[blackjack21]

Problem is, with the sociopathic incompetence we are seeing in the White House, it's going to get worse for us than in similar countries like Germany.

Oil is at $41 a barrel. Interest rates are at record lows. That's going to put a solid floor under real asset prices. Stocks may be in flux for a bit longer, but we'll be seeing some good buying opportunities soon.

So much winning I could die from it. Literally.

Not to worry. You can now die literally from Chinese Coronavirus.

[late]

Not to worry. You can now die literally from the Coronavirus.

Your incompetence is duly noted.

[Rancid]

The dollar is also depreciating. That would seem quite the opposite of people piling into dollars.

The dollar depreciating isn't always a bad thing.

[Rancid]

RANCID:

Do you mean a sinking shock market or lower consumer spending?

Both, but ultimately the latter.

The stock market (I like that you called it the shock market lol) is only a reflection of the general mood on he economy. It in itself does not tell us if the economy is doing well. Then again, financial services is such a big part of the economy, that the stock market certainly does impact the economy directly to some degree.

[Crantag]

The dollar depreciating isn't always a bad thing.

Irrelevant. You falsely claimed falling interest rates indicates people turning to the US for safety. I mentioned the dollar price as an indicator. My post had nothing to do with whether it was 'good', 'bad', or 'neutral' that the dollar was depreciating.

[Rancid]

Irrelevant. You falsely claimed falling interest rates indicates people turning to the US for safety. I mentioned the dollar price as an indicator. My post had nothing to do with whether it was 'good', 'bad', or 'neutral' that the dollar was depreciating.

You brought up the dollar. Anyway, with respect to bonds:

When people buy bonds, their yield goes down. That is what is happening now. US and other European bond yields are dropping. This is happening because people pour their money into bonds in bad times. That is, they are pulling their money out of stocks which is why the major indexes around the globe are falling. They are then taking that money and putting them into bonds which is why interest rates are falling. People are chasing bonds for safety. What is there to not understand here?

When there's high demand for bonds (bond prices go up), interest rates fall (because effective yield drops). When there's low demand for bonds (bond prices go down), interest rates increase (because effective yield increases). This is how it works. I can provide you a simple mathematical example of this relationship if you need it. There are a shit ton of resources out there that will explain this basic concept too.

That is what I meant by they are turning to the US for safety. To be more fair, they are also turning to European bonds for safety as well.

What is incorrect about the above?

If you want to talk about the dollar, typically the dollar index is correlated to bond yields. SO if bond yields drop, you will generally see the dollar index drop as well. I haven't looked at the dollar index, but if you are saying it's dropping, that makes sense, since bond yields are dropping. The correlation happens because the appeal of the dollar drops since you can't get as much interest on it.

Ultimately, at this very moment with the corona virus panic, the dollar index is kind of irrelevant, so who cares what it does. All it's saying is that the dollar against European currencies is getting weaker (i.e. people are buying more US bonds relative to European bonds). Really, that doesn't matter right now, and like I said, isn't necessarily a bad thing as it makes US exports look more attractive than European exports. Maybe this is all a ploy by Boeing to sell more airplanes.

[Crantag]

@Rancid you just basically restated much of what I already said. Except you seem to be wrongly conflating a few things. Dumping US stocks for US bonds isn't running to the US for safety it's just exchanging one USD denominated equity for another. Running to the US for safety implies foreigners buying dollars in order to buy US assets. This leads (ceterus paribas) to a rise in demand for US Dollars, and thus an appreciation of the USD. Thus the depreciation of the US dollar doesn't seem consistent with people running to the US for safety.

Reports today are that the dollar has depreciated over 3 percent against the Japanese yen. It's also depreciated significantly against the Euro.

Japan is actually considered a safe haven, and 'people' are running for safety there.

[Rancid]

@Rancid you just basically restated much of what I already said. Except you seem to be wrongly conflating a few things. Dumping US stocks for US bonds isn't running to the US for safety it's just exchanging one USD denominated equity for another. Running to the US for safety implies foreigners buying dollars in order to buy US assets. This leads (ceterus paribas) to a rise in demand for US Dollars, and thus an appreciation of the USD. Thus the depreciation of the US dollar doesn't seem consistent with people running to the US for safety.

Reports today are that the dollar has depreciated over 3 percent against the Japanese yen. It's also depreciated significantly against the Euro.

Japan is actually considered a safe haven, and 'people' are running for safety there.

Sure whatever, people can run to various places for safety.

[Crantag]

Sure whatever, people can run to various places for safety.

You're really not keeping up here. You said the falling interest rates indicated that people were running to the dollar but I, for all the reasons I've explained, fail to see why you would rationally say such a thing.

That isn't me calling you irrational it's to say you've presented nothing to rationally support such your position.

What's more, for my part, I don't see anything that tells me 'people' are running to the US for safety. Actually I see potentially quite the opposite.

I'm guessing fund managers are dumping US equities and buying ones in other currencies.

[Rancid]

You said the falling interest rates indicated that people were running to the dollar

I didn't say that. Can you quote me where I said that? Perhaps you are misunderstanding something I said.

What's more, for my part, I don't see anything that tells me 'people' are running to the US for safety.

