Markets still falling like whoa

[Henry Hill 3,156]

Is DJIA 15,000 out of the question? Seems like cash positions are growing exponentially even with the interest rate cut and stimulus news and without the impending unprecedented unemployment claims data and terrible quarterly earnings reports.

[Harrison Stafford 3,353]

1 hour ago, Fudge Nuggets said:

Risk management is everything.  Nice trading, padnuh.

Gracias.  Will wait for SOXS to drop back in the 20’s and sell in the 30’s.  When it hits the 40’s (which it will), I’ll start buying in the 30’s and selling in the 40’s.  Q2 earnings will be a disaster

[Homercles 10,206]

39 minutes ago, UTPhil2006 said:

Marcus not so Smart

He once got lost in his own museum

[Thetexashammer 1,062]

29 minutes ago, Henry Hill said:

Is DJIA 15,000 out of the question? Seems like cash positions are growing exponentially even with the interest rate cut and stimulus news and without the impending unprecedented unemployment claims data and terrible quarterly earnings reports.

I'll repeat my earlier prediction. Get out your Dow 10,000 hats. You''re practicing a cognitive bias known as anchoring.

Edited March 20, 2020 by Thetexashammer

[Sbbruin 21,912]

Just now, Thetexashammer said:

I'll repeat my earlier prediction. Get out your Dow 10,000 hats. 

The bounce if it went that low would be like a super ball when we get to the other side, whenever that is.

[Thetexashammer 1,062]

3 minutes ago, Sbbruin said:

The bounce if it went that low would be like a super ball when we get to the other side, whenever that is.

Even gold is down. Everybody is selling, everybody needs cash. It took ten years from the last crash to create enough jobs for everyone. The damage is literally incalculable. Mark Cuban donating money now is like the Christmas Truce of WWI. 

Edited March 20, 2020 by Thetexashammer

[UTexasFight 9,628]

I think it's crazy to put some sort of entry number right now, because we have no clue how bad this could get.  I think we'll just know when we've hit bottom. 

So you’re waiting for zero?

Fair enough

[UTexasFight 9,628]

Debated putting this here instead one of the other 90 other corona threads but really thought this op-ed from the WSJ last night hit the nail on head.

To keep this markets-focused, I’m staying all cash until the tide turns on some of these suggestions

Fi­nan­cial mar­kets paused their slide Thurs­day, but no one should think this rolling eco­nomic calamity is over. If this gov­ern-ment-or­dered shut­down con­tin­ues for much more than an­other week or two, the hu­man cost of job losses and bank­ruptcies will ex­ceed what most Amer­i­cans imag­ine. This won’t be pop­u­lar to read in some quar­ters, but fed­eral and state of­fi­cials need to start ad­just­ing their anti-virus strat­egy now to avoid an eco­nomic re­ces-sion that will dwarf the harm from 2008-2009.

The vast so­cial-dis­tanc­ing project of the last 10 days or so has been nec­es­sary and has done much good. Warn­ings about large gath­er­ings of more than 10 peo­ple and lim­it­ing ac­cess to nurs­ing homes will save lives. The pub­lic has re­ceived a cru­cial ed­u­ca­tion in hy­giene and dis­ease pre­ven­tion, and even young peo­ple may get the mes­sage. With any luck, this be­hav­ior change will re­duce the coro­n­avirus spread enough that our hos­pi­tals won’t be over-whelmed with pa­tients. An­thony Fauci, Scott Got­tlieb and other dis­ease ex­perts are buy­ing cru­cial time for gov­ern­ment and pri­vate in­dus­try to mar­shal re­sources against the virus.


Yet the costs of this na­tional shut­down are grow­ing by the hour, and we don’t mean fed­eral spend­ing. We mean a tsunami of eco­nomic de­struc­tion that will cause tens of mil­lions to lose their jobs as com­merce and pro­duc­tion sim­ply cease. Many large com­pa-nies can with­stand a few weeks with­out rev­enue but that isn’t true of mil­lions of small and mid-sized firms.


