Bull Market officially over!! Year heading negative.

[Shadowferal]

Looks like it's well over 7.5% now...

[Zan15]

They'll probably keep it up for a year, which they can easily afford, and see what it does to the US shale industry which has been thorn on their sides for a long time. The industry was able to recover from the 2014/2015 oil war with the promise of humongous return to Wall Street investors. The return never materialized. Will Wall Street bailed them out again the second time? I have my doubt. Even Blackrock has abandoned their oil/gas investments.

shale can just shut down. bankrupt themselves...which they are dying to do with their bonds/junk sitting at 6-12%+… then reorganize and reopen when oil jumps and banks come back to loaning them cheap money.

Also I suspect in an election year a huge bailout to this industry in the form of access to really cheap refinance / cheap loans/subsidies...basically farm subsidies on steroids.

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Looks like it's well over 7.5% now...

@Breccia

Dow 23,654.97 is the new bottom to look for. 20% drop(Low for today 23,754)


SP500- 2,714 - (low today 2,740)


Nasdaq - 7,870 (low today 7,946)



If all 3 hit those numbers the bull market is officially over with the 11th anniversary

Trump...I mean the US came really close in December....and almost twice under Obama.

four strikes you're out??

[Omega10]

shale can just shut down. bankrupt themselves...which they are dying to do with their bonds/junk sitting at 6-12%+… then reorganize and reopen when oil jumps and banks come back to loaning them cheap money.

Also I suspect in an election year a huge bailout to this industry in the form of access to really cheap refinance / cheap loans/subsidies...basically farm subsidies on steroids.

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So what you are suggesting is: fracking companies go bankrupt, keeping all of their equipment and assets in place. When oil prices rebound, which they will, the fracking companies restart with all of their debts discharged. So they restart as if nothing happened.

In the meantime, the federal government bails out the banks that made the loans that did not get repaid, and so everything is back to normal?

[Breccia]

Dow plunges as much as 2,000 points, oil crashes as price war erupts and coronavirus spreads
-- FOX News headline right now

Hey, didn't Trump say the Fake News media was working with the Democrats to make this worse? By which I mean this exact quote:

The Fake News Media and their partner, the Democrat Party, is doing everything within its semi-considerable power (it used to be greater!) to inflame the CoronaVirus situation, far beyond what the facts would warrant.

Well, then, I guess it would be really inflammatory for me to further quote FOX News, which I will now do:

The Dow Jones Industrial Average was down by as many as 2,046 points, or 7.9 percent, in the opening minutes of trading while the S&P 500 and Nasdaq Composite were lower by 7.4 percent and 7.3 percent, respectively. The Dow and S&P 500 were on track for their biggest drops since Decmeber 2008.

"Hey Breccia, sorry to interrupt, but, how many times has Trump had 'the biggest drop since 2008'?"

I'm glad you asked, voice in my head.

The biggest DOW loss pre-Trump was 8/29/2008, at -777. It is now the 11th worst of all time. Trump owns the top ten.

"Ah. So, ten."

Well, timing screws with that. Trump also had the drop in 2/5/2018, which was -1171. This means Trump was defended from "worst drop since 2008" because of his own earlier worse drop.

That said, he broke that number 2/27/2020. In an eerie coincidence, that's when this thread got necro'd:

Well, looks like we're doing this again.

That day was an 1190 drop. Today is probably going to be worse than that. Stranger things have happened, I suppose, than the DOW self-correcting 800 points mid-fall.

So when people say it today, for Trump at least, it'll be the third time they can say that. Barring a miracle, he will own the top 11 spots.

And, as I and Zanzibar Quince said, he's about to have his first entry on the worst proportional drops. Considering the placeholders are, like I said, oftentimes 1929 and 2008, this is a very significant change.

[Zaydin]

@Breccia So on a scale of 1 to 'We're screwed', where has today landed thus far?

[Breccia]

Oh goddammit, I wasn't finished quoting FOX News.

U.S. Treasurys were the beneficiary of the flight to safety with heavy buying pushing longer-dated yields lower by more than 30 basis points. Overnight, the benchmark 10-year yield fell to a record low of 0.38 percent before bouncing to 0.433 percent. Likewise, the 30-year yield plunged below 1 percent for the first time ever, and was down 36.8 basis points at 0.854 percent on Monday morning.

The drop in Treasury yields accompanies expectations the Federal Reserve will cut rates by 100 basis points at its March 18 meeting, lowering its key interest rate to a range between 0 and 25 basis points.

