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There are three main reasons why stocks are falling hard.

1– Uncertainty. It’s impossible for investors to gauge the economic impact of the rapidly-spreading coronavirus or its effect on stock prices. Investors buy stocks with the expectation that their investment will grow over time. In periods of crisis, when the environment becomes unfamiliar and opaque, expectations are crushed under the weigh of uncertainty. When expectations dampen, investors sell.

2– The Fed. Although investors have not faced a challenge like the coronavirus before, confidence in the Fed has remained surprisingly high. For the last 10 years, investors have seen multiple interventions by the Fed that were aimed at keeping Wall Street happy and stock prices high. Only recently have investors begun to doubt the Fed’s ability to stop the market slide by slashing rates or increasing liquidity. As more investors realize that the Fed does not have the tools to address a supply shock, the selloff is likely to accelerate.

3–Stock buybacks. In the last few years, stock prices have not been driven higher by institutional buyers or Mom and Pop investors. The rise is almost entirely attributable to share repurchases or stock buybacks as they are called. According to the Harvard Business Review, “In 2018 alone, with corporate profits bolstered by the Tax Cuts and Jobs Act of 2017, companies in the S&P 500 Index did a combined $806 billion in buybacks, about $200 billion more than the previous record set in 2007.” Coronavirus is dramatically impacting corporate earnings projections and many analysts are predicting recession. Shrinking revenues and profits will put a damper on the jet-fuel that had been pushing stocks higher.

The Ball is in the Fed’s Court

The pressure is building on the Fed to respond to the relentless 6-day stock market slide. In a Thursday article in the Wall Street Journal, former Fed governor Kevin Warsh appealed to the Fed to launch a coordinated response to the crisis with other central banks around the world. Here’s an excerpt from the article:

“A central bank’s primary job is to offset major disturbances to the economy. Today, the novel coronavirus is a material risk to the economy. It represents an unexpected shock, and the Federal Reserve should lead the world’s central banks in taking immediate action.

In a coordinated move alongside the People’s Bank of China, the European Central Bank, the Bank of England, the Bank of Japan and others so willing, the Fed should announce a 0.25-percentage-point interest-rate cut and make clear it’s open-minded about further action. The Fed should also encourage other central banks to take appropriate simultaneous action to loosen monetary policy in their jurisdictions. Global action would help make the most of scarce policy ammunition.

More than a decade ago, then-Fed Chairman Ben Bernanke and his colleagues chose to act decisively. When confronted with a major economic shock, the Fed took extraordinary monetary-policy actions, often in coordination with other leading central banks. Acting sooner would have been better, but Mr. Bernanke’s leadership at the Fed was exemplary. Less appreciated but no less important, the Fed benefited from a rich inheritance: a strong, highly credible institution replete with a large reservoir of interest rates to cut and a modest balance sheet with space to grow.” (“The Fed Can’t Wait to Respond to the Coronavirus”, Wall Street Journal)

We think Kevin Warsh is being disingenuous. We think his plea is aimed at saving Wall Street not Main Street. Warsh is worried that the downdraft in stocks will trigger defaults by deeply-indebted financial institutions that will domino through the financial system severely impairing critical counterparties and precipitating another financial crisis. This is why is wants the Fed to act immediately even though he knows that interest rate cuts will have no material effect on a supply shock.

So what is a supply shock?

When the Fed slashes rates, it lowers the cost of money making it cheaper to borrow. When people or businesses borrow, they increase their spending which generates economic growth. This is how the Fed boosts demand by cutting rates. But rate cuts are not a panacea. They can’t, for example, resolve supply-chain disruptions in China that have been brought on by the coronavirus outbreak. Many market participants have not yet grasped this fact. Simply put: The Fed does not have the tools to fix this problem. Therefore, confidence in the Fed– to reverse the current selloff by cutting rates or adding liquidity– is misplaced. It’s misplaced because the approach will not work. If you are trying to fix your computer and the only tool you have is a sledgehammer, you are not going to have much success. This is the predicament the Fed is in.

Earlier this week, market analyst Mohamed El-Erian said, “Coronavirus cannot be countered by central bank policies”. This is the critical fact that investors must realize before settling on a strategy. Financial Times journalist Katie Martin expanded on El-Erian’s comments saying, “The expectation alone of monetary assistance may already be softening the blow…But anyone who can clearly articulate how easier policy can fix an economic pullback based on deaths, grounded flights, closed factories and ghost cities is very welcome to get in touch.”

Good point, in other words, cheap money and boundless liquidity is not a cure-all. A can of 30-weight oil might keep your ’98 Corolla running smoothly, but it’s not going to help your head cold. It’s simply not the right antidote. The Fed needs a remedy for supply disruptions, but doesn’t have one. Here’s more from an article at Marketwatch:

“It’s that threat of a supply shock — an unexpected change in the supply of a product or commodity — that is particularly unnerving for investors. They are more used to dealing with the occasional threat of negative demand shocks — an unexpected hit to demand for goods and services….

Big, negative supply shocks are rare, Nielsen noted, with the oil shocks of the early and late 1970s offering perhaps the most well-known examples.... The problem is that there’s little that looser monetary policy or additional fiscal stimulus can do to offset the impact because those stimulus measures work by boosting demand….

While demand has so far held up outside of China, the disruption to global supply chains running through China, Korea and, potentially, Japan is likely to take a toll on production, wrote Nuveen’s Nick. If Asian production stoppages worsen or continue well into the second quarter, a global supply crunch could hit the already weakening manufacturing sector, he said, with implications for jobs and the wider global economy.

Moreover, it comes in an environment where valuations for U.S. stocks and credit markets were “’priced to perfection’ or something close to it following the three Fed interest rate cuts last year and the resolution of various trade deals,” he said.” (“Stocks keep getting slammed because investors fear a ‘supply shock’ that central bankers can’t fix” , Marketwatch)

Until this Monday, investors had been brushing aside the negative news on the coronavirus confident that the Fed would save market as it had done so many times before. Now more people are beginning to see that the so called “Fed Put” will not work this time, that the Fed will not be able to put a floor beneath stock prices because it doesn’t have the power to do so. The realization of the Fed’s limitations is going to weigh heavily on stocks which had been “priced to perfection” but are presently retracing their steps downward until prices are more consistent with fundamentals and the rapidly-deteriorating economic data.

Here’s a quote from an article by Caroline Baum at Marketwatch which helps to underscore the Fed’s impotence in dealing with a supply shock:

“The Fed can’t produce parts for automobile manufacturers across the globe that are dependent on intermediate-goods imports from China. It can’t reopen factories in Hubei Province, the epicenter of the coronavirus outbreak. It can’t provide needed factory workers for plants in locked-down areas of China. And it can’t create alternate supply chains as a substitute for China’s role as manufacturer to the world.

A Fed rate cut is not the prescribed antidote for a negative supply shock. In fact, “the only reason you would cut rates now is if you’re the central bank of the S&P 500,” said Jim Bianco, president of Bianco Research, using a moniker the Fed abhors.” (“Why the Fed can’t defend the economy against the coronavirus outbreak”, Marketwatch)

There’s no doubt that the Fed will cut rates and perhaps even take more extreme measures like monthly purchases of individual stocks and ETFs. But the chance of stocks roaring back into record territory like they did in the heady pre-coronavirus days, are infinitesimally small. The contagion has not even spread to the United States yet, and look at the mayhem it has created. The virus has exposed the essential fragility of a market system that depends on the endless meddling of outside actors whose only objective is to transfer trillions of dollars in wealth to their voracious constituents on Wall Street.

So where is the bottom for stocks that have been grossly inflated for more than 7 years due to extreme monetary easing, below market rates, and regular infusions liquidity?

We don’t know, but we suspect there’s still a long way to go. As economist Nouriel Roubini said in a recent article in the Financial Times, “Investors are deluding themselves about how severe the coronavirus outbreak will be. Despite this week’s big sell-off in equity markets, the worst is yet to come.”

NOTE: Thursday’s 1,190 point rout was the Dow Jones’ biggest one day loss in history. Benchmark 10-year Treasury yields tumbled to an all-time low of 1.26%

 
• Category: Economics • Tags: Coronavirus, Federal Reserve, Wall Street 
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  1. John Wear says:

    In my opinion, a major reason why stocks are falling is that they have become overpriced.

  2. Jsal says:
    @John Wear

    Exactly. Not for nothing we are only back to January 1 2020 on the charts.

  3. It feels different this time. I think a lot of people are sick to death of the globohomo oligarchic ass-orgy and are sort of hoping that it does not continue, even if the pain does not entirely pass over their lintels. You cannot stand athwart a change in popular sentiment like that. The momentum now is with the bears.

  4. JUSA says:

    A good analysis. The Dow had a nice run up immediately after the Wuhan lockdown because of China’s QE. I suspect some of the $400B China injected into their financial markets also ended up at the Dow, because they probably thought as long as the Dow is kept high, the world won’t have a meltdown. Unfortunately the Dow is not immune from markets in Japan, SK and Europe. I had known all last week that the market would crater this week, but I was even surprised by the speed.

    So where is the bottom for stocks that have been grossly inflated for more than 7 years due to extreme monetary easing, below market rates, and regular infusions liquidity?

    There is certainly more room to fall, unless the Fed directly intervenes and starts buying stocks. Wall Street has increasingly decoupled from main street for the last 7 years. It wasn’t just the Fed that’s been doing the QEs, central banks in China, Japan and Europe have all been doing it. While Wall Street made more billionaires than ever before, main street has been hammered by the combination of low interest rates (for their savings) and high inflation led by housing cost and food price increases. Our inflation rate published by the US government has been far below real inflation for a long time.

    The chickens have finally come home to roost. This ten year fake prosperity led by governments printing gobs of money to prop up Wall Street has finally come to an end. I predict the Dow will fall by at least 50% over the next 3 months, unless the Fed comes in with massive direct intervention in the market. Since Trump’s #1 priority is to keep the Dow at an all time high so he can get reelected, I wouldn’t put it pass him to pressure Jay Powell to throw in a TARP style rescue fund at some point. Too big to fail is again too big to fail. The more things change the more they stay the same. This is almost like 2008 except Bush didn’t need to get reelected.

  5. @John Wear

    This is nothing, for example, the NASDAQ is down 12.15% over the past five days and that seems dramatic. Yet even with these losses, it remains 13.73% higher than one year ago!

    https://www.marketwatch.com/investing/index/comp?mod=home-page

    • Replies: @Anonymous
  6. TG says:

    Um.

    But. Increasingly, perhaps, the financial economy is no longer in contact with reality. The world could fall to pieces, the real physical economy of real things and real people and real products and services, could wither and die, but ‘the economy’ as the fed sees it, could still be doing great, as long as you just tweak the bits in the computers. Well, until the computers run out of electricity and the central bankers run out of champagne and the police haven’t been paid for so long that they no longer take orders from the high and mighty – well, until then, it will all be fine.

  7. The corona virus provide the perfect trigger for the dump phase of a proper pump-n-dump.

    • Agree: Miro23
    • Replies: @Realist
  8. Kind of off-topic but probably over 30 Turkish soldiers were killed in airstrike in northern Syria.

    • Replies: @NoseytheDuke
    , @Fred777
  9. Svevlad says:

    The world economy is about to get royally btfo. And this time, they won’t be able to offload it to the regular people

    • Replies: @Buzz Mohawk
  10. utu says:

    Stock ownership should be about the dividends and not about the stock prices.

    Stocks that do not pay dividends should be eliminated.

    Stock transaction should be heavily taxed to reduce speculations and manipulations.

    The impact of stock values is chiefly psychological. People are preoccupied with money that did not exist in the first place.

  11. The Fed doesn’t control the stock market any more than it controls the economy. The only thing it controls is liquidity in the financial system.

    Still, that simple fact didn’t prevent knuckleheads like Caroline Baum, Jim Bianco and Mike Whitney from trying to claim that the Fed controlled everything.

    Now, they’re running like heck as they look in the mirror and the light goes on regarding their past stupidity.

    • Agree: SBaker
  12. Bolteric says:

    Ah, brings back my old brokerage days… wish I still had money to gamble with. I’m of course long in the 401k s — probably not time to liquidate. Shit, anyone know the trigger man? The US dollar, bitcoin, or gold? Fuck, I’m in a nice cyclical industry too.

    • Replies: @Bolteric
  13. Franz says:

    Simply put: The Fed does not have the tools to fix this problem.

    Right Mike.

    Already a few outlets have stated “empty shelves by April” and maybe mid-March for essentials like car parts and even medicines the US foolishly outsourced to China.

    The Big Secret attraction of Globalization — which was never a secret — was the wage differential between Our World and the Third World. But with no industrial plant to replace plague areas, Our World is the Third World.

    Suddenly those loony lefties and conspiracy theorists who said “Keep the work HERE” don’t seem so stupid at all.

    • Agree: DaveE
    • Replies: @GuestAug
    , @FvS
    , @Skeptikal
  14. DaveE says:

    This country’s economy has been nothing but a Ponzi scheme for a long, long time. Once the Harvard MBA program of 1969 started replacing honest manufacturing with a never-ending search for offshore labor to screw the American worker, the writ was sealed.

