This is a screaming buy...what funds/shares are you buying?

[Logosone]

The GBP/USD exchange rate will obviously affect the GBP/Baht exchange rate, whether you care about it or not.

[Brunolem]

1 hour ago, saengd said:

Well actually that's my problem, you have presented zero facts to support your rhetoric, for example, you wrote:

 

"Stocks are still valued at over 100% of GDP and have only gone back to their level of 2017!

The bottom is very very far from near..."

 

Many countries in the world have borrowings that are greater than their GDP, is there a rule that says this cannot be so and why should stocks values be any different. Bretton Woods did away with the gold standard, since then economies play by different rules.

 

The stocks global value/GDP is Warren Buffet's favorite ratio.

 

It signals overvaluation when reaching 100%, to say nothing of 150% as of lately.

 

The ratio of debt/GDP is a completely different thing, and yet it has been shown (see the famous paper from Reinhart and Rogoff) that a debt load over 95% of GDP creates a drain on growth...not to mention a ratio well over 100% as we have in many countries now, which is getting bigger by the day with all these daily interventions...a few hundred billions here, a few hundred billions there...

 

Facts have confirmed this, with the so-called recovery from 2009 to 2019 being the weakest ever...so weak that it couldn't cope with 2% interest rates, even though the historical rates, up until 2007, used to be somewhere between 4 and 6%.

 

Obviously, no (over indebted) economy today could cope with such rates...which shows how deep we have gone in just a decade.

 

Meanwhile, stocks were going higher and higher, for one reason only: buybacks financed by borrowed money at ultra low interest rate.

 

There are plenty of charts confirming this.

 

This had nothing to do with the health of the concerned companies, or the economy in general.

 

As a matter of fact, why would the stock market go up by 20% year after year, while the economy grows by 2%?

 

How can both be so disconnected, for so long?

 

And today we have companies like Boeing crying for a 60 billion dollars bailout, after having wasted 35 billion in buybacks.

 

Needless to say that buybacks will not come back anytime soon...so what will push the markets up?

 

[saengd]

Sorry but name dropping Buffet and Reinhart and Rogoff doesn't do anything for me, there's nothing constructive or useful in those things, unless you're writing a thesis and trying to impress tutors.

 

Fact is that a trillion in debt today may seem high now but in ten years time it will have been inflated away and will seem like peanuts, ditto over-valuations. My first mortgage was for 40k but that was 40 years ago, we thought that was a lot back then, my dad borrowed 5k for his last mortgage in 1963 and that was big also. And then in 1990 I borrowed 500k for a Cotswolds pile, we thought that was huge. It's all a matter of time and of perspective.

 

Why you ask would stock markets go up by 20% per year whilst economies increase by only 2%.

 

Because countries economies are not company balance sheets and because they can!

 

[christophe75]

49 minutes ago, Brunolem said:

 

Needless to say that buybacks will not come back anytime soon...so what will push the markets up?

 

 

The answer is obvious : the central banks !

FED, BCE BOJ, BOE etc. It's a festival of "QE" (the nice letters for the bad word "printing-money-until-it-blows-in-supernova")

It's even difficult to follow the additions of.... trillions.

And let's be clear.... This is not new.

But they can't do anything else. They can only continue to accelerate. That's the way the system is wired.

It's Star Trek : "To infinity and beyond"  ????

This is why, incidentally , the people who bet on "bankruptcies" (big banks, and big "friend" companies) are totally mistaken.

The one who will loose everything are... the little ones. As usual.

The Joe Blows.

For them no bailout, no QEs...

[saengd]

31 minutes ago, christophe75 said:

 

The answer is obvious : the central banks !

FED, BCE BOJ, BOE etc. It's a festival of "QE" (the nice letters for the bad word "printing-money-until-it-blows-in-supernova")

It's even difficult to follow the additions of.... trillions.

And let's be clear.... This is not new.

But they can't do anything else. They can only continue to accelerate. That's the way the system is wired.

It's Star Trek : "To infinity and beyond"????

This is why, incidentally , the people who bet on "bankruptcies" (big banks, and big "friend" companies) are totally mistaken.

