SSOTT

[UncleWede]

Originally Posted by GrussGott

This just in:

also #PacificStatesofAmerica - apparently CA and WA are going to get OR, CO, and HI, and start a new gig.

AGAIN?? Is that the new NorCal faction

[Joekerr]

Originally Posted by Captain Blood

403(b), actually. And my kids college fund is tied to the market.

Originally Posted by Lups

How is that going?

Yeah, I thought about this, but ultimately did not yank any money from the markets...ouch. I'm down about $80K right now, that's a fairly nice car that just drove off a cliff.

But I'm young enough and now it is priced in (though might be further declines) so I might as well ride it out now.

Now the question is when to invest. So far the investments we do have in the corp are returning about $12-$18K per year in dividends which are all reinvested. But we could probably kick another $50K in tomorrow to the market, but I don't think we've seen the bottom yet.

Though we'll see what happens this afternoon with Canada and US rolling out stimulus / economic outlook stuff. Could be a fast bounce back, but I doubt it.

I would say we are likely in the start of a recession, but we'll see.

[GrussGott]

Originally Posted by UncleWede

AGAIN?? Is that the new NorCal faction

Well, apparently Trump was sabre-rattling about suspending travel from California and Washington, so people were joking that if you add in Oregon - and then Hawaii and Colorado for spice - you'd have a pretty nice country (1/2 the GDP, 1/4 the people, all of the western ports, most of the produce)

It's the same shit you always hear from Texans if you know any of them. Every time I visit Texas I always joke with them that they let me over the border again.

Originally Posted by Joekerr

Could be a fast bounce back, but I doubt it.

I would say we are likely in the start of a recession, but we'll see.

I think you're spot on - and not just a recession, but a global recession - it's almost a certainty at this point.

Further, I'll say that it's pretty obvious to market watchers that something is seriously broken, i.e, we have some major - and unknown - market dysfunction right now. Yesterday stock and bonds were moving together (they're supposed to move separately), treasuries were going up (they supposed to go down), crypto is down, GOLD WENT DOWN!, and the "repo market", i.e., overnight repurchase agreements, was so froze up the Fed had to step in and dump $1.3 trillion! to unfreeze them. And, more scary, that repo problem started last September. Something is very fucked up.

So it's very very obvious now that we've got 4 major problems:

(1.) Unexplained, unknown, market dysfunction - can't fix what you don't understand, and has to potential to drive and/or accelerate everything below

(2.) Corp debt bubble contagion - zombie debt, and swaps to insure defaults, has surged since 2008 to record levels. If companies (like Ford!!) start getting downgraded, it could trigger a cascading financial contagion, which is looking ever more likely. Side note - the market dysfunction could be people selling everything to cover their positions, but, but, but ....

(3.) Oil price war contagion The Russians and Saudis are going to war, with the Russians looking to punch US shale in the face. This is a big deal because about $1.3T of that bad debt above is in the energy sector alone! (see Occidental petroleum). The price war could kill revenue and trigger the zombies, who trigger the swaps market, who then get own margin calls and so on and so on...

(4.) Dual demand/supply shocks. Normally we get only one of these (which causes a recession), now we're getting both: the Chinese factories shut down, and now the American consumer is shutting down. You can certainly toss out Q1, and almost certainly Q2, and probably Q3. At least. That's a global recession for sure, and that assumes markets have confidence in the US which, so far, they absolutely don't (see black wednesday, see bear market, see Trump Slump)

The good news is, the Chinese consumer has started a "revenge buying" rally so that's maybe a good sign, and even despite a lack of testing in the US preventing us from knowing the scope of the problem, hospitals aren't yet overwhelmed.

If and when COVID19 does start pounding hospitals you can start a 3 month timer which is about how long the average outbreak lasts, during which time we'll have a minimum of a demand shock.

So, yeah, I'd stay out of the market at least that long - most major investors seem to be going to cash, Warren Buffett has been for years. I'll say this - people who thought they had an appetite for risk by holding 80% equities are seeing why us more conservative types like fixed income over shorter time horizons.