    Bubbles break. This bubble was popped by a “virus” that probably doesn’t even exist.

    We ain’t seen nuthin’, yet.

  15. Thomm says:

    NOTE: Thursday’s 1,190 point rout was the Dow Jones’ biggest one day loss in history.

    Fail. Talking about total points lost rather than percentage (the accurate measure) invalidates the credibility of the author.

    Did you know that in the 2030s, there will be MANY days where the point movement (both up and down) are over 1190? *gasp*

    Secondly, knowledgeable people discuss the S&P500, not the Dow.

  16. Alfred says:

    The US stock market is influenced by foreign investors to a much greater degree than is generally appreciated. The USA does not operate in a vacuum. Most analysts don’t ever take into account what foreign investors are doing or the movement of capital internationally. They think domestically. That is natural to people living in the USA and subject to its relentless propaganda.

    The US stock markets went up hugely because of capital fleeing Europe and the Far East. The successes of Bernie Sanders has had a negative effect on that sentiment. Quite simple really when you think about it.

    Ahead of everyone else (Feb 25, 2020), Martin Armstrong pointed this out.

    I would be deeply concerned that the target on Trump’s back for assassination is growing bigger with each passing month from externally and internally within Washington. The intelligence community would love to see him taken out any way they possibly can. When Kennedy would not go to war in Vietnam, they found a solution. Their patience is running thin once again and they are already spinning stories that Putin will aid Trump to get reelected. That is total nonsense. If I were Putin, I would be praying for Bernie to win for he will defeat the United States faster than anyone and bring Nikita Khrushchev’s prophecy to fulfillment.

    International Capital Starting to fear Bernie Sanders

    • Replies: @NPleeze
    , @Alfred
  17. Kim says:
    @John Wear

    In my opinion, a major reason why stocks are falling is that they have become overpriced.

    But what does “overpriced” mean?

    I am just speaking from memory here, but aren’t we now in the second year of stalled profits for the S&P?

    So why did the market go up 30% over the last year? It wasn’t on profitability.

    Tesla, Netflix, Spotify and Uber – all great price performers – have never made a profit. In fact they owe probably-unrepayable billions.

    20% of the S&P are zombie corporations and do not even make enough to cover their interest bills. If interest rates ever go up (can this happen?), they are finished.

    The current S&P 500 PE ratio is a bit over 24, which is high but not too high compared to some past bubbles; but this is of course a deceiving number as a decade of buybacks means that there has been a huge decrease in the size of the total share “float”, that is, the number of shares now available for sale.

    So what does “overpriced” mean?

    Of course it can always bounce back if only the Fed keeps cutting interest rates. After all, the prices are still nowhere near Zimbabwe or Venezuela levels, and I certainly expect to see that.

    • Replies: @Realist
    , @Anonymous
    , @John Wear
  18. Polemos says:

    With so many pointing out the issue being supply shock as the inability for workers to go to factories, the arguments for total automation of industries become stronger and more persuasive to certain folks who like their economies predictable and simple. Robots can’t catch viruses and don’t have limbic systems,they’ll say.

    (Of course, not all viruses are biological; not all fear is organic)

  19. Over valued definitely. Especially since it became generally accepted to use non-GAAP figures in financial statements and quarterly reports. The valuations are based on the Dollar. The same Dollar that is created on computers at the Federal Reserve to hand out to the Banksters doing God’s work.

    Old accountant joke, a business owner was interviewing accountants to do his books. He asks the accountant, “how much is 2+2?” Accountant replies softly “how much do you want it to be?” That’s non-GAAP.

    I figure this is the Flash Crash in slow motion, set to the Corona virus theme. Robbing the 401K piggy banks.

    SPY lost $37B in market cap from close 2/19 through close 2/27. 10+% gone. What a short opportunity, if one had foreknowledge.

    If it isn’t an accident, then the in crowd knew it was going to happen. Even if it is a hoax, same thing. They seek profit from human misery.

    • Replies: @9/11 Inside job
  20. gotmituns says:

    Why are stocks crashing?
    ——————————-
    The usual reasons. The jewish money power wants to destroy any type of Gentile competition they may be up against and does so by destroying millions of innocent people as they go about their stinking destructive business.

  21. @Agathoklis

    It’s not off-topic if you add that more tears will be shed over the stocks than the Turks.

  22. “Investors”? Try “speculators”. given that they make up the lion’s share of the stock market.

    I agree with utu’s dividend comment.

  23. Fred777 says:
    @Agathoklis

    Good news none the less.

    • Agree: Realist
  24. antibeast says:

    The people who doesn’t want Trump to get reelected are spreading “fake news” about the mortality of the coronavirus and are actively inducing panic-selling by crashing the stock markets which they had pumped up over the past seven years. For all we know, the coronavirus has the health effects of the common cold but the media is hyping it as a deadly pandemic in order to derail Trump’s reelection bid, by crashing the stock market.

    • Agree: SBaker
  25. I saw this comment on Twatter that is relevant:

    “Everyone has got an agenda.

    When the Sacramento covid19 patient with dual confirmation was announced exactly one minute after Trump said there weren’t any. That was orchestrated with the presidency in mind. The CDC has a lot of explaining to do for withholding that info.”

    My question is this: Would Hillary Arkancide the entire planet in order to prevent Trump from getting re-elected?

    Then there is this little gem from ZH:

    https://www.zerohedge.com/geopolitical/israeli-scientists-say-they-will-have-coronavirus-vaccine-few-weeks

    Let’s call it pure luck,” he said. “We decided to choose coronavirus as a model for our system just as a proof of concept for our technology.”

    How convenient, God’s chosen people will have a vaccine ready just when the virus spreads to Israel. One Rabbi has already announced that the virus is Yaweh’s retribution will disappear after the third temple to Solomon is completed.

    There is plenty of evidence that the 1929 crash was a staged event, there are plenty of reasons why this 2020 crash and the entire “pandemic” could have been deliberately syncronized. China is being hit by a swine virus and a poultry virus, also likely deliberately timed to destabilize China. This market crash will also devastate China’s over-leveraged over-capacity economy.

    Another clue is how Iran’s leadership appears to have been targeted with Covid-19.

    • Replies: @Mustapha Mond
    , @UK
  26. Realist says:
    @Kim

    You answered your own question. Stocks are not worth their price.

  27. Realist says:
    @John Wear

    In my opinion, a major reason why stocks are falling is that they have become overpriced.

    Stocks have been overpriced for many years…since, using very low interest borrowed money for, buy backs.

  28. Realist says:
    @JUSA

    The chickens have finally come home to roost. This ten year fake prosperity led by governments printing gobs of money to prop up Wall Street has finally come to an end.

    Exactly correct. There are a lot of really dumbass Americans.

    I predict the Dow will fall by at least 50% over the next 3 months, unless the Fed comes in with massive direct intervention in the market. Since Trump’s #1 priority is to keep the Dow at an all time high so he can get reelected, I wouldn’t put it pass him to pressure Jay Powell to throw in a TARP style rescue fund at some point.

    The market should fall at least 50%…but the Fed and Trump will most certainly try to stop it.

  29. The chatter about the stock market is funny. The real issue is that previous Presidents — Bushes, Clinton and Obama- have encouraged corporations to save pennies on the dollar in labour costs by offshoring jobs, manufacturing and high-end technologies to China and SE Asia. The Global Coastal Elites have thus made lots of money (the working class, not so much). “Supply chain disruption” is to be expected with any serious virus in China (most flu and respiratory viruses originate in SE Asia), that’s why it is critical to keep basic manufacturing and supply chain function in parallel in the US (but that’s only for true national security, not much profit there).
    According to Moon of Alabama, the Chinese CDC shows the Wuhan coronavirus epidemic is winding down in China, so unless other countries encourage its spread by not restricting travel, it should end soon everywhere. An odd feature of this virus is that children and younger workers are minimally affected. That’s good for Neoliberalism which is trying to find a way to decrease overpaid older workers and pensioners.

    • Agree: SBaker
    • Replies: @SBaker
  30. sally says:
    @JUSA

    i think there is more to the fall than just “the price is too high” price too high may have made the market sensitive to and prepared the market for fall but it did not cause the shift in mind set that delivered the fall.

    The tipping stone from rising to falling seems to be investor intuition that corrupt governments in times of virus crisis times nearly always milk the system for its profits instead of proving honest full support all out effort to turn off the incoming vial disaster, Trump decreed that he and he alone would decide what and when virus related data would be allowed to reach the public, it confirmed that government and pharma intend to bilk the situation for all its worth. Victimize infected humanity for feudal lord profit.. imagine if every person in Dallas were to be the dead as victim of the virus, unless Trump were willing to allow all other Americans to know about it, no one would know. What a sorry state of affairs.
    also the war in Syria is heating up replenished with new western weapons Turkey, Israel, Saudi and USA are pushing back Syrian Army gains at Idleb, Syria . The new weapons are being used to fight Russia, Assad , and so on.. http://www.informationclearinghouse.info/ so I think it is the promise of a prolonged war that is about to burst into WWIII that is causing the downward direction of market. The Yellow Jackets in France are moving stronger and stronger against the French government, India government is under siege from its citizens, and Scotland is about to break free of the UK.. the implication of that break are enormous.

    Trump has failed to bring the troops home, has made his 4 year old campaign to get himself elected into a laughing stock of never intended to do promises. The fact that there is no alternative to Trump or his methods is not sitting well with voters. Sanders might become the next and last President of the USA. America is looking for change and everyone agrees, changing faces is in the same government is not working.

    The market has strong downward pressure.. I don’t think anything the fed can do will overcome those negative pressures. . economic depression of the 1890s, 1932s kind is on the horizon, war is on the horizon, and more spying and citizen denial of access to government and truthful information is on the horizon..

  31. Oh, so stocks are falling because corona virus. I thought you were going to say that stocks are falling because the eevull joos.

    • Replies: @Bill Jones
  32. @Svevlad

    The GLOBALIST economy is about to get royally btfo. And this time, they won’t be able to offload it to the regular people.

    There, fixed it for you.

    The sad thing is, the “regular people” will pay the price of misery anyway…

    … If everything falls apart. I am not so sure everything will. My take so far on this is that it is being covered and presented to us the same way the American TV media (plus government) now report on approaching storms: Big, 24/7 graphic presentations and warnings by everyone. Major evacuations. Then, often, less happens, and people go back to their regular programming.

    • Replies: @Three of Swords
  33. Greg Bacon says: • Website

    A central bank’s primary job is to offset major disturbances to the economy.

    Really? I thought it was to protect & enable the con artists and fraudsters that the SEC and FBI ignore, but occasionally catching one and to make sure those TBTF banks have plenty of money to prop up all those busted bets they made, which now are coming due.

    Just think what the economy would do if a group of kleptomaniacs weren’t in control of our currency.

    If we followed the Constitution and let only the Treasury Dept issue debt and interest free money, that alone would save Americans 600 BILLION a year since we wouldn’t be forced to pay that interest to international gangsters who control Central Banks all over the world.
    But gird your loins if that ever happens, because that’s what Hitler did to rescue Germany and it worked.
    And look what eventually happened to Germany, courtesy of the same gangsters who won’t let go of their money power w/o a fight.

    • Agree: Paul C.
  34. geokat62 says:

    They can’t, for example, resolve supply-chair disruptions in China that have been brought on by the coronavirus outbreak.

    Should be supply-chain.

  35. Stocks crashed because of Corona germs, market overpriced, some Turk soldiers got smoked by Putin who may be trying to influence 2020 elections, the Fed, companies buying back shares and the increased price of noodles and Won Ton blah blah bah and also because Santa’s sleigh broke down so he is unable to come down the chimney in March.

    Another reason :: The market crashed also because there are a lot of amateur traders who consider themselves geniuses when the market is rising but become whimpering babies with Jello spines when things turn downward. They panic and dump their shares contributing to the rout ! To make money buy low and sell high. These morons buy high and sell low…consistently ! Also Instead of buying quality companies they buy dogs like the Fly bye Night Corporation they heard about in the barbershop.

    Who cares ?? Not me ! My advice is to always own quality stocks. If they are paying a 4% or more dividend that is a cherry on top. It does not matter what happens in the short term these businesses will continue to operate and prosper well into the future and the share price will rise again. Take Bank of Nova Scotia for example (BNS). In 1997 the share price was around $10 and even with this decline now stands at $70. An investment of $5000 then would have increased to $35000 or a 7 fold increase. Over that period we have had 911, housing crashes and so on. Oh and did I mention the stock pays a 4.7% dividend ? There are hundreds of other similar companies that will be bargains in this “disaster”.

    This type of thing happens in all markets with all products. For example when the supermarket reduces your favourite coffee by 50% do you leave it on the shelf ? I stock up and sure enough a few weeks later the price is back up double.