Even cash-rich busi­nesses op­er­ate on a thin mar­gin and can bleed through re­serves in a month. First they will lay off em­ploy­ees and then out of ne­ces­sity they will shut down. An­other month like this week and the lay­offs will be mea­sured in mil­lions of peo­ple.


The dead­weight loss in pro­duc­tion will be pro­found and take years to re­build. In a nor­mal re­ces­sion the U.S. loses about 5% of na­tional out­put over the course of a year or so. In this case we may lose that much, or twice as much, in a month.


Our friend Ed Hy­man, the Wall Street econ­omist, on Thurs­day ad­justed his es­ti­mate for the sec­ond quar­ter to an an­nual rate loss in GDP of mi­nus-20%. Trea-sury Sec­re­tary Steven Mnuchin’s as­ser­tion on Fox Busi­ness Thurs-day that the econ­omy will power through all this is happy talk if this con­tin­ues for much longer.


If GDP seems ab­stract, con­sider the hu­man cost. Think about the en­trepreneur who has in­vested his life in his Mem­phis ribs joint only to see his cus­tomers van­ish in a week. Or the re­tail chain of 30 stores that em­ploys hun­dreds but sees no sales and must shut its doors.


Or the re­cent grad­u­ate with $20,000 in stu­dent-loan debt—taken on with the en­cour­age­ment of politi­cians—who finds her­self laid off from her first job. Per­haps she can re­turn home and live with her par­ents, but what if they’re laid off too? How do you mea­sure the hu­man cost of these crushed dreams, lives up­ended, or men­tal-health dam­age that re­sult from the or­ders of fed­eral and state gov­ern­ments?


Some in the me­dia who don’t un­der­stand Amer­i­can busi­ness say that China man­aged a com­pa­ra­ble shock to its econ­omy and is now be­gin­ning to emerge on the other side. Why can’t the U.S. do it too? This ig­nores that the Chi­nese state owns an enor­mous stake in that econ­omy and chose to ab­sorb the losses. In the U.S. those losses will be borne by pri­vate own­ers and work­ers who rely on a func­tion­ing pri­vate econ­omy. They have no state bal­ance sheet to fall back on.

The politi­cians in Wash­ing­ton are telling Amer­i­cans, as they al­ways do, that they are rid­ing to the res­cue by writ­ing checks to in­di­vid­u­als and of­fer­ing loans to busi­ness. But there is no amount of money that can make up for losses of the mag­ni­tude we are fac­ing if this ex­tends for sev­eral more weeks. Af­ter the first $1 tril­lion this month, will we have to spend an­other $1 tril­lion in April, and an­other in June?


By the time Trea­sury’s small-busi­ness lend­ing pro­gram runs through the bu­reau­cratic hoops—com­plete with or­der­ing own­ers that they can’t lay off any­one as a price for get­ting the loan—mil­lions of busi­nesses will be bank­rupt and tens of mil­lions will be job­less.


Per­haps we will be lucky, and the hu­man and cap­i­tal­ist ge­nius for in­no­va­tion will pro­duce a vac­cine faster than ex­pected—or at least treat­ments that re­duce Covid-19 symp­toms. But bar­ring that, our lead­ers and our so­ci­ety will very soon need to shift their virus-fight­ing strat­egy to some­thing that is sus­tain­able.


Dr. Fauci has ex­plained this se­vere lock­down pol­icy as last­ing 14 days in its ini­tial term. The na­tional guid­ance would then be re­con­sid-ered de­pend­ing on the spread of the dis­ease. That should be the mo­ment, if not sooner, to of­fer new guid­ance on what might be called phase two of the coro­n­avirus pan­demic cam­paign.


That will surely in­clude strict mea­sures to iso­late and pro­tect the most vul­ner­a­ble—our el­derly and those with un­der­ly­ing med­ical prob­lems. This should not be­come a de­bate over how many lives to sac­ri­fice against how many lost jobs we can tol­er­ate. Sub­stan­tial so­cial dis­tanc­ing and other mea­sures will have to con­tinue for some time in some form, de­pend-ing on how our knowl­edge of the virus and its ef­fects evolves.