The one who will loose everything are... the little ones. As usual.

The Joe Blows.

For them no bailout, no QEs...

Too funny, your last line.

 

Have you ever stopped to wonder what would happen to the Joe Blows if the Central Banks didn't do QE?

[Orton Rd]

Sainsbury's, Asda and Aldi

[BillStrangeOgre]

7 minutes ago, saengd said:

Sorry but name dropping Buffet and Reinhart and Rogoff doesn't do anything for me, there's nothing constructive or useful in those things, unless you're writing a thesis and trying to impress tutors.

 

Fact is that a trillion in debt today may seem high now but in ten years time it will have been inflated away and will seem like peanuts, ditto over-valuations. My first mortgage was for 40k but that was 40 years ago, we thought that was a lot back then, my dad borrowed 5k for his last mortgage in 1963 and that was big also. And then in 1990 I borrowed 500k for a Cotswolds pile, we thought that was huge. It's all a matter of time and of perspective.

 

Why you ask would stock markets go up by 20% per year whilst economies increase by only 2%.

 

Because countries economies are not company balance sheets and because they can!

 

Gotta jump in here...true, debt gets inflated away over time but you need a high rate of inflation to make any real dent in a trillions dollars over ten years.

40 years ago inflation was running considerable higher than it is now. Some people will argue though that with all this QE inflation will rise, perhaps hyperinflation...remember they were saying that back in the last crisis. Didn't happen 

[BillStrangeOgre]

3 minutes ago, Orton Rd said:

Sainsbury's, Asda and Aldi

Good call!

https://metro.co.uk/video/shoppers-crush-asda-wembley-doors-6am-opening-time-2133396/?ito=video.desktop.share.top.facebook&fbclid=IwAR1uK2mrnkwHAgf1M2LLzbFJ-zOJbCz1MpyKJqy_cDw2zKxyxOoid80uB1o

[saengd]

4 minutes ago, BillStrangeOgre said:

Gotta jump in here...true, debt gets inflated away over time but you need a high rate of inflation to make any real dent in a trillions dollars over ten years.

40 years ago inflation was running considerable higher than it is now. Some people will argue though that with all this QE inflation will rise, perhaps hyperinflation...remember they were saying that back in the last crisis. Didn't happen 

We're usually happy in economics terms if inflation is at 2%, that represents growth, if debt increases at a faster pace then issue more bonds with longer maturity dates, mortgages for life, multi-century debt, nobody said it had to make sense, it just has to be dooable. And in a decade from now, the word trillion will not raise eyebrows or cause panic, it will be the norm.

[Orton Rd]

Makers of chloroquine etc would be a good bet

[jojothai]

16 hours ago, Logosone said:

Isn't that a bit drastic for now? Yes, some thai officials have voiced anti-foreigner sentiment, but I doubt they'd freeze farang bank accounts only.

 

The real danger would be if they freeze everyone's bank accounts. That would only happen if there is an extreme run on banks. If people fear the system will collapse. No sign of that yet.

If you think that is a possibility then consider going out and buy some gold.

However, I doubt this should lead to a bank run. Maybe some smaller banks go bust, lack of liquidity.

A run on the supermarkets (to get supplies) - probably yes. Other countries are feeling the pain from this.

[BillStrangeOgre]

13 minutes ago, saengd said:

We're usually happy in economics terms if inflation is at 2%, that represents growth, if debt increases at a faster pace then issue more bonds with longer maturity dates, mortgages for life, multi-century debt, nobody said it had to make sense, it just has to be dooable. And in a decade from now, the word trillion will not raise eyebrows or cause panic, it will be the norm.

Yes, high inflation is not desirable and around 2% is the benchmark for central banks. I'm not an economist, but surely you cannot claim that huge debt levels cannot simply be inflated away with annual rates of 2%? And I understand how that debt can be structured to make it affordable.