    So I say let the prices collapse, the more the better. Once the bottom stabilises I will add to my positions.I have to finally say that if it were not for the idiots I would have to go back to work and deal with shitty bosses and coworkers. So while I find these donkeys irritating I also find them useful !

    Continue dumping those stocks and increase the panic. Hopefully we will have another 1000 drop in the DJIA today. The Joker is waiting and watching and drooling.

    In the meantime I have more important things to do than worry about the market fallout and the reasons. I have a few more squirrels in my backyard this winter. Got to feed them.

    • Replies: @HdC
    , @Parfois1
  36. @SaneClownPosse

    Yes, “what a short opportunity if one had foreknowledge ” of both the Coronavirus outbreak and 9/11 , see :
    “Osama Bin Laden and the 911 illusion : The 911 short-selling financial scam” by Dean Henderson , globalresearch.ca

    • Replies: @The Grim Joker
  37. @utu

    The Gordon Model:

    The market value of the share is equal to the present value of future dividends. It is represented as:

    P = [E (1-b)] / Ke-br

    Where, P = price of a share
    E = Earnings per share
    b = retention ratio
    1-b = proportion of earnings distributed as dividends
    Ke = capitalization rate
    Br = growth rate

    Your comment is valid and relevant. There is a good argument to be made that equities have no real value at all except for dividends and what a buyer will pay for them at any given time.

    Frankly, real estate and some other things function the same way. It is laughable how so many people make their plans and base their psychological comfort on what a hypothetical buyer would pay today for something they are not selling but might sell at a future date.

  38. Emslander says:

    You expect to get some unvarnished truth on Unz, but this is just the usual gibberish trying to do an ex post facto analysis of a market manipulation. Tell us the truth. Reliance on the market on flimsy corporate equities for a healthy economy is a like having cotton candy for supper.

    Interest rates ought to reflect the time value of money, which is at least four per cent with the current rate of inflation. Such a rate would destroy governmental financing by making the servicing of its massive debt an untenable taxpayer expense. Maye the market is reflecting the Trump bubble by finding some normal valuation or maybe it’s on its way to zero, because most of measured GDP is government spending with printed money.

    • Replies: @sally
  39. onebornfree says: • Website
    @Thomm

    “Fail. Talking about total points lost rather than percentage (the accurate measure) invalidates the credibility of the author.”

    Exactly.
    Thank you. One of the few intelligent comments here so far. Took the words right out of my mouth. What was it [without bothering to check], a close to 20% drop in the Dow in late 1987?

    “Why Are Stocks Crashing?”

    A real world fact: nobody really knows exactly why stocks are “crashing”. Everybody [including the “experts”] just makes educated or uneducated guesses[ the Fed, coronovirus, etc. etc. blah, blah blah]

    See: “The World’s Best Kept Investment Secret”: http://onebornfreesfinancialsafetyreports.blogspot.com/2019/07/the-worlds-best-kept-investment-secret.html

    Also: “Got Money You Can Afford to Lose? Or: How to Safely Profit In Stocks, Bonds,Gold, Crypto-Currencies etc.”: http://onebornfreesfinancialsafetyreports.blogspot.com/2016/11/speculations-got-money-you-can-afford.html

    Regards, onebornfree

    • Replies: @Thomm
  40. @John Wear

    Overpriced like housing, medical care or the military? The mafia class knows we live in an Old Testament society based on rigged cruelty for the poor and a life of luxury for the rich. These wonderful people say the issue is simply people don’t have enough money not that any given necessity is overpriced. So the solution is to give the poor more money but not so much that it inflates the lifestyles of today’s Roman Emperors. Naturally the stock market means nothing to most people anyway.

    • Replies: @obwandiyag
  41. So where is the bottom for stocks?

    “Rara avis in terris, nigroque simillima cygno … a rare bird upon the earth, and exceedingly like a black swan.”

    Juvenal, Satires, VI. 165

  42. @utu

    Very much agreed. It’s hard to even fathom the concept of a non-dividend paying stock on anything other than the Greater Fool theory. There is no economic meaning to such a transaction. It’s pure speculation; you might as well be playing fantasy football.

    When this correction sets in in ernest, it’s going to bring about the end of a lot of things. The whole economic mood of the last 20 years is coming to stop, and with it globalization, Big Tech, the welfare state as we know it, and a great deal of asscoiated socio-cultural bric-a-brac.

    For several years I have been telling the HBD devotees on this very forum that they were barking up the wrong tree, that The Wokeness was entirely dependent on today’s unbalanced economic circumstances and that when those ended, so would The Woke. We are about to find out how right I really was.

    • Replies: @Dieter Kief
  43. Biff says:

    If stocks were worth their value they would hold their value – otherwise – welcome to the gambling table.

  44. Greg Bacon says: • Website

    The Masters of the Universe know that this bloated and rigged stock market can’t keep going up forever, it needs to crash to clear out the flotsam and jetsam.

    Can’t tell the sheeple–again–that “Gosh, we didn’t see this coming” or that certain gangster banks are Too Big to Fail, so letting the market crash and blaming it on Corona will do to hoodwink the spectators.

    After the 2008 controlled demolition of the stock market, Fed Head Bernanke was talking to some group of fellow vultures and when asked about the Crash of 1929, he laughed and said, “Yes, the Fed was responsible for that crash,” then he laughed some more.
    That video was on Youtube, but it got memory holed.

  45. The Criminal Reserve Cartel will do anything to try to put a floor under stocks and “foam the runway”, as Timmie G put it, for its cartel socio banks. I’d say direct purchase of stocks is a given, probably already happening, through hidden channels. Still, it will fail. In W’s words in ’07, “this sucker’s goin’ down!”

  46. Anonymous[102] • Disclaimer says:
    @Carlton Meyer

    Hoping for another 20% drop in the market. Then we can tell better about the nearing the bottom.

  47. @JUSA

    Well stated and putting a little humor on it: The ten year fake prosperity led by government QE fiat $ printing to prop up Wall Street has now ended at the hands of a bat and a pangolin.

    • Replies: @Intelligent Dasein
  48. @Winnetou1889

    I am become Death, the destroyer of worlds.”

    • LOL: SafeNow
  49. Thomm says:
    @onebornfree

    Exactly.
    Thank you. One of the few intelligent comments here so far. Took the words right out of my mouth. What was it [without bothering to check], a close to 20% drop in the Dow in late 1987?

    Thanks.

    The media is a large part of the hysteria. They still talk about ‘points’. As I said above, by the 2030s, days of 1000+ points will be common (both up and down), as that will be a far lower percentage.

    Similarly, the 1987 crash of 20% was 500 points at the time.

    Plus, grown-ups use the S&P500 anyway.

    • Replies: @RadicalCenter
  50. Stocks are falling because the huge run-up in valuations in the first several weeks of 2020 was nothing more than a “short-squeeze” designed to crush short sellers into covering their losses.

    US markets have literally gone straight down this week because the markets can decline without having to pay massive amounts to the short sellers. Look for upward bounces ( we had one intra-day yesterday – Feb 27 ) in the next few weeks. The markets won’t give up massive profits to short sellers without putting a good scare into them.

    Shutting down mega-cities in China and restrictions in South Korea and Japan will continue to wreak havoc on the world economy. It now appears may health officials are admitting a pandemic is a virtual certainty.

    Since 2020 is the year of the median for Baby Boomers hitting the magic 65 year “retirement age”, the weaponized coronavirus will “thin the herd” and the markets will take their savings. Brilliant!

  51. The market is crashing because the “big boys” anticipated (and still are anticipating) a decline due to Coronavirus. It’s that simple. “This will cause some problems. Sell, sell, SELL before everyone else does!”

    • Replies: @RadicalCenter
  52. Realist says:
    @Gleimhart Mantooso

    The corona virus provide the perfect trigger for the dump phase of a proper pump-n-dump.

    Yes, a black swan…with a cough.

  53. Anon[242] • Disclaimer says:

    Stock markets are inclined to panic. Once Covid-19 has run a couple of more months and done some damage, the markets will look at the 2.3 or 1.2 % death rate, and calm down a bit and the market will find a bottom. It will climb up again very rapidly once the first part of the pandemic is over. Most people will be left alive, and if you don’t panic and sell stocks at the bottom of the market, you’ll be all right. Your stock holdings will recover in a year or so. Good investors understand that big markets drops ALWAYS occur because of panic, but good investors never panic with the crowd.

    • Agree: RadicalCenter
  54. I nominate “Krugman’s Plague” as moniker for the current disaster because, after all, he did more than anyone to provide the intellectual justifications for our current economic policy of national specialization and interdependence; assuring thereby that a failure in any one part would become a failure of all.

    While it may have been true that ten Dutch shipowners each owning one tenth share of ten ships spread risk, it does not logically or experientially follow that this proposition can be expanded universally.

  55. Anonymous[265] • Disclaimer says:
    @Kim

    If real inflation or Dow CPI deflator is 6 % and 2-1/2 times the official number, then the equity markets are rigged by definition. Shadowstats’ latest summary has the current recession deepening, so the Corona virus sure came at an opportune time.

    It’s probably almost time for a two-tiered, technocratic, one-world government with the Wall Street magicians who transfer wealth from the people who earned it into their bank accounts in charge. Imagine the serendipity if Mike Bloomberg was available, while a Sanders sell-off would be brilliant since that wealth transfer scenario worked beautifully last time around and would be less obvious than pulling an even bigger MAGA rabbit out of the hat.

  56. SafeNow says:

    People increasingly have recognized that this is America 2.0, in which doing things proficiently has unraveled. The Boeing Max. A Hopkins study reporting that 250,000 annual deaths result from medical negligence. Homeless encampments. The list goes on. Covid-19 emerges in this context of Idiocracy, and therefore, pessimism and panic about our ability to cope with it is greatly magnified. And correctly so.

  57. Ahoy says:

    You did not heed the Founding Fathers. You left the Kingdom of Jesus Christ the Savior. You embraced the satanic propaganda of communism=internationalism=globalism=zioDC. When you entered the theater to see the show you thought it was free. Now you are called to pay the price.

    You have not seen anything yet. Brace yourself. The House of the Rothschild is coming down.

    You need ear plugs.

  58. So we are in cycle number 100 of “kicking the can” down the circular road…when I hear or see the word or theme of “economics” that circular road is all I see–until maybe one day we get rid of fiat currency and return to currency backed by gold-silver, which actually has value. Until then, who cares? It’s all illusion anyway.

  59. @Intelligent Dasein

    What you say is, that the bear shows up, when its time for him. – No matter what the market aks for. The bear being “something else” than what our regular stock market expert is telling people.

  60. @Ship Track

    That’s from Ziohedge, eh?

    Israeli scientists just happen to be working on corona viruses and through “pure luck” develop a possible vaccine they claim will be ready in a ‘few weeks’, eh?

    Israel saves the world, eh?

    (Why am I suddenly feeling overwhelming nausea…..?)

  61. Ah so al queda strike US stocks.. Which are already so over valued even if they go down to 10% of where it is at, its still over valued. Without the free money for stock buybacks, and the easy loans, prices should have stayed at 25% of where it is at. The fed might not want the money back but someone would have to replay it.. Most likely some future generations of slaves.

    • Agree: DaveE
  62. @Thomm

    I saw this same remark made elsewhere in web news. This is not to say that the Mr. Whitney should have spread the “news” further, especially if it is misleading as you say.

    What was the actual percentage then please? I didn’t look to see what the Dow started off at that day.

    Thanks.

  63. off-guardian.org “Reality check-Coronavirus fear porn” by Kit Knightly:
    “This is not a global health emergency , so why is everyone pretending otherwise? …So why the lockdown, why the fear ? Usually that means al least one agenda . Maybe more than one …If you are agenda -spotting in this case, be on the lookout for a new medicine being rushed through patent offices …Longer-term there is vaccination to consider …a goldmine for pharmaceutical companies …and if the government makes vaccines mandatory , even better …Generally speaking fear is always useful . If you can frighten people they do whatever you say . A fact known to leaders and propagandists for centuries…It never hurts to normalise the idea of martial law . After all you don’t know when you might need it for real…As usual absolute scepticism is required .”

  64. I watch the markets from the sidelines with fascination. After my father’s death I managed my mother’s money. Following advice and examples from my father-in-law I was able to get her a nice little stream of income from securities which paid good dividends, mainly utilities. I also built up the value of her portfolio with carefully selected stocks. Lots of cash and little debt were the things I looked for. But right now I wouldn’t put money in stocks even with a gun to my head.

    After Black Monday, 1987 I remember my father-in-law saying, “Everyone is just trying to get out the door at the same time. One thing to keep in mind is that for every share that is being sold, someone’s buying.” He then told me a story from his youth during the Depression.

    His father took him to downtown Chicago and the Northern Trust building. They positioned themselves near the alley behind the building and watched as trucks came and went, unloading bags of cash. His dad told him, “No matter what is going on if you keep your mouth shut and your eyes open you can find a way to make money.”

    Seems to me the inverse is true: Talk all you want, keep your eyes shut and you can find ways to lose lots of money.

