Why the Bulls are still around?

[ironchef]

1) U.S. real unemployment rate passes 23.9% with 2.1 million weekly jobless claims, 40.7 million total claims for benefits, insurance.

2) Covid-19: USA: 1,827,425 (24,955 New Cases) TOTAL DEATHS 106,202 (1,045 New Deaths*)
see https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html


3) Grim economic outlooks:
a) https://www.cbo.gov/publication/56351
b) https://www.thebalance.com/us-economic-outlook-3305669
c)The EU economy is forecast to contract by 7½% in 2020 and grow by around 6% in 2021. Growth projections for the EU and euro area have been revised down by
around nine percentage points compared to the Autumn 2019 Economic
Forecast.May 6 202
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_799
d) https://www.marketwatch.com/story/imf-isnt-convinced-the-global-economy-can-
shake-the-great-lockup-by-2021-2020-04-14

4) The George Floyd Protests across the Nation/World

What else needs to be broken? Still it keep going up... Please help me to understand why (... I think I know the answer, but would like other to chime in ....)

I posted this in another thread earlier today:

Why not? Just do some simple math:

1. Total US GDP ~$20 T;

2. 25% reduction due to worst case 25% unemployment costs ~$5 T;

3. Total USG bailout: At least $5 T and counting;

4. On top of that, FED QE like there is no tomorrow;

5. On top of that, zero federal fund rate;

6. On top of that a hidden tax cut for corporations (you need to be a tax accountant reading the fine print to find it).

7. Where can all the money go?

8. This is a presidential election year!

That is why I kept buying all through March and April as soon as the magnitude of the first bailout was discussed.

 

[ironchef]

Beautiful, man. So where does it tell you price is heading tomorrow?

Up.

Just kidding, I have a 50% chance of been correct.

 

[formikatrading]

Now we're cooking with gas!

 

[bone]

Well that didn't take long.

Path of pain for the shorts.

 

[Stamamarti]

https://images.app.goo.gl/HMwPNSewrNzyTd6V7

 

[bone]

I've always been amazed about those of us who insist on arguing with the market. It beat me into submission long ago. If it wants to go up I get long.

What else needs to be broken? Still it keep going up... Please help me to understand why (... I think I know the answer, but would like other to chime in ....)

 

[Stamamarti]

I've always been amazed about those of us who insist on arguing with the market. It beat me into submission long ago. If it wants to go up I get long.

Don't get me wrong-- I do not argue with the market-- my 401 is LOVING IT--- I simply am a true believer in the laws of physics --i.e: gravity.....if this is due to the Fed-- then I am afraid the long term damage could be irreversible...

 

[bone]

If the US Treasury yielded six percent you'd have a point.

But you are ignoring the requisite need for institutions to find yield.

1) U.S. real unemployment rate passes 23.9% with 2.1 million weekly jobless claims, 40.7 million total claims for benefits, insurance.

2) Covid-19: USA: 1,827,425 (24,955 New Cases) TOTAL DEATHS 106,202 (1,045 New Deaths*)
see https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html


3) Grim economic outlooks:
a) https://www.cbo.gov/publication/56351
b) https://www.thebalance.com/us-economic-outlook-3305669
c)The EU economy is forecast to contract by 7½% in 2020 and grow by around 6% in 2021. Growth projections for the EU and euro area have been revised down by
around nine percentage points compared to the Autumn 2019 Economic
Forecast.May 6 202
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_799
d) https://www.marketwatch.com/story/imf-isnt-convinced-the-global-economy-can-
shake-the-great-lockup-by-2021-2020-04-14

4) The George Floyd Protests across the Nation/World

What else needs to be broken? Still it keep going up... Please help me to understand why (... I think I know the answer, but would like other to chime in ....)

 

[formikatrading]

As long as people accept the US dollar, they can keep the presses going. This may or may not be an issue in our lifetimes. Just kick the can down the road.

Don't get me wrong-- I do not argue with the market-- my 401 is LOVING IT--- I simply am a true believer in the laws of physics --i.e: gravity.....if this is due to the Fed-- then I am afraid the long term damage could be irreversible...

 

[bone]

I am an Engineer by training and I love me some Newtonian physics.

But COVID is not the 2008 crisis structurally.

And most economists I've read are convinced that the Fed actually made money on TARP and the various QE iterations over the years.

And as a side note, you could argue on the merits of elasticity the other way - that is, pandemics are temporary in nature as compared to the 5,000 largest Companies in the US reporting consistent negative or underperforming earnings over a protracted period of time.

Don't get me wrong-- I do not argue with the market-- my 401 is LOVING IT--- I simply am a true believer in the laws of physics --i.e: gravity.....if this is due to the Fed-- then I am afraid the long term damage could be irreversible...