Fed buying junk bonds
https://www.cnbc.com/2020/04/09/fed...-its-shopping-list-to-include-junk-bonds.html
Didn't expect that so early, figured they would stick TBills/MBS for a little while longer.
That's just gonna prop the zombies up now to make the economy even more inefficient than it already was.
https://www.cnbc.com/2020/04/09/fed...-its-shopping-list-to-include-junk-bonds.html
Didn't expect that so early, figured they would stick TBills/MBS for a little while longer.
That's just gonna prop the zombies up now to make the economy even more inefficient than it already was.
I have a question, what if the treasury runs an auction now and there just aren't any buyers willing to buy debt .6-1.4%? Or not enough buyers?
The fed then has to buy on the primary market? If there is a liquidity crunch, couldn't this happen fairly easily?
I just thought about it, so could be way off.
The fed then has to buy on the primary market? If there is a liquidity crunch, couldn't this happen fairly easily?
I just thought about it, so could be way off.
LOL!! how many more trillions to get it to 3800?
SPY
6 mth
8 ema
STUNNING WEEK!!!!!!! broke the top of the box and ran, unreal!!!!!
targets:
upside: 50 sma , $289 (note, 50 sma crossed the 200 sma- death cross......the SPY is fighting,...... still breathing)
downside;
1st- $263ish (the top the box, this ceiling is now the floor)
2nd- a zone: $243-$253ish
3rd- $230 ish , gap fill and reverse
4th - $220 ish, cant hold? forms a lower low, all bets are off..........load up the RV
closes the week with an indecision candlestick ...............getting strecthed from the 8 ema
made Golf Digest's top 100 courses , Kauri Cliffs, New Zealand
SPY
6 mth
8 ema
STUNNING WEEK!!!!!!! broke the top of the box and ran, unreal!!!!!
targets:
upside: 50 sma , $289 (note, 50 sma crossed the 200 sma- death cross......the SPY is fighting,...... still breathing)
downside;
1st- $263ish (the top the box, this ceiling is now the floor)
2nd- a zone: $243-$253ish
3rd- $230 ish , gap fill and reverse
4th - $220 ish, cant hold? forms a lower low, all bets are off..........load up the RV
closes the week with an indecision candlestick ...............getting strecthed from the 8 ema
made Golf Digest's top 100 courses , Kauri Cliffs, New Zealand
The (full) interview that Chamath Palihapitiya did today was gold. Left the stooges speechless (although I still like Wapner). Worth a listen if you can find it. There are links to the part where he's good with airlines failing, but the rest of his spiel was great.
“On Main Street today, people are getting wiped out. Right now, rich CEOs are not, boards that have horrible governance are not. People are.”
"You do not make the people whole by plugging corporate balance sheets and buying illiquid financial assets . . . that benefits hedge funds, banks" and "props up zombie companies".
I think he's somewhat regular on CNBC but won't be surprised if they don't hit him up for a while...
“On Main Street today, people are getting wiped out. Right now, rich CEOs are not, boards that have horrible governance are not. People are.”
"You do not make the people whole by plugging corporate balance sheets and buying illiquid financial assets . . . that benefits hedge funds, banks" and "props up zombie companies".
I think he's somewhat regular on CNBC but won't be surprised if they don't hit him up for a while...
Yeah, I just watched it like 20 mins ago. Was gonna come here and link it.
https://www.cnbc.com/2020/04/09/op-ed-get-ready-for-the-recovery-of-the-1percent.html
Maybe Powell will take the foot off the gas sooner than later, but this crap is going to do irreparable damage.
Miners caught a nice bid today...GDXJ back over 35.
https://www.cnbc.com/2020/04/09/op-ed-get-ready-for-the-recovery-of-the-1percent.html
Maybe Powell will take the foot off the gas sooner than later, but this crap is going to do irreparable damage.
Miners caught a nice bid today...GDXJ back over 35.
I think he talked off and on for at least a min of 10 mins. CNBC isn't letting it all out.
I'm finally positive on GDX...hoping this doesn't get crushed when things start to open back up.
I'm a gold bug but now I'm in the process of cashing out $50K from my 401k to grab more physical gold and silver. Silver has finally been coming back around.
