Markets still falling like whoa

[Lurch 5,952]

This. There should be one option that is virtually zero risk, zero growth, zero fee. Usually invested in currency and or govt bonds

[Fudge Nuggets 19,490]

9 hours ago, ChiTownDoc said:

I will likely push all the chips I have left back in at 2000 but 1750 is a realistic bottom.

If you really want to get scared then it should be pointed out we never retested the March 2009 low when we started the epic bull run.  What a kick in the pants that would be.

[Fudge Nuggets 19,490]

8 hours ago, UTexasFight said:

My 401k has no cash/money market option.

Is your 401k managed by a boiler room in Boca Raton?

[Grade of D as in David 13,256]

2 minutes ago, Fudge Nuggets said:

Is your 401k managed by a boiler room in Boca Raton?

Are your saying Goldman Sacks in Florida is not a legitimate Investment management firm?

Impossible, they have an office in the same strip center as Robert Kraft's favorite tug shop.

[Wally Fairway 5,679]

23 minutes ago, Grade of D as in David said:

Are your saying Goldman Sacks in Florida is not a legitimate Investment management firm?

Impossible, they have an office in the same strip center as Robert Kraft's favorite tug shop.

Except there is no happy ending from the GS shop
Oh wait you said Goldman Sacks, not Goldman Sachs....maybe there is a happy ending at Goldman Sacks

Edited March 17, 2020 by Wally Fairway
my bad I misread the quoted post

[Trey3216 15,458]

9 hours ago, LABEVO said:

Yeah, the bond funds in this market are shit. Shows that the markets aren't working that highly rated bonds are getting crushed albeit way less than equities. 

No, it shows you that they are working correctly, but that we are breaching the point where a full on credit crisis is close so bond funds are down too.  
 

bond funds don’t always for up when stocks go down.  Bond funds have been crazily overvalued as well recently.  

[Trey3216 15,458]

29 minutes ago, Fudge Nuggets said:

Is your 401k managed by a boiler room in Boca Raton?

No shit.  That’s beyond incompetent as a 401k manager.  
 

id love to look at the plan and find out his HR manager.  

[Grade of D as in David 13,256]

11 minutes ago, Wally Fairway said:

Except there is no happy ending from the GS shop
Oh wait you said Goldman Sacks, not Goldman Sachs....maybe there is a happy ending at Goldman Sacks

Yeah going for a knockoff joke. Botched the landing but the East German judge didn't ding me too hard for it.

Edited March 17, 2020 by Grade of D as in David

[bernorange 8,388]

Quote

A corner of the financial system that provides corporate America with short-term IOUs to buy inventory or make payrolls is seizing up, triggering a scramble for cash elsewhere and fueling speculation that the Federal Reserve will intervene.

In the $1.13 trillion commercial paper market, yields over risk-free rates have surged to levels last seen during the 2008 financial crisis. The strains are causing companies to draw down on backup credit lines, according to people with knowledge of the situation.

The longer the commercial paper market remains stressed, the more companies will look to tap credit lines, increasing the risk that banks will need to raise funds themselves, Bank of America Corp. strategists Mark Cabana and Olivia Lima wrote in a March 13 note. Cabana said the Fed needs to start buying commercial paper to unclog the market.

“It’s prudent for everyone to try and raise liquidity, and the Fed needs to facilitate this,” he said. If not contained, the turmoil could increase risks for money-market funds that hold the debt, he said.
...

https://www.bloomberg.com/news/articles/2020-03-15/key-source-of-corporate-cash-seizing-up-amid-credit-market-rout

This explains the smashing of the bank reserve ratio I think.

Edit. :"This isn't like 2008." - Goldman Sachs  lolololo

Edited March 17, 2020 by bernorange

[ballrific 221]

10 hours ago, UTexasFight said:

So where do I hide.
My 401k has no cash/money market option.

 

I've seen that with some employer plans, they don't list it specifically as "money market" or "cash".  It might be listed under "US treasury money market fund" or some shit like that but it won't be called "cash/money market".

[LTtxfan 50,040]

10 hours ago, LTtxfan said:

Probably will happen this week....

It's been a topic of conversation on both CNBC and Bloomberg since last Thursday.

Reuters reporting Fed set to reinstate Commercial Paper funding... so probably gets done in next couple of days.

