A Game-Changing Crash . . . .

[errolanderson]

The stock market crash this week will have a big impact on attitudes toward easy money, the price paid from Fed manipulation, consumer debt and leverage. Credit markets globally are going to be impacted . . . some may seize-up . . . . much like what happened in 2008. Liquidity problems between lenders is a real risk. This is called the repo market. But this time, supplies chains are also disrupted.

China produces 90% of the ingredients required for U.S. drug manufacturers. Also, China has clear global control of rare earth metal alloys. This could trigger shortages. The U.S. economy was already struggling, now this. Global commodity markets will be hit hard.

In my view, the watch is now on credit markets. Credit markets are the inner plumbing. U.S. 10-year treasury yields hit an all-time low of 1.25% today.

Debt no longer generates growth, it hasn't for a long time. But the Fed kept bailing the market out. Now debt has now become an insidious risk to both consumers and business. And there are no big guns left to save the day from the Fed. Rates cuts now offer what?

Group; this is history in-the-making and a changing-of-the-guard and attitudes in-progress . . . Buying the dip mentality is clearly old school. For those that have cash in their pocket, there may be massive opportunities ahead (IMO).

[AlbertaFarmer5]

Or is it short term pain for long term gain?

Because all those same factors could also lead to an unprecedented boom in the US, as they finally recognize the risks, and repatriate all of the industries and resource extraction back home. Just like they have already done with oil and natural gas, which literally paves the path for bringing back all of the other energy intensive industries with the now almost permanent low energy costs.

Imagine if all the money printing went into industry and infrastructure instead of banks, stocks and housing bubbles? Building mines, manufacturing plants, etc. Long lasting growth. Plus all of the money coming from off shore to the only safe haven, if even a small fraction of that finds its way into productive assets, it will lead to exponential growth.

Recent events seem to have awaken the giant.

The current pro business government with reduced red tape, and regulations, plus reasonable and predictable environmental standards just add fuel to the fire.

Look at how fast industry was mobilized during WW2 in the US, could the same thing happen again, if the threat of a globally dispersed supply chain for vital industries is perceived to be serious enough?

After all, automation has largely closed the gap between the US and third world manufacturing, chemical and resource extraction industries, the biggest difference now is in the prohibitive regulatory costs, reduce those, and the gap nearly disappears.

[helmsdale]

There is no way JT and his band of diversity hires is equipped to deal with this. Hell, there's NO-ONE on the stage that appears equipped!

Discussion on FBN at the close was:
-"multiple interest rate cuts incoming"
-"well have to go negative"

Good grief, even helicopter money in the trillions isnt going to restart overseas suppliers. You can stimulate aggregate demand all you want, but it ain't going to make a damned buy of real world difference.

We're in deep shit!

[jazz]

Watch for a 65c loonie with at least a half pt rate cut by BOC next month. I bought unhedged S&P500 ETF on the bet that our dollar falls 10c and the US buck strengthens with repatriation of supply chains.

I have a hard on the S&P because I beleive globalization just died. And its not just the virus, its the response by the communist party, the vast distances of these supply chains and how easily they cn be distrupted. They will need massive stimulus cough debt to restart that beast.

And china alreay has the highest credit bubble in human history. Nobody is going to want to be attached to that when it blows.

There are reports of literally millions of Chinese businesses shutting down.

[agstar77]

Chickens coming home to roost. Easy money big federal deficits, trade wars and finally flue pandemic. Are those enough swans?

[macdon02]

Know more tomorrow on months end but she's looking like currencies are getting ready to rip for Act II. Biggest move down ever in equities and gold just hung there. Something is up. Almost terrifying thinking of leaving positions on over the weekend as the kill count could be a shocker(either way) blowing through stops. If your up heading into the weekend, taking home the winnings isn't a terrible policy before the close.

[SASKFARMER]

Eroll the USA economy is in the tank?

Hm must not be in most states I travel in. Slowing down but definitely not in the tank.

[ajl]

This weeks action has allowed me to get three short positions in the win column so that was good. The US market likely needed a correction anyways so now that is done. A buying opportunity is like soon so will watch for that. Prospects for the US don't change much but some supply chain changes will be made and the US will be stronger than ever as a result as other posters have pointed out. The picture is much bleaker for the ROW. The death of China is going to be felt in commodity prices. The money printing by Asian central banks are threatening to push US rates in negative territory which is somewhat worrying but will result in the US deficit coming in lower than projected this year despite higher spending which will be stimulative.

[shtferbrains]

How long will the gold rush go?

[tweety]

And yet the months go by of doom posts, and the stock market keeps going up. One of these days you're bound to be right, but you don't have to be an analyst for that. Can i say i've been reading these posts for years now, and you've always been wrong? Terrible thing to say - but that is what has happened.

[GDR]

The stock market crash this week will have a big impact on attitudes toward easy money, the price paid from Fed manipulation, consumer debt and leverage. Credit markets globally are going to be impacted . . . some may seize-up . . . . much like what happened in 2008. Liquidity problems between lenders is a real risk. This is called the repo market. But this time, supplies chains are also disrupted.

China produces 90% of the ingredients required for U.S. drug manufacturers. Also, China has clear global control of rare earth metal alloys. This could trigger shortages. The U.S. economy was already struggling, now this. Global commodity markets will be hit hard.

In my view, the watch is now on credit markets. Credit markets are the inner plumbing. U.S. 10-year treasury yields hit an all-time low of 1.25% today.

Debt no longer generates growth, it hasn't for a long time. But the Fed kept bailing the market out. Now debt has now become an insidious risk to both consumers and business. And there are no big guns left to save the day from the Fed. Rates cuts now offer what?

Group; this is history in-the-making and a changing-of-the-guard and attitudes in-progress . . . Buying the dip mentality is clearly old school. For those that have cash in their pocket, there may be massive opportunities ahead (IMO).

Agree it all looks bad but now what? How does it play out on our level as farmers? Are we talking 2008 bad where we really didnt notice or 1930s bad where we are walking away from the farm?

I really cant wrap my mind around what a significant recession / downturn would look like in today's world. Cant really see too many downtown guys out hunting for supper or living off the land. Or does it just mean one less winter holiday, only half as many hockey games or one less toy in the garage?

[furrowtickler]

Countries with the weakest leadership and lack of economic vision will get hit hard .... Canada ...

[macdon02]

Loonie is shitting its pants, finally.....

Euro needs to end month over 1.105 to reverse trend or DXY is on a moonshot.

Yen needs 111.7

Gold needs 1698 to imply upward

[farming101]

Loonie is shitting its pants, finally.....

Euro needs to end month over 1.105 to reverse trend or DXY is on a moonshot.

Yen needs 111.7

CAD failed to make 78 last Dec. Opened possibilities for 72 in 2020. A lot of empty space below after today.

[errolanderson]

Gold having a volatile week on virus and commodity fallout . . . . Gold prices down $90 per oz since Monday rocket highs. Gold is now in a tug-a-war between fear-stuck investors and immense commodity deflationary pressures.

Fallout in crude is pressuring the loonie. Weekly WTI shows key support around $44 per barrel, but this is a moving target given geo-political tensions could arise.