## Corona and Stockmarkets...

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• 7.9k

Why do you think that neither party wants Bernie?

Sickening.
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If Martha Stewart deserved prison time...
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Price of gold is shooting up. That reflects the fact that the dollar is being destroyed. Mnuchin said the total bailouts are adding up to $6 trillion. There's no corresponding increase in productivity or actual wealth. The dollars in your pocket are simply worth less ... soon to be worthless. Or then the loonies of Modern Monetary Theory are correct and I and you are wrong. What has to be understood that in the end this con game the end, a monetary crisis, is about the credibility of the currency and about inflation. Now if inflation would start picking up...that would be a sinister sign. But I think it won't. You see, the money goes only to the rich and connected. It goes to prop up corporations. That's the secret. But this can indeed change if or when those trillions start flooding the real economy. But that can take time as otherwise things are quite deflationary now. • 6.7k Price of gold is shooting up. That reflects the fact that the dollar is being destroyed. Mnuchin said the total bailouts are adding up to$6 trillion. There's no corresponding increase in productivity or actual wealth. The dollars in your pocket are simply worth less ... soon to be worthless.

The price of gas is down and we can celebrate! There's no sports, we need to celebrate something. In this case we're all winners and we can all celebrate together.

Now, which politicians have that information first?ssu

That information cannot be characterized as knowledge of an impending stock market crash. In hind sight you say it is, but predictions are excellent in hind sight. That the virus posed a huge threat was common knowledge, reported in the media. We went through this already with SARS, but that threat didn't materialize in the same way as this one. But this demonstrates that there is no necessary relation between the information and the crash. That some people were lulled into complacency, perhaps because we were so successful against SARS, doesn't nullify the fact that the threat posed by the novel coronavirus was public information well before the market crash.

Do you recognize that the real crash did not occur until the drop in oil prices? If you're looking for verifiable insider trading you should look to see who had information on the events which caused the oil price drop. There are verifiable events here, rather than the fears and suspicions involved with the virus. The virus is a red herring. The dip prior to the oil price drop, which is blamed on coronavirus, may have actually been caused by those people exiting, with inside information about the coming oil price drop.

And in the end it ought to be the voters who decide what to do, if nothing is done and it's just business as usual. Unfortunately these kind of things will just die out because there is much bigger news. And the real corruption will happen when giving those trillions away of the freshly created money.ssu

It is just business as usual. Why fuss over it now?
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The virus is a red herring.
Really?

Like Senator Burr after an closed door representation of the virus dumping ALL OF HIS STOCK PORTFOLIO?

If you think that is normal, you don't know anything about investing? Normal would have been to sell 20% or even 50%, if the economy is in high gear. Dumping everything is not normal, actually.

When the politician Burr was briefed by Fauci and others, it's obvious that the "lock down" option was explained. And this is where the inside information comes into existence: Burr as head of the Intelligence Committee (and others like Feinstein) had then a pretty clear idea what the US government / states has to and would do. Fauci and others could (and likely did) clearly say then what they know have said that the US isn't prepared. And when Burr himself behind closed doors talked to others, he compared the virus to the Spanish flu.

As I said to Benkei, there's a way to discipline members of the Congress and this case it should be looked at. Burr can explain his innocence. How it goes who knows. And will the voters notice? Unlikely.

Actually it's refreshing to put a clip from FOX NEWS to show that even they can a little bit of journalism sometimes, even if the tone isn't the best in my view:

It is just business as usual. Why fuss over it now?
Many will agree with you that it's business as usual! But I don't know if that's sarcasm to you. Or just trolling.
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The price of gas is down and we can celebrate! There's no sports, we need to celebrate something. In this case we're all winners and we can all celebrate together.

Ok that is a good point. There's deflation in most commodities; but gold is going up. As a striking contrast, silver went way down and the gold/silver ratio as I understand it is at record levels. I should mention I'm not a gold bug or gold nut, but I do keep an eye on what's going on.