"UPDATE 1-Fed to revive commercial paper funding facility -sources"

https://www.reuters.com/article/health-coronavirus-commercialpaper-idUSL1N2BA0PK

Edited March 17, 2020 by LTtxfan

[52-80 19,381]

25 minutes ago, ballrific said:

I've seen that with some employer plans, they don't list it specifically as "money market" or "cash".  It might be listed under "US treasury money market fund" or some shit like that but it won't be called "cash/money market".

or if you have a bunch of date-target funds, just shift it over to the nearest-dated one, as it should be the most conservative

[Dnaguy 12,731]

2 hours ago, Lurch said:

This. There should be one option that is virtually zero risk, zero growth, zero fee. Usually invested in currency and or govt bonds

0 fee?

Bwwwahhhhahahahahahahahahah!

 

[Wally Fairway 5,679]

49 minutes ago, bernorange said:

https://www.bloomberg.com/news/articles/2020-03-15/key-source-of-corporate-cash-seizing-up-amid-credit-market-rout

This explains the smashing of the bank reserve ratio I think.

Edit. :"This isn't like 2008." - Goldman Sachs  lolololo

Well at least they didn't wait until somebody broke the buck this time.
I remember while everyone was panicky about LB collapse that it was hardly noticed when a couple of MM funds broke the buck, but that panicked the overnight markets and shit locked up until the Fed stepped in. I'm guessing we are/were at the same point of banking collapse, but gov'ment intervention saves all (including bonuses for mgmt)

[Wally Fairway 5,679]

Apparently US airlines have been reading /r/wallstreetbets and spending all their cash on their own #stonk, and now will likely get a bail out

 

[Fudge Nuggets 19,490]

16 minutes ago, Wally Fairway said:

Well at least they didn't wait until somebody broke the buck this time.
I remember while everyone was panicky about LB collapse that it was hardly noticed when a couple of MM funds broke the buck, but that panicked the overnight markets and shit locked up until the Fed stepped in. I'm guessing we are/were at the same point of banking collapse, but gov'ment intervention saves all (including bonuses for mgmt)

The day they broke the dollar and the first time TARP came up for a vote and got voted down were scary as hell.  Two pretty catastrophic events all within two weeks.

[Rusty Shackelford 414]

1 hour ago, bernorange said:

https://www.bloomberg.com/news/articles/2020-03-15/key-source-of-corporate-cash-seizing-up-amid-credit-market-rout

This explains the smashing of the bank reserve ratio I think.

Edit. :"This isn't like 2008." - Goldman Sachs  lolololo

I have a question for the bankers about reserve ratios.  I have seen where the Fed has temporarily reduced their reserve requirement to 0%, but doesn't the BIS - Basel Committee have their own standards that banks have to follow, or are they just strong suggestions?

[UT_OB1 2,270]

Is there any chance that banks freeze lines of credit?  I have a personal LOC through WF.  We started our first vacation rental 13 months ago, and perfrect timing on the second getting up and running 3 weeks ago.  Yesterday was national "cancel your booking" day apparently (and I understand why).  We are fine in the short term of 2-3, but not as comfortable as I'd like coming out of getting house 2 ready.  If there is danger of credit being stopped, I'd rather pull 3-6 months of mortgages out of the loc to set aside and pay the interest on it 

[Parliament 14,639]

That seems pretty extreme.  I'm not sure we're there yet.

[Wally Fairway 5,679]

5 minutes ago, UT_OB1 said:

Is there any chance that banks freeze lines of credit?  I have a personal LOC through WF.  We started our first vacation rental 13 months ago, and perfrect timing on the second getting up and running 3 weeks ago.  Yesterday was national "cancel your booking" day apparently (and I understand why).  We are fine in the short term of 2-3, but not as comfortable as I'd like coming out of getting house 2 ready.  If there is danger of credit being stopped, I'd rather pull 3-6 months of mortgages out of the loc to set aside and pay the interest on it 

yes - there is a danger, and they will never tell about it, even 1 minute before the freeze those lines.
play it safe, more companies fail because of a liquidity crisis than you can even imagine

[Continental Op 3,934]

Is there any chance that banks freeze lines of credit?  I have a personal LOC through WF.  We started our first vacation rental 13 months ago, and perfrect timing on the second getting up and running 3 weeks ago.  Yesterday was national "cancel your booking" day apparently (and I understand why).  We are fine in the short term of 2-3, but not as comfortable as I'd like coming out of getting house 2 ready.  If there is danger of credit being stopped, I'd rather pull 3-6 months of mortgages out of the loc to set aside and pay the interest on it 

If you pull the money and don't need it you're out the interest. If you don't pull the money and do need it you're out a rental house.