Also, debt levels have risen to unusually high level over the past decade through multiple tranches of QE. That's why the word trillion has entered the lexicon of every day speech, not because it has been deflated. A trillion today is worth pretty much what a trillion was 10 years ago and with low rates of inflation...what it will be in 10 years hence

Edited March 20, 2020 by BillStrangeOgre

[Brunolem]

28 minutes ago, christophe75 said:

 

The answer is obvious : the central banks !

 

FED, BCE BOJ, BOE etc. It's a festival of "QE" (the nice letters for the bad word "printing-money-until-it-blows-in-supernova")

 

It's even difficult to follow the additions of.... trillions.

 

And let's be clear.... This is not new.

 

But they can't do anything else. They can only continue to accelerate. That's the way the system is wired.

 

It's Star Trek : "To infinity and beyond"

????

 

This is why, incidentally , the people who bet on "bankruptcies" (big banks, and big "friend" companies) are totally mistaken.

 

The one who will loose everything are... the little ones. As usual.

 

The Joe Blows.

 

For them no bailout, no QEs...

The central bank of Japan has done this for years, and it has led nowhere...the Nikkei is still very far from its historic peak of 1990.

 

(by the way, many European indexes, in France or Italy for example, have never recovered their year 2000 peak, despite booming markets for the past 10 years).

 

So maybe the Western central banks are also going to buy equities, which will only lead to the long predicted "japanification" of the global economy.

 

That is, if we are lucky, and don't end up with hyperinflation...

[saengd]

1 minute ago, BillStrangeOgre said:

Yes, high inflation is not desirable and around 2% is the benchmark for central banks. I'm not an economist, but surely you cannot claim that huge debt levels cannot simply be inflated away with annual rates of 2%? And I understand how that debt can be structured to make it affordable.

Also, debt levels have risen to unusually high level over the past decade through multiple tranches of QE. That's why the word trillion has entered the lexicon of every day speech, not because it has been deflated. A trillion today is pretty much what a trillion was 10 years ago and with low rates of inflation...what it will be in 10 years hence

No I'm not suggesting that 2% can inflate away the debt, I'm suggesting the debt will continue to grow. Affordability is one of the issues and that's manageable, being accustomed to the new norms is another factor, it's a question of whether in ten years time we will continue to think that a trillion is that huge, I suggest we will not. In basic mathematical terms there is no solution to the problem other than perhaps debt forgiveness at some point which I think is very probable.

[Logosone]

16 minutes ago, jojothai said:

If you think that is a possibility then consider going out and buy some gold.

However, I doubt this should lead to a bank run. Maybe some smaller banks go bust, lack of liquidity.

A run on the supermarkets (to get supplies) - probably yes. Other countries are feeling the pain from this.

I agree, I also don't expect a bank run in the short term. However, we are still in the medical crisis phase. The economic crisis phase has not even begun yet.

 

That is obvious also by the fact that gold is not rallying. You'd think with the concern about the virus gold would be skyrocketing again. That's not the case.

 

It looks like smart investors and big money are adopting a wait and see policy. Liquidity is precious and it is too early to decide where to put it.

 

 

[BillStrangeOgre]

17 minutes ago, saengd said:

No I'm not suggesting that 2% can inflate away the debt, I'm suggesting the debt will continue to grow. Affordability is one of the issues and that's manageable, being accustomed to the new norms is another factor, it's a question of whether in ten years time we will continue to think that a trillion is that huge, I suggest we will not. In basic mathematical terms there is no solution to the problem other than perhaps debt forgiveness at some point which I think is very probable.

Yes, agree the debt will probably grow and as long as the bond markets have faith the the US is good for it's debt it will be able to service it

[Brunolem]

27 minutes ago, Logosone said:

I agree, I also don't expect a bank run in the short term. However, we are still in the medical crisis phase. The economic crisis phase has not even begun yet.

 

That is obvious also by the fact that gold is not rallying. You'd think with the concern about the virus gold would be skyrocketing again. That's not the case.

 

It looks like smart investors and big money are adopting a wait and see policy. Liquidity is precious and it is too early to decide where to put it.

 

 

This is not the reason.

 

Investors need to sell whatever they have, and that include their gold holdings, in order to meet their obligations (margin calls).

