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NOTABLE! The Coming Recession (2019-2020?)

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Budgeoly

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fyi: Today's nice rebound has not, thus far, been accompanied by a big VIX reversion. I tend to interpret that to mean the bounce isn't real, or isn't to be trusted.
Thank you just learned definition of VIX I think
 

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Envision

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Doesn't your argument assume that the supply of goods is constant, while demand for those goods drops? Aren't we in a situation where the supply of goods is about to drop (at least temporarily, due to the China shutdown)?

While demand for many things is down, demand for everyday goods is as strong as ever. Even to the point where Walmart and other grocer chains are hiring a boatload of workers to fulfill the demand.
Just a note here, my factories in China are all working. Pakistan and India are shut down for 2-3 weeks starting at the beginning of this week in Pakistan and today in India.

I think if they can flatten the curve on what we are experiencing with the virus we can get controls in place to get most businesses back to work in some fashion relatively quickly.
 

samsig03

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So I search this thread and a few others.... looking for stock picks while the market crashes. I think we are not at the bottom yet, but I wanted to start getting people's ideas of stocks you are eyeing to ponce on. This kind of buying opportunity is rare and I have cash this time to really purchase quite a few.

Like this 2008 thread:

Your Stock Picks for this Economy


I am eyeing: Amazon, Apple. Airlines that have strong balance sheets and other blue chip stocks.

Stay safe!
 

MJ DeMarco

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PizzaOnTheRoof

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MJ DeMarco

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Looks like the FED started their stock buying program today, LOL.
 

DrWumbo

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Has anyone looked at LQD? With the fed buying corporate bonds/debt, going into this would be following the Fed Money into this asset class
 

Silverfox148

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If correct, they are setting a pretty bad precedent.

How long can they keep the show going, this virus thing is going to last months/years if everything is true about it.

Now is the time for good honest leadership, instead of all this bread and circuses act.
 

MJ DeMarco

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In all my years of trading, I've never seen the SPY go up 5 or 10% while the VIX didn't revert in some fashion. As of right now, the VIX is higher than yesterday. Something doesn't smell right.
 

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JScott

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Looks like the FED started their stock buying program today, LOL.
I find this to be stepping over the line...

Lots of hyperbolic talk about socialism recently, but this is actually the definition of socialism -- the government owning the means of production.

I'm good with loans and even free money, but the government having ownership of American companies isn't appropriate. It's a slippery slope...

EDIT: Btw, this is not intended to be political. I don't believe that the administration has any desire for "socialism." But, I believe this is setting a precedent that can snowball should we ever get a government that is looking to move toward true socialist policy, like the government owning manufacturing. This gives that opening.
 

MJ DeMarco

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I find this to be stepping over the line...

Lots of hyperbolic talk about socialism recently, but this is actually the definition of socialism -- the government owning the means of production.

I'm good with loans and even free money, but the government having ownership of American companies isn't appropriate. It's a slippery slope...

EDIT: Btw, this is not intended to be political. I don't believe that the administration has any desire for "socialism." But, I believe this is setting a precedent that can snowball should we ever get a government that is looking to move toward true socialist policy, like the government owning manufacturing. This gives that opening.
I couldn't read into your statement. Are you saying you believe that actually is happening here? I was being sort of facetious... but I have to admit, today's market action has me wondering.
 
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I couldn't read into your statement. Are you saying you believe that actually is happening here? I was being sort of facetious... but I have to admit, today's market action has me wondering.
Maybe I misread your post...

I thought you were saying that the Fed started buying equities/stocks. I hadn't seen that yet, but if it was true, I believe this is something the government shouldn't be doing. Ever.

But now it sounds like you were just making a joke, and I didn't get it. Now I'm confused... :)

(Btw, if it's not true, it's sad that it's so conceivable that I didn't even question it...)
 

MJ DeMarco

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I thought you were saying that the Fed started buying equities/stocks.
My statement was in jest, with a sliver of skepticism ... meaning, part of me wouldn't be surprised if that was actually happening.

Can't think of the word to describe that: part sarcasm, part sardonic, part facetious ... the right word escapes me.
 
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JScott

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My statement was in jest, with a sliver of skepticism ... meaning, part of me wouldn't be surprised if that was actually happening.

Can't think of the word to describe that: part sarcasm, part sardonic, part facetious ... the right word escapes me.
Got it... Yup, I'm right there with you... Not nearly as farfetched as it should be. Scary.
 

MJ DeMarco

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In all my years of trading, I've never seen the SPY go up 5 or 10% while the VIX didn't revert in some fashion. As of right now, the VIX is higher than yesterday. Something doesn't smell right.
I'm guessing the VIX elevation is due to the job report due out tomorrow. While this is a big risk-event, I still would expect the VIX to retreat by a few %. But nope, it hasn't moved down at all.
 

nitrousflame

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In all my years of trading, I've never seen the SPY go up 5 or 10% while the VIX didn't revert in some fashion. As of right now, the VIX is higher than yesterday. Something doesn't smell right.
So much for my plan to restock on some cheap(er) puts during a counter trend rally...
 

