We are so screwed!

[Spekulatius]

Wow, Trump is really showing his lack of ability. “How not to lead a nation” on display here.

 

He is putting a lot of effort into juicing the stock market, even though we know what the stock market can well take care of itself when everything is running along nicely. It’s his outer scorecard.

 

The interest rate cut don’t surprise me, but the extend of it did. I expected a 0.75% cut,  it they shot the entire wad. maybe we go negative next?

[Castanza]

*RuleNumberOne has entered the chat  :P

[Dalal.Holdings]

Monetary Policy has hit its limit.

 

What we need is fiscal spending on the order of 1940s--why not? Gov't can borrow at like 1% for 30 years and spend on infrastructure, etc. That might be what actually causes inflation to occur in the end.

[mcliu]

Fiscal might not work right now since you want people to social distance, isolate, stop spread of virus. Maybe after virus goes away, fiscal will provide a big boost.

Right now you want people/companies to borrow and extend debt maturities, lower borrowing costs, get enough cash to sustain themselves until the virus is contained.

[no_free_lunch]

I guess it is possible that markets close.  It happened post 911 but only for a week. I believe that was prompted in part by concerns of a follow up attack. In this case I don't see it happening.  Things will have to get much worse.  They didn't close down during the second world war, is this really worse than that event?  The markets didn't close for the Spanish flu either.

[alwaysdrawing]

unless you are already 100% cash, how can you prepared for that?

 

Cash, treasuries, long term puts.

 

 

[Jurgis]

Monetary Policy has hit its limit.

 

What we need is fiscal spending on the order of 1940s--why not? Gov't can borrow at like 1% for 30 years and spend on infrastructure, etc. That might be what actually causes inflation to occur in the end.

 

They should do infra. But they can't really do infra or anything economy boosting until the pandemic has passed. OK, they can actually throw money on producing tests and building ICU units in 2 days like China did... They could throw money at delivering meals to people who are out of work because of shutdown and quarantine (assuming there's a way to do it safely). Possibly would cost less and deliver more than just cutting the rates. BWDIK.

[Dalal.Holdings]

Monetary Policy has hit its limit.

 

What we need is fiscal spending on the order of 1940s--why not? Gov't can borrow at like 1% for 30 years and spend on infrastructure, etc. That might be what actually causes inflation to occur in the end.

 

They should do infra. But they can't really do infra or anything economy boosting until the pandemic has passed. OK, they can actually throw money on producing tests and building ICU units in 2 days like China did... They could throw money at delivering meals to people who are out of work because of shutdown and quarantine (assuming there's a way to do it safely). Possibly would cost less and deliver more than just cutting the rates. BWDIK.

 

Exactly--healthcare infra. Maybe subsidize delivery boys with sterile gloves on for groceries/restauarant to keep those places in biz. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable.

[rb]

Exactly--healthcare infra. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable.

I don't know how to do the guy that rolls around, so just LOOOOL!!!

[Kaegi2011]

I'm not suggesting that closing down is **likely** - but it has entered my mind as a possibility.  Again, the argument isn't an economic one as much as a political one.  I don't know if Trump can do it, but if he can, it would be a good move.  Shut the markets (all of them) until 6 weeks from now, and when deaths and new cases are declining reopen.  If I were in his shoes, I'd at least explore that option.  What does he have to lose?  The news about the market is drowning out his message, which is that everything is great.  Better to get that out of the way so he can dominate the headlines. 

[alwaysdrawing]

Exactly--healthcare infra. Maybe subsidize delivery boys with sterile gloves on for groceries/restauarant to keep those places in biz. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable.

 

Why would the Democrats bail out Trump here?  The Dems will pass whatever they think will help, and the GOP will take it or leave it, and then face the voters. 

 

Anyone who thinks big business shareholders are gonna get bailed out by the Democratic controlled House in an election year...please write puts.

[Read the Footnotes]

Monetary Policy has hit its limit.

 

What we need is fiscal spending on the order of 1940s--why not? Gov't can borrow at like 1% for 30 years and spend on infrastructure, etc. That might be what actually causes inflation to occur in the end.

 

They should do infra. But they can't really do infra or anything economy boosting until the pandemic has passed. OK, they can actually throw money on producing tests and building ICU units in 2 days like China did... They could throw money at delivering meals to people who are out of work because of shutdown and quarantine (assuming there's a way to do it safely). Possibly would cost less and deliver more than just cutting the rates. BWDIK.

 

Agree. We need a wartime mobilization for the health of the citizenry and not bad for the economy either.