But no society can safeguard public health for long at the cost of its overall economic health. Even America’s resources to fight a viral plague aren’t limitless—and they will become more limited by the day as individuals lose jobs, businesses close, and American prosperity gives way to poverty. America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown.

 

[Dbeasy 15,235]

S&p 1800 is definitely in play

[Harrison Stafford 3,353]

I’m thinking 1750 where we pause and try to make a stand.  Then, we go lower.  

[Dnaguy 12,343]

56 minutes ago, Harrison Stafford said:

I’m thinking 1750 where we pause and try to make a stand.  Then, we go lower.  

[Henry Hill 3,156]

2 hours ago, Thetexashammer said:

I'll repeat my earlier prediction. Get out your Dow 10,000 hats. You''re practicing a cognitive bias known as anchoring.

 

[Wally Fairway 5,600]

1 hour ago, Dbeasy said:

S&p 1800 is definitely in play

 

1 hour ago, Harrison Stafford said:

I’m thinking 1750 where we pause and try to make a stand.  Then, we go lower.  

I like the way you think - as I have a series puts that start at 310 and go down to 150, so as much as that would mean bad things to the economy (short-term I hope) I will have protected my IRA.

[bernorange 8,375]

2 hours ago, Thetexashammer said:

Even gold is down. ...

Just FYI, because I know a lot of you peeps don't pay much attention to gold (or silver), but the spot price is down because of action in the futures market ("paper gold/silver").  No one is selling physical gold/silver.  Quite the opposite in fact.  Dealers are selling out of inventory and a demand shock is playing out. 

[52-80 19,281]

Gave my sister a 1oz gold coin for her wedding.  Hope she didn't try to sell it for the nominal/face value of €100

[heso 2,822]

Well guys my step brother’s wife and her antivax mom group determined that the stock market is going to bottom out at zero. 
 

I didn’t bother asking if that was for the Dow or all public companies. I couldn’t handle any more stupidity. 

whatever it is, give me all of it. All of everything. 

Edited March 21, 2020 by heso

[hornbri 1,467]

Thought this was a good read for those of us trying to stay the close and not time the market. 

3 Charts that show why investors should stay the course

[Lurch 5,941]

Man, my 401k money market fee sucks! S&P index fund .01%. 2040-50-60 etc are .06%. Money market is .11%?!? Wtf?

[UTPhil2006 3,828]

51 minutes ago, heso said:

Well guys my step brother’s wife and her antivax mom group determined that the stock market is going to bottom out at zero. 
 

I didn’t bother asking if that was for the Dow or all public companies. I couldn’t handle any more stupidity. 

whatever it is, give me all of it. All of everything. 

Lol good lord.  Sad thing is they're probably rooting for it.

[Nice Guy Eddie 13,549]

Whether it’s good or bad, yesterday I decided to shift an old 401k (~40% of my retirement money) to another custodian. This will keep that money out of the market for a week.  

[XYZ 2,154]

31 minutes ago, Lurch said:

Man, my 401k money market fee sucks! S&P index fund .01%. 2040-50-60 etc are .06%. Money market is .11%?!? Wtf?

Is that your biggest problem?

[tantric superman 4,668]

1 hour ago, hornbri said:

Thought this was a good read for those of us trying to stay the close and not time the market. 

3 Charts that show why investors should stay the course

Wife went into total sell mode.  She agreed to let me keep IRA at 70% stock as long as I locked in my losses and went conservative on the 401K. (They are each about equal amounts).  I'm going to start buying back into stocks next week on the 401k.

If my wife doesn't sleep, I don't sleep.  

[Henry Hill 3,156]

That strategy doesn’t compute. Sounds like you need to sack up.

[Incredulity 11,698]

I am targeting week after next.  

I expect freak outs over seeing the actual UI claim numbers roll in and government capitulation to the impossibility of locking down entire states.  If tanks roll in my view changes significantly.