That i'll pay a stupid premium even after waiting for a dip. I've been in at least this amount in metals ETFs...but physical is, and will probably be for the foreseeable future be at a premium to the paper.
Will not be surprised have a few days of successive ridiculous limit downs in the next couple of months so the FED can finally be upfront and admit to getting in the equity market.
Game over after that.
Dollar will eventually have no choice to but blow up after months of FED bailing out everything. Probably won't happen until after this year...under Trump's supervision.
they did and the market puked it out. Both cut for a few months. Have no idea what US will do, but shale is in big trouble. Its an industry so levered. I dont know how this ends well. USA as a net exporter was awfully brief. Saudi's r going on a buynig spree too-- bought into sizable positions in Euro oil companies. Nice to be in a big cash position when shit hits the fan
https://www.wsj.com/articles/saudis-take-big-stakes-european-oil-companies-11586382353
https://oilprice.com/Energy/Crude-Oil/Is-US-Energy-Dominance-Coming-To-An-End.html
Is U.S. Energy Dominance Coming To An End?
America’s era of “energy dominance” was brief.
The slogan was always silly. Leaving aside the extensive environmental fallout, the notion that a debt-fueled drilling boom allowed the U.S. to “dominate” energy markets in some way never really made sense. And despite a substantial increase in production over the past decade, activity is and always was connected with the global market – aggressive drilling never insulated the American economy from these global forces, at least not in the way that industry-friendly politicians seemed to think.
But the metric that proponents of the “dominance” mantra often cited was export levels. Indeed, U.S. petroleum import dependence decreased over the past decade and volumes of exports rose. Notably, the U.S. became a net exporter of petroleum products on a monthly basis last September for the first time since 1973, punctuating claims to energy dominance.
But the American shale bonanza was built on a decade of debt, aided by near-zero interest rates and a tidal wave of cash (several waves, actually). The drilling boom was already expected to slow dramatically this year, even before the pandemic.
Now, it is definitively over, at least for a while, and with it goes America’s claim to energy dominance. In its latest Short Term Energy Outlook, the U.S. Energy Information Administration (EIA) predicted that the U.S. “will return to being a net importer of crude oil and petroleum products in the third quarter of 2020 and remain a net importer in most months through the end of the forecast period,” which runs through 2021.
It was only a few months ago that the U.S. became a net exporter. America’s energy dominance didn’t last very long.
The EIA says U.S. oil production could fall by 0.5 mb/d this year, and decline by another 0.7 mb/d in 2021. That’s an annual average figure, masking a 1.75 mb/d drop between March and October. The
Department of Energy cited this data as a justification for why the U.S. doesn’t need to mandate cuts in order to “participate” in the potential OPEC+ agreement. “With regards to media reports that OPEC+ will require the United States to make cuts in order to come to an agreement: The EIA report today demonstrates that there are already projected cuts of 2 (million bpd), without any intervention from the federal government,” the U.S. Energy Department said.
Even that might be on the optimistic end. U.S. E&Ps may cut spending by $25 billion between 2019 and 2020, according to a new estimate from IHS Markit. That could translate into production declines of 2.9 mb/d by the end of the year compared to the first quarter. “The Big Cut is here. The U.S. government can’t order cutbacks like other countries. But economics and the market are mandating dramatic budget cuts that will bring down U.S. production this year,” Daniel Yergin, vice chairman, IHS Markit, said in a statement.
The U.S. oil industry has scrapped 102 oil rigs in just the past two weeks, including 54 from the Permian. Even ExxonMobil, which hopes to consolidate its position in the Permian, is retrenching, slashing spending by 30 percent.
Rystad Energy forecasts a decline in the rig count by 65 percent from mid-March levels. “The speed of this decline exceeds the initial post-oil-price-crash expectations. This is for sure a much faster industry reaction than during the previous US land rig down cycles, and we will likely see continuous downward adjustments of similar magnitude throughout the next couple of months,” says Rystad Energy’s Head of Shale Research Artem Abramov.