Silver, and oil, and most other commodities, reflect the expected state of the economy. Industrial stuff, the stuff you use to run the world, is falling in price. There's no demand. Everyone's hunkering down. In fact even dropping helicopter money on businesses won't help because there's nobody to buy their products. There's a demand crash. So everything useful is going down.

But gold is going up. Because while there's some amount of industrial use for gold, the main use is to serve as a collective measure of confidence in paper money. Even though the dollar is up against all the other currencies, it's down against gold. Short term, the US dollar is always the safest asset in a crisis. Long term. all this printing is going to crash the dollar sooner or later.

That's what I think's going on.

I drove around downtown in my little town today on the southern California coast. It's a ghost town. Restaurants and shops. All those small business people and their workers out in the cold, no income, no answers, no help. Meanwhile Nancy Pelosi is jamming abortion and DACA and green new deal and every other line items of the social justice agenda. Of course the GOPs are a little too pro-business.

Personally I'm steamed that the airlines, to pick one industry, all plowed their profits into stock buybacks the last ten years; and now they want a bailout. We should have let the incompetent greedy banks fail in 2008 and we should let the incompetent greedy airlines fail today. Because when we don't, we create a moral hazard. The bank bailout of 2008 now turns into the everything bailout of 2020. Socialism for the rich, capitalism for the poor.

No wonder the kids are angry.
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Or then the loonies of Modern Monetary Theory are correct and I and you are wrong.ssu

Yes. Some Very Smart People think that the wealth of a nation comes from its ability to print currency. If I think that's insane and Paul Krugman thinks it's perfectly correct; then what razor can decide who's sane and who's insane? He has a Nobel prize in economics, right? Which tells you more about the Nobel prize in economics (which is not actually a Nobel prize) than it does about the estimable Paul Krugman.

What has to be understood that in the end this con game the end, a monetary crisis, is about the credibility of the currency and about inflation. Now if inflation would start picking up...that would be a sinister sign.

But I think it won't.
ssu

Gold crashed the first day of the DOW crash but it's up sharply. I think people are going to bet on big inflation as the Fed and Congress flood the country with what Ben Bernanke called Helicopter money.

You see, the money goes only to the rich and connected. It goes to prop up corporations. That's the secret. But this can indeed change if or when those trillions start flooding the real economy. But that can take time as otherwise things are quite deflationary now.ssu

Yes. This is the continuation of the fraud perpetrated on the public in the 2008 bailout. The moral hazard was created and now every big company in America is "too big to fail." You know airlines have always failed. TWA, Pan Am, Pacific Southwest. But now the airlines plow a decade's worth of profits into stock buybacks and now demand a public rescue for their greed and incompetence. It's obscene. If the people understood this they'd march on Washington with pitchforks. Or, as I fear, they DO understand this and are resigned to it, as the citizens of the Soviet Union became resigned to their fate until the regime collapsed of its own weight.
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Gold crashed the first day of the DOW crash but it's up sharply. I think people are going to bet on big inflation as the Fed and Congress flood the country with what Ben Bernanke called Helicopter money.

Yes. This is the continuation of the fraud perpetrated on the public in the 2008 bailout.
Yes, it is.

Inflation didn't happen after 2007-2008 in the "Great Recession". Neither it happened in economic crash of the 1990's in my country (and other Nordic countries), which was a classic speculative bubble that started from deregulation of banking and ended in a banking crisis. In both cases many thought that inflation would kick next in. Others thought that deflation would happen. Either didn't happen. What simply happened is that the money stayed propping up the banks first stayed in the banks (with the banks sitting on the money as Uncle Scrooge) and then raised the prices stocks and financial instruments, created asset price inflation. That was different from classical inflation.

Now it's interesting what will happen when again trillions are poured into the system. Those money given to people will likely be either saved or with the poorest people spent on necessities. But here's the interesting million dollar question: if and when this pandemic is over, will the economy get going again. Or has the corona-virus shown that there wasn't any recovery and we will just continue having the Japanese-disease in our economy of low to negative growth?