  65. @JUSA

    There is certainly more room to fall, unless the Fed directly intervenes and starts buying stocks.

    Nope. The Fed can’t directly buy stocks. Not legally. Other central banks do it and I believe it began with the central Bank of Japan where they’d buy ETFs of Japanese equities spread across market caps. Do those central banks now do stock picking or selectively bail out one company and not others? Maybe anything really is possible.

    Fed is limited to buying sovereign debt by law, which means bonds backed by the full faith and credit of a country, maybe any country, but they can’t buy corporate debt and certainly can’t buy corporate equities.

    • Replies: @Stonehands
  66. @Buzz Mohawk

    The plight of the “regular people” never really changes, does it?

    As for the comment about the weather hysteria, I am definitely in agreement.

  67. UK says:
    @Ship Track

    The League of Shadows isn’t a real organisation. And the Israelis are great at biotech. It seems God works in mysterious ways…

    …Or not…

    …and it is just some random small Israeli outfit engaging in typical overhyped corporate PR which, ironically, mostly works because of those weirdly obsessed with Jews.

    Is anyone a better advocate for Jewish brilliance than the anti-Semite, no matter how hard he tries to not be?

    • LOL: Alfred
    • Replies: @Ship Track
  68. @Intelligent Dasein

    PC and wokeness are in a way an answer to the drying out of the middle class heaven. – It started in the mid-seventies when the extraordinarily profitable time for the regular guy in the US (and the rest of the West) started to fade away.

    (Japan and South-Korea might be a somewhat different story).

  69. @Mustapha Mond

    Super Jews to the rescue. Of course, all these Marvel super heroes are figments of talmudic imaginations, but it is easy to see how this could be played to the hearts and minds of your typical Jewish racial supremacist:

    “Once again, super jews save the planet. In doing so, they save Yahweh’s wonderful CB/Fed financial-usury system as well as improving goyim by giving them noahide vaccinations”

    This rescue of the goyim through vaccination would be almost as big a win for the goyim as their rescue through the holocausts of Hiroshima, Nagasaki, Dresden and Hamburg. The goy will be so overjoyed with their salvation that they will finally forget the Palestinian genocide.

    • LOL: Mustapha Mond
  70. @Mustapha Mond

    The article read a bit sarcastic to me over Israel’s timely development. The comments however were priceless.

  71. Its not a panic til stockbrokers, bankers, and CEOs starting falling from rooftops. Little people losing their 401k’s is not a big deal. We got replacement people coming for them anyway.

  72. HdC says:
    @The Grim Joker

    Agree with your position.

    My investment advisors (Two different investment houses) and I agreed on our investment MO which has withstood the test of time since the 1999/2000 panic. 2007/8 was pretty bad but I resisted the panic. Did well then too. Basically we buy stocks in businesses that have an impeccable record of paying dividends for more that 5 years.

    Interestingly the annual returns from both advisors is quite similar each year.

    Ask yourself: “Why would I invest in a business? To make money, of course!” Hence the emphasis on the dividend payout record.

    Of course I understand that one can make a “killing” by speculating in “high flyers” but, the ones that make out like bandits are the ones with REAL and LEGAL insider information such as Wall Street bankers and members of parliament, congress, and senate. The average joe investor like myself may as well depend on lottery tickets for income than invest in one of the “flyers”.

    I’ll let y’all know how this panic turns out for me on this forum. HdC

  73. Bolteric says:
    @Bolteric

    I remembered to dollar cost average and continue socking away a little bit on a regular basis. Started an Acorns account today. Only reason I hadn’t to this point was I was jealous of the idea.

    Use code: https://www.acorns.com/invite/?code=RZJFLV

    If you want to stay positive.

  74. Bookish1 says:
    @Mustapha Mond

    Israel wants us to think that jews have something to contribute to the world. Its ass kiss time for the suckers.

  75. Per zerohedge.com :NYSE announces disaster recovery testing on March 7 amid Coronavirus fears “…as if the 11Wall Street trading floor were unavailable .” A drill , don’t they always coincide with “events ” such as 9/11 , Boston Marathon bombing and Sandy Hook ?

  76. The Fed’s and other Central Banks’ easy money policies over the past dozen years or so have only served to set the current days’ markets up for an epic fail. More easy money is like pushing on a string at this point.

    • Agree: Agent76
  77. @UK

    “Is anyone a better advocate for Jewish brilliance than the anti-Semite, no matter how hard he tries to not be?”

    This topic has seen thousands of comments at Unz and it is a typical example of yid word
    and language weaponization. Of course by weaponized I mean weaponized against goyim. In relation to this threads theme, “why are stocks crashing”, the answer is because it is good for the jews, or more correctly the jewish aristocracy. That your every day jewish racist supremacist doesn’t realize that he is as big a victim as the goyim he so despises is really secondary to the question.

    Any student of factual history, and not historical narrative, knows that these recurring earth shaking events always serve multiple agendas and are surrounded by a smoke screen of mis and dis information. 9/11 comes immediately to mind.

    Anyone paying attention can recognize how negligent the US government, the CDC and Donald Trump have been concerning this bio-weapon. Even if the blow-back was not intended, surely the US and Israeli genociders would have considered the possibility of a pandemic and war gamed the optimal outcomes.

    • Agree: Alfred
  78. Well, my broker in Israel advised me to buy the dips.

    He also told me that Israel is gonna have a vaccine for this virus in a few weeks.

    However, the vaccine will only be available to those who can provide a brokerage statement proving that they bot the dip.

  79. Agent76 says:

    Feb 12, 2020 Financial Expert: The End Game Is Unfolding Before Our Eyes

    A financial expert has come forward to provide his current State of the Union summary and it is quite different that what we witnessed on Capitol Hill.

    • Thanks: Liza
  80. Miro23 says:

    Like the article says, the problem is really globalization, and global supply from Asia. No-one was expecting this to fail.

    No doubt they’ll fix it, but the longer term story of Empire is world industrial/political dominance. Great Britain had this dominance in 1850, the US had it 1950, and China will have it in 2050 ( Check NE Asian PISA test scores and the number of NE Asian STEM graduates).

    • Replies: @JohnPlywood
  81. procapi says:

    He’s better hope it’s not endgame for the goldbugs – they’re the loudest whinge-ers when they lose money.

    Great thing is, it’s never their fault.

  82. The zionists are just playing their games with the cornovavirus that they created to attack China, just another NWO game.

  83. GuestAug says:
    @Franz

    right; and the wage differential is due … to the US dollar being at least 50% overvalued as a result of (1) it being the world’s “reserve currency” and (2) being the currency that the majority of carbon-based energy is traded in.

    • Replies: @Franz
  84. @Sammy Bounivant

    Stocks go up and up. Then they go down and down. I find it diverting that, every time stocks go up and up, the boneheads forget the part about the stocks going down and down. And yet they are Masters of the Universe. Some universe.

  85. @Intelligent Dasein

    I kind of like how they slow down a little of the construction sprawl when this happens. Not much though. I wish there were some other way to slow it up.

  86. @utu

    You be iceberg-tippin.

    Underneath there, there “shorting” stocks and high-speed trading. How bout abolishing them while you at it?

    And then there’s them CDOs and them CDSs and that whole alphabet soup of “derivatives” and other homunculi, implicated in 2008, and that sound crooked and unfair and absurd as hell to me, but what the hell, I only a person, what I know.

  87. Tim too says:

    Mike Whitney:
    research ‘administered prices/markets’ =>Gardner Means
    and ‘price makers’ various authors, eg Hyman Minsky (stabilizing an unstable economy)
    http://www.levyinstitute.org/publications/stabilizing-an-unstable-economy. => price makers

    and Michael Hudson: ‘the crash point is political’ –one needs to grasp how banks work, in particular, loan officers, and why they make the decisions they make…!
    ‘an asset is worth whatever a bank will lend to buy it’

    The markets are not what people think.
    https://www.jstor.org/stable/4226792?seq=10#metadata_info_tab_contents
    Gardiner Means on Administered Prices and Administrative Inflation Author(s): Richard Goode Source: Journal of Economic Issues, Vol. 28, No. 1 (Mar., 1994), pp. 173-186Published by: Taylor & Francis, Ltd.Stable URL: https://www.jstor.org/stable/4226792

    “Means was not the first to notice that prices are not set in auction markets, as economists usually assumed, implicitly or explicitly. But to characterize the transactions of price makers, as distinguished from price takers, he introduced the apt phrase “administered prices”-more descriptive than the now prevalent term “sticky prices”-and in his 1935 study, he provided novel statistical evidence on the behavior of prices. He advanced plausible, though incomplete, explanations for administered prices. Furthermore, Means elucidated the macroeconomic implications by showing that industries with relatively inflexible prices responded to demand shocks by adjusting the volume of production, while at the other extreme the response was primarily in the form of price changes. Applying this analysis, he viewed the price movements during the early stage of World War II as a wholesome correction of distortions inherited from the Great Depression. This may have been correct from the standpoint of equity and incentives, but it played down the politics of price and wage controls and the cumulative effects of rapidly rising government expenditures. Means associated administered prices with markets dominated by small numbers of firms. In the 1970s, he argued that increased concentration of industry had led to administrative inflation, which persisted during periods of slack aggregate demand and which was resistant to fiscal and monetary measures. Means, how- ever, never demonstrated a connection between the degree of in- dustrial concentration and the extent of administered prices,8 and he recognized that administered prices were prevalent in retail trade, where concentration was low. His explanation of ad- ministrative inflation included several plausible factors, but the number of factors may be more a weakness than a strength”…

    The stock markets are not auction markets, nor are they markets of many buyers and many sellers like farmers markets, or flea markets, etc.

  88. Howdy, Folk,

    The question should be what do you think what stocks are doing now
    are telling you about the future………….

    AYE………….

  89. Franz says:
    @GuestAug

    the wage differential is due … to the US dollar being at least 50% overvalued

    Like working for like can’t be “overvalued” — Eisenhower was president when the “reserve currency” nonsense began and it’s been a joke since Nixon. There was NO reason to maintain the fiction of world reserve currency after Breton Woods was abandoned.

    And it was a fiction. If work in the US was properly valued, workers would get in remuneration about 40 times the pay of their owners… as they did during Eisenhower.

    By century 21 it became hundreds, than thousands times more. What’s really overvalued here?

    The “overvalue” argument started when work started leaving. So did the lust for socialism. It’s conditions within a society that sets the wage. American cost of living is “overvalued” in this scheme, so why aren’t free market advocating for ripping out the interstate highways and high-speed rail lines — both fine examples of socialism for Walmart and Amazon?

    I’m all for the Adam Smith necktie club. But they don’t practice what they preach.

  90. @Miro23

    Bullshit. The “Chinese century” (actually a decade) is already over.

    • Disagree: RadicalCenter
  91. Quintus says:

    If Marketwatch and other Establishment mouthpieces say there’s nothing the Fed can do, it doesn’t mean it’s necessarily true: rather, it means the Fed wants you to believe at this appointed point in time that there’s nothing they can do. Their Plunge Protection team has intervened before many times keeping the stock market on life support. They were just waiting for an opportune time to pull the trigger: what better scapegoat than the virus from the land of the evil bat-eating Communist Chinese to deflect the blame from their own massive guilt?

  92. John Wear says:
    @Kim

    You ask: So what does “overpriced” mean?

    My response: When you look at such factors as price-to-earnings ratio, price-to-book value, and dividend yield, the stock market at its peak was probably overpriced based on historical valuations. A pullback of some sort was to be expected.

  93. DaveE says:

    So why all this bullshit talk about “the Fed should do THIS” or “the Fed should do THAT” or “the Fed can / can’t do anything – it’s up to YOU to “invest” better” or similar garbage?

    How about getting down to the REAL problem: this country doesn’t make / produce shit anymore except shitty airplanes that fall out of the sky, shitty cars that are overpriced and rolling planned obsolesence, shitty software designed to keep you perpetually spied on, shitty clothing, dangerous drugs that will more likely kill you than help you, shitty food and just plain shit in general?

    Hell, we don’t even make our own Weapons of Mass Destruction anymore. Sixty-something percent of an F-18 fighter jet is made abroad. Financial machinations and endless Ponzi scheming ain’t gonna change the fundamental reality: this country is a flesh-eating virus on God’s blue marble.

    China’s got her problems, yes, but they still have a functioning economy that supplies the entire world with high-quality products. The MBA crowd (Masters of Bullshit Administration) just hate the fact that we are sick of their lies, doubletalk and thievery for “the Chosen”. Find me one goddamn “financial planner” who can even tell you how a transistor works or what DNA is and why it matters……. let alone one who has ever produced anything of value.

    We’re looking at desperate times for desperate criminals who think nothing of destroying the entire world for their insatiable lusts. We Goyim may not be too bright, in general, but we DO occasionally wake up when it becomes blindingly clear exactly WHO is trying to kill us, enslave us and rob us blind. (Not necessarily in that order, however.)

    Maybe the stock market DOES tell the truth every so often.