[Lurch 5,941]

Is that your biggest problem?

 

No. Your point?

 

It’s about $50/month in management fees that I wasn’t paying before. It sucks, as per post.

[Telegraph_it 3,374]

26 minutes ago, tantric superman said:

Wife went into total sell mode.  She agreed to let me keep IRA at 70% stock as long as I locked in my losses and went conservative on the 401K. (They are each about equal amounts).  I'm going to start buying back into stocks next week on the 401k.

If my wife doesn't sleep, I don't sleep.  

Lulz my wife doesn’t even know what a 401k is. I don’t keep her apprised of market views for my sanity. 

[Incredulity 11,698]

5 minutes ago, Telegraph_it said:

Lulz my wife doesn’t even know what a 401k is. I don’t keep her apprised of market views for my sanity. 

Quote

We don't sell stock to women. I don't care who it is; we don't do it. Nancy Sinatra calls, you tell her you're sorry. They're a constant pain in the ass and your never gonna hear the end of it. All right? They're gonna call you every furking day wanting to know why the stock is dropping. And god forbid the stock should go up. You're gonna hear from them every bleepin' 15 minutes. It's just not worth it. Don't pitch the bitch.

 

[Fudge Nuggets 19,276]

2 hours ago, hornbri said:

Thought this was a good read for those of us trying to stay the close and not time the market. 

3 Charts that show why investors should stay the course

I understand that market timing is impossible and usually not a good idea, but when markets are crashing like this there is no harm to have some dry powder available.  You have to love those stories that say "If you miss the best single month you will miss out on a significant portion of overall positive returns" (to paraphrase).  Yeah, no shit.  But when the market starts off the month with a -15% move it's probably safe to bet it ain't going to be one of those "best months" that are so crucial. 

[hornbri 1,467]

9 minutes ago, Fudge Nuggets said:

I understand that market timing is impossible and usually not a good idea, but when markets are crashing like this there is no harm to have some dry powder available.  You have to love those stories that say "If you miss the best single month you will miss out on a significant portion of overall positive returns" (to paraphrase).  Yeah, no shit.  But when the market starts off the month with a -15% move it's probably safe to bet it ain't going to be one of those "best months" that are so crucial. 

Yes but if day 1 is -15% and days 2-30 are +1% each you still missed out. The point is you just don't know what is going to happen. 

I do get the point in having dry powder available, and if we all know for 100% certainty what was going to happen in the next week we would sell everything and buy puts. 

[Wally Fairway 5,600]

32 minutes ago, Telegraph_it said:

Lulz my wife doesn’t even know what a 401k is. I don’t keep her apprised of market views for my sanity. 

Yeah, my wife has a long term hold philosophy. She has no idea that I'm neck deep it puts; although most of it is parlaying gains....so far it's gains

[jimmyjazz 46,479]

13 minutes ago, hornbri said:

Yes but if day 1 is -15% and days 2-30 are +1% each you still missed out. The point is you just don't know what is going to happen. 

No, you don't.  But that doesn't mean one has to throw up one's hands and just buy and hold.

Here's the deal:  "buy and hold" is market timing.  It just is.  It is the most primitive version, but it is just as arbitrary as anything else.

I've been out of the market except for a small pile of risk trading capital for probably a year.  This had nothing to do with any sense that the market was overheated -- I did it for other reasons.  But I'll say this:  my market timing strategy that I use would have had me out of the S&P 500 at $3,226 or so.  It's currently at $2,305.  Is that evidence that my ridiculously simple means of "timing the market" works?  Of course not.  For one thing, I haven't yet seen a buy signal, and if and when it triggers if the S&P is above $3,226 then the concept failed in this particular case.  And, as is almost always true, a strategy that works to get you out of the huge downturns often whipsaws during normal market ebb and flow, and that right there costs money.

That said, just stop with the "we just don't know" bullshit.  There are by definition a million different ways to time the market, and "buy and hold" is merely one.   It is not infalllible and it for damn sure is not always the "best".  If you're comfortable with it, great.  Others aren't.  Risk abounds.  How will you deal with risk?