Or will this spending with the recession create finally a dollar crisis?

But now the airlines plow a decade's worth of profits into stock buybacks and now demand a public rescue for their greed and incompetence. It's obscene.
Ah. Good that you mentioned those stock buybacks. Think about all that money wasted in propping up the stock prices by stock buybacks, so the managers can get money from their options. And now they have disappeared into thin air. And all those index funds that have been propping up the price of Apple and Google and the like. Ouch! And of course, that's the thing Trump and his supporters are worried about.
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Many will agree with you that it's business as usual! But I don't know if that's sarcasm to you. Or just trolling.ssu

It's neither sarcasm nor trolling. There's nothing new here. It is business as usual.
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Inflation didn't happen after 2007-2008 in the "Great Recession".ssu

Yes thank you for reminding me. Excellent point. Many people, myself included, believed QE1, 2 and 3 would blow up the dollar and send gold to the moon. Instead, gold peaked in 2011 and has been way down and sideways since then. Somehow the system accommodated all the money printing. And instead of inflating consumer goods, they inflated stocks and real estate and corporate profits. Part of the economy did really well, and other parts, mostly populated by the deplorables, didn't. No wonder Trump got elected.

But your point means that we must consider, what if they get away with it again? What if they inject another six trillion dollars of funny money into the economy and the rich keep getting richer and they still don't blow up the dollar? How long can this go on?

Keynes said: "Markets can stay irrational longer than you can stay solvent!" Smart guy.

N
either it happened in economic crash of the 1990's in my country (and other Nordic countries), which was a classic speculative bubble that started from deregulation of banking and ended in a banking crisis. In both cases many thought that inflation would kick next in. Others thought that deflation would happen. Either didn't happen. What simply happened is that the money stayed propping up the banks first stayed in the banks (with the banks sitting on the money as Uncle Scrooge) and then raised the prices stocks and financial instruments, created asset price inflation. That was different from classical inflation.ssu

Yes, for some reason the ultimate crash just never happens. Maybe they really can borrow and print their way to prosperity. It's been working far longer than you'd think it could.

Now it's interesting what will happen when again trillions are poured into the system. Those money given to people will likely be either saved or with the poorest people spent on necessities. But here's the interesting million dollar question: if and when this pandemic is over, will the economy get going again. Or has the corona-virus shown that there wasn't any recovery and we will just continue having the Japanese-disease in our economy of low to negative growth?ssu

One theory is that the stock crash isn't about the virus at all. The market was in a huge bubble and if it wasn't the virus it would have been something else. Blowing 10,000 points out of the DOW was a much-needed pressure relief. In which case this might just be the start of the next leg up! Or maybe this is just the start of the great crash and the world economy's gone for good, and all the printing in the world won't help. Nobody knows. Could go either way.

This massive corporate bailout though. I think there will be a lot of unintended consequences. You can't just keep subsidizing bad corporate behavior like this. It's far worse than the 2008 bailout.

Or will this spending with the recession create finally a dollar crisis?ssu

Paradoxically, at times of crisis everyone flees into dollars. All the other fiat currencies are in even worse shape. How long this insanity can go on, nobody knows. Maybe it really is time to buy Bitcoin.

Ah. Good that you mentioned those stock buybacks. Think about all that money wasted in propping up the stock prices by stock buybacks, so the managers can get money from their options. And now they have disappeared into thin air.ssu

I opposed the 2008 bailout. I was for actual capitalism. Let the "too big to fail" banks fail. If they managed their affairs in such a way as to not be able to continue to be in business, let them be liquidated and their assets absorbed into more profitable and sound companies. That's exactly how it's supposed to work.

Instead, the system propped up and rescued the worst operators, who learned the lesson that crime pays. They kept on doing what they were doing, and now not only the banks, but every other company overloaded with debt is lining up for a bailout.