[Skipper 6,412]

8 minutes ago, UT_OB1 said:

Is there any chance that banks freeze lines of credit?  I have a personal LOC through WF.  We started our first vacation rental 13 months ago, and perfrect timing on the second getting up and running 3 weeks ago.  Yesterday was national "cancel your booking" day apparently (and I understand why).  We are fine in the short term of 2-3, but not as comfortable as I'd like coming out of getting house 2 ready.  If there is danger of credit being stopped, I'd rather pull 3-6 months of mortgages out of the loc to set aside and pay the interest on it 

What basis would they have to freeze it?  If they can't freeze it contractually (default or purely discretionary commitment) don't think anything to worry about.

[bernorange 8,388]

14 minutes ago, Rusty Shackelford said:

I have a question for the bankers about reserve ratios.  I have seen where the Fed has temporarily reduced their reserve requirement to 0%, but doesn't the BIS - Basel Committee have their own standards that banks have to follow, or are they just strong suggestions?

My understanding is that the Basel III are strong suggestions which individual nations/central banks adopt or not.

https://www.federalreserve.gov/supervisionreg/basel/basel-default.htm

[UT_OB1 2,270]

9 minutes ago, Wally Fairway said:

yes - there is a danger, and they will never tell about it, even 1 minute before the freeze those lines.
play it safe, more companies fail because of a liquidity crisis than you can even imagine

 

7 minutes ago, Continental Op said:

16 minutes ago, UT_OB1 said:

Is there any chance that banks freeze lines of credit?  I have a personal LOC through WF.  We started our first vacation rental 13 months ago, and perfrect timing on the second getting up and running 3 weeks ago.  Yesterday was national "cancel your booking" day apparently (and I understand why).  We are fine in the short term of 2-3, but not as comfortable as I'd like coming out of getting house 2 ready.  If there is danger of credit being stopped, I'd rather pull 3-6 months of mortgages out of the loc to set aside and pay the interest on it 

If you pull the money and don't need it you're out the interest. If you don't pull the money and do need it you're out a rental house.

The above 2 is where I'm at.  Its a few hundred in interest.  It would be soul crushing to lose one of the houses we just busted our asses on repairing and getting set up.  

6 minutes ago, Skipper said:

What basis would they have to freeze it?  If they can't freeze it contractually (default or purely discretionary commitment) don't think anything to worry about.

Technically, the bank could do it anytime they want, financial crisis or no, if they just decided they wanted to take the business a different direction.  

Edited March 17, 2020 by UT_OB1

[B00M 6,740]

Soooo are we expecting another big drop tomorrow or should we start dollar costing back in?!

[Wally Fairway 5,679]

1 minute ago, B00M said:

Soooo are we expecting another big drop tomorrow or should we start dollar costing back in?!

[Fudge Nuggets 19,490]

21 minutes ago, B00M said:

Soooo are we expecting another big drop tomorrow or should we start dollar costing back in?!

Yes.

[Trey3216 15,458]

26 minutes ago, Skipper said:

What basis would they have to freeze it?  If they can't freeze it contractually (default or purely discretionary commitment) don't think anything to worry about.

Because if the banks themselves get close to not being able to keep up with their overnight transactions, then the entire credit market freezes up.  Defaults on overnight lending are one of the things that caused the massive credit crunch during '08/9

[Parliament 14,639]

Seems appropriate:

[Wally Fairway 5,679]

Looking back at yesterdays market, keep this in mind as you see today's bump

[UTexasFight 9,838]

I've seen that with some employer plans, they don't list it specifically as "money market" or "cash".  It might be listed under "US treasury money market fund" or some shit like that but it won't be called "cash/money market".

Yeah, I get that. But still was expecting something a little more clear discussing “money market” in the description

here are my five most conservative options. I’ve got one managed income/stable value and 4 bond funds:


Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) -Intermediate Core Bond

Dodge & Cox Income Fund (DODIX)- Intermediate Core-Plus Bond

Vanguard Intermediate-Term Treasury Index Fund Admiral Shares (VSIGX)- Intermediate Government

MFS Government Securities Fund Class R4 (MFGJX)- Intermediate Government

Managed Income Portfolio Class 2



Seems

VSIGX:

Objective
The investment seeks to track the performance of a market-weighted Treasury index with an intermediate-term dollar-weighted average maturity.

