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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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Thetexashammer

Thetexashammer 1062

Posted
Posted (edited)
6 hours ago, bernorange said:

No risk at all.  NRAA . 

I think large institutions are gonna start blowing up soon. At least around the edges of the system. Obviously the big ones have systems in place to avoid disclosure and direct lines of unlimited credit with central banks. But lots of smaller entities don't have that. Hedge funds, for example, many of which are highly leveraged and have trading accounts and leveraged contracts with the money center banks.

Edited by Thetexashammer
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Eastwood
Eastwood

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if o

Rusty Shackelford
Rusty Shackelford
Eastwood
Eastwood

I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

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Nice Guy Eddie

Nice Guy Eddie 13515

Posted
Posted

Were (are) the banks running into a liquidity problem, or was the govt just trying anything yesterday to stop the market from dropping?

seems to me that we are running into a wall where many won’t have an income soon, and even people that have an income won’t spend that money except on essentials. I don’t see how the govt can solve that finance problem.

The real problem to solve is the healthcare crisis and the financial market will follow. However No one knows what sort of market damage can be done to get to that point.

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Fudge Nuggets

Fudge Nuggets 19208

Posted
Posted
1 minute ago, Nice Guy Eddie said:

seems to me that we are running into a wall where many won’t have an income soon, and even people that have an income won’t spend that money except on essentials. I don’t see how the govt can solve that finance problem.

This is exactly why the surge after the first fed rate cut was a no-brainer to "sell the news".

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52-80

52-80 19185

Posted
Posted
13 minutes ago, Anastasis said:

O/U on number of circuit breakers we trip: 1.5

 

 

7 minutes ago, SimonBolivar said:

I'm going with the under with the only stop coming in about 5 minutes of trading followed by a close to the day somewhere around -5%.

you boys should trade in circuit breaker backed securities or other CB derivatives

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Parliament

Parliament 14262

Posted
Posted
23 minutes ago, Nice Guy Eddie said:

Were (are) the banks running into a liquidity problem, or was the govt just trying anything yesterday to stop the market from dropping?

I've read that companies are maxing out their revolving credit lines; drawing whatever they can borrow into their checking accounts or whatever.  They don't need the cash right now, but wanna have it on hand in case their credit lines are pulled.  Seems that would create a liquidity problem for banks?  If I understand that correct.

In 2008 money market accounts were roiled quite a bit.  Some almost went broke and many of the rest stopped allowing new accounts. (Existing customers could still deposit whatever they wanted.)  I haven't heard anything like that this time.  Should we not be concerned?

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Parliament

Parliament 14262

Posted
Posted (edited)
19 minutes ago, Anastasis said:

O/U on number of circuit breakers we trip: 1.5

Under. We'll flirt with Level 2 but not hit it.

 

ETA

I have a SPY put order in.  Pretty sure it ain't gonna fill.

 

ETA 2

Have we ever hit level 2?  I don't know.  Seems like the limit rules work pretty well.

Edited by Parliament
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bernorange

bernorange 8362

Posted
Posted
49 minutes ago, Nice Guy Eddie said:

Were (are) the banks running into a liquidity problem ...

Fed's repo operations were signalling liquidity issues in the system.  There were/are issues in the credit markets.  The Fed just unleashed all of it's ammo in a 21 bazooka salute.  Did you peeps notice that they also reduced reserve ratios for banks to zero?  Zero reserve banking.  Holy shit.  NRAA holla!

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Thetexashammer

Thetexashammer 1062

Posted
Posted
1 minute ago, bernorange said:

Fed's repo operations were signalling liquidity issues in the system.  There were/are issues in the credit markets.  The Fed just unleashed all of it's ammo in a 21 bazooka salute.  Did you peeps notice that they also reduced reserve ratios for banks to zero?  Zero reserve banking.  Holy shit.  NRAA holla!

NRAA = no rules at all? No regulation? No reserves? No residual value?

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Parliament

Parliament 14262

Posted
Posted
4 minutes ago, bernorange said:

Fed's repo operations were signalling liquidity issues in the system.  There were/are issues in the credit markets.  The Fed just unleashed all of it's ammo in a 21 bazooka salute.  Did you peeps notice that they also reduced reserve ratios for banks to zero?  Zero reserve banking.  Holy shit.  NRAA holla!

Using small words, would you please explain that?

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Captainant

Captainant 27682

Posted
Posted (edited)
4 minutes ago, bernorange said:

According to Goldman Sachs, it's No (systemic) Risk At All.

Except for ya know, that global pandemic that is stressing the supply chain and business side of the financials harder than anything else has before. Goldman's analysis was very fiscally focused, but the basic rules that make our economy tick are being disrupted. 

The underlying consumption model is going to be extremely different for the next quarter, at least. That is going to completely deep dick the market

Edited by Captainant
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Fudge Nuggets

Fudge Nuggets 19208

Posted
Posted
Just now, Captainant said:

Except for ya know, that gonna pandemic that is stressing the supply chain and business side of the financials harder than anything else has before. Goldman's analysis was very fiscally focused, but the basic rules that make our economy tick are being disrupted. 

The underlying consumption model is going to be extremely different for the next quarter, at least. That is going to completely deep dick the market

Bingo.  It's like all these experts have never heard of a demand side reset.  It's also why zero interest rates will do fuck all to help.

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bernorange

bernorange 8362

Posted
Posted
Just now, Parliament said:

Using small words, would you please explain that?

We had a fractional reserve banking system.  Banks could create money (loans/bank credit) but they had to have a certain fraction of their credit backed by actual cash reserves.  Something like 5-10% IIRC (didn't look it up).  With zero reserve requirements, there is no limit at all on bank credit issuance.  Seems like a sledgehammer move to salve liquidity issues in the banking system. 

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Thetexashammer

Thetexashammer 1062

Posted
Posted
6 minutes ago, bernorange said:

We had a fractional reserve banking system.  Banks could create money (loans/bank credit) but they had to have a certain fraction of their credit backed by actual cash reserves.  Something like 5-10% IIRC (didn't look it up).  With zero reserve requirements, there is no limit at all on bank credit issuance.  Seems like a sledgehammer move to salve liquidity issues in the banking system. 

The Fed just shot the last round in it shotgun. Result: limit down on the market. Excellent job, fake government agency.

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Thetexashammer

Thetexashammer 1062

Posted
Posted (edited)

Even if it drops 50%, who would look around and say "shit everything's cheap!"? That's the danger of having such amazingly high multiples, once we try and find a bottom, it's a long way down. Never mind that entire industries will come close to liquidating and that banks are probably fucked again.

Get out your Down 10,000 hats.

Edited by Thetexashammer
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Wally Fairway

Wally Fairway 5568

Posted
Posted
3 minutes ago, Thetexashammer said:

Even if it drops 50%, who would look around and say "shit everything's cheap!"? That's the danger of having such amazingly high multiples, once we try and find a bottom, it's a long way down. Never mind that entire industries will come close to liquidating and that banks are probably fucked again.

Get out your Down 10,000 hats.

Yeah, part of the math that I don't think anyone can figure at this point is - what will company earning be post COVID, until there are guesses on that then, and only then, can multiples be discussed.

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