    • Replies: @OldCynic
  94. @David riskanalyst

    “Nope the Fed can’t directly buy stocks.Not legally…”

    The big banks that comprise the Fed took over their revolving door subsidiary – the Treasury -officially in March 2009. Secret bailouts guaranteed that there would be no way to ascertain whether any of these crooks paid back the tax- payers largesse.

    The State is the enforcement arm of the jew in their counting houses. The 2 parties are the servants entrance to this oligarchy. Money is “people” according to the Supreme law of the land. The only answer to this intolerable condition is to strew the streets with the bodies of the bureaucrats who enable this. After all, your children are being overtly conditioned in their brainwashing academies to exist at an animal level, while toiling away as wage CUCK slaves.

    So, now’s the time for intensive resistance against this Beast System (while its being stressed.) A disciplined, sober, austere, truly moral destruction of that which is unclean. Not some PIDDLING CONSERVATIVE SIDESHOW CRUSADE. No more cajoling, weasel- jew- lawyer words like
    “ they can’t do that-that’s illegal” but a Heraclitian conflagration that incinerates this human dross.

  95. FvS says:
    @Franz

    loony lefties

    Yeah, like Pat Buchanan.

    • Replies: @Franz
  96. Greed and stupidity have once again peaked. The ruling class need not worry, the working class will once again pay the price. Just another massive transfer of wealth from the bottom to the top. More austerity for the goyim, new mega yachts for the capitalist class. Same as it ever was.

    Virus will provide a convenient scapegoat for the fake, fraudulent, unsustainable, and rigged scheme we call an economic system. Ponzi schemes always eventually collapse.

    Bend over and spread em goyims!

  97. Skeptikal says:
    @Franz

    It wasn’t “loony lefties and conspiracy theorists.”
    It was people of many stripes who had in common that they all had a measure of common sense.

    • Agree: RadicalCenter
    • Replies: @Franz
  98. Hacienda says:
    @utu

    “Stocks that do not pay dividends should be eliminated.”

    Bye, bye Tesla.

  99. @Thomm

    True. Who cares merely about the top 30 US stocks?

    But: Better diversification even than the top 500 largest publicly traded US company stocks, would be the top 4,000-5,000 US stocks, plus some Chinese and to a lesser extent russian stocks (emphasis on steady dividend-generating stocks), plus real estate investment trust (again emphasis on steady dividend-generators).

  100. @Thomm

    Except that grown-ups wouldn’t have their money only in stocks, let alone only US stocks.

    Stocks in corporations from Chinese and a Russian corporations should be part of the portfolio.

    And non-stock investments definitely should be part of the portfolio, perhaps more than all stocks combined. I prefer REITs with an emphasis on consistent dividend-payers.

  101. @John Needham

    If you sold sold sold in 2008-2009, you’d have screwed yourself unnecessarily and missed the stocks fully recovering and then some.

    I would, however, gradually shift new investment money into non-stock investments, such as REITs. And what new money you put into stocks, shouldn’t be overwhelmingly in US stocks.

  102. Chinaman says:

    Everyone have missed a logical consequence of this “supply shocks” . A squeeze on supply should lead to Inflation.

    Of course, we won’t see that immediately as demand have crated even more. This will lead a recession which is long overdue.

    This could be the point where the pendulum start swinging back in terms of 2 decades of low inflation which was mainly driven by the introduction of 1 billion Chinese into the global workforce. The China price have been exporting disinflation all over the world. This coincide with the demographics transition in China and reduction in working population. ( I am aware that this is disinflationary and this might mean inflation in some sector such as healthcare and deflation in others, such as consumer goods.)

    With the trade war, prices for many things have already gone up 10%-15%, this supply disruption and the move to local production over the next year could lead to wage inflation around the world which is exactly what the Fed been trying to do. Low interest rate is tinder and this supply shock lights it up. This is a good thing and what needs to happen to save the system.

    The assets markets won’t like that.

    There is a basic misunderstanding of economics among the populace and people like Ron Paul that inflation is bad. We need inflation to inflate away the debt and future pension obiligations. Inflation is the main driver that keeps the Ponzi scheme going and all the prosperity we seen in the last 200 years.

    Is it a surprise that gold is going up even b4 the coronavirus?

  103. Whitewolf says:
    @Intelligent Dasein

    I think a lot of people are sick to death of the globohomo oligarchic ass-orgy

    They are sick of the globohomo oligarchic ass-orgy and probably wouldn’t care about the stock markets plunging. If they are close to retirement however they might hope that things hold up a little longer. The ponzi scheme that is the stock market sucks in almost all of everyone’s retirement funds. Everyone is invested in it whether they like it or not. The oligarchs have their ass covered on that front.

  104. sally says:
    @Emslander

    if the government were to institute the plan Lincoln used when the bankers tried to starve him out during the civil war, there would be no interest to discount. A nation that issues its own reserve currency has no interest to repay.. all loans are interest free. The bankers tried to raise the interest rate on Lincoln, so Lincoln instituted the greenback in 1860s. Lincoln had foiled the bankers by reducing budget short fall with USA issued (greenbacks) notes that d/n accrue interest nor do they need to be paid back to the banks. it was the same type of money that long had served the America when it was a British colony.

    Colonial issued money was interest free and did not need to be paid back <=such a system had long served the colonies.. The mob in England finally managed to convince king George to outlaws colonial issue of its own currencies. <=this reduced the money supply in america and precipitated such a depression that it lead to the American Revolution.

    To remedy the tight money supply situation that resulted when the Greenbacks were halted after Lincoln's assassination, Coxey proposed that Congress issue $500 million more Greenbacks.. to redeem the federal debt and to stimulate the economy <=such a plan would have put back to work the many who were unemployed <bankers would have none of that, the very idea that government could or would issue its own money would dangerously threaten the value of banknotes issued by private banks. Each Greenback would replace the bankers private paper with greenbacks basically bankrupting the ruthless British Banksters. The British owned American banker reaction to this was to impose a propaganda campaign that wrongly convinced the elected government that if government should issue its own money it will be dangerously inflationary. <=if the banksters had failed to get this to happen, it would have put the dangerous bankers out of business. But as usual the government actors were paid off, and the gold standard was installed to save the banksters. Every year after Lincoln was shot the banksters tried to get Article I, Section 9, para 4 of the Constitution of the United States changed or ruled constitutional (even though it was part of the constitutional).
    Getting that section section changed became urge when the Banksters and Mobsters wanted tto get the USA to bring America into war war I , the Banksters therefore increased their effort, in 1912, they banksters and mobsters got stupid congress to agree to wipe out the protection from banksters and mobsters that had been put into the constitution. Amendment 12. eliminated Art. I, Sec. 9, para (4); it allowed the Banksters to get the USA to tax the people so the government could pay to the Banksters the interest on the debt created by the Banksters as due from the USA and more importantly, it being able to tax the America people allowed the banksters to make loans all over Europe to those willing to fight the Germans and take out the Ottomans.
    Do not forget that in 1870s source of oil was changing from Whale Oil to petroleum oil and that the Ottoman Empire was sitting on the oil rich land that is now Iran, Saudi Arabia, Syria, Yemen, Iran, Lebanon and Iraq etc. . so they crime of 1873 was change in the monetary system from Bimetallic (paper notes backed by either gold or silver) to an exclusive gold only standard J.P. Morgan Wall Street Grover Cleveland and the Rockerfeller (standard oil contingent in the west which allowed fractional reserve banking). All this came to an organized effort at the First Zionist Congress in Basil Switzerland in 1897 ( after that convention France signed a treaty with Russia to get Germany, and a year later, in 1898 (France, England and The USA agreed to work together to take out Germany (it was too successful) and to take out the Ottoman so the Banksteres could get the Ottoman oil.
    Behind the wall street group (protectionist McKinley and Hanna) were powerful British Financiers, who funded the USA civil war because they had been trying to divide America for over 100 years in order to recolonize it. The Lion (Wm. J. Bryan) reappeared in the 30 to run against Roosevelt. <=whom Unz exposed a few weeks ago as war lord responsible for forcing America into WWI.
    Let us remember that most money today is not created by either the federal reserve or the USA. instead it is created by private Banks when the private banks books on the book of the banks a phantom transaction..
    Deposits to account of (a name ) XXX
    Capital Reserve . XXX (sometimes called debt)
    (simple form)
    money is never earned its just created by paper transactions in local banks.

    If Americans could get the USA to make illegal the stock market, and to close down the federal reserve and to print its own money, there would never be an inflation. or a depression. It is these two things(stock market equities and third party money) that make the USA a completely different country from America. Nearly everything Americans vote for the USA is against.

  105. Parfois1 says:
    @The Grim Joker

    Stocks crashed because of Corona germs, market overpriced, some Turk soldiers got smoked by Putin who may be trying to influence 2020 elections, the Fed, companies buying back shares and the increased price of noodles and Won Ton blah blah bah and also because Santa’s sleigh broke down so he is unable to come down the chimney in March.

    Thanks for revealing the secret… and the laugh! But you forgot to add the fears of commie Sanders’ winning the circus parody contest and nationalizing the Fed, Wall Street and the S&P 500, for starters.

    The parasitic financial overseers don’t produce anything – their job is to redistribute the wealth produced by workers for themselves.

    • Replies: @The Grim Joker
  106. Chinaman says:
    @utu

    That is ludicrous and a basic misunderstanding of how markets work. Paying dividends is a terrible idea. dividends are taxable and double- taxed in the US. 30% to foreigners. Much more efficient to do stock buyback etc.

    There will be no new companies and no way to raise capital if that were the case since no company can afford to distribute dividends in their first few years. Ever heard of a growth stocks?

    Trading and Stock valuation and is a game for the professionals. Retail investors should stay out in the first place. Who are you to regulate other people’s game?

    • Replies: @The Grim Joker
  107. The central banks of the world created this everything bubble and they know it will crash some day.
    Covid 19 gives them a way to let world economy crash without them taking the blame.

    • Agree: NoseytheDuke
  108. If “The central banks of the world created this everything bubble” then it can’t possibly crash – can it? I mean, they must control it – right?

    This stupidity about central banks and monetary policy (the ultimate causation excuse for everything) is far, far more frightening that anything central banks themselves actually can do or have done.

    Any time any one needs to “explain” something or “blame” some one, it’s always the same refrain: “It’s the central banks..”. Why suuuuuure it is……..

    If that’s really what you believe, then it must have cost you a fortune trading that view – it’s been so wrong for so long.

    (p.s. Still, you’re in good company – Trump is also dumb enough to believe that the Fed controls the stock market. Just yesterday, he admonished it to “put some money in”. Now, there’s a real dope for you…)

    • Replies: @DaveE
  109. Wantoknow says:

    Please consider:

    ‘“the only reason you would cut rates now is if you’re the central bank of the S&P 500,” said Jim Bianco’

    I would suggest that the Fed is the central bank of the S&P 500 and more. While the Fed cannot address a supply shock it certainly has the ability with government toleration to make a market in stocks. As with foreign exchange the price of stocks can be pegged. One would suspect that the major players would go along with this considering the alternative. It is even possible that the peg could be to some low growth exponential curve to keep stocks viable while the corona virus is sorted out.

    Do not underestimate the effort to support the current system the Fed and other central banks will provide. The past makes it clear that it is unwise to underestimate the will and audacity of the central banks.

  110. instone says:

    Does the Federal Reserve Act (as amended) grant the Fed the legal authority to purchase the equity of U.S. companies and n what circumstances? Either it does or it doesn’t.

    If it doesn’t, how can any one keep arguing for it – rather than stating that they think that the Congress and the President will pass new legislation enabling it?

    More importantly, does the Federal Reserve Act of the United States empower the Fed to print bank reserves and give them away directly and without taking a valid financial claim in return (aka helicopter money/MMT/debasement)? Who has the fiscal authority in the United States and who does not?

    It’s time to sort out this basic matter once-and-for-all – instead of letting a bunch of morons and their ignorant “wink-winks” run wild over the internet lecturing every one that this sort of thing is a dead cert.

    Here’s something to consider: late July 2016. The blogosphere was alight with conspiracy nonsense from blogs like the always unreliable zerohedge that “helicopter money” in Japan was “not a matter of if, but when…” By the end of that week, they were humiliated and sent packing by both Kuroda and the cabinet secretary who reminded them that helicopter money in the true sense (i.e. the BoJ printing money and giving it away) is illegal under current Japanese law.

    Here’s something else to consider: back in 2011-12, Silvio Berlusconi encouraged the ECB to purchase Italian government notes and then turn around and forgive them. That too was illegal under ECB regs, but it didn’t stop him from trying.

    Here’s something else to consider: In May 2016, then candidate Trump declared that the central bank could prevent a U.S. default by directly purchasing bonds from the Treasury. That’s explicitly forbidden, but it didn’t stop him from stating it.

    Beware bloggers and billionaires when it comes to monetary policy.