Strategy
The fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays U.S. Treasury 3-10 Year Bond Index. This index includes fixed income securities issued by the U.S. Treasury (not including inflation-protected bonds), with maturities between 3 and 10 years. At least 80% of the fund's assets will be invested in bonds included in the index.


Or the managed income:

Objective
The fund seeks to preserve your principal investment while earning a level of interest income that is consistent with principal preservation. The fund seeks to maintain a stable net asset value (NAV) of $1 per share, but it cannot guarantee that it will be able to do so. The yield of the fund will fluctuate.

Strategy
The fund invests in benefit-responsive investment contracts issued by insurance companies and other financial institutions ("Contracts"), fixed income securities, and money market funds. Under the terms of the Contracts, the assets of the fund are invested in fixed income securities (which may include, but are not limited to, U.S. Treasury and agency bonds, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, and collective investment vehicles and shares of investment companies that invest primarily in fixed income securities) and shares of money market funds. The fund may also invest in futures contracts, option contracts, and swap agreements.




(taking investment advice from surly. What could go wrong)

[LABEVO 928]

3 hours ago, Trey3216 said:

No, it shows you that they are working correctly, but that we are breaching the point where a full on credit crisis is close so bond funds are down too.  
 

bond funds don’t always for up when stocks go down.  Bond funds have been crazily overvalued as well recently.  

....yes, i understand that markets do fail but immediately during a social crisis shouldn't reverberate into the bond market. 

not sure i agree that bonds have been crazy overvalued. money has to be deployed and interest rates is putting so much into the system. 

[Dnaguy 12,731]

So... wondering if I have the balls to buy $SQQQ at this price and just wait for the market to fall tomorrow and sell it.

Anyone want to talk me out of this?

[Trey3216 15,458]

3 minutes ago, LABEVO said:

....yes, i understand that markets do fail but immediately during a social crisis shouldn't reverberate into the bond market. 

not sure i agree that bonds have been crazy overvalued. money has to be deployed and interest rates is putting so much into the system. 

Bonds have been overvalued because there is no yield anywhere other than bonds and high dividend paying stocks.  Bond markets are a much more efficient forward discount mechanism than even the stock markets.  The bond markets were declining weeks ahead of the stock market in this instance, just as they were during the financial crisis.  

 

The bond markets, and thus, bond funds, are reflecting a higher possibility of defaults.  Therefore, prices drop and yields rise (particularly on the corporate bond side) and the only thing that goes up (price-wise) are high quality treasuries, and cash.  Which is why the US Treasury markets are yielding all-time lows.  

[Harrison Stafford 3,395]

In SOXS at $27.50.  If you think it's going to get worse, this price is a gift. 

Edited March 17, 2020 by Harrison Stafford

[Rusty Shackelford 414]

 

[Fudge Nuggets 19,490]

17 minutes ago, Harrison Stafford said:

In SOXS at $27.50.  If you think it's going to get worse, this price is a gift. 

Pretty good fill there, padnuh.

[Thetexashammer 1,062]

25 minutes ago, Harrison Stafford said:

In SOXS at $27.50.  If you think it's going to get worse, this price is a gift. 

You do know what a "daily" ETF is, right? It's not something you hold as a long term investment. 

https://www.etf.com/etf-education-center/etf-basics/leveraged-and-inverse-etfs-why-2x-is-not-the-2x-you-think

[Beau Vine 55,901]

5 hours ago, Lurch said:

This. There should be one option that is virtually zero risk, zero growth, zero fee. Usually invested in currency and or govt bonds

[Harrison Stafford 3,395]

39 minutes ago, Thetexashammer said:

You do know what a "daily" ETF is, right? It's not something you hold as a long term investment. 

https://www.etf.com/etf-education-center/etf-basics/leveraged-and-inverse-etfs-why-2x-is-not-the-2x-you-think

Yep and the time decay is minimal in this ETF. I bought SOXS this morning at $27.50 and will sell in the next few days when it hits $35 or $36.  

[52-80 19,381]

1 hour ago, UTexasFight said:

 

Yeah, I get that. But still was expecting something a little more clear discussing “money market” in the description

here are my five most conservative options. I’ve got one managed income/stable value and 4 bond funds:


Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) -Intermediate Core Bond

Dodge & Cox Income Fund (DODIX)- Intermediate Core-Plus Bond

Vanguard Intermediate-Term Treasury Index Fund Admiral Shares (VSIGX)- Intermediate Government

MFS Government Securities Fund Class R4 (MFGJX)- Intermediate Government

Managed Income Portfolio Class 2



Seems

VSIGX:

Objective
The investment seeks to track the performance of a market-weighted Treasury index with an intermediate-term dollar-weighted average maturity.

