General Investing and Economics Discussion - No Politics

LibertyTurns

LibertyTurns

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Skeptic said:
Yes, and I hope the House is tough enough to buck the man in the WH who desperately wants it ... I guess they must disembark in Miami and stay at his joint sometimes. I think this bill is desperately needed, even to the point of waving off such corruption and graft. Maybe enough can get to people and small businesses who need it.
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The people who stay at Mar-a-Lago own yachts. They’re not doing jello shots on Carnival with people that carry their own luggage & belly up to the buffet bar. Geez.
 
awbuzz

awbuzz

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MountainBuzzMan said:
I grew up in Appalachia as well. We were all so poor that we did not even know it. We never wore shoes in the summer time. We sharecropped as well. Not much is worse than suckering tobacco by hand and we used to shovel out chicken houses. I am not even that old.
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... picking cotton by hand sucks too.
 
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Skeptic

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LibertyTurns said:
The people who stay at Mar-a-Lago own yachts. They’re not doing jello shots on Carnival with people that carry their own luggage & belly up to the buffet bar. Geez.
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That just left another ulterior motive for pushing cruise lines. One day we might even know it.
 
LibertyTurns

LibertyTurns

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bwelbo said:
A detailed review of our financial house of cards:
https://finance.yahoo.com/news/feds-cure-risks-being-worse-110052807.html

On the bright side, if the Fed eventually owns 2/3rds of our debt, all the Tide Pod eaters will eventually start demanding they just rip up our debt like its monopoly money. Why can't we do that? Why can't we just hit the delete button on 2/3rds of our debt?
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Well, Crazy Uncle Joe inadvertently let it slip out that the cure was going to be much worse than the problem. He was absolutely positive about that. Many mocked him. Perhaps the demented dude is the only sane one among us? Now if he can only find some hot butt to grope or someone's wife’s hair to smell we can get some more pearls of wisdom?
 

Skeptic

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LibertyTurns said:
Well, Crazy Uncle Joe inadvertently let it slip out that the cure was going to be much worse than the problem. He was absolutely positive about that. Many mocked him. Perhaps the demented dude is the only sane one among us? Now if he can only find some hot butt to grope or someone's wife’s hair to smell we can get some more pearls of wisdom?
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Incredible. Just incredible given, as realtors are wont to say, the comparable. Incredible.
 

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Government updates its best case scenario to 100,000 - 200,000 deaths. Extends the shutdown over a month until the end of April. The visibility on the financial damage and damage to the healthcare system based on these changes is significantly worse. ... ... wait for it.........Dow opens up 200 points. :D
 
LibertyTurns

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Wow after all this the S&P sits right below the 2650 resistance line. Maybe we get some more horrendous news to skyrocket the market up again today?

I’m still sitting on cash. Not convinced yet the volume supports the run up and we’ll reverse/ re-test the low.
 

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LibertyTurns said:
Wow after all this the S&P sits right below the 2650 resistance line. Maybe we get some more horrendous news to skyrocket the market up again today?

I’m still sitting on cash. Not convinced yet the volume supports the run up and we’ll reverse/ re-test the low.
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Ive been trying to figure out if the Fed is using intermediaries to buy equities. They’ve said they will print as much money as we need. I know they’re not supposed to do that, but technically they’re not supposed to buy other investment vehicles either but they do. This is the most disconnected from the economy I’ve ever seen the stock market - and it’s not even close.
 

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Trump proposes $2T infrastructure bill. If he keeps trying, he could go from a $4T deficit this year to $6T.

Also, nevermind the entire country is under a stay-at-home order, so nobody can go work anyway.
https://finance.yahoo.com/news/trump-calls-2-trillion-infrastructure-150934537.html

My personal opinion is these "shovel ready jobs" will be the same level of shovel readiness as last time. When you have 3% unemployment, you're going to have a hell of a time finding people to go work hard labor. I think our money will be better spent helping get people back to the jobs they were already specialized in, and then see where we are once the dust settles from that.
 

cyclejacket

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bwelbo said:
Trump proposes $2T infrastructure bill. If he keeps trying, he could go from a $4T deficit this year to $6T.

