A Game-Changing Crash . . . .

[sawfly1]

I know very little about the stock market.
Is all this new money to cover the loss in stocks.
Stocks bought on margin.
Or is it needed to cover payouts on derivatives?
Or both

[errolanderson]

Commercial paper is now in freeze-up. The Fed must provide massive liquidity in addition with more problems in the repo market again surfacing. U.S. now heading into a monetary black hole and recession.

Saudi’s flooding global markets with oil. Supertanker rates have shot up more than 650% of-late.

We may hear and see a major shoe or shoes drop in the financial / banking industry. This may lead to financial contagion in North America (IMO).

Gold and bitcoin have been hammered. This broad based meltdown is even too much for even go-to alternate investments.

Interest rate cuts normally just increases consumer debt loads . . . which is the big problem in the first place. Rate cuts now will backfire (IMO) . . . Consumers are hooped and totally tapped out.

Could the Dow lose 50 percent of it’s value? Not out of reason should financial sector continue to unravel. In 2008 financial crisis, the Dow plunged to a low of 6,500 points, more than 1/2 its value.

Coronavirus was the fuse that imploded this burgeoning debt bomb. And it has opened up a gapping hole for market contagion on several fronts. Write offs are inevitable and just beginning to appear.

The pain of cleansing artificially supported markets and the failure of Keynesian economics has begun . . . .

[helmsdale]

Discussion on FBN this afternoon...

Host:"Is helicopter money an inevitability now?"

Guest:"we're beyond that... its C-130 or C-5 Galaxy time!"

[parsley]

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).

Do you think the Govt will order banks to reduce & limit the amount of cash we can withdraw?

[errolanderson]

Do you think the Govt will order banks to reduce & limit the amount of cash we can withdraw?

Pars . . . it’s possible. The current financial crisis is deeper than in 2008. The Fed really has no rounds left in its holster. This is a financial crisis with no vaccine (so to say).

[Austrian Economics]

Do you think the Govt will order banks to reduce & limit the amount of cash we can withdraw?

If a federally regulated bank is failing, the bank can legally seize your savings to effect a "bail-in". The Harper government enacted legislation years ago to allow banks to do this.

Two things will have to happen in order for the equity markets to find a bottom: short term interest rates fall to around negative 2.5% and a rerun of the Troubled Asset Relief Program that will make the 2008 version look like a Sunday school picnic.

If businesses can get access to capital at negative rates, many money-losers could eke out a profit again. What this means though is that savers subsidize the losses of borrowers. But an economy can't function very long in that scenario. Eventually savers will run out of real capital. We would literally be like a farm which eats all of its seed corn. A Zimbabwe situation would not be far behind.

[jazz]

Why are there so many CEOs jumping ship right now when the govt is pumping trillions in? That seems counter intuitive. Eventually that money will get into share prices and those guys will make big bank again.

In 2008 the govt had to forceably remove some of these bad players. Now we see them resign on their own?

My radar going off.

[farming101]

Insider trading?

[parsley]

Austrian, I knew about the legislation. That why I asked about whether they would•, as opposed to whether they could• raid cash. I wasn’t pleased with the legislation at the time. Another socialist scheme to overspend and then rob the responsible folks.

Morality got flushed when the economy gets feeling• flush.

[farming101]

Dow futures not trading again. Locked limit down.
Anything below 17,600 indicates a very prolonged battle for recovery

[errolanderson]

Cash run on U.S. banks in past 24 hours. U.S. Fed governor interview on 60 minutes stated they won’t allow bills to run out. Money will be printed till the cows-come-home. A lot of mattresses appear being stuffed with cash.

Fed promotes they have the big weapons ahead . . . they simply don’t. Stock markets may be headed for a 40 to 50 percent collapse (IMO). Stimulus bill stateside (1 trillion dollars) has now yet to be passed.

Grains holding up well, cattle board appears quite oversold.

Markets need to take a deep breath for stability to return.

[errolanderson]

The Fed has officially thrown-the-kitchen-sink at the stock market this morning . . . “ QEternity “ . . . and the Dow is still down . . . not good.

[errolanderson]

Jobs data released this morning . . . . A record 3.3 million filed claims for U.S. unemployment this past week. New jobless claims filed seeking unemployment benefits rose by more than three million to 3.28m from 281,000 the previous week. The figure is the highest ever reported, beating the previous record of 695,000 claims filed in October 1982.

[furrowtickler]

https://www.youtube.com/watch?v=NEnuWv38urI

This unfolding before our eyes ? All points that way

[AlbertaFarmer5]

Jobs data released this morning . . . . A record 3.3 million filed claims for U.S. unemployment this past week. New jobless claims filed seeking unemployment benefits rose by more than three million to 3.28m from 281,000 the previous week. The figure is the highest ever reported, beating the previous record of 695,000 claims filed in October 1982.

And this news surprised absolutely no one:


Almost like 2008 period where the market cheered on bad news because it meant more stimulus money and policy, while selling good news, since it could mean the end of the largesse.