[Okie State 3,863]

Why is this even a debate? Who gives a shit what anyone else is doing? We all have our reasons for making the decisions we make.

[hornbri 1,467]

48 minutes ago, jimmyjazz said:

No, you don't.  But that doesn't mean one has to throw up one's hands and just buy and hold.

Here's the deal:  "buy and hold" is market timing.  It just is.  It is the most primitive version, but it is just as arbitrary as anything else.

I've been out of the market except for a small pile of risk trading capital for probably a year.  This had nothing to do with any sense that the market was overheated -- I did it for other reasons.  But I'll say this:  my market timing strategy that I use would have had me out of the S&P 500 at $3,226 or so.  It's currently at $2,305.  Is that evidence that my ridiculously simple means of "timing the market" works?  Of course not.  For one thing, I haven't yet seen a buy signal, and if and when it triggers if the S&P is above $3,226 then the concept failed in this particular case.  And, as is almost always true, a strategy that works to get you out of the huge downturns often whipsaws during normal market ebb and flow, and that right there costs money.

That said, just stop with the "we just don't know" bullshit.  There are by definition a million different ways to time the market, and "buy and hold" is merely one.   It is not infalllible and it for damn sure is not always the "best".  If you're comfortable with it, great.  Others aren't.  Risk abounds.  How will you deal with risk?

I am not telling anyone else to do it that is not comfortable with it. My post said "for those of us trying to stay the course". 

Of course any number of strategies might be better then others. My point was more once you pick one you should stick with it. Bouncing between different strategies is no strategy. 

[Thetexashammer 1,062]

So are they going to borrow $5 trillion dollars, or just print it? I'm guessing they aren't going to borrow it.

[jimmyjazz 46,479]

19 minutes ago, hornbri said:

I am not telling anyone else to do it that is not comfortable with it. My post said "for those of us trying to stay the course". 

Fair enough.  There is a large demographic for whom it's a pretty sound strategy:  people who don't have the time or inclination to pay attention to the daily or weekly swings of the market.

[Lurch 5,941]

They are going to mint two $1trillion coins.

 

Made of platinum, because reasons.

[Parliament 14,377]

[Thetexashammer 1,062]

Just now, Parliament said:

Not orange enough.

[UTGrad98 2,318]

6 minutes ago, Parliament said:

Edited March 21, 2020 by UTGrad98
edit

[ChiTownDoc 21,229]

2 hours ago, Thetexashammer said:

So are they going to borrow $5 trillion dollars, or just print it? I'm guessing they aren't going to borrow it.

They can print 10Tr more.  The dollar ain’t dropping in value anytime soon.  

[heso 2,822]

They are going to mint two $1trillion coins.
 
Made of platinum, because reasons.

[bernorange 8,375]

Quote

Goldman Sachs Group Inc (GS.N) poured more than $1 billion into two of its prime money-market portfolios this week due to heavy investor withdrawals, according to a filing with the U.S. securities regulator.

The Wall Street bank purchased $722.4 million in assets from its Goldman Sachs Financial Square Money Market Fund (GPMXX.O) and $301.2 million from its Goldman Sachs Fund Square Prime Obligations Fund.
...
The bank repurchased securities from its two funds on Thursday after investors withdrew a net $8.1 billion from them during a four-day stretch, according to the disclosure.

Industrywide, investors pulled tens of billions of dollars from prime money-market funds, which buy top-rated corporate debt. Although they are among the tamest investment vehicles, they can be riskier than portfolios that rely more on U.S. government bonds.

The U.S. Federal Reserve rolled out three emergency credit programs this week to battle a global economic shutdown that has roiled the $3.8 trillion money-market mutual fund industry. The Fed is in effect encouraging banks to buy assets from those funds, insulating them from having to sell assets at a discount if they come under pressure from households or firms wanting to withdraw money.

