Right now airlines, cruises, oil, casinos, and banks are getting hammered. No one is going to step foot on a ship for months. Oil companies were racking up huge debt and a few months ago just starting to look ok. With oil sub 30 they have to be bleeding. Banks are going to get creamed once this sinks in for an extended period. There's no way some of these companies are going to survive this slowdown/quarantine.
Life will go on for sure.. panics happen more frequently then people realize...check back in 1 month and see if the market stills exists.....they say don't trade as if it's the end of the world because that only happens once
Concern over the decline is understandable, with all the debt and leverage. But years ago a 25% dip was more-or-less routine and considered mere "noise".
This is why the ongoing, and as of this morning, enhanced REPO has been going on. There are major solvency troubles somewhere, and banks don't know who's holding the paper so they won't lend to each other without raising ultra-short term rates... in came the Fed to do the only thing they can... provide the illusion of control over short-term rates. And THEN came Coronavirus and oil into the playing field.
Thanks, that's exactly what I was wondering. I saw the repo amount and it looked insanely high but wasn't sure if that was preventative or a reaction to something ongoing. My guess is it should show up soon.
Yes, great post. There's a multitude of factors all coming into play all at once. So far FED actions haven't done anything either, plus market's were already primed for an excuse to go down.
It's not the end of the world. It's certainly not ebola. But the effects of this type of panic is going to have serious effects that haven't come to fruition yet. Florida said if you stepped off an international flight, stay home for 14 days. NYC says dont go to work. When was the last time you saw this? Not in 2000 and not in 2008. If this spreads toward the midwest its going to be a big problem.
Credit Default Swaps, my friend. I wish that I had more visibility into them; but, IB doesn't seem to offer pricing. If anyone knows where I can get some charts/prices on CDSs, I'd appreciate it.
This is what happens when you have the fed propping markets up, a simple recession every few years with a market drop of 15-30% should the norm, but when 11 years of solid straight gains is the only thing people understand, days like today feel like the coldest darkest place one can be. These drops should be more frequent but when you have the fed bowing to wallstreet this is what you get!!