 

Also, in wartime, people grew victory gardens and organized themselves and mobilized themselves. Please try to think about ways you can help or we can help. Time to start contributing and stop waiting on the calvary to arrive, I am especially looking at you small government types  ;)

[Dalal.Holdings]

Exactly--healthcare infra. Maybe subsidize delivery boys with sterile gloves on for groceries/restauarant to keep those places in biz. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable.

 

Why would the Democrats bail out Trump here?  The Dems will pass whatever they think will help, and the GOP will take it or leave it, and then face the voters. 

 

Anyone who thinks big business shareholders are gonna get bailed out by the Democratic controlled House in an election year...please write puts.

 

True dems have control, but dems have wanted infra spending. They may not want to bail out Trump, but if this becomes a systemic crisis they will have to act. In Sept 2008 when Lehman failed and Obama was debating McCain, Pelosi approved Bush admin bailouts (after it came up to vote for a second time).

[Viking]

Futures are limit down, interest rates are zero. That went well.

 

Limit down just takes the S&P back to where it was at 3:30 last Friday before the big last half hour ramp.  That move felt unnatural (perhaps short-covering) and was bound to be given back - rate cut or no.

 

This rate cut isn't to help now.  It's to get the economy going again quickly after this virus-induced shutdown of the economy is over - hopefully soon.  Better to do it too soon, than too late.  If too soon, you can always mop it up later.

 

wabuffo

 

Explain to me what economic activity is worthwhile undertaking with 0% risk free interest rates can’t be done with 1%. Europe and Japan went this route and have nothing to show for it, other than the destruction of their financial system. US is probably next.

 

My read is Trump has completely politicized the Fed the past 24 months. His constant intimidation and jawboning has had an enormous effect. The Fed did exactly what the President wanted when he wanted it. Period.

 

The problem is what the president wanted might not be what the Fed should do.

 

The question I am asking is what will Trump do next to get the stock market up? I guarantee you that something is coming. Someone suggested closing the stock market; yes, something crazy like that.  Trump is highly motivated. And he is wickedly creative. And he has nothing to lose. And there is no accountability to anything he does.

 

 

[Kaegi2011]

Trump is highly motivated. And he is wickedly creative. And he has nothing to lose. And there is no accountability to anything he does.

 

All true.  I bet if there's an announcement that the mkts will close for four weeks on Tuesday close, the market will be up.  Anyone who is short will close out the trade, and anyone who's afraid will want to buy.  I think if we were all to make a bet here on short vs. long vs. cash **right now** and keeping with that for the duration the majority would go long (I'd be 50% long, FWIW).  This virus will pass - we just don't know how painful it'll be until then...

[Castanza]

Exactly--healthcare infra. Maybe subsidize delivery boys with sterile gloves on for groceries/restauarant to keep those places in biz. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable.

 

Why would the Democrats bail out Trump here?  The Dems will pass whatever they think will help, and the GOP will take it or leave it, and then face the voters. 

 

Anyone who thinks big business shareholders are gonna get bailed out by the Democratic controlled House in an election year...please write puts.

 

Didn’t that recent bill proposed by the House eliminate pretty much all fiscal responsibility to employees for big business?

[alwaysdrawing]

Didn’t that recent bill proposed by the House eliminate pretty much all fiscal responsibility to employees for big business?

 

I'd view it as the Dems got 90% of what they wanted, and gave up some small concessions.

 

How much payroll tax was cut (the primary GOP policy aim)? 

 

There isn't a bazooka big enough to fix this, and I can't believe the Dems would use it to bail out big business.  Checks to every household maybe....but shareholders????  Good luck.

[Spekulatius]

Monetary Policy has hit its limit.

 

What we need is fiscal spending on the order of 1940s--why not? Gov't can borrow at like 1% for 30 years and spend on infrastructure, etc. That might be what actually causes inflation to occur in the end.

 

They should do infra. But they can't really do infra or anything economy boosting until the pandemic has passed. OK, they can actually throw money on producing tests and building ICU units in 2 days like China did... They could throw money at delivering meals to people who are out of work because of shutdown and quarantine (assuming there's a way to do it safely). Possibly would cost less and deliver more than just cutting the rates. BWDIK.

 

Exactly--healthcare infra. Maybe subsidize delivery boys with sterile gloves on for groceries/restauarant to keep those places in biz. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable.

 

I think that’s a great idea. Set up a system for restaurants to deliver food at no cost, or even pay for the food. It helps the restaurant and gives some jobs to people who are delivering. Most importantly, it would be safer than people venturing out by themselves.

