The Fed went all in and it is not getting the effect that was expected

[Krugminator2]

50 day moving average of the Dow shows a drop comparable to December 2019. And it came right back.

100 day moving average is potentially a little more troubling, but still similar to Dec 2019.

Those two times are not even close.

I traded through that time and made a zillion posts on here during that time. That was a fierce decline. That was was about 1/3 as severe as this. That was a little baby move. Yesterdays move alone was bigger as a percentage to the entire death drop part of 2018 which lasted nine days.

[Bern]

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

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

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

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

https://www.bloomberg.com/news/artic...it-market-rout

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

[Brian4Liberty]

Ya I think they did it because they anticipated a run.

When the general public is living paycheck to paycheck, and is net in debt, with credit cards, car loans, student loans, etc, is it possible to have a run on banks? They don’t have any savings to pull out of a bank.

[Brian4Liberty]

Those two times are not even close.

I traded through that time and made a zillion posts on here during that time. That was a fierce decline. That was was about 1/3 as severe as this. That was a little baby move. Yesterdays move alone was bigger as a percentage to the entire death drop part of 2018 which lasted nine days.

I realize that. Did you look at a 50 day moving average chart?

My point remains the same though, regardless of which crash we are talking about. One day does not tell the whole story. The market could set a record going down one day, and a record going up the next. The net move over time is more important.

Yes, in this crash, the net is moving down, severely. But at the moment the DOW is up 650. And the question is will there be a V shaped recovery within the year?

[oyarde]

When the general public is living paycheck to paycheck, and is net in debt, with credit cards, car loans, student loans, etc, is it possible to have a run on banks? They don’t have any savings to pull out of a bank.

That is a legitimate point . Hard to say . Take me as an example . i am retired , don't draw social security or a pension but i still probably dump 37k a yr in a checking or savings account that i later convert to silver or gold after utilities and property taxes. Some people park money there , more now than a month ago because of the amount of stock that has been sold.There are probably more people in cash now than in a long time .

[H_H]

except chicken liver

I love the stuff, so that works.

Chicken is pure estrogen, 3pO. Good if you're going for a tranny transition; bad if you're looking to up your benchpress numbers.

[H_H]

Wife will be gone over the weekend so I'll see what I can find in the woods.

Word on the street is very low estrogen in squirrel.

[Madison320]

I agree. This flu bug will run its course and the market will spring back up like a dandelion.

But they do a flu bug scare yearly. The H1N1 was far worse, but it didn't affect the market like this. This market is existing volatility looking for an excuse. Confidence is back to zero. Everything's overvalued and everyone knows it.

Just like in 2008. These shocks are a sign. The actual crash is coming. Yeah, the mainstream media says three biggest crashes ever like the dollar amount means something. Comparing this to 1929 by the numbers is comparing pennies to dollars. These are just volatility--a symptom. The real crash is coming.

Most happen in late September or October, some in late April or May. Will they be able to blow the bubble back up after that one?

The problem is that our economy is the weakest it's ever been in history if you use debt as your weakness gauge.

[Okie RP fan]

The Fed blew their load less than a minute in. Now they have nothing left.

And all this means for the rest of us is that we're screwed.

Can be the quickest way to civil war, which may be the exact thing the powers that be want out of all of this. You know, population control and all that jazz.

[Slave Mentality]

The Fed blew their load less than a minute in. Now they have nothing left.

And all this means for the rest of us is that we're screwed.

Can be the quickest way to civil war, which may be the exact thing the powers that be want out of all of this. You know, population control and all that jazz.

It looks like your prediction is accurate so far. The fed blew their wad, the market rebounded little (dead cat style), and now the reality of people not working will set in. A hungry man is a desperate man.

[Okie RP fan]

It looks like your prediction is accurate so far. The fed blew their wad, the market rebounded little (dead cat style), and now the reality of people not working will set in. A hungry man is a desperate man.

Yep. It all happened so quickly that I've come to two conclusions: they've bene planning this and achieved the effects they wanted or they are so stupid and panicked and are now left with their thumbs up their butts wondering what comes next.

[rosenfield]

Oh i think there plenty of room to drop further... trying to stave off panic but am honestly concerned with how much further this can drop. Next comes the real estate market along for the ride.

Do you think that the next dump of the market will be in real estate? Perhaps this will be a good reason to buy while cheap?
A month ago, I almost bought an apartment in Europe at https://korter.ro, but the situation quickly changed, I heard that in some countries the showing of apartments was stopped altogether. I do not know what will happen next, and it is difficult to accept the decision now.

[oyarde]

Do you think that the next dump of the market will be in real estate? Perhaps this will be a good reason to buy while cheap?

So far I do not expect to see that . It would take several months for real estate to show lower I think.

[sam1952]

Do you think that the next dump of the market will be in real estate? Perhaps this will be a good reason to buy while cheap?

Yes, I expect real estate to follow. No homes are being shown. Peoples investments are losing value. The real estate market where I am is at a stand still. The only positive is people are remortgaging their homes with the lower interest rates.

[rosenfield]

So far I do not expect to see that . It would take several months for real estate to show lower I think.

Yes, I expect real estate to follow. No homes are being shown. Peoples investments are losing value. The real estate market where I am is at a stand still. The only positive is people are remortgaging their homes with the lower interest rates.

Thank you both for yours opinion!

[BortSimpson]

Do you think that the next dump of the market will be in real estate? Perhaps this will be a good reason to buy while cheap?

I see others have responded and I'll throw another opinion out there. DISCLAIMER: I'm no expert, so make your own judgments about what I'm saying.

I think real estate will dump but I wouldn't buy right now. With all the moves the Fed is making these days, it's going to cause prices to rise (potentially massively). That will cause interest rates to move way up and, thus, housing prices way down. If you're in a good financial position at that point, then you can consider buying. (Note that government may try to bail it out again but I can't imagine it will work again. That card has already been played).

In the meantime, I think you'd be better off investing some money in precious metals (which should go up as the Fed prints more and more money).

[Bern]

Fed balance sheet 3/26/2020: $ 5.302 T. Roughly $600 billion dollars more than last week. I wonder if it hits $6T next week.

[oyarde]

Fed balance sheet 3/26/2020: $ 5.302 T. Roughly $600 billion dollars more than last week. I wonder if it hits $6T next week.

I wonder what it will be this time a yr from now .