And final rant since I'm typing - the last 20 years have seen coordinated central banking insanity which has meant just about anyone with a pulse could buy just about any stock and make money since companies have been using cheap money to do stock buy-backs, pay dividends, refinance their debts, sell junk bonds, etc. And this extends to real estate prices rising everywhere always, and is also why there's a huge gap between the haves and have-nots: if you own assets you're doing great (due to insanely cheap central banking money), if you don't, you're no better off and probably worse off, while you watch your neighbors living it up.

Again, I'm conservative, but I think that time of easy equity returns is over - we may be seeing the collapse of central banking, or at least the bottom of it. I'll be thinking in terms of a minimum of a 10 year return time horizon, but more like 20-25 years, and won't be expecting anything near what we've seen in the last 20 years.

Net-net: we're turning Japanese, I really think so.



thanks for listening! That felt good to get off my chest.

[Joekerr]

Originally Posted by GrussGott

Well, apparently Trump was sabre-rattling about suspending travel from California and Washington, so people were joking that if you add in Oregon - and then Hawaii and Colorado for spice - you'd have a pretty nice country (1/2 the GDP, 1/4 the people, all of the western ports, most of the produce)

It's the same shit you always hear from Texans if you know any of them. Every time I visit Texas I always joke with them that they let me over the border again.



I think you're spot on - and not just a recession, but a global recession - it's almost a certainty at this point.

Further, I'll say that it's pretty obvious to market watchers that something is seriously broken, i.e, we have some major - and unknown - market dysfunction right now. Yesterday stock and bonds were moving together (they're supposed to move separately), treasuries were going up (they supposed to go down), crypto is down, GOLD WENT DOWN!, and the "repo market", i.e., overnight repurchase agreements, was so froze up the Fed had to step in and dump $1.3 trillion! to unfreeze them. And, more scary, that repo problem started last September. Something is very fucked up.

So it's very very obvious now that we've got 4 major problems:

(1.) Unexplained, unknown, market dysfunction - can't fix what you don't understand, and has to potential to drive and/or accelerate everything below

(2.) Corp debt bubble contagion - zombie debt, and swaps to insure defaults, has surged since 2008 to record levels. If companies (like Ford!!) start getting downgraded, it could trigger a cascading financial contagion, which is looking ever more likely. Side note - the market dysfunction could be people selling everything to cover their positions, but, but, but ....

(3.) Oil price war contagion The Russians and Saudis are going to war, with the Russians looking to punch US shale in the face. This is a big deal because about $1.3T of that bad debt above is in the energy sector alone! (see Occidental petroleum). The price war could kill revenue and trigger the zombies, who trigger the swaps market, who then get own margin calls and so on and so on...

(4.) Dual demand/supply shocks. Normally we get only one of these (which causes a recession), now we're getting both: the Chinese factories shut down, and now the American consumer is shutting down. You can certainly toss out Q1, and almost certainly Q2, and probably Q3. At least. That's a global recession for sure, and that assumes markets have confidence in the US which, so far, they absolutely don't (see black wednesday, see bear market, see Trump Slump)

The good news is, the Chinese consumer has started a "revenge buying" rally so that's maybe a good sign, and even despite a lack of testing in the US preventing us from knowing the scope of the problem, hospitals aren't yet overwhelmed.

If and when COVID19 does start pounding hospitals you can start a 3 month timer which is about how long the average outbreak lasts, during which time we'll have a minimum of a demand shock.

So, yeah, I'd stay out of the market at least that long - most major investors seem to be going to cash, Warren Buffett has been for years. I'll say this - people who thought they had an appetite for risk by holding 80% equities are seeing why us more conservative types like fixed income over shorter time horizons.

And final rant since I'm typing - the last 20 years have seen coordinated central banking insanity which has meant just about anyone with a pulse could buy just about any stock and make money since companies have been using cheap money to do stock buy-backs, pay dividends, refinance their debts, sell junk bonds, etc. And this extends to real estate prices rising everywhere always, and is also why there's a huge gap between the haves and have-nots: if you own assets you're doing great (due to insanely cheap central banking money), if you don't, you're no better off and probably worse off, while you watch your neighbors living it up.

