful investor is ‘ Capitol Preservation’. I said, huh? He explained how some traders do well in sideways markets playing with oscillator tools that work quite well in such markets. Some traders are excellent in bearish conditions. Some are great bull traders. But he said the market is a perfect mechanism. It has a way to find “EVERYONES” chink in their Armour. If you are in the market and you are losing money hand over fist how long before you are wiped out? Can you play markets if you have been seriously damaged because you forgot about Capitol preservation?

I am not anyone’s financial advisor. I am just telling you fellas and gals... this feels different. That’s all I am saying.

I and wife have 401K s --but we never put stocks in them -just treasuries. Per your statement that the "market will find everyones weak 'chink'---so does Las Vegas. LOLOLOL

[geoleo]

Originally Posted by geoleo

You and Trump are "hoping".

Trump 2020 lol

[geoleo]

Originally Posted by alansmith

And the prize goes to .... Geoleo... congratulations!!! You are the winner of the “ just had to make it politics with the mention of the Prez.

I love President Trump---but "hope" by him for a miracle drug should be kept to himself.

[Mike OReilly]

Although I fully appreciate the very real life-and-death catastrophe that Covid-19 represents, I find myself becoming increasingly concerned with how quickly and easily this disaster is leading to authoritarian responses.

At this point it's clear to me that all our vaunted freedoms and liberties are as fragile and flimsy as our entire economic system is showing itself to be. I'm no libertarian wing-nut, and anyone who's been around here for long knows I'm certainly not opposed to government intervention when needed. But night after night I watch our Western leaders simply stand at the podium and impose greater and greater limitations on all our freedoms, while basically putting a spigot to the future's resources through massive outpourings of debt-driven "stimulus."

Some of these actions I fully support, but surely I am not the only one with a growing sense of unease over all this rapid authoritarian intervention. Where are the checks and balances? Where is the sober second thought? Heck where is any second thought?

Fear is never a good place from which to make rational decisions. We have good reason to fear Covid-19, but with each passing measure this line rings louder in my mind:

Beware, most especially, of your best intentions.

[Lake-Effect]

Originally Posted by alansmith

Where did all of prosperity that was built up go? Wealthy corporations and astute traders who shorted the market. If you don’t know markets .. or care about such things... you should. If you are a working stiff your 401k /403 is now worth 30% less than it was before this epic virus hit. That loss of value didn’t just vaporize. Your money just disappeared into another fella’s pocket through options or futures traders taking the opposite of the coin than your investment in things like Mutual Funds. It is a fundamental of the free worlds’s financial trading practices.

I'm an investing dummy, so our retirement funds are managed. We're down close to 22% on paper, so I guess we're doing better than some.

Anyway, I know about shorts and other games for making gains on market losses. But, correct me if I'm wrong - the majority of the on-paper loss in this downturn is indeed value just vapourizing, no? A stock worth $100 in December is now worth $70 or less today because of sentiment; there's less desire to buy it, and only a little of that $30/share loss was scooped up in shorts etc... Is this accurate?

Again, based on my limited understanding, this big downturn was triggered by COVID-19, but the market was also considered overheated and a correction was overdue anyway. I don't know whether it is possible to quantify the losses from each cause separately, but it's been explained to me that the coronavirus 'part' of the loss should come back relatively quickly once the uncertainty and shutdowns around coronavirus are gone. The correction we were expecting anyway will have a longer impact, as it would if this were just a normal correction without the virus.

But we are also in new territory, and I haven't yet seen any analyses about how all the current and planned government interventions will shape the recovering market. I'm hoping that the bulk of the intervention flows to workers and small business, as opposed to just the big corporations like in 2008.

People who actually know this stuff are welcome to school me, and favour us with their take.

[Lake-Effect]

Originally Posted by Mike OReilly

Although I fully appreciate the very real life-and-death catastrophe that Covid-19 represents, I find myself becoming increasingly concerned with how quickly and easily this disaster is leading to authoritarian responses....


Fear is never a good place from which to make rational decisions. We have good reason to fear Covid-19, but with each passing measure this line rings louder in my mind:

Beware, most especially, of your best intentions.

If you've looked at the forecasts for potential impact of the virus if unchecked, how would you address this crisis this differently; what could be done to contain or slow its spread that would be less authoritarian?


My impression is that the "authorities" in charge right now are the epidimiologists and that governments are mainly following their guidance, while economists fret and mutter about how to deal with the economic fallout.


I think that the people won't let this lockdown persist indefinitely, and it's certainly doing no government any good, financially or otherwise, so I am optimistic that it shouldn't have any lasting effects... unlike 9/11, which has had lasting authoritarian effects.

[Mike OReilly]

Originally Posted by Lake-Effect

If you've looked at the forecasts for potential impact of the virus if unchecked, how would you address this crisis this differently; what could be done to contain or slow its spread that would be less authoritarian?

My impression is that the "authorities" in charge right now are the epidimiologists and that governments are mainly following their guidance, while economists fret and mutter about how to deal with the economic fallout.

I think that the people won't let this lockdown persist indefinitely, and it's certainly doing no government any good, financially or otherwise, so I am optimistic that it shouldn't have any lasting effects... unlike 9/11, which has had lasting authoritarian effects.

I hope you appreciate I have some sense of the science. And I don't mean to downplay the seriousness of the disease. But this doesn't mean that nothing else matters.

My growing unease is over the speed and seemingly unfettered way our freedoms are being stripped away. It is mostly happening by decree, from those at the top. Epidemiologist advise, but leaders act. And epidemiologist are great in their lane, but are no better equipped to appreciate the broader values of our society than the rest of us.

You raise 9/11 -- that is exactly the kind of recent event which has my warning bells ringing. Coupled with the rise of authoritarian tenancies in many of our so-called "free societies", my fear is around the lessons we will take from this current crisis.

[CarinaPDX]

Mike, you are not alone. The establishment is taking advantage of the crisis already (1/2 trillion dollar slush fund, "managed" by Mnuchin???) The authoritarianism has already ramped up with reinforcements on the southern border - to keep out the migrant hordes. It could get pretty ugly.

Consider this: ventilators are about to get very scarce (particularly since Trump refuses to order production). The first time some elderly "real American" is turned down due to lack of availability, if there is an undocumented migrant on a ventilator anywhere Trump is going to play dirty. And here I thought that after the last 3 years it couldn't get any worse...

Greg