  111. For once I can agree with Trump on something : that is the Coronavirus outbreak is probably a “hoax”. Isn’t it just the flu under a different name? They can’t even test for Covid-19 in the field . The worst of the outbreak is likely to be over by mid to late April in the Northern hemisphere but, just like the normal flu,will re-occur in the Southern hemisphere in May to September . The sell-off in stocks will end soon and Warren Buffet,who is sitting on a pile of cash ,will be buying again, if he isn’t already.

  112. DaveE says:
    @smarttrade

    It’s become obvious that somewhere, somehow, there exists a HUGE reservoir of money, very opaque, that is frequently used to manipulate stock prices, particularly in “emergencies” like this.

    Just look at the curve for yesterday’s (Friday 2/28) Dow. Doesn’t it look a little strange to you that the Dow was down 700 – 1000 points most of the day, until the last half hour, when it suddenly jumped upward 500 points?

    https://www.marketwatch.com/investing/index/djia

    While I realize active trading in the last moments before closing is quite common, this don’t pass the smell test. Somewhere, somehow, someone tried to inject a little (LOTS of) cash into the market, just before the weekend, after a week of 3000+ point losses, to try and boost optimism for the coming week. That maybe this is just temporary and next week the market will recover.

    Or the last mini-crash a few months ago when the market fell 1000+ points and Trump managed to divert some $$ from the bond market (via the Fed / treasury) to stage a “recovery” or at least the perception thereof.

    There is some serious hanky-panky going on….. obvious to even a casual observer.

    • Replies: @Jonathan Mason
  113. testhim says:

    Well, if we can’t test for covid19, then clearly, it’s not there – just like the President’s IQ.

    No, the latter wouldn’t be found even if it were tested.

  114. exammine says:

    “…Or the last mini-crash a few months ago when the market fell 1000+ points and Trump managed to divert some $$ from the bond market (via the Fed / treasury) to stage a “recovery” or at least the perception thereof…”

    Sorry, who “diverted” what money and whence? What exactly do you say that Trump did and where is the evidence that you have found?

    The Fed can’t “divert” funds from the U.S government. They act merely as the debt agent for the Department of the Treasury when the latter raises money at auction. The debt buyers pay the Fed for the bonds out of their commercial bank accounts and the Fed transfers that money into the Treasury’s General Account at the Fed. Since commercial banks themselves bank at the Fed, this represents a transfer between Fed liabilities.

    As for repo and coupon passes that the Fed itself undertakes, the Fed credits that money to the bank accounts of its counterparties (“reserves”). Those transactions appear on its weekly balance sheet. The Fed has an IG, is subject to review by the the GAO and also has an outside auditor (KPMG?).

    If you think the Trump Administration is using borrowed money to intervene in the stock market, then show so. Maybe go through the General Ledger of the U.S. or something like that, but there are no accounting entries on the Fed’s own balance sheet showing that they have an equities trading or equities derivative trading balance.

    If you think the Trump Administration is using the ESF to trade equities, then by all means, show so.

    Telling is one thing, but show-and-tell is better.

    • Replies: @DaveE
  115. quothing says:

    Is quoting others better than trying to speak for them?

    9/11Insidejob declares on Unz February 29th:

    …The sell-off in stocks will end soon and Warren Buffet,who is sitting on a pile of cash ,will be buying again, if he isn’t already…

    Warren Buffet’s actual words in shareholder letter released on February 22nd:

    …That rosy prediction comes with a warning: Anything can happen to stock prices tomorrow. Occasionally, there will be major drops in the market, perhaps of 50% magnitude or even greater. But the combination of The American Tailwind, about which I wrote last year, and the compounding wonders described by Mr. Smith, will make equities the much better long-term choice for the individual who does not use borrowed money and who can controlhis or her emotions. Others? Beware!…

  116. DaveE says:
    @exammine

    It was reported / theorized on Zero Hedge and others, I don’t have time to dig up the articles right now.

    You talk as if you’re a Junior in college pursuing a Business Major who believes all the crap they teach in Econ 101. I mean, c’mon. The Fed and the Treasury may as well be one, and we aren’t allowed to see into any of their shenanigans. But we’ve seen this ovah and ovah and ovah again since 1913, at minimum.

  117. All examminee asked is whether you have any evidence and all you can cite is some fuzzy recollection of a zero hedge column that “reported/theorized” it. Sounds convincing.

    Econ 101 is one thing, but skipping law school 101 to sit and make up stuff from a barstool might not have been such a good idea.

  118. Franz says:
    @FvS

    loony lefties

    Yeah, like Pat Buchanan.

    Check his “vampire cover” on Time Magazine after he won the New Hampshire primaries; the article accompaning it was pretty carbolic.

    They did imply he was goofy, evil… and at least flirting with national socialism.

    But Pat is Pat. A decent man, but he forgot what won him the primary real fast and went back to talking about abortion. The workers who won him deserted him real fast. Why can’t he hold one thought in his head?

  119. Franz says:
    @Skeptikal

    It wasn’t “loony lefties and conspiracy theorists.”
    It was people of many stripes who had in common that they all had a measure of common sense.

    You’re right,

    Now tell it to the national media. Anybody who opposed the “free market” in the 90s was at least a commie. Talking to reporters/”experts” back then was like being in a Kafka story.

  120. Ahoy says:

    The era of upside down debt economy with the side kicks of Rothschild throwing shit in peoples’ mind like Buffet, Gates et. al. is coming down with a bang.

    America has suffered so much brainwashing that they can’t think beyond a coke and a Macdonald. Along the way some truly learned men tried to tell them a few things but coke proved more powerful.

    The economy is coming down like a house of cards never to be revived again in the same construct. Have brain will travel. The rest will be left by the sidewalk.

  121. eah says:

    Why did they go up so dramatically in Q4 2019? — why did they reach all time highs weeks after COVID-19 was known to be a significant and growing problem?

    • Replies: @antibeast
  122. Anonymous[386] • Disclaimer says:

    Because china is closed down, if china isnt prosperous neither is anyone else. Economies are neither handed down from god as divine gifts ualtered and forever, nor are they unconnected. Remember the great depression? It was because germany was slowed down from various things like lack of purchasing power and coal fields occupied by the french. Nor to forget the breakuo of the austro-hungarian emorie that resulted in bickering nations where the supply lines were broken up and everyone wanted the complete capitalist profit….and so all harbors, mines, roads, “trucking”, factories and worlers were all standing still twiddling thumbs. And the rest of the world suffered as well.

    And when the worlds biggest ecoomy goes into martial law, curfew and quarantine, everyone else is if not yet then soon forced to stand twiddling thumbs with nothing to do. And yes much of especially the us stock market has been comically overpriced vs more normal p/e 10 for cashcows and p/e 17 for fast growers with good profit.
    Never mind the actual undead zombies kept alive solely on free money like tesla, snap, netflix, twitter etc companies that should not exist at all in a rational economy. And yes, this means in short massive malinvestments. I have no idea if all that will come undone now, but there s a very real risk none of those companies along with other “will never be profitable” companies will continue to exist next year.

    All those coming down will mean massive secondary and tertiary hits, just imagine how much food and homes and services etc those employees and cmpanies have been buying. Banks that have lent fantasy sums to them. All these secondary and tertirary (selling food to bank person of bank that lent) people will take massive hits too. Overall expect a pretty spicy writedown of national and world economies.

  123. NPleeze says:
    @Alfred

    Most analysts don’t ever take into account what foreign investors are doing or the movement of capital internationally.

    When you have the efficient market theory, it doesn’t matter. If foreigners sell, domestic investors will see the opportunity.

    Personally I don’t buy into the efficient market theory but if you doubt that, there are far more issues at play than foreign investors. Esp. domestic and foreign political actors.

    The US stock markets went up hugely because of capital fleeing Europe and the Far East.

    LOL, as if. Low interest rates = No. 1 cause, plus other central bank behavior (i.e., the same pre-Depression maneuver of central banks holding stocks as “assets”).

    Basically the deregulation of the financial industry – which your beloved Orange Satan is 100% behind – is responsible. The Orange Satan of course takes the credit for the market run-up – in part he is correct, he did give the trillionaires massive tax breaks, but that is only a tiny portion of the market “froth” since in general the truly rich never pay taxes on their stock holdings anyway.

    I would be deeply concerned that the target on Trump’s back for assassination is growing bigger

    Why would the Deep State assassinate its most loyal agent? I mean, it would be a happy moment if that monster paid for some of his crimes, but he should be tried and convicted like Saddam Hussein and hung by his neck (even though Saddam’s crimes pale in comparison to the Orange Satan’s, and indeed the crime of which Saddam was convicted is an absolute joke), but it’s not like anybody better would replace him, and the Deep State would use the event to further consolidate their power.

    • Replies: @Skeptikal
  124. antibeast says:
    @eah

    Hedge funds were borrowing cash from the short-term money-market funds of commercial banks using long-term treasury bonds as collateral in the repo market after the Fed lowered rates three times in Q3 2019. After the Fed injected $6T in the repo market to meet demand for cash which the hedge funds then used to buy stocks, that pushed equities to all time highs in Q4 2019. That momentum spilled over to early 2020 which is now crashing as fear mongering and mass hysteria over the Coronavirus pandemic is inducing panic selling in the stock markets. China was supposed to start fulfilling its obligations in the US-China trade deal which would have boosted the US economy, thus giving Trump an easy victory in November 2020. If China recovers quickly from the Coronavirus pandemic by 2Q 2020, the global economy might slow down a bit but not by much because the busiest season is the 3Q for mass production of consumer goods for export markets. The global travel industry will be the hardest hit because of mass hysteria over the Coronavirus pandemic.

  125. ouching says:

    …After the Fed injected $6T in the repo market to meet demand for cash which the hedge funds then used to buy stocks, that pushed equities to all time highs in Q4 2019…

    That’s total crap. The Fed’s balance sheet is only $4.2 trillion, so how could they have injected $6 trillion???????

    The Fed’s balance sheet expanded from $3.8 to $4.2 trillion between the beginning of the repo market tightness (early September 2019) and present.

    That $400 billion increase was comprised of $150bn of rolling, short-term repo and $250 billion of outright short-term government securities purchases.

    “Short term money market funds of commercial banks”? Hedge funds repo-ing their own treasuries to buy stocks? Why wouldn’t they just sell their treasuries outright and swap the proceeds into equities? Or, were they merely financing leveraged longs in the Treasury bond market?

    You’re a total, grade-A rube.

  126. Skeptikal says:
    @NPleeze

    “Basically the deregulation of the financial industry – which your beloved Orange Satan is 100% behind – is responsible.”

    No, it was Clinton who deregulated banks etc.

    • Replies: @NPleeze
  127. nymom says:

    The stock market is tanking because the Democrats and their media allies are over-hyping Corona virus in an attempt to deny Trump another win in 2020.

    They have been using every trick in the book since about 2016 to crash the market and they finally latched onto one that worked.

    Just for the record the US normally averages about 10,000 deaths a year from regular flu whereas, so far with Corona we have had ONE in the US.

    Not saying it doesn’t have the potential to get worse. It does, but we are a long way from that now.

    But the important thing for the Dems is they crashed the market just before the election campaign was getting ready to take off.

    Not to mention on a personal note, they probably just took away my own financial gains in the market a few years before my retirement. Another plus for them as they wanted to hit the Boomers hard who voted for Trump originally….

    Idiots.

    • LOL: bluedog
    • Replies: @Skeptikal
  128. SBaker says:
    @Michael888

    A good assessment of the current situation. It appears lots of people here are caught In the downdraft. I’ve lost less than 1% since I’m mostly in bonds. This market is being driven by the short sellers and the absence of buyers.

    Corona viruses are very common respiratory viruses in many species, mostly animals by a magnitude. I suspect this one may be an accidental escape from one that was isolated, maybe even altered, by the virology institute in Wuhan.

  129. @Parfois1

    I am always glad to amuse Unz readers !

    Look, if Bernie wins I am moving to Syria up near the Turkish border. One minute listening to and looking at that guy leads me to believe he has been eating Preparation H and washing it down with bleach and toilet bowl cleaner.

  130. Skeptikal says:
    @nymom

    You may be right.

    I have enough cash in my IRA to cover my minimum required distribution for a couple of years.
    Meanwhile I’ll go on working and paying into my SEP and IRA accounts (IRA contributions recently reinstated for retirees)
    I am going to hang on to what I have, mostly dividend-paying stocks, and see what happens.
    I might take the opp’y to look for some bargains in Dividend Kings.
    I wouldn’t buy anything else.
    Too stressful.

  131. excuses says:

    If you’re right NYMOM and the corona virus rout in the stock market is all just a big exaggeration by the Dems, then take out a loan and buy some more stocks – prove those tricksters wrong.

    Of course, if there really is something to worry about….

    Enjoy the land of idiotic excuses.

  132. @Twodees Partain

    “Oh, so stocks are falling because corona virus. I thought you were going to say that stocks are falling because the eevull joos.”

    Why do you seem to think the two are mutually exclusive?