I think the consequences of this are not going to be bad. But as you say, I thought the consequences would be bad in 2008 but the powers that be seem to be gliding along on a magic carpet of money printing.

I have a friend who inherited a lot of money and put it all into gold in 2009. He wakes up every day and checks to see if the global economy blew up yet. This time he may be right. Who's to say.
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One theory is that the stock crash isn't about the virus at all. The market was in a huge bubble and if it wasn't the virus it would have been something else. Blowing 10,000 points out of the DOW was a much-needed pressure relief. In which case this might just be the start of the next leg up! Or maybe this is just the start of the great crash and the world economy's gone for good, and all the printing in the world won't help. Nobody knows. Could go either way.

Right, the market was a huge bubble set to burst. The real drop was triggered by Russia's refusal to cooperate with OPEC, Friday March 6, which sent the price of oil into the basement. Planned event? Lots of money to be made. The price of oil has a huge overall significance in the market, and coinciding with corona fears the drop was amplified. Notice the usual rebound now, lots of waves yet to come. Sell high, buy low. Social distancing isn't so bad when you're sitting at home with the same portfolio and lots of cash in the pockets.

This massive corporate bailout though. I think there will be a lot of unintended consequences. You can't just keep subsidizing bad corporate behavior like this. It's far worse than the 2008 bailout.

The problem might be foreign elements in the US markets. With the globalized economy, the factors with the greatest power to influence the markets have moved outside the country. Despite laws against inside trading, conspiracy, etc., much remains an honour system. If you cheat the market, you might get caught, therefore don't cheat the market. Foreigners might play by different rules, if I cheat the market, no one has the power to punish me. It would be a big problem if the US government was channelling huge amounts of money into bailouts, and that money was being siphoned off by foreigners who cheat the market.
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Yes, for some reason the ultimate crash just never happens. Maybe they really can borrow and print their way to prosperity. It's been working far longer than you'd think it could.
That's the view of the Modern monetary theory (MMT) and Chartalism say.

But I firmly believe there is a limit when people simple have doubts or lose confidence in the currency system. But that might be a long way from now. Or not. But then again, it isn't an apocalyptic thing: it's just one of the crisis we experience and wealth just changes hands.

One theory is that the stock crash isn't about the virus at all. The market was in a huge bubble and if it wasn't the virus it would have been something else.
I say it's definitely both. Our system was a reinflated bubble-economy, yet now the stock market is truly responding to events in the real economy.

Rarely do you see stats like this:

I opposed the 2008 bailout. I was for actual capitalism. Let the "too big to fail" banks fail. If they managed their affairs in such a way as to not be able to continue to be in business, let them be liquidated and their assets absorbed into more profitable and sound companies. That's exactly how it's supposed to work.
I was too, with the exception that ordinary people with bank accounts up to 200 000$would have been guaranteed by the Fed printing the money at the last case. I would have been for that horrific -20% deflation and shock and then have. The have bankers (banksters) who broke the existing laws worst to go to jail. That would have sent a message not only to the financial community, but also to the people. The close it came was that the Fed looked at the "Nordic Model" of rearranging the banking system. That they didn't do. Wall Street was in charge, literally. Nobody went to jail except a con-man that simply was fed up of lying to the World. He too would likely have gone as nothing has happened, if only he would have denied it and gotten some of that bailout money. It's real ugly when you think about it. And they are now trying to do the same thing: keep alive a bursting bubble. • 1.4k That's the view of the Modern monetary theory (MMT) and Chartalism say.ssu Very interesting reading! MMT is neo-chartalism. Today I learned! I actually understand MMT a bit now. Maybe they do have a point. Thanks for the links. I ran across something of great interest. I saw a video of a guy who's figured out why the 2008 bailout didn't crash the dollar and paradoxically led to a strong dollar. In a nutshell the thesis is that even though the Fed was printing like crazy, every other central bank is printing like crazy too. Since the dollar is still the reserve currency, all international debts settle in dollars creating great demand for dollars, the least-weak paper currency. Hence a strong dollar and a strong American stock market. He thinks the same thing will happen with the current bailout, and lead to a stronger dollar and a strong American stock market for another two or three years. After that, when the world finally moves off the dollar ... look out below. The guy's name is Brent Johnson. Here's the video. I don't know if this is true or not, he's just some guy with an opinion. It seems to explain 2008 though. https://www.youtube.com/watch?v=PWVRWUkm54M Rarely do you see stats like this:ssu My little coastal town's a ghost town. It's shocking. I went for a walk yesterday, easy to social distance since hardly anyone was on the street. Normally this time of year they're getting ready for summer and people are walking around buying stuff and eating at the many restaurants. Now everything's closed except for a few restaurants that have takeout, but there are no customers. It's awful. Multiply this by the entire country and this is truly a disaster. My heart goes out to everyone who lost their job because of this. These are all little people, store workers and small business owners.$1200's not going to save these people's lives and businesses. And what happens to state budgets when tax collections are down and welfare and unemployment spike through the roof? How bad is this going to get?