Joe Cassandra

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@MJ DeMarco

The VIX job losses are probably already built in...we're likely to see heightened VIX until companies finally release data about the damage.

Right now, we're seeing the FED and sugar high from the stimulus propping the markets up.

Most likely the markets will go up and down through the summer...as they always do...then drop heavily in Sept - Oct.

(most major stock crashes happen in March and October ---> 1929, 1987, 2001, 2008, 2018 (correction),March 2020).

So far, we haven't even hit a billing cycle yet of people missing payments.

Once we see how those numbers shake out ... it'll give a good idea whether a recession could be on for the next 12-24 months.
 

socaldude

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LOL the VIX didnt even flinch.

My guess is that investors are expecting more bad news. I think all of this is a lot worse than what is being reported. A lot of collateral damage to be reported. Investors are future oriented and the media doesnt do a good job of predicting hardly anything.

For trump to suggest its better to open everything again tells me he has some information that our economy is hurting bad.

Just my ametuer .02 cents.
 

socaldude

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My statement was in jest, with a sliver of skepticism ... meaning, part of me wouldn't be surprised if that was actually happening.

Can't think of the word to describe that: part sarcasm, part sardonic, part facetious ... the right word escapes me.
Humor by exaggeration?

Satirical?...:wideyed:
 

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PizzaOnTheRoof

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lowtek

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My uneducated opinion:

Just as the Chinese response to the virus told us that it presented a serious danger to life and well being, the actions of the federal reserve and federal government tell us that we're on the precipice.

We're already at 0%, helicopter money for the people, 4T in bailouts and unlimited quantitative easing... and it's only been 2 months of the virus and a couple of weeks of shelter in place orders. We haven't even hit peak case load, assuming the models are correct.

Where do we go from here? When it gets worse what are they going to do? When it eventually gets better how does the fed unwind all this?
 

Rivoli

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My uneducated opinion:

Just as the Chinese response to the virus told us that it presented a serious danger to life and well being, the actions of the federal reserve and federal government tell us that we're on the precipice.

We're already at 0%, helicopter money for the people, 4T in bailouts and unlimited quantitative easing... and it's only been 2 months of the virus and a couple of weeks of shelter in place orders. We haven't even hit peak case load, assuming the models are correct.

Where do we go from here? When it gets worse what are they going to do? When it eventually gets better how does the fed unwind all this?
That’s extremely debatable dude.

I’d argue that the Fed is reacting to our REACTION to the virus. The gov’s reaction doesn’t vindicate the idea that this is the plague.
 

lowtek

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That’s extremely debatable dude.

I’d argue that the Fed is reacting to our REACTION to the virus. The gov’s reaction doesn’t vindicate the idea that this is the plague.
No idea what there is to debate. I didn't stake a position. I asked what ammo do they have left and what are they going to do to walk back the accelerating slide to socialism.

It doesn't matter if they're doing this in response to the virus, in response to our response to the virus, or because they want to and are using the virus as an excuse.
 

Kevin88660

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My uneducated opinion:

Just as the Chinese response to the virus told us that it presented a serious danger to life and well being, the actions of the federal reserve and federal government tell us that we're on the precipice.

We're already at 0%, helicopter money for the people, 4T in bailouts and unlimited quantitative easing... and it's only been 2 months of the virus and a couple of weeks of shelter in place orders. We haven't even hit peak case load, assuming the models are correct.

Where do we go from here? When it gets worse what are they going to do? When it eventually gets better how does the fed unwind all this?
The Fed can buy everything if they have to. They have unlimited firepower of fiat money.
 
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JScott

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The Fed can buy everything if they have to. They have unlimited firepower of fiat money.
That's like saying that if I get into economic trouble, I can simply start stealing. From my neighbors, from the grocery store, from the bank etc...

It's a winning strategy... Until it's not.

The Fed's balance sheet is currently at around 25% of GDP, and in the next two months, it's likely to be at 50% of GDP. To put things into perspective, Japan's central bank has a balance sheet at about 100% of their GDP, and they've been in an economic slump for over two decades.

Sure, the Fed can print as much money as they need, but do you believe that won't have an impact on our economy?

Not only will it create inflationary pressure, but stimulus generated by the Fed buying assets doesn't get distributed through the economy efficiently. As we saw after 2008 (and back in the 1930s), central bank stimulus increases the wealth gap, which increases political divide, which increases social unrest.

Of course, if you're happy to ignore a stagnating economy, inflation, wealth gaps, political divides and social unrest, then yes, you're absolutely correct that the Fed has "unlimited firepower of fiat money."
 

biggeemac

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VIX is currently down over 7%, and I'm not smart enough to know if this is a fake recovery or not.....(sigh) !!
 

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