    • Replies: @Twodees Partain
  133. I recently read an article by an Israeli financial guy named Farber. He is predicting a U.S. market meltdown at the end of Q3 2020, prior to the election, followed by a currency meltdown. He predicts a possible Bernie win; that any Jew in the U.S. had better be prepared to jump on a plane and run to Israel because….Hitler!!!!!!!!

    As far as I can determine, the world financial system is approaching a crisis, natural or induced, that could create unprecedented pressure to go to a world crypto-currency, with national currencies tethered to it, that would solve all our problems while simultaneously enslaving all of us to debt for the next 5-6 generations.
    At a certain point, the financial misconduct of the last quarter century, initiated by Nixon and Kissinger and ‘improved’ upon by each successive collaborator, should be repudiated by the Masses.
    My main point is that every citizen in the West, as well as up and comers like Brazil and the rest of the Western Hemisphere, needs to be aware that ‘elites’ (aka rentiers/parasites) have rigged the game for about 150 years (post-Civil War). They have used national currencies, that voters have no control over, yet are stuck paying huge rental fees to scumbags (aka, the Rotchild Mafia) who use and abuse ‘our’ money. It has been a long period of socialism for Billionaires and we are supposed to cover their losses? No. Time to repudiate these debts and highlight the blatant criminality.
    I really believe they will try to paper over the problem with a world crypto that would begin with a U.S. federal crypto-currency and expand to include Europe. The real tough ones would be China and Russia. I just can’t see them being willing to buy into a scheme of tethering their currencies to a world crypto UNLESS an existential crisis was created.

    Quite possibly a 1929^10, or the fear of the knock on effects of such a crisis of confidence, could be enough to get participation in a scheme. Combined with a pandemic and the shock of persistently barren shelves in supermarkets of course. This will probably be enough to create a state of numb terror throughout the West. A worldwide pandemic, coronachan, will make a very nice ‘deus ex-machina’ to try to sell a real [email protected] narrative and act as a judas-goat. If that is the case, it lends even more credence to CoronaChan NOT being an agent of nature but, rather, a laboratory agent of change. So much destruction, so much opportunity for reshaping the world according to the tiny group of powerbrokers at the top; I’m estimating less than 5,000 critical players but it could be as little as a few hundred.
    We have never been here before; that is, we have never been facing a financial collapse and resultant economic depression where so much information is available prior to the collapse (thanks, Mr Gore /s). What happens if the worst occurs? In a year or so, what happens when all over the planet, intelligent people arrive at the conclusion that they are being used and abused and that elites intend on enslaving us and our children in perpetuity in ‘smart prisons’.

  134. NPleeze says:
    @Skeptikal

    LOL, are you an ignorant partisan cultist or a liar? Republicans heavily voted for financial deregulation and the Orange Satan is 100% behind it.

    The Glass-Steagal Act was repealed by the Gramm–Leach–Bliley Act (all of Gramm, Leach and Bliley are REPUBLICANS). While signed into law by the Teflon Don, the final bill was approved by the Senate (52 Republicans for, 1 against; 38 Democrats for, 7-8 against) and the House (207 Republicans for, 5 against, and 155 Democrats for, 5 against). In fact the original version of the bill was almost defeated in the Senate (53 Republicans for, 1 against, and 44 Democrats against) until some consumer protections were put in by the conference committee.

    The most recent law related to banking deregulation is the Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law by the Orange Satan on May 24, 2018.

    Try to stick to facts instead of your partisan cultish devotion to an evil political party.

    • Replies: @Skeptikal
    , @Skeptikal
  135. How on earth does a crypto-currency “solve all our problems” – or didn’t that Israeli expert tell you?

    Every one keeps gratuitously mouthing the same BS about crypto – that it is some sort of solution.

    Trouble is, they never exactly explain how exactly it solves anything – not even in the barest detail. It’s nothing but a slogan. It’s just like listening to gold bugs swearing that the yellow metal is gonna solve it all and every one needs to buy it.

    The more I hear this stupid talk, the more worried I am. It suggests that people can’t even tie their shoelaces any more.

    • Replies: @NPleeze
  136. NPleeze says:
    @cryptoiscrap

    How on earth does a crypto-currency “solve all our problems”

    If I were gunning for it, one argument I would make is that it removes the Evil Empire from the switch on the flow of funds. The US mass murders millions of people with its financial sanctions – no matter what your view of finance or banking or currency, it is obvious that no country should have this kind of power.

    And I agree with this point 100% – the profoundly evil US must be removed as the gatekeeper for international trade. It’s wrong in principle and vastly more so in practice.

    Of course the Orange Satan is playing right into this argument, by imposing his satanic sanctions on countless countries.

    Now, the vast majority of the world will run with the argument that the US must be removed as the tyrannical murderer it is. The question is, what will be the alternative? And only one will be presented. They will also argue (dishonestly, of course), that this solution will reduce crime and money laundering, etc.

    • Replies: @nymom
  137. Skeptikal says:
    @NPleeze

    Larry Summers was the architect of deregulation of Wall Street.

    Larry Summers was Clinton’s Treasury Secretary.
    Doesn’t matter was congress did. Deregulation would not have happened without Summers/Clinton.

    Re ” your partisan cultish devotion to an evil political party.” you are making a huge assumption as to my political proclivities. While you refer to the “Orange Satan.” So who is a “cultist” here?

    You stick to facts. Deregulation was born in the Clinton administration.

    It was part of Clinton’s “triangulation” strategy whereby the Dems ultimately became more beholden to Wall Street than to their traditional constutuencies.

    • Replies: @NPleeze
  138. Skeptikal says:
    @NPleeze

    NB: “While working for the Clinton administration Summers played a leading role in the American response to the 1994 economic crisis in Mexico, the 1997 Asian financial crisis, and the Russian financial crisis. He was also influential in the Harvard Institute for International Development and American-advised privatization of the economies of the post-Soviet states, ***and in the deregulation of the U.S financial system, including the repeal of the Glass-Steagall Act. ***

  139. @John Wear

    In my opinion, a major reason why stocks are falling is that they have become overpriced.

    That does look to be the case, except if you look at certain stocks like BP or Exxon, with just a little more downdraft they will be paying 9% dividends, so the overpriced thing may not apply equally to all stocks.

    It is more the case for stocks that have future growth price in, if the future growth is going to be less than expected. Some stocks really are (were) overpriced like Tesla, a company with very little sales that is the most highly valued automobile company in the world based entirely on future expectations that may or may not come to pass. But TSLA has already come down a huge amount in the recent minicrash.

  140. @DaveE

    Just look at the curve for yesterday’s (Friday 2/28) Dow. Doesn’t it look a little strange to you that the Dow was down 700 – 1000 points most of the day, until the last half hour, when it suddenly jumped upward 500 points?

    Actually it was in the last 10 minutes that the indexes soared. Partly this may have had something to do with options expiring on the last trading day of the week and month.

    • Replies: @Alfred
    , @DaveE
  141. NPleeze says:
    @Skeptikal

    Doesn’t matter was congress did. Deregulation would not have happened without Summers/Clinton.

    LOL, partisan bunk. Lots of Presidents propose things that Congress does not approve – you remember Clinton’s healthcare plan? FFS, the stupidity of arguments people make is just astounding. And the Republican congressmen, who tried to impeach Clinton, are passing legislation simply b/c he proposed it?

    No wonder US is falling into shit, well deserved. Partisan idiocy is so extreme – despite the lack of any meaningful differences between the duopoly parties – it’s not even possible for a rational mind to comprehend.

    • Replies: @Skeptikal
  142. Alfred says:
    @Jonathan Mason

    Partly this may have had something to do with options expiring on the last trading day of the week and month

    Correct.

    This is something that those who want to ban short-selling will never understand. When the market crashes, the only buyers of stock are these very same short-sellers. But don’t try to explain that to ordinary people in the street or any politician that I know of.

    Brussels Contemplates Outlawing Short Selling on European Bank Stocks | Armstrong Economics

  143. Skeptikal says:
    @NPleeze

    You are the partisan idiot.

    Projecting.

    Of course Republicans supported Clinton’s financial deregulation.

    This was the essence of Clinton’s “Third Way” triangulation gambit.

    • Replies: @NPleeze
  144. @Chinaman

    I agree with you regarding dividends but then again I believe Alice in Wonderland is a REAL person, People far smarter and far richer than you will ever be think dividends make good business sense.

    Oh and no, ignorant investors have never heard of growth or value stocks.

    You are an ignorant ass. Better checkup for Corona, your brain may be overheating !

    • Replies: @Chinaman
  145. @9/11 Inside job

    Correct, what a short opportunity. But the upside opportunity is there for all to see…..except that few will see it.

    Dont miss it because I dont want to see you comment in another few months “What a long opportunity if one had foreknowledge”

    • Replies: @9/11 Inside job
  146. @The Grim Joker

    Thanks for your advice , I put in a buy order for Carnival Cruise Line over the weekend , check back with me in a year !

  147. DaveE says:
    @Jonathan Mason

    Good point. However, now that the Dow is climbing back up very quickly on Monday (it’s now +800 as I type this) it looks like no-one bought the totally contrived “coronavirus” scam, once the weekend gave the Goyim a chance to wise-up.

    Yep, the zionists got creamed again . Oh darn….. such nice people too………

  148. counting says:

    So the March S&P e-minis high on February 19th was 3397-ish, the low on Friday was 2854-ish and we are now at 3020-ish.

    So, we’ve regained 165 points. Only 370 points more to go to get back to breakeven…….

    • Replies: @Wally
  149. NPleeze says:
    @Skeptikal

    Nope, you’re the Republican cultist blaming all the world’s faults on Democrats.

    I despite and loathe both parties equally, you cultist.

    Of course Republicans supported Clinton’s financial deregulation.

    Good you realize that.

    This was the essence of Clinton’s “Third Way” triangulation gambit.

    But it was Clinton’s fault, LMFAO!!!!

    • Replies: @Skeptikal
  150. Chinaman says:
    @The Grim Joker

    Your vitriolic outburst and conviction on the matter do make me re-think why US companies declare dividends even though it is so tax-inefficient. Some companies obviously agree with me since they have done a trillion of stock buyback since 2008. In the ideal case, the retained earnings should be reinvested or kept for acquisitions (instead of using debt) to generate enterprise value. You mentioned people far richer and smarter than me think otherwise so may be we should ask the richest and smartest investor ever existed and his opinion on the matter. Warren Buffet’s holding company Berkshire famously don’t pay any dividends and he have given various reasons for it. He does collect a lot of dividends so may be both you and him know something that I don’t.

    I am just a derivative trader who trade quant strategies so what do I know! This is despite the fact that I was entrusted money by one of the “Market Wizards” to trade his personal money and also ran money for George Soros, you may actually know more about the Equity market than I do.

    As a trader, I am always happy when someone exposes my ignorance as long as he goes beyond ad-hominem argument and articulates his case. You haven’t done that.

    Please enlighten me.

  151. Skeptikal says:
    @NPleeze

    “Good you realize that. ”

    Of course I “realize that,” you obnoxious have-to-be-right idiot.

    You careen along with your “partisan” assumptions, perennially on “broadcast” and never on “receive.”

    Switch your receiver over.

    You sound autistic.

    • Replies: @NPleeze
  152. Wally says:
    @counting

    Comrade Mike Whitney must be crapping his pants.

    Dow Soars 5.1%, Best Day in More Than a Decade:
    https://www.breitbart.com/economy/2020/03/02/dow-soars-5-4-best-one-day-gain-in-more-than-a-decade/

    All those main street retirement plans are lovin’ it.

  153. NPleeze says:
    @Skeptikal

    you obnoxious have-to-be-right idiot

    LOL, nice act of projection, describes you perfectly. Let’s recount how our discussion started. I wrote:
    “Basically the deregulation of the financial industry – which your beloved Orange Satan is 100% behind – is responsible.” To which you responded: “No, it was Clinton who deregulated banks etc.”

    I of course proved your statement to be utter bullocks, total crap, 100% partisan/idiot bullshit. So your feelings got hurt and you kept moving the goalposts.

    And now you blame me for seeing through your idiotic partisanship and call me partisan. Sad.

  154. Alfred says:
    @Alfred

    It seems that foreigners now understand that Bernie Sanders will not be allowed to run. That explains rather well why the markets went back up on Monday.

    “Trump says Dems are plotting ‘coup’ against Sanders. See his response.”

    It always amazes me how parochial Americans are. You guys think that you are isolated from the rest of the world.

    The only person to reply to my previous comment, NPleeze, downgraded the role of foreign investors. It was all “efficient market theory” or “low interest rates”. As though “efficient market theory” has ever had a role to play in stock prices and as though foreign central banks did not have negative interest rates. 🙂

    Foreign investors have a huge effect on the US dollar and US stock prices.

    “To be forewarned is to be forearmed”

    • Replies: @Skeptikal
  155. OldCynic says:
    @DaveE

    ” this country doesn’t make / produce shit anymore” Fully agree. But America is not alone in having sent its industries to China. Other countries are even worse. Take Australia. It produces no planes, no cars, almost no software that is sold internationally, no clothing, almost no drug industry, no electronics industry and almost no defense industry. ( It’s a third world country with a first world standard of living). And its stock market is tanking just like the market in the USA.