Oil prices could yet rebound in the months ahead, not least because so much supply is uneconomical. OPEC+ may or may not come to a global arrangement with the U.S. and other non-OPEC producers later this week, and the U.S. could claim to “contribute” to production declines, but either way supply is heading down.
If WTI were to average $30 per barrel, roughly 40 percent of oil and gas companies would be insolvent in the next 12 months, according to a survey from the Kansas City Fed. Standard Chartered estimates a decline in U.S. oil production by as much as 4 mb/d by the end of 2021 if WTI were to average $30.
In that video what he said seemed to make perfect sense to me. From what I have seen how the bailout money is being spent. So far the little guy is going to get hurt the most. If you have a small business and you are still operating and have revenues and keep your employees you basically get 10 weeks of free money. I had one business owner tell me the pandemic is free money to him.
The next round has to be all about getting checks to the public. The $1,200 isn't going to really cut it. You have professionals like he said like a dentist that was making say $250,000 now making basically zero. There are all kinds of jobs like that that have been hurt. Checks to individuals will go right back into the economy.
I also agree with letting companies go bankrupt. Take the oil industry. Some company owes $100 million and needs oil to be at pick a price...$35 a barrel to be profitable. They go bankrupt and someone comes in and buys the assets for $20 million. They might only need oil to be $20 a barrel to be profitable. Who lost? Banks or investors. Who wins....people that buy oil for cheaper.
We cant possibly bailout every industry and company like he said. The 2008 meltdown was a much more confined virus....in terms of industries most effected.
The next round has to be all about getting checks to the public. The $1,200 isn't going to really cut it. You have professionals like he said like a dentist that was making say $250,000 now making basically zero. There are all kinds of jobs like that that have been hurt. Checks to individuals will go right back into the economy.
I also agree with letting companies go bankrupt. Take the oil industry. Some company owes $100 million and needs oil to be at pick a price...$35 a barrel to be profitable. They go bankrupt and someone comes in and buys the assets for $20 million. They might only need oil to be $20 a barrel to be profitable. Who lost? Banks or investors. Who wins....people that buy oil for cheaper.
We cant possibly bailout every industry and company like he said. The 2008 meltdown was a much more confined virus....in terms of industries most effected.
I think they have to bailout 'little guys' rather soon if they don't want to see another housing meltdown. The crisis has spilled over to mortgage market. Homeowners in some states can defer payments for 3 months - but they have to come up with a balloon payment in the 4th month to stop the mortgage to switch to 'default'.
The government has set a new precedent. They can stop/start the economy as they wish. They can't blame anyone.
This is a government mandate shutdown. They will have to backstop everyone, foods/utilities/healthcare/education/housing...etc.
We're living in a Bernie Sanders' dreamland.
The government has set a new precedent. They can stop/start the economy as they wish. They can't blame anyone.
This is a government mandate shutdown. They will have to backstop everyone, foods/utilities/healthcare/education/housing...etc.
We're living in a Bernie Sanders' dreamland.
Nice work Pats Fan - that is a great interview with Chamath i like what he had to say....Watch out for zombie companies with unsecured debt - love it ....I amd personally looking for companies with no Debt and lots of cash on the books
He also goes on to say Nobody knows what will happen there are no guarantees of safety!
make products locally and keep locals employed
Balance sheet does not really matter. The Fed can monetize entire bond market. Sovereign countries that has trade surplus with the US still bid for T-bonds. It's a spreadsheet operation for them, moving $ from a checking to a saving account. The Fed will be buying a lot of T-bonds in coming years so the government can bail out everyone. Their priority is trying to keep everything afloat.
They have done too much damages to the economy, it will take years to return to pre-coronavirus level. COVID-19 is just one of many issues now, we're dealing with high unemployment/social unrest/mental health/food insecurities...etc. Universal income could be coming rather soon. Lots of jobs in airlines/cruiselines/retails/movie theaters/theme parks/restaurants... will disappear for good.
They have done too much damages to the economy, it will take years to return to pre-coronavirus level. COVID-19 is just one of many issues now, we're dealing with high unemployment/social unrest/mental health/food insecurities...etc. Universal income could be coming rather soon. Lots of jobs in airlines/cruiselines/retails/movie theaters/theme parks/restaurants... will disappear for good.