Weekly liquidity levels at the nearly $18 billion Goldman Sachs Fund Square Money Market Fund dropped to 34% on Thursday from 43% on Monday. SEC rules on weekly liquidity dictate that funds have to keep at least 30% of their portfolios in securities that can be converted to cash in five business days.

During that four-day stretch, investors made $6.84 billion in net withdrawals from the fund, Goldman disclosures show.

Goldman’s support is unusual, but it does not stand alone in supporting its funds during the coronavirus panic. Bank of New York Mellon Corp (BK.N) also stepped in twice this week with a total of $2.1 billion to prop up Dreyfus Cash Management.

That $10.5 billion portfolio was also hit by heavy investor withdrawals. BNY bought $1.2 billion from the prime money-market fund on Wednesday and then another $949 million on Thursday, according to fund disclosures, part of which was first reported by the Financial Times.

If a prime fund’s weekly liquidity level falls below 30%, SEC rules give its board discretion to introduce redemption fees of up to 2% to slow down investor withdrawals. They can also put up gates for up to 10 business days.

Those moves, however, would not be welcomed by investors. That’s why fund sponsors like Goldman and BNY Mellon can provide capital support so liquidity levels don’t drop below the threshold. Other fund sponsors have stayed more heavily weighted in liquidity.

The recent market panic has been reminiscent of what happened in 2008, when money-market fund problems threatened to freeze up global markets.
...

https://www.reuters.com/article/us-health-coronavirus-goldman-mny-mkt-ex/exclusive-goldman-injects-1-billion-into-own-money-market-funds-after-heavy-withdrawals-idUSKBN21810A

 

[Parliament 14,377]

So refresh my memory.  Wasn't it just the opposite in 2008?  Money poured IN to MMA's?  Or was it the same as this time?

[Dbeasy 15,235]

If it’s pouring out of Money markets, where is it going? Moves to 250k fdic insured bank accounts can’t produce that much outflow can it?

[bernorange 8,375]

My assumption is that businesses facing economic slowdowns, supply chain disruptions, etc. are pulling cash to make payroll and debt payments.  People may be pulling cash to weather extended quarantine conditions.

@Parliament - no, 2008 was the same problem in essence (cash outflows) :

https://money.cnn.com/2008/09/29/news/economy/money_market/

Edited March 22, 2020 by bernorange

[52-80 19,281]

Didn't see too much shock and awe in this news this weekend.  I'm tempted to gamble again, against small cap market. 

 

And to cut my losses on the (earlier) airline purchase.....cuz that was fucking stupid. 

[bluto 4,947]

While true no panic news necessarily, the states are starting to fall one by one on shelter in place calls. There’s just not any good news, and short of a chloroquine miracle I don’t expect there to be any good news for a while.

Just need one more nonsensical silly day of a bump to narrow a few losses then I cash out til it settles in the next few wks. Thinking stimulus might provide it but that’s just a band aid on a Bowie knife wound IMO.

[Trey3216 15,380]

Just now, bluto said:

While true no panic news necessarily, the states are starting to fall one by one on shelter in place calls. There’s just not any good news, and short of a chloroquine miracle I don’t expect there to be any good news for a while.

Just need one more nonsensical silly day of a bump to narrow a few losses then I cash out til it settles in the next few wks. Thinking stimulus might provide it but that’s just a band aid on a Bowie knife wound IMO.

More like trying to superglue a gunshot exit wound 

[Harrison Stafford 3,353]

The rat bastards at Goldman Sachs predict -6% GDP for Q1 and -24% for Q2.  You can not invest in a market with -24% GDP with a global economy at a standstill.

[ChiTownDoc 21,229]

I think the numbers show if you're overly aggressive you shorten the time period that we have to shut the damn economy down.  I think that allows a quicker transition to quarantining just the olds.  If this administration believes this and it seems lately they have bought into the science just a bit more...I don't see how you don't shut domestic travel down for a week or two.  Makes total sense and how much money is being made anyway with planes flying around at 10% capacity?  

Edited March 22, 2020 by ChiTownDoc