 

Same with for grocery delivery. Some large supermarkets can do it, but only in areas. The government may pay for the delivery as it makes it easier to put up with a lockdown and it is safer for everyone, including grocery workers. I bet that alone would be worth the cost. Better than a payroll tax cut or bailing out the cruise industry for sure.

[rb]

I think that’s a great idea. Set up a system for restaurants to deliver food at no cost, or even pay for the food. It helps the restaurant and gives some jobs to people who are delivering. Most importantly, it would be safer than people venturing out by themselves.

 

Same with for grocery delivery. Some large supermarkets can do it, but only in areas. The government may pay for the delivery as it makes it easier to put up with a lockdown and it is safer for everyone, including grocery workers. I bet that alone would be worth the cost. Better than a payroll tax cut or bailing out the cruise industry for sure.

Isn't that called food panda? I got some tonight.

[james22]

How lame will the next .25% cut seem?

[Spekulatius]

I think that’s a great idea. Set up a system for restaurants to deliver food at no cost, or even pay for the food. It helps the restaurant and gives some jobs to people who are delivering. Most importantly, it would be safer than people venturing out by themselves.

 

Same with for grocery delivery. Some large supermarkets can do it, but only in areas. The government may pay for the delivery as it makes it easier to put up with a lockdown and it is safer for everyone, including grocery workers. I bet that alone would be worth the cost. Better than a payroll tax cut or bailing out the cruise industry for sure.

Isn't that called food panda? I got some tonight.

 

Yes, you can get delivery in some areas, but not where I live. I propose really to encourage the use and subsidize it, plus expand it where it is not available yet. I think even giving away food for free would make sense.

[meiroy]

Didn’t that recent bill proposed by the House eliminate pretty much all fiscal responsibility to employees for big business?

 

I'd view it as the Dems got 90% of what they wanted, and gave up some small concessions.

 

How much payroll tax was cut (the primary GOP policy aim)? 

 

There isn't a bazooka big enough to fix this, and I can't believe the Dems would use it to bail out big business.  Checks to every household maybe....but shareholders????  Good luck.

 

Household QEs would bail out many real businesses by increasing demand -- exactly what was required pre-crisis.

 

 

[alwaysdrawing]

Didn’t that recent bill proposed by the House eliminate pretty much all fiscal responsibility to employees for big business?

 

I'd view it as the Dems got 90% of what they wanted, and gave up some small concessions.

 

How much payroll tax was cut (the primary GOP policy aim)? 

 

There isn't a bazooka big enough to fix this, and I can't believe the Dems would use it to bail out big business.  Checks to every household maybe....but shareholders????  Good luck.

 

Household QEs would bail out many real businesses by increasing demand -- exactly what was required pre-crisis.

 

How much stimulus money would it take for you to go on a cruise?  Or an airplane?  Or to a restaurant?

 

Money won't solve this problem, even if it solves some of the secondary issues.

[SharperDingaan]

As at 9:36 pm, Dow Jones futures are down 1,045 points. Trump would seem to be trying to beat his record last week of 2,000 points in 20 minutes.

 

The US has done very little to flatten the viral infection curve. What are the odds that the projections now indicate loss of control? hence the political panic. Trump is on record stating that Covid-19 is under control, this is going to kill a lot of the elderly, and people will want someone to blame. The China experience suggests that the virus will be over shortly before the US election. All we see is a drowning man, grabbing at anything that might keep him afloat.

 

The USD is not just a currency, it is also the worlds reserve currency. Cutting rates to zero, simply forces everyone else to cut their rates to zero, or further. It adds little net value, except deter Trumps bankers from foreclosing on the family real estate. More drowning man reaction?

 

Most recognize that US Shale will have to be bailed out, but it is not practical unless it’s the majors consolidating the industry, and using QE dollars. It may well save 2/3 of all the industry jobs, but are Texans still going to vote for Trump after that? And in the same numbers? 

 

We live in interesting times.

 

SD

 

[meiroy]

Didn’t that recent bill proposed by the House eliminate pretty much all fiscal responsibility to employees for big business?

 

I'd view it as the Dems got 90% of what they wanted, and gave up some small concessions.

 

How much payroll tax was cut (the primary GOP policy aim)? 

 

There isn't a bazooka big enough to fix this, and I can't believe the Dems would use it to bail out big business.  Checks to every household maybe....but shareholders????  Good luck.

 

Household QEs would bail out many real businesses by increasing demand -- exactly what was required pre-crisis.

 

How much stimulus money would it take for you to go on a cruise?  Or an airplane?  Or to a restaurant?

 

Money won't solve this problem, even if it solves some of the secondary issues.

 

Think bigger.