The expectation of the oversized rate cut is putting pressure on financials, which typically make 50 percent to 75 percent of their net revenue from the spread between the interest paid to depositors and the interest charged to borrowers. Lower rates mean the banks will make less per loan.

J.P. Morgan Chase, Bank of America and Truist were all tumbling. Meanwhile, Wells Fargo was in focus after board chair Betsy Duke resigned.

They add other information about international markets, ending with "and China's getting it the worst!" Even FOX News has its limits.

[Bdatik]

Currently siting inside the top 10 largest percentage drops for DOW, or am I reading this wrong?

[Shadowferal]

Interesting times...

[Orbitus]

Dow plunges as much as 2,000 points, oil crashes as price war erupts and coronavirus spreads
-- FOX News headline right now

Hey, didn't Trump say the Fake News media was working with the Democrats to make this worse? By which I mean this exact quote:



Well, then, I guess it would be really inflammatory for me to further quote FOX News, which I will now do:



"Hey Breccia, sorry to interrupt, but, how many times has Trump had 'the biggest drop since 2008'?"

I'm glad you asked, voice in my head.

The biggest DOW loss pre-Trump was 8/29/2008, at -777. It is now the 11th worst of all time. Trump owns the top ten.

"Ah. So, ten."

Well, timing screws with that. Trump also had the drop in 2/5/2018, which was -1171. This means Trump was defended from "worst drop since 2008" because of his own earlier worse drop.

That said, he broke that number 2/27/2020. In an eerie coincidence, that's when this thread got necro'd:



That day was an 1190 drop. Today is probably going to be worse than that. Stranger things have happened, I suppose, than the DOW self-correcting 800 points mid-fall.

So when people say it today, for Trump at least, it'll be the third time they can say that. Barring a miracle, he will own the top 11 spots.

And, as I and Zanzibar Quince said, he's about to have his first entry on the worst proportional drops. Considering the placeholders are, like I said, oftentimes 1929 and 2008, this is a very significant change.

I clicked on that Fox News article to read the comments and the Varney video started auto-playing and whoever he had on is fucking retarded. "We are kicking tush", is literally the first fucking thing the guest said. "Kicking Tush" as the stock market has lost all gains over the last 3 years.

[Shadowferal]

Down 8.23% (2130 points)

[jeezusisacasual]

Well the FED is a bit late on this but still an interesting statement none the less

https://www.newyorkfed.org/markets/o..._policy_200309

[Zan15]

So what you are suggesting is: fracking companies go bankrupt, keeping all of their equipment and assets in place. When oil prices rebound, which they will, the fracking companies restart with all of their debts discharged. So they restart as if nothing happened.

In the meantime, the federal government bails out the banks that made the loans that did not get repaid, and so everything is back to normal?

Most of those wells and fields sat there for decades before they got around to "shale-ing" the hell out of them.


would not be the first or the last time this exact scenario happened.
banks will be fine, they are insured on the losses. Its the reinsurers like AIG that would end up getting boned just like in 2009.

banks and oil got a mini bailout from the tax cuts and banks have been pulling in billions extra a month because of tax cuts and super low fed rates.

[Shalcker]

Neither one of them can afford it for long. the burn rate with an economic downturn on top of an oil price war will suck them dry quickly.

Yes, in a decade or so. Burn rate have long been calculated for every oil price scenario.

And Russia doesn't have oil only, unlike Saudis. We aren't going to starve or anything.

For Russia, almost 35% of their gdp is oil or 500-600 billion dollars. Cut the price in half (more like 65% from where it needs to be) and you have to make up 300-350 billion a year.

You know we were running budget surplus for last few years? Budget doesn't run on "gdp" (especially nominal GDP at that).

We also have simple budget rule - any oil profits above cut-off point go into "rainy day fund". Every year of oil above 42$ means one more year with no pain for oil below 42$.

There is also a point that budget is in roubles while oil is sold in dollars/euro... which means with rouble falling (as it does) lower oil price will be partially counteracted with higher USD/EUR exchange rate.

The real power is the ability to borrow if necessary. SA has Russia beat by miles, by trillions.....

Russia doesn't even need to borrow at the moment though.

[Zan15]

Well the FED is a bit late on this but still an interesting statement none the less

https://www.newyorkfed.org/markets/o..._policy_200309

meh its just repo. won't change much since some days they were already over 100 billion.,

[Breccia]

@Breccia So on a scale of 1 to 'We're screwed', where has today landed thus far?

I am no expert.

But if you asked me anyhow, I'd say "threeve".