Also, nevermind the entire country is under a stay-at-home order, so nobody can go work anyway.
https://finance.yahoo.com/news/trump-calls-2-trillion-infrastructure-150934537.html

My personal opinion is these "shovel ready jobs" will be the same level of shovel readiness as last time. When you have 3% unemployment, you're going to have a hell of a time finding people to go work hard labor. I think our money will be better spent helping get people back to the jobs they were already specialized in, and then see where we are once the dust settles from that.
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You keep assuming all $$$ are spent immediately in your deficit estimates. Likely not true, especially for the reasons you state and others. Also, the government fiscal year ends 9/30 so we're halfway through already.

It is still obscene spending as we assess a "wartime" footing for economic recovery. Of course, anyone who originally thought a real estate developer was going to be averse to borrowing money fooled themselves long ago.
 

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cyclejacket said:
You keep assuming all $$$ are spent immediately in your deficit estimates. Likely not true, especially for the reasons you state and others. Also, the government fiscal year ends 9/30 so we're halfway through already.

It is still obscene spending as we assess a "wartime" footing for economic recovery. Of course, anyone who originally thought a real estate developer was going to be averse to borrowing money fooled themselves long ago.
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I keep assuming all $$$ are spent immediately, because I'm assuming the vast vast majority of the $2.3T will be spent by the end of September. Otherwise, what would be the point? The portion that's the money back to workers and the unemployment is the largest block - that's all going out in the next 3 months. The remaining part is loans and bailouts to companies. True, people may not use the loans, but I imagine the large company bailouts will take the money immediately. But that is indeed my speculation.
$250B - unemployment.
$300B - one time checks.
$500B - large company bailouts like post office, airlines, etc.
$150B - money straight to states.
$200B - to hospitals and what-not.
$50B - safety net increases.

That's well over $1T that should be spent completely in the next 3 months. We were running a $1T deficit. That makes about $2.5T right there, if you assume about $800B (one-third) of the package doesn't get spent by end of September.

The next piece of the puzzle is tax revenue. That's hard for me to guess. But if unemployment averages over 20% for the last 6 months of the fiscal year (The Fed forecasts a peak of 32%), thats a tax revenue reduction of 20% over those 6 months roughly. That's a $200B shortfall. Payroll taxes will also be reduced largely commensurate with that, which would be another $150B shortfall. If corporate taxes fell 6% in the great recession, I think a 15%-20% reduction (based off unemployment forecasts and what-not) in profits is a good guess. Across the last 6 months of the year would equate to another $30B shortfall. That's a total tax revenue shortfall in the final 6 months of about $400B.

If you add all that up, that's very roughly $3T. I'm guessing $4T, because the House is already working on another package, Trump just proposed a different one, and I think the plummet in tax revenue will be more pronounced than what I just listed. The Great Recession was a much more mild time than what we're experiencing, and total tax revenue to the government missed the original forecasts by $1T in 2009.
 
LibertyTurns

LibertyTurns

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Another wild day in the world of financial markets.

S&P has support at 2478, then 2346 and 2191. Katie bar the door if we pierce 2190.

Not ready to call last week a dead cat bounce but I don’t see any feet or tail moving yet.
 

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LibertyTurns said:
Another wild day in the world of financial markets.

S&P has support at 2478, then 2346 and 2191. Katie bar the door if we pierce 2190.

Not ready to call last week a dead cat bounce but I don’t see any feet or tail moving yet.
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Sounds like a conspiracy theory, but I wouldn't be surprised to learn the Fed through an intermediary like Blackrock was supporting the stock market. They already are supporting the commercial paper and mortgage markets through Blackrock, all things that they aren't supposed to be doing. But they get around that by using an intermediary. Based on the current state of the economy and projections, this is the most disconnected from reality I've seen the stock market in my entire life.

My QE8 idea is for the Fed to keep buying as much of our own debt from home and abroad they can. They already own several Trillion worth. See if they can get to $10T - $15T+. Then renegotiate the terms of the debt with the Treasury to 1000 year bonds at 0.001%. We'd effectively wipe out most of our national debt, saving us several hundred Billion a year just in interest. Its a quasi-banana republic thing to do, but I actually don't think it would hurt the dollar if they did this in silence behind the scenes and since the rest of the world is in the same boat. We're a financial house of cards anyway.
 
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