    The one thing the West should learn from the stock market problems and the “supply side crisis” is that unless each Western democracy stops being so reliant on China, and starts rebuilding its manufacturing capability, their economies will collapse and China will control them by virtue of its economic might.

  156. @Bill Jones

    I don’t think they are. I’m just needling Mike for dragging the corona virus hoax into his analysis. That corona virus meme has all the earmarks of the typical media scam that is deployed to cover yet another Wall Street raid; different putsch, same target audience.

  157. Wally, the only one “crapping his pants” about the stock market dump was herr drumpf. He had an epic meltdown because he’s dumb enough to regard it as a personal scorecard.

    “La bourse c’est moi” he believes – but, only when it’s rallying. When it goes down, it’s never his fault.

    He only needs another two days of yesterday’s price action to breath easy once again.

    Or, didn’t actually undersatand the simple maths that counting remarked?

  158. nymom says:
    @NPleeze

    How do sanctions murder people? All sanctions does is deny the elites all the little luxuries they have gotten used to importing.

    Farmers can still grow food, everyone can eat. I can even make the case that sanctions can make a country stronger as it demonstrates to them weak points in their own economic production lines and they can address them. A crop is turned over in less than a year so there is absolutely no reason for people to be staving due to sanctions…

    Proper diet, sanitary habits, etc., probably did more to improve the life span of most people than vaccines. So let’s stop the nonsense of how sanctions are killing people. Russia is doing fine with sanctions against them and one could make the case South Africa was in better shape with sanctions against it, then it is today 25 years later after sanctions ended.

  159. nymom, you’re a hasbara hoot!

    “Sanctions don’t matter” – except when Israel demands that the U.S.severely sanction their regional rival Iran.

    Of course, “sanctions don’t work” when any one suggests sanctioning Israel for stealing land and pursuing apartheid.

    That’s why the Israel lobby has to try to legally ban even the freedom to discuss any sanctioning of Israel in West.

    • Replies: @nymom
  160. Prior to the Coronavirus “hoax” Trump had been pushing for a rate cut from the Fed , he now has his rate cut .Was the Trump administration somehow behind ginning up the Coronavirus media hysteria ? Trump stated it was going to be over by April , maybe it will be over sooner after the Fed’s action today.

  161. …Coronavirus media hysteria ? Trump stated it was going to be over by April , maybe it will be over sooner after the Fed’s action today….

    What nonsense is inside your head “9/11 inside job” – how on earth can the Fed do anything to affect the course of virus of any degree????

    This is the problem with the internet: with no accountability, it turns folks’ minds to mush.

  162. Skeptikal says:
    @Alfred

    Not to worry.
    NPleeze is a certified idiot

  163. nymom says:
    @4themnotus

    I never said they don’t work. Clearly they impact the elites in society and government who can’t travel for instance or buy products made internationally. So eventually, after a number of years, they do have an impact on the group that makes the actual decisions to end the sanctions by adhering to the demands…

    But this business of blaming sanctions for a country’s death rate or claiming more people are starving due to sanctions is an exaggeration of what sanctions do.

    Sanctions are a slow and tightening grip on the elite of a country, nothing else.

    • Replies: @Alfred
  164. Because it’s a fabricated psyop, so it can be brought to an end whenever the items on the agenda have been accomplished , admittedly it’s a stretch to suggest that a Fed cut was one of the items. See:
    stateofthenation.com :”The Coronavirus psyop ”

    blog.nomorefakenews.com : “Coronavirus: The contagion of propaganda ”

    foreignpolicyjournal.com: “It’s flu shot propaganda season ! Beware the big lies about the vaccine”

  165. USA Today : “Coronavirus : China sees ‘coming victory…” figures released on Tuesday showed that
    “…new cases in China dropped to 125 , a six week low “

  166. cato.org: “The misleading arithmetic of COVID-19 death rates ” :
    “…it is important to avoid scaring people about the risk of death from COVID-19 [seasonal flu?] by continuing to ignore the fact that the vast majority of cases have mild disease and get better without any special treatment ”
    Further proof of “fear porn” and massmedia hysteria over the Coronavirus outbreak.

  167. The stocks simply crashed a bit because it was a good time to pull it off with news. Time for the Jewish stock people to make another big and not unusual haul of loot from the impatient simkins who actually believe all that news baloney. Can you blame them? I call it “Sticking you up with a pencil.” On the other hand, if you follow all of the great reasons your fed in the fake and meaningless news you need to be shook down. 98% of the news is BS.

  168. Alfred says:
    @nymom

    Sanctions are a slow and tightening grip on the elite of a country, nothing else

    That might be true for Russia – because they export food and oil. However, in the case of countries like Yemen and Iran, it is not true because they import food. In the case of Syria, they import oil and food – two indispensable resources.

    Sanctioning a country like Egypt would quickly result in millions of deaths. Iran is in a better situation as they can import from Russia.

    In the case of Venezuela, there is really no reason whatsoever for anyone to starve. They have immense agricultural potential and oil. In the jungle you only need to let chickens run about and breed and you will quickly have a surplus. All you need do is to protect them from predators.

    How the Chicken Conquered the World
    The epic begins 10,000 years ago in an Asian jungle and ends today in kitchens all over the world

  169. orbiss says:

    “China sees coming victory” over the virus goes a column you quote?

    If that is indeed the case, then how exactly have they achieved it – by “faking” the threat and having their central bank cut rates?

    No, they have taken extreme measures and are paying a heavy economic price.

    Trump isn’t even willing to stop trying to goose his stock market – hence his twitter conspiracy and misinformation spew.

    What did he say diring his first press conference, that the US had 15 cases and those would be down to zero in short order?

    Talk about fake news and hype…….

  170. So much is missed by so many people.

    It is taken for granted, and rightfully so, that printing money can’t put the supply chain back together. This is saying, implicitly, that it will just drive the cost of the goods that are already here higher. Right?

    Well, folks, it works the same for stocks. Stock prices are not moved by the economy or earnings. They are moved by …..wait for it…..money. The amount of money in the system is going to roughly equal the level of asset prices. How can it by any other way? If there is the same amount of assets and more money, asset prices are going up no matter what happens to the economy. There can be a shift as to which assets, like for example stocks vs gold, but asset prices are going up if the central banks print money. It’s tautological. People who think stocks must go down are betting that there will be a significant drop in leverage. Sharp moves can happen, yes, we’ve just seen one, but in the long run, as long as central bankers are lunatics printing money, the assets you hold will increase in price.

  171. Which “money” exactly makes stocks go higher??? Base money, M1, M2, broad money???

    If the Fed creates bank reserves/base money by purchasing an asset (t-bond/t-bill) which, by definition, isn’t in equities, you’re saying that this new money is going to go straight into equities?

    What if cash stays in cash – or more precisely, out of equities? Can you explain that???

    You want to believe that central banks control financial assets exogenously. Heaven help you when you discover endogenous financial market behaviour. You’ll be crying all the way to the poor house.

    Enjoy.

    (p.s. folks, don’t believe any one who lectures you that the central banks control the financial markets – let alone the real economy – it’s total nonsense.)

    • Agree: dc.sunsets
    • Replies: @antibeast
  172. @John Wear

    They were overpriced 20 years ago. So what?

    The last 40 years were a witches’ brew of contributing factors:
    – Fiat money that is nothing but an IOU without a consistent tangible yardstick.
    – A bond market bull run since 1981
    – A related public mania of social trust, characterized by bat-guano crazy ideas like Open Borders, homophilia and the Tranny Insanity.

    Since 1981 the public couldn’t get enough debt. As debt prices rose, the market-clearing quantity didn’t fall (per Econ 101 supply-demand models) it ROSE. Paradoxically, as governments, corporations and individuals borrowed like drunken sailors waving a no-limit MasterCard in a Bangkok bordello, their increasing indebtedness an open hamstringing of future ability to service debt, “investors” couldn’t get enough of those IOU’s.

    Why not? For every dollar borrowed and spent into the GDP-counting economy, a second dollar (an ASSET) was placed on the bondholder’s balance sheet. Borrow one, get two of “wealth!” Why, it’s a miracle!!!

    Sure. Every pyramid scheme looks miraculous for a while. This one did for 39 years (and may still have life left, who knows?)

    Stocks are in a position to confirm a bear market at monthly trend by May. If this occurs, at least a 2000-2002 or 2007-2009 level of bear market has begun. But the key is BONDS! Hindsight shows that those prior stock washouts occurred during the continuing bond market bull run. It was BONDS that informed us that the debt-based paradigm was intact, and that stocks would roar back from their lows. Ah, but this time might be different. While the 3-month T-bill yield is plunging toward zero again, the price of the 30-year T-bond spiked last week, driving the yield to below 1% (for a THIRTY YEAR TERM!!!!) But as stocks fall THIS week, the 30-year yield is actually rising.

    This seems reasonable. If stocks are dropping on worries of economic contraction, what on Earth is debt service resting on, if not the same thing?! Why would bonds be “safe” if economic contraction (and the taxes it produces) looms? It’s irrational. But so is every asset market. Rationality is the illusion, not the norm or the reality.

    If yields on debt begin to rise in earnest, it will be due to an evolving grasp that all those IOU’s cannot be serviced. That has been true for decades, but mass manias ignore such silliness as “oh, look!” Most of the world’s financial wealth now sits in one form of debt or another. When this long Madness of Crowds ends, taking with it Pathological Trust, most of those bonds will be toast, taking with them all that “wealth,” returning it to where the Fed (and all central banks) pulled it in the first place….nowhere.

    We’ve experienced the longest, largest credit bubble and resultant asset market bubble in human history. It was a credit inflation of galaxy-sized proportion. But that inflation mostly flowed (via mass psychology) into asset prices. It filled a veritable Bond Ocean. But that Bond Ocean is broad and shallow, and each uptick in interest rates evaporates astronomical amounts of “wealth” from the surface of that Bond Ocean. Each downtick in bond price strips the same $ off every single drop of that Bond Ocean.

    Leverage is a bitch.

    BONDFIRE is guaranteed. We just don’t know when, until it’s too late to flee.

  173. all4sale says:

    No wonder gold is collapsing – taking its whingeing, ignorant bulls along with it.

    If bonds have to be liquidated, then so will everything else – including gold, bitcoin and real estate.

    ’bout time.

  174. Yahya K. says:

    This is a golden opportunity for cool-headed investors.

    The virus could inflict economic damage, but it will be short-lived. Meanwhile, stocks are becoming cheaper, meaning there is an opportunity for investors with long-term horizons to buy great companies at cheap prices. I personally have a watch list I am sitting on, waiting to pull the trigger. Unfortunately, I am only 21 so don’t have much money in the bank.

    Don’t worry about trying to wait for the bottom. Just buy once the companies’ inverse P/E meets your desired rate of return.

    Be fearful when others are greedy, greedy when others are fearful – Warren Buffett

  175. pricefree says:

    Roll up! Roll up and buy stocks folks! Please bail out Yahya and his longs.

    He sounds desperate – just like Trump.

  176. antibeast says:
    @frontingface

    Which “money” exactly makes stocks go higher??? Base money, M1, M2, broad money???

    Bank credit. These are bank loans to investment firms and publicly-listed corporations based on their financial assets which are hypothecated as collateral.

    If the Fed creates bank reserves/base money by purchasing an asset (t-bond/t-bill) which, by definition, isn’t in equities, you’re saying that this new money is going to go straight into equities?

    That’s QE which involves buying T-bills to expand the assets of Fed balance sheet. Nothing to do with bank reserves of commercial banks which is kept at the Fed and is included in M0 (base money).

    What if cash stays in cash – or more precisely, out of equities? Can you explain that???

    The bank loans given to investment firms and publicly-listed corporations are used to buy stocks and bonds.

    You want to believe that central banks control financial assets exogenously. Heaven help you when you discover endogenous financial market behaviour. You’ll be crying all the way to the poor house.

    The Fed decides monetary policy by setting interest rates which it charges commercial banks for the money that it borrows from the Fed. If the Fed sets the interest rate low, then commercial banks can borrow more money because it costs them so little. To the extent that these monies were lent out to investment firms and publicly-listed corporations to buy stock and bonds, the Fed’s loose monetary policy over the past decade has inflated financial assets such as stocks and bonds. As these financial assets rose in value, these firms borrowed even more bank loans based on the rising value of their financial assets. Any shock to the financial system will deflate the credit market which is happening now as investors sell their collapsing stocks and bonds to cover their sky-high debts. SoftBank is a good example of this phenomenon having borrowed billions based on its stock market value which has now collapsed, forcing the Japanese conglomerate to sell assets in order to cover its debts.

    Enjoy.

    My pleasure.

    (p.s. folks, don’t believe any one who lectures you that the central banks control the financial markets – let alone the real economy – it’s total nonsense.)

    No the Fed doesn’t control the financial markets; it’s the Capitalist owners of the Fed who control the financial markets.

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