 

There is a rush for cash, in USD, going on now.

 

Nothing else matters...run for the exits first and think later...

[jojothai]

The following charts will give you some appreciation of where we are in comparison to 2008-2009. 

One chart matches the initial 2008 crash but within a long term topping out process. Compared to 2020 in timescale and value.

The second chart simply compares the initial 2008 crash with 2020, more as comparison of index value and how much lower we could go in comparison.

2008 - 2009 was extreme, so you can see how extreme it is now in 2020.

The charts show the possibility of a fall to 17500 or 15000., if there was a similar sequence.

This is not for financial advice. The past does not predict the future.

However, IMHO market analysts do use previous patterns to try to estimate what could potentially happen.

[Logosone]

Technical analysis and fundamentals point in the same direction, downwards.

 

You just have to factor in that all the people who lost and will lose their jobs due to companies failing will have less money to spend, less growth, less taxes, less money to spend for the governments.

 

The full effects of the economic crisis are still to come, not even close yet.

 

I remember back in 2008 I was thinking 'what crisis', I was still setting up funds, had clients, then a year later the crisis truly hit. 

 

It takes time for an economic crisis to feed through the system.

[jojothai]

1 hour ago, Logosone said:

I agree, I also don't expect a bank run in the short term. However, we are still in the medical crisis phase. The economic crisis phase has not even begun yet.

 

That is obvious also by the fact that gold is not rallying. You'd think with the concern about the virus gold would be skyrocketing again. That's not the case.

 

It looks like smart investors and big money are adopting a wait and see policy. Liquidity is precious and it is too early to decide where to put it.

 

 

Yes, the economic fallout is still to come.

liquidity had to be raised and Markets analysts are pointing out that is why gold has fallen.

The dollar has surged higher. Gold would normally have gone down heavily, much more than it has.

Its similar to 2008 - 2009. The same happened and gold fell very hard but later started the big bull market 2009 to 2011.

 

So far Gold has held up well this time, but still could get knocked down further if the dollar rises more.

 

[Susco]

4 minutes ago, jojothai said:

Yes, the economic fallout is still to come.

liquidity had to be raised and Markets analysts are pointing out that is why gold has fallen.

The dollar has surged higher. Gold would normally have gone down heavily, much more than it has.

Its similar to 2008 - 2009. The same happened and gold fell very hard but later started the big bull market 2009 to 2011.

 

So far Gold has held up well this time, but still could get knocked down further if the dollar rises more.

 

What you mean gold has held up well?

 

Gold has declined much more than the dollar has increased over the same period

[Logosone]

7 minutes ago, jojothai said:

Yes, the economic fallout is still to come.

liquidity had to be raised and Markets analysts are pointing out that is why gold has fallen.

The dollar has surged higher. Gold would normally have gone down heavily, much more than it has.

Its similar to 2008 - 2009. The same happened and gold fell very hard but later started the big bull market 2009 to 2011.

 

So far Gold has held up well this time, but still could get knocked down further if the dollar rises more.

 

I would interpret that as a sign of the seriousness of the situation, if people are not buying gold because they need the liquidity so desperately they are actually selling gold then something must be seriously wrong.

 

The Gold rally has to come at some point, but timing will be everything, as usual.

 

One thing this crisis has settled once and for all is which is the true safe haven currency. Initially the Yen was going up, but as things got worse the USD rose against the Yen.

 

 

 

 

[Brunolem]

24 minutes ago, Susco said:

What you mean gold has held up well?

 

Gold has declined much more than the dollar has increased over the same period

He means that gold has held up well compared with other assets.

 

Today an ounce of gold buys much more stocks or oil than 2 weeks ago.

 

Markets are in deflationary spiral, because everyone is chasing dollars, and gold is faring better than everything else.

[Brunolem]

21 minutes ago, Logosone said:

I would interpret that as a sign of the seriousness of the situation, if people are not buying gold because they need the liquidity so desperately they are actually selling gold then something must be seriously wrong.

 

The Gold rally has to come at some point, but timing will be everything, as usual.