It's important to keep long-term results in mind. The stock market is going to go lower, because it's a predictive force, but at some point, the status quo will be forseeable, and the stock market will level out. As I posted earlier, if Trump hits election day with 24,600 or whatever, he ties Obama's 2nd term growth (he will never touch Obama's first term, Obama recovered from a recession, Trump won't). The GDP is nowhere near what Trump promises, he's sub-Obama in that and jobs too.

These, by themselves, are bad but not crippling. A stock market growth of 8 or 9 percent is below the industry average of 10 or 11 percent. And sub-3% GDP didn't stop Obama from slashing unemployment rates in half, halving the deficit, or keeping the economic recover going to the point the Fed started raising rates again.

But that's where it starts, not ends.

Trump has paid a lot of money for worse results. Companies were struggling even before the coronavirus because of his intentionally self-inflicted tariffs -- the biggest tax increase in American history, without the benefit of closing the deficit. He's also already been working on hacking apart low-cost healthcare and he's looking at SS and Medicare next, regardless of what he says. And none of his proposed actions, from Infrastructure Week's I-V to the Wall, are gainful employers. He inflated the GDP for a quarter or two with some one-shot spending, that's it. And his friends, from Boeing to coal, are going bankrupt almost as fast as Trump's casinos did.

These actions will have consequences. Farmers and factory workers will be jobless, some already are. Low-income people will get sick and have no way to deal with it, some already are. The rich will see their portfolios tumble, some already have. And the US will have no allies to help, not just because they're sick, but because Trump alienated them with trade wars, coddling dictators, and directly negotiating with terrorists. There is nobody riding to the rescue.

There are two ways this ends.

A) A mild recession begins in 2020, hitting red states at least as much as blue ones. This compounds to the existing damage Trump has done, to the point where he actually begs for a Russia question during the debates. Unable to run on his own record and unable to win, Trump either makes up an excuse and quits, or just loses, and slinks off into history as one of the worst Presidents ever while someone competent begins the ugly process of turning things around.

B) The recession happens, but too late to change the election results. Trump, knowing that he can't lose a third election anyhow, holds nothing back and does as much damage as possible. Shutdowns, plural. As many tax cuts or refunds to corporations as the Executive Branch can give. Attacking entitlements directly, without letting the House or Senate vote, and putting them in play while the court cases rage. With no reason to act on his second shot of campaign promises like Phase Two (after the election) tax cut for the middle class (after the election) troop withdraw (after the election), Trump allows the recession to hurt as many poor people as possible, the House and Senate go strongly blue in 2022, and Trump becomes the first President successfully impeached for actions that haven't even happened yet, leaving the country in a pit of debt, wealth inequality, and sickness normally associated with third-world countries.

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Well the FED is a bit late on this but still an interesting statement none the less

I saw that earlier.

I'm not sure what this is supposed to accomplish, but again, they're the Feds not doctors. Their tools are limited.

[jeezusisacasual]

meh its just repo. won't change much since some days they were already over 100 billion.,

Yea its funny in the sense that was an old problem to address like uuumm have you guys seen today at all?

[Breccia]

Currently siting inside the top 10 largest percentage drops for DOW, or am I reading this wrong?

You are not. At time of my writing, -7.32% and therefore on the list. You posted when it was even worse.

[Zan15]

Yes, in a decade or so. Burn rate have long been calculated for every oil price scenario.

And Russia doesn't have oil only, unlike Saudis. We aren't going to starve or anything.

You know we were running budget surplus for last few years? We also have simple budget rule - any oil profits above cut-off point go into "rainy day fund". Every year of oil above 42$ means one more year with no pain for oil below 42$.

Russia doesn't even need to borrow at the moment though.

if the low oil prices spread into the rest of the economy they will have bigger economic problems to cover. employment, lower tax revenue outside of oil, pensions, etc etc.

Saudi's also have a much larger ability to cut expenses in their country and their "payouts" from oil.

Russia is already running bare min and really have nothing more to cut. Even their military spending fell out of the top 5 world wide.


On top of that the more they push low oil the bigger impact on world economy. this means less oil being used. means even less money going to Russia and SA. it will compound on itself month to month.


Both countries would last maybe 9-12 months before the pain became something that would drive them to the table.

[Breccia]

Yea its funny in the sense that was an old problem to address like uuumm have you guys seen today at all?

Maybe I'm reading "repo" wrong, but, if the Fed wants to fix anything they'll need money to do it. Calling in outstanding loans is one way to do that.

It might be hitting some people while they're down, like you suggested. But the Fed doesn't care about feelings.

[Zan15]

Here we go
last hour.
Fun times..

Get your popcorn

i'd bet 60/40 that we have a spike up to 1200-1400. but odds are about 50/50 on either sitting where it is or recover a little.