I was too, with the exception that ordinary people with bank accounts up to 200 000$would have been guaranteed by the Fed printing the money at the last case. I would have been for that horrific -20% deflation and shock and then have. The have bankers (banksters) who broke the existing laws worst to go to jail. That would have sent a message not only to the financial community, but also to the people. The close it came was that the Fed looked at the "Nordic Model" of rearranging the banking system. That they didn't do.ssu Yes didn't Iceland or somebody just let the banks fail and now they've come through the crisis in better shape? In the US we just papered it all over, created a huge moral hazard, and now here comes yet another bailout. Wall Street was in charge, literally. Nobody went to jail except a con-man that simply was fed up of lying to the World. He too would likely have gone as nothing has happened, if only he would have denied it and gotten some of that bailout money. It's real ugly when you think about it. And they are now trying to do the same thing: keep alive a bursting bubble. ssu Well they just did it. We'll see what happens. The media are shrieking every day and reporting the death numbers and everyone's just whipped up into a hysteria and they just snuck in this corporate bailout and I can personally see my entire town shut down except for grocery stores and gas stations. Is this the end? Time to build a bunker, or what? • 2.3k Very interesting reading! MMT is neo-chartalism. Today I learned! I actually understand MMT a bit now. Maybe they do have a point. Thanks for the links. Yep. Our whole financial system is so f*ed up that as crazy it may sound, they may have a point. But perhaps up only to a point I would argue. But I may be wrong. Yes didn't Iceland or somebody just let the banks fail and now they've come through the crisis in better shape? In the US we just papered it all over, created a huge moral hazard, and now here comes yet another bailout. Yes. Iceland is a great example. Estonia is also: they let the free market mechanism handle it and they had a quick and very sharp recession and then things got better. With stimulus and bail out you get the zombie economy of Japan. Here's a great short recap on what happened to Iceland when they didn't choose the "socialism for the few rich"-option: Unfortunately those that argue for free markets seldom argue for the same mechanism to carry us out when bad times come (and hence the bail out those who created the bubble). My little coastal town's a ghost town. It's shocking. From which we come to a really callous and despicable topic specifically on this thread: We may be soon coming to the best possible moment to buy stocks ever in our lifetime, perhaps. Who knows when exactly, this summer or next year? Or are we seeing the bottoms because of helicopter money? I don't think the last option is probable. Because even if now you don't have blood on the streets, you do have a shock quite the same. Never in our lifetime has the economy been literally shutdown. All around the World. Yet we know that the pandemic will go away. The economy will open afterwards to people who are quite timid people and living in an economic depression, but we will get through this and the economy will come back. Many people understand this. But when they are at the verge of bankruptcy or in bankruptcy, those assets will have to be sold on the cheap. And that's what economic depressions are: events where huge transfer of wealth takes place. I remember my great aunt, a real-world example of the classical stereotype of a stingy landlady. She went during our 90's economic depression into these compulsory auctions of homes organized by the authorities. She didn't buy any of the flats back then, a few did with usually a person from the bank in the end buying it back to the bank. Years later we would be walking in the city center of Helsinki and she point out at these old expensive apartment buildings "Here was a lovely two-room flat being auctioned only for X marks. I wish I would have bought it back then!" (A good motto for the times?) I got worried about the financial state of the World in 2007 thanks to this forum (or basically the precursor of it) because of a great warning from an intelligent poster (although I don't remember who it was). So I do respect people here for their intelligence and knowledge. Also when philosophy loving people here started a thread about "Cryptocurrencies", I thought this itself was a alarm bell that it was the highest point of the bubble (like the saying "taxi drivers giving you stock advice"). It seems to have been that time then. • 1.4k Right, the market was a huge bubble set to burst. The real drop was triggered by Russia's refusal to cooperate with OPEC, Friday March 6, which sent the price of oil into the basement. Planned event? Lots of money to be made. The price of oil has a huge overall significance in the market, and coinciding with corona fears the drop was amplified. Notice the usual rebound now, lots of waves yet to come. Sell high, buy low. Social distancing isn't so bad when you're sitting at home with the same portfolio and lots of cash in the pockets. People have been predicting the burst of this 2008 Fed-induced bubble since 2008! The virus was a convenient excuse. If it had collapsed of its own weight, which it was about to do any day now regardless of the virus, then the bankers and the Fed would have been blamed. Now the virus is blamed ... and they did yet another identical money-printing bailout of the bankers only this time much larger. And out of thr$2.2T they graciously threw in $360B for the proles. That's 300 million people times$1200 each, that's my rough estimate. The actual number's probably a lot smaller. What a swindle and what a scandal. They're blowing an even bigger bubble leading to an even worse crash down the road.