 

One thing this crisis has settled once and for all is which is the true safe haven currency. Initially the Yen was going up, but as things got worse the USD rose against the Yen.

 

 

 

 

Something is seriously wrong...there is a 12 trillion dollars margin call going on...

 

That's a lot of cash that is needed, especially for foreign investors who can't print dollars at will...

[jojothai]

22 minutes ago, Susco said:

What you mean gold has held up well?

 

Gold has declined much more than the dollar has increased over the same period

You must be new to this. Suggest you look at the history some more, especially the interrelationship gold to the USD. 

FYI Gold fell almost 25% in the similar crash in 2008 over a few weeks. When the USD index went up about 10&

That's why I am saying it has held up well.

Now its only down just over 10%. when the USD has gone up over 8%.

 

 

[NightSky]

I sold all stocks in December 2019 - seems it was a good time to sell!

 

Ive been cost buy averaging the major index funds for the past week on the way down including a few other companies I like. I will continue to buy now every week or so until all chips are in.

 

[Susco]

27 minutes ago, jojothai said:

FYI Gold fell almost 25% in the similar crash in 2008 over a few weeks. When the USD index went up about 10&

That's why I am saying it has held up well.

Now its only down just over 10%. when the USD has gone up over 8%.

The difference being that the gold price decline in 2008 started in March and accelerated at the end of the year when the crash happened.

 

Currently, gold price was increasing rapidly in price before the crash happened, which obviously has influenced the reaction.

[jojothai]

10 minutes ago, Susco said:

The difference being that the gold price decline in 2008 started in March and accelerated at the end of the year when the crash happened.

 

Currently, gold price was increasing rapidly in price before the crash happened, which obviously has influenced the reaction.

Then you should also see that gold also had a big upward run 50% for six months in 2007-08 before the crash started. Far more than now 2019-20. That influenced why gold fell heavily in 2009 and it lost most of its gains from the previous year.

This time we have only lost about a third of the gains. So I repeat it has not fallen as heavily as could be expected.

 

Gold fell 15% march to may 2008  when the dollar was also falling.

Then in july to sept 2008  gold fell 25 % when the dollar gained about 12%. Before the crash that I stated earlier.

 

In comparison to  the last crash you would expect gold to go down more than 25%.

10% fall is not bad in the circumstances.

NB: Gold miners have fallen far more heavily. I think this is because markets were expecting gold to drop a lot more than it has.

 

Still, we have to consider that If the dollar goes up another few percent its possible that gold may crack and go down another 10%.

 

 

[Brunolem]

44 minutes ago, jojothai said:

 

 

Still, we have to consider that If the dollar goes up another few percent its possible that gold may crack and go down another 10%.

 

 

Trump is gonna jump through the roof if the dollar keeps on climbing and ask the Fed to do something about it.

 

What the Fed could then do would be to start buying gold, which is what many other central banks have done recently.

[Choctastic]

In 2008 I was day trading the NASDAQ using Thinkorswim at $5 per trade. Then I was told Thai-based investment accounts had to close and was forced to quit.

 

Would like to dip a toe back in the water. Wondering if that is still the case today? What platforms are available to those based in Thailand? Cost of trade?

 

On the news side, Trump said yesterday this crisis could go on for 18 months with regular waves. Not sure how he knows but there's a whole heap of possibility in those comments. Markets could be roiled by riots in the streets. Bank failures. China retaliation. Lots of ways the market could fall further.

 

Tucker Carlson on Fox is lamenting that the U.S. moved all its manufacturing capacity to China and it needs to come back as a matter of national security. Is this the hidden geo-political agenda? Who would want to invest in China stocks?

 

There seems to be plenty of 'agendas' being spoken about. I have no idea what's coming down the pipe but this is definitely different to previous virus 'cattle drives'. I will mention just one.

 

Seems to me crypto currencies could be wiped out overnight if the banksters force us all onto digital currencies and end cash, pushing their own crypto currency.  18 months with the principal players 'locked-down' seems like the ideal opportunity for the banks to 'reset'.

 

Apologies if this has already been discussed.

 

Edited March 20, 2020 by Choctastic