Again, I'm conservative, but I think that time of easy equity returns is over - we may be seeing the collapse of central banking, or at least the bottom of it. I'll be thinking in terms of a minimum of a 10 year return time horizon, but more like 20-25 years, and won't be expecting anything near what we've seen in the last 20 years.

Net-net: we're turning Japanese, I really think so.



thanks for listening! That felt good to get off my chest.

Thanks for the analysis, I always like to try to keep informed, and the above is a logical analysis, and I think it is more likely than not that you are right.

[GrussGott]

Originally Posted by Joekerr

Thanks for the analysis, I always like to try to keep informed, and the above is a logical analysis, and I think it is more likely than not that you are right.

for what it's worth on the repo market thing, here's why it's so weird:

in case you don't know, basically the repo market is where businesses (financial) go to get their daily cash for operations.

So analogy: let's say you run a restaurant and the restaurant owns lots of US treasuries, but you don't have any actual cash for customer transactions tomorrow. You can go to the repo market and ask for a 1 day loan of cash, secured with all of your treasuries, and the market gives you the cash and off you go, and then you pay back the loan at the end of the day from the cash you generated.

BUT, what if you go to get that loan and nobody will lend you the cash (because they're not there or they don't want to)?? Then you're fucked, you can't run your business and you shut down.

So back in September that started happening - so the Fed had to step in. Why did that suddenly happen? Nobody knows, and everyone brushed it aside and said it was normal. And then it's kept sorta happening since ... Well now it's spiked again, and in such a huge way, that the fed has had to dump $1.3 Trillion to keep the lights on and business running.

That's some of the market dysfunction and why people are getting pretty nervous and why I'd wait to invest until whatever is causing that is known.

[GrussGott]

Oh! One more thing to think about investment-wise, especially right now with market plunges - Tax Loss Harvesting (TLH). If you don't know about it, kinda complicated, but here's the net-net of how you *might* be able to benefit from a falling market ...

Let's say 6 months ago you bought $50k of Boeing straight out and taxable, i.e., *not* 401k, IRA, etc. Since the market's tanked, especially for Boeing, let's round and say if you sold today, you'd get $25k for your shares, so a $25k loss.

Well, you can do this thing called tax-loss harvesting where you go ahead and sell knowing you're getting hit with a loss, but that's cool because TLH lets you deduct up to $3k of the loss from your regular income tax and up to infinity from any capital gains tax (but not dividends) in that tax year - *AND* you can bank those losses for future years! So if you used $3k of that loss to deduct from your federal taxes this year, you'd still have $22k to use for future years!

Anyway, it's a bit complex (e.g., losses come from cap gains first, income 2nd, etc), but it's a very popular thing for investors to do in a downturn.

A more practical example might be, let's say you own $10k of a Vanguard emerging markets fund and it hasn't done that great and now we've got this downturn with, say, a 30% loss. Well you can sell your Vanguard, which you weren't that hot on anyway, take the $3k loss off of your federal taxes, and immediately buy, say, $7k worth of Blackrock's emerging markets fund while it's down!

Cool, huh? Huh?? no?

Uh, ok, don't bother getting up, I'll just show myself out now ...

[GrussGott]

for Arcades, Taiwan's healthcare system is one of the best in the World

[GrussGott]

Just in case anyone was wondering why we were so unprepared for such a foreseeable problem that was addressed multiple times in the last administration,

May 10th, 2018:

The abrupt departure of Rear Adm. Timothy Ziemer from the National Security Council means no senior administration official is now focused solely on global health security. Ziemer’s departure, along with the breakup of his team, comes at a time when many experts say the country is already underprepared for the increasing risks of a pandemic or bioterrorism attack....

The personnel changes, which Morrison and others characterize as a downgrading of global health security, are part of Bolton’s previously announced plans to streamline the NSC...