Strategy
The fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays U.S. Treasury 3-10 Year Bond Index. This index includes fixed income securities issued by the U.S. Treasury (not including inflation-protected bonds), with maturities between 3 and 10 years. At least 80% of the fund's assets will be invested in bonds included in the index.


Or the managed income:

Objective
The fund seeks to preserve your principal investment while earning a level of interest income that is consistent with principal preservation. The fund seeks to maintain a stable net asset value (NAV) of $1 per share, but it cannot guarantee that it will be able to do so. The yield of the fund will fluctuate.

Strategy
The fund invests in benefit-responsive investment contracts issued by insurance companies and other financial institutions ("Contracts"), fixed income securities, and money market funds. Under the terms of the Contracts, the assets of the fund are invested in fixed income securities (which may include, but are not limited to, U.S. Treasury and agency bonds, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, and collective investment vehicles and shares of investment companies that invest primarily in fixed income securities) and shares of money market funds. The fund may also invest in futures contracts, option contracts, and swap agreements.




(taking investment advice from surly. What could go wrong)
 

 

Do u have a cousin named asadulah?

Edited March 17, 2020 by 52-80

[MAUFRAIS 6,761]

Back up in your ass with the resurrection

[EuroHorn 3,295]

4 hours ago, ballrific said:

I've seen that with some employer plans, they don't list it specifically as "money market" or "cash".  It might be listed under "US treasury money market fund" or some shit like that but it won't be called "cash/money market".

Usually it’s not an option but the default if you don’t select a fund or funds to invest, i.e., the money will come into the account and just sit as cash and you’ll get a very low rate of interest 

Edited March 17, 2020 by EuroHorn

[dad 557]

34 minutes ago, EuroHorn said:

Usually it’s not an option but the default if you don’t select a fund or funds to invest, i.e., the money will come into the account and just sit as cash and you’ll get a very low rate of interest 

That's how mine is setup.

[UTexasFight 9,838]

Mine requires 100% to be allocated among the 33 funds available.
There is no default /do nothing = cash option

Which is amazing because the average age of my company’s employees, I swear, is ~55-60.

[Trey3216 15,458]

21 minutes ago, UTexasFight said:

Mine requires 100% to be allocated among the 33 funds available.
There is no default /do nothing = cash option

Which is amazing because the average age of my company’s employees, I swear, is ~55-60.

Then it's in violation of QDIA rules, unless the default option is a age/retirement band portfolio.  

Edited March 17, 2020 by Trey3216

[Not a cat 5,822]

With all this talk of 401k plans and the market being down, now's a good time to see if your plan allows a mega backdoor Roth.

Google the term for the specifics but the short explanation is you contribute after tax dollars to a plan and then immediately convert them to Roth.  Makes sense if you're already hitting the 19.5 k pretax max and were already going to be able investing after tax amounts- might as well get that in a Roth and tax free forever. 

Your plan has to allow it but if it does the big custodians can typically accommodate.  Fidelity even has it on auto pilot so it automatically converts after tax amounts the moment it hits so you avoid any tax liability.

[Fudge Nuggets 19,490]

3 minutes ago, Not a cat said:

With all this talk of 401k plans and the market being down, now's a good time to see if your plan allows a mega backdoor Roth.

Google the term for the specifics but the short explanation is you contribute after tax dollars to a plan and then immediately convert them to Roth.  Makes sense if you're already hitting the 19.5 k pretax max and were already going to be able investing after tax amounts- might as well get that in a Roth and tax free forever. 

Your plan has to allow it but if it does the big custodians can typically accommodate.  Fidelity even has it on auto pilot so it automatically converts after tax amounts the moment it hits so you avoid any tax liability.

That's what I do once I hit the yearly limit.  I have to manually set it up and usually miss one pay period before I realize it, but better than no contributions.

[The People’s Elbow 707]

4 hours ago, B00M said:

Soooo are we expecting another big drop tomorrow or should we start dollar costing back in?!

I YOLOed for few units of TVIX the other day, so here’s hoping for more drops. 
 

 

[ClubWhatever 12,331]

Big oil is at 17 year lows.