Bond yields dropping suggest people are buying T-bills, no?

Now, of course this doesn't mean people are only buying US treasuries. I'm sure they are buying others from other countries as well, as you pointed out. That's fine, but that's besides my point.

So, when I said people are piling into the US, I mean US bonds, which is true. Otherwise, yield would not be falling. If you want to make the point that people are piling into other bonds as well, maybe even more so than US bonds, that's fine too, and it does not invalidate the fact people are in fact buying US bonds (otherwise yields wouldn't be where they are).

I never said people were not buying bonds from other countries either.

[jimjam]

Donald's worst nightmare is coming to pass. The bullshit of his wonderful economy is being shown for what it is, bullshit. Before the election. The happy days are here again of trillion dollar give aways to corporations and billionaires are over and we are reaping what Donald has sowed. He has bankrupted his businesses numerous times and now this brilliant businessman is doing the equivalent on the world stage with his thievery of the US Treasury.

It appears we have reached the end of years of economic disruption with a global pandemic and a fatal lack of leadership in democratic governments. Mix that brew with wealth concentration that has the rich and powerful barricading the exits as they run to their fortresses, and we are looking at an abyss far deeper than 2008-2009. The decision to raid the treasury of a trillion and a half dollars upon Trumps arrival will prove to be our Achilles heel. History is repeating itself in so many ways.

“Cheer up, the worst is yet to come !”
- Mark Twain

[Rancid]

He's in talks to do another tax cut due to the virus and oil price war.

I think it's pre-mature, as people haven't actually lost their jobs or have had hours reduced. Sounds like he's doing this for the corporations.

I think the oil price war and job loses in the fracking industry could be damaging to his re-election chances. No amount of stimulus will bring back jobs in fracking. The only thing that can do that is if Russia and the Saudi's decide to cut production to get oil prices back up.

[jimjam]

We are seeing the beginnings of the Trump recession materialize. It really isn't all that surprising.

Trump gave huge tax breaks to his Billionaire donors, pushed the Fed to reduce interest rates, and pushed the deficit well past 1,000,000,000,000 dollars - All in what was described as a "booming" economy.

Why didn't trump invest in infrastructure, or emerging technology, or alternative energies ? Because, he needed to pay off his donors with huge tax breaks. Huge mistake, and now we are going to pay the price.

[Hindsite]

“Cheer up, the worst is yet to come !”
- Mark Twain

And it did, for Mark Twain.
Praise the Lord.

[jimjam]

As historian Rick Wilson memorably said: “Everything Trump touches dies.” First his businesses, all of which went into bankruptcy, now our country.

His sole concern is himself, and he has effectively turned America into a failed state.

[Stormsmith]

I think it's lovey that President Trump has lower bank rates:

M/billionaires cant get enough almost free money to invest during a major market slump

Just don't waste money giving poor folks a raise in pay. If they knew how to handle money, they wouldn't be poor. I mean just look at President Trump 's tax returns

[jimjam]

“The payroll tax would be great,” Trump told reporters on Wednesday at the White House. “Dems are not in favor of it. I’m trying to figure out why.”

The King of Debt, Bankruptcy and the Wall St. bubble can't figure out why defunding Social Security and Medicare isn't a brilliant idea.

Would someone escort this clueless commander to the bridge of the Trump Titanic ?

[jimjam]

Donald is a near perfect example that proves the old axiom that you cannot teach an old dog new tricks. As a builder he would repeatedly borrow, borrow, borrow until he went bankrupt. While the party was going he was careful to skim off billions for his personal aggrandizement and ego. He immediately applied his here today gone tomorrow economic theory to the American economy once he gained control of the goose that lays the golden egg …. the US Treasury. America was soon awash with an increase of $3,000,000,000,000 to $4,000,000,000,000 in additional debt and enjoying Donald's equivalent of "prosperity". Now with increasing probability of the national/worldwide equivalent of bankruptcy (recession/depression) approaching, he is considering reverting to his time tested solution for dealing with all or most problems …… firing people. He has given thought to firing the Chairman of the Federal Reserve, Jerome H. Powell. Due to the seriousness of the mess he has created he has even skipped the public shaming phase that frequently precedes a firing thus sparing Mr. Powell a series of dumb shit such as: "Jerry the Jerk" or "Frog Face Powell".

[Hindsite]

Fed to lower rates to near-zero

We expect the Fed to cut interest rates by an additional 50bp at the scheduled FOMC meeting next week, with a final 50bp cut at the April meeting taking the fed funds rate back to its crisis-era level of between 0.0% and 0.25%.

https://www.capitaleconomics.com/public ... near-zero/

Fed's Powell sees weak second-quarter growth, won't use negative interest rates

In a stunning move, the Fed announced on Sunday that it was dropping interest rates by a full percentage point to a range of 0 percent to 0.25 percent. The cut essentially brings the nation’s interest rate to zero -- something that President Trump has repeatedly pressed for over the past year.

https://www.foxbusiness.com/economy/fed ... oronavirus

[blackjack21]

While the party was going he was careful to skim off billions for his personal aggrandizement and ego.

Dumb and pointless. Hotel owners lose billions when there is a quarantine. Trump isn't creating emergency situations to profit himself.