NSC spokesman Robert Palladino said Wednesday the administration “remains committed to global health, global health security and biodefense, and will continue to address these issues with the same resolve under the new structure.”

Uh, nope.

Following up from that, Sen Brown both sent a letter and directly asked the Admin why they weren't replacing a core part of America's national security, with no answer from the Whitehouse:

Oh, and the Whitehouse is still planning to go forward with recommended budget cuts to the CDC.

[Captain Blood]

Originally Posted by GrussGott

Just in case anyone was wondering why we were so unprepared for such a foreseeable problem that was addressed multiple times in the last administration,

[COLOR="Blue"]May 10th, 2018[/COLOR]:

The abrupt departure of Rear Adm. Timothy Ziemer from the National Security Council means no senior administration official is now focused solely on global health security. Ziemer's departure, along with the breakup of his team, comes at a time when many experts say the country is already underprepared for the increasing risks of a pandemic or bioterrorism attack....

The personnel changes, which Morrison and others characterize as a downgrading of global health security, are part of Bolton's previously announced plans to streamline the NSC...

NSC spokesman Robert Palladino said Wednesday the administration "remains committed to global health, global health security and biodefense, and will continue to address these issues with the same resolve under the new structure."

Uh, nope.

Following up from that, Sen Brown both sent a letter and directly asked the Admin why they weren't replacing a core part of America's national security, with no answer from the Whitehouse:

Oh, and [COLOR="Blue"]the Whitehouse is still planning to go forward with recommended budget cuts to the CDC.[/COLOR]

But, but, but The deep state is after Trump...........

I will say this. I enjoy downloading anti-Trump Memes from trumps Twitter account. When I was looking at his Twitter feed yesterday, he had like six tweets in a row that were factual. Or at least not non-factual. A new record.

[GrussGott]

Message to SSOTT People: I work in the healthcare industry, and I say this with no hyperbole: the shit is about to hit the fan. We're tracking about 16 days behind Italy:



Sometimes the stats don't make it seem that bad, so here's my analogy: You're buckling up for a flight of 200 people and captain announces

Welcome aboard folks, on today's flight, 40 of you will get so ill you'll need hospitalization and 6 of you will die. Also, that hospitalization may not be available when we land. Anyone who'd like to leave the flight now, can. Any takers?

So that's exactly our choice, except for us it's to self-isolate and, if we absolutely must go out, wear disposable/washable gloves and n95 masks.

In about 1-2 weeks the hospitals will be overflowing, with only 1 ventilator for every 8 people that need one. I really really hope it's not that bad, but every country that hasn't taken preemptive action - and that's the USA - has followed the same trajectory.

If you're not already, this is the time to get really serious and plan on staying in your home for the next 2-4 weeks.

UPDATE #1 - this ain't just an old people thing: the death rate in South Korea is higher for 30-39 year olds than 40-49 year olds and 50% of French ICU patients are < 60. These are early numbers, but there does appear to be a genetic component to this in addition to other risk factors ...

UPDATE #2 - StayTheFuckHome.com has good, albeit basic, info and Vox has good info too

UPDATE #3 - How to get tested per local health departments

UPDATE #4 - US infection rates: 2,572 today; 1,714 Friday; 1,297 Wednesday; 539 last week - current reported death count is 56. Given low testing, we're likely to be higher, but overall the numbers are following Trevor's model showing how the exponential growth occurs:

[GrussGott]

Data out of China, here's why you want covid19 avoidance to be your top strategy:

Note that 41-45 year olds have a higher death rate than 46-50! This seems to be an emerging pattern:



Also scary is that it's about 7-14 days from onset to death:



Another scary thing, 33% of people died from respiratory failure AND heart damage and another 7% died from just heart damage. That means there's something going on damaging other organs, but we're not sure what yet.

[GrussGott]

The libs got Newt!

[GrussGott]

The you-are-here graph

[GrussGott]

I've been talking to all kinds of health experts and here's what I'm hearing: this is about the gold standard for recommendations on what to do.