The problem might be foreign elements in the US markets. With the globalized economy, the factors with the greatest power to influence the markets have moved outside the country. Despite laws against inside trading, conspiracy, etc., much remains an honour system. If you cheat the market, you might get caught, therefore don't cheat the market. Foreigners might play by different rules, if I cheat the market, no one has the power to punish me. It would be a big problem if the US government was channelling huge amounts of money into bailouts, and that money was being siphoned off by foreigners who cheat the market.

The Davos crowd. George Soros blowing up the economy to screw Trump. The Illuminati. Who the hell knows. But the DOW was definitely ripe for a sharp drop. A lot of smart people were selling in January, you didn't have to be a Senator to see this coming one way or the other.
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People have been predicting the burst of this 2008 Fed-induced bubble since 2008!
And that's the problem.

It was 12 years ago. 12 years is quite a long time in the lifespan of anybody. And typically the forecasters can be divided into "bears" and "bulls" that unfortunately turn into permabears and permabulls, talking just to a specific crowd that either wants to be pessimistic or optimistic. It's hard first to paint a picture of doom & gloom and then suddenly change it to a rosy dawn with great optimism. Or vice versa. I remember this one commentator I've followed who was very bullish about gold (before and in the start of the great recession), yet then changed his view and finally disregarded the hyperinflation argument. He got at first so much flak from his audience that basically he stopped answering questions of the public.

And people politicize these issues. Those buying gold started to be the Tea-party type libertarians while on the other side the liberals upholded Paul Krugman etc. as real economists to be listened to. The idea of "right" and "wrong" economists isn't the way one should approach these issues: one economist has one point, another has another point. Hopefully we won't see a similar politicization of the response to corona-virus, but those lines can be seen emerging with Trump "let's go back to work" attitude and with his opposition.

you didn't have to be a Senator to see this coming one way or the other.
And will we have a long economic depression or can it be a shorter sharper depression? Is that easy to predict too?
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