Basically - here in the US - this is the week to socially isolate, because it's the highest week of the asymptomatic contagious - and next week the sick will have symptoms and/or we'll have a better idea of who the symptomatic are. So we should start a mental clock today for now, and 10 days from now - as that's when the first bomb wave will hit.

The important thing is, as that starts happening, that we trace a path to us for anyone we know that has symptoms. So if our boss has symptoms in a week or two, and we had a meeting with him last Friday, we're at high risk and should possibly isolate ourselves from our families. OR if you met with someone that met with her, etc

The goals are:

(1.) Not be asymptomatic carriers ourselves, and

(2.) Avoid other asymptomatic carriers (nihilist 20-something clubbers I guess), to bend the hospital capacity curve down. That peak-bomb wave should hit in ~20 days. (and to say out of that wave, we have to isolate now)

We all may get it eventually, so the goal to push that time out as far as possible to keep hospital capacity available.

On a fun note, Norway now (rightly) thinks of the USA as a 3rd world failed state:

[GrussGott]

If you haven't already, now is the time to protect and secure your finances - the only step left from here is freezing markets, meaning no access to illiquid assets at a minimum for an indefinite period

and the markets say:

[GrussGott]

I've been a resident of MN, CA, amongst other states ... but in both MN & CA I've always felt that I DEFINITELY got my money's worth for high state taxes (and for us, they are equal amounts).

Not that this fully bears that out, but MN people ALWAYS come together in emergencies

[GrussGott]

UPDATE: Trump finally figures out how fucked he is, and how it's been 100% due to his idiotic response to coronavirus questions he's been getting since January:

“We’re fighting an invisible enemy ... It’s just so contagious ... I really think the media has been very fair.”
"I've spoken actually with my son. He says, 'How bad is this?' It's bad. It's bad ... We're going to be hopefully a best-case, not a worst-case."
"The best thing I can do for the stock market is we have to get through this crisis...that's what I think about."
"The market will be very strong as soon as we get rid of the virus"

In other news, Amazon is hiring 100,000 warehouse and delivery workers because of the spike in demand, will raise employees' pay by $2 an hour

Oh, also, Trump probably didn't take the coronavirus tes, because when asked how it was:

"Not, not uh - something I want to do everyday...you know, it's a little bit of a -- it's a little bit of -- good doctors in the White House, but it's a test. It's a test. It's a medical test. Nothing pleasant about it."

(Note: it's a nasal swab)

UPDATE #2: Trump beats Hoover with 12.93%, so he's not quite #1 yet

[GrussGott]

So now that we've had our first oh-it's-reality-and-not-bullshit-I'm-supposed-to-talk-about? press conference, hopefully the next one will be an actual, real semi-competent which would include:

- number of tests conducted
- number of current cases
- number of new cases
- number of total deaths
- number of new deaths
- current mortality rate
- number of people recovered
- vaccine research update
- treatment update

[Captain Blood]

Luck! We were going to take our kids out for their birthday Saturday, & my wife changed the reservations to tonight.

Just announced: Restaurants in Dallas will be closed after midnight tonight.

[GrussGott]

Originally Posted by Captain Blood

Luck! We were going to take our kids out for their birthday Saturday, & my wife changed the reservations to tonight.

Just announced: Restaurants in Dallas will be closed after midnight tonight.

Shelter-in-place order around here starting at midnight or the next 3 weeks!

[minn19]

Originally Posted by Captain Blood

Luck! We were going to take our kids out for their birthday Saturday, & my wife changed the reservations to tonight.

Just announced: Restaurants in Dallas will be closed after midnight tonight.

Originally Posted by GrussGott

Shelter-in-place order around here starting at midnight or the next 3 weeks!

We are getting there to, restaurants closing as of 1700 tomorrow night.

[GrussGott]

Hopefully now we'll finally get national agreement and action, which will slow this thing down, not bomb our hospital capacity and we can get to the recovery!