Stimulus Bill , ok, but who will pay the Bill

[Fermion]

Well that's the question.
50% down possibly or will it go to 70-80% down?

If it goes 80% down I am going to try and find a job...not because I need the money for expenses, but rather I would want to be able to put more money into tax sheltered accounts at that level.

You mean buy Microsoft at $25 a share? Tesla at $100?

 

[Dtail]

If it goes 80% down I am going to try and find a job...not because I need the money for expenses, but rather I would want to be able to put more money into tax sheltered accounts at that level.

You mean buy Microsoft at $25 a share? Tesla at $100?

in the Great Depression, it went down more than 80%, although technically 1966 was still a worse year to retire in real terms.

 

[brewer12345]

At this point it is looking like there's not going to be a stimulus bill, and futures are limit down. So no worries on paying for it.

 

[Aerides]

At this point it is looking like there's not going to be a stimulus bill, and futures are limit down. So no worries on paying for it.

not tonight, but not not-at-all.

 

[Fermion]

This is creating some great potential opportunity for trading. I might buy some SPY calls at the bottom of the dip tomorrow and then sell them on the pop when the stimulus bill gets approved. I'll have to see if the call premiums are silly expensive or reasonable.

This is a time for gambling, but not for the faint of heart!

 

[gwraigty]

If it goes 80% down I am going to try and find a job...not because I need the money for expenses, but rather I would want to be able to put more money into tax sheltered accounts at that level.

Really? With all the people being thrown out of work right now? You're going to get a job that you don't need? Really?

The selfishness of that just astounds me!

 

[Fermion]

Really? With all the people being thrown out of work right now? You're going to get a job that you don't need? Really?

The selfishness of that just astounds me!

I am a engineer, not worker in one of the service industries which will be losing jobs left and right. Maybe I could work on the next generation ventilators.

Being upset at somebody getting a job is a bit like me being mad you sold off your stocks and helped cause the market to drop.

 

[Beststash]

I do think we need a stimulus but.....

I have actually seen everything from 2-4 trillion. A trillion here, a trillion there, and pretty soon you're talking real money.

I would prefer that we extend unemployment benefits for those losing their jobs and small business owners and low/no interest loans to big businesses with stipulations - no executive bonuses and no stock buybacks. I do not like the idea of helicopter drops of $$$. It is merely a followup to our previous blunder and will do nothing other than increase our debt.

It seems that as a nation we have embraced financial engineering as an acceptable alternative to prudent business practices and we wonder why so many have little faith in the markets these days other than rationalizing that there is little alternative.

Those that like to blame globalization and immigration on all of our ills (oh, and I forgot in Texas we love to blame California) we only have ourselves to blame with the politicization of EVERYTHING.

I look back fondly at the days when you had learn how to understand a earnings report instead of simply betting on emotion or gambling on the come. I prefer that be left to Las Vegas.

On the optimist side �� I hope this experience helps us to be better world citizens and get our priorities back to what really made us a Great Nation -- it could happen??

 

[RetiredAt55.5]

Well that's the question.
50% down possibly or will it go to 70-80% down?

To be honest, I worry more what the recovery is going to look like, and how long it's going to take.

We are such a service oriented economy now, it does put a different spin on things. E.g., will working from home become the new norm? What will that do to all the restaurants that benefit from the work lunch crowd, and the workplace cafeterias?

 

[Ian S]

not tonight, but not not-at-all.

Exactly! And hopefully the final bill will look more like what the Danes are trying to do. Allow companies to sort of "hibernate" with the government picking up their costs and workers being kept at the companies even though they may not be working (supported by unemployment insurance.) That way when the pandemic passes, it will be easier for companies to "wake up" and get their business going again with their existing workers instead of starting from scratch.

 

[Lakewood90712]

If a company can still operate and generate a profit, the share price should be irrelevant to true investors. I would bet Berkshire is not selling off stakes in good companies.

For those investors in companies that do not / never did make a profit , that is not investing, its speculation ( tesla , Uber , Lyft) . Bear markets do the ugly , bloody job of flushing out unsustainable share prices.

As to hedge funds and firms making money on mass high freq. trading with borrowed money , no lemonade from lemons this time.

Buffet and Munger have opined that anyone not willing to take a 50 % share price drop for up to 10 years has no business buying equities. Anyone want to argue with the investing success of the guys ?

The causes of The 2 simultaneous triggers are unusual this time , the bloodless oil war between Saudi, Russia and US , along with the pandemic.

The illusion that the equity markets and mutual funds have little risk is just that , an illusion.

 

[aaronc879]

We will pay via hyper inflation.

That's what people said after the 2002 stimulus and the 2008 stimulus but it never happened. Why would this time be different?

 

[Beststash]

That's what people said after the 2002 stimulus and the 2008 stimulus but it never happened. Why would this time be different?

I would say that there is real inflation happening but we have just re-defined "inflation" to be limited to the prices of goods and services, while asset price inflation is excluded. If inflation is defined to include asset prices, then we have plenty of it.


With the recent drop in stocks and bonds it will be interesting to see what happens going forward .

 

[NW-Bound]

Well, we're still paying for the Vietnam war, which was started and continued by the generation(s) before mine. So it's just continuing a tradition!

But this time the US is spending money on itself. It's all good.

 

[audreyh1]

I would say that there is real inflation happening but we have just re-defined "inflation" to be limited to the prices of goods and services, while asset price inflation is excluded. If inflation is defined to include asset prices, then we have plenty of it.


With the recent drop in stocks and bonds it will be interesting to see what happens going forward .

Well I think many years of that asset price inflation has just been wiped out, and will probably extend to other assets such as real assets.

 

[Dtail]

Yup if there is a prolonged mass loss of jobs, then the real estate market will be next.
The combination of all of this feels worse than 2008, unless there could be some true development of drugs to lessen the symptoms sooner than later.

 

[atmsmshr]

This is one time I'm ok with raiding the piggy bank.

The house is burning down, we have to put out the fire.

What are our other choices? Risk a complete economic meltdown that could last for years? What would that end up costing us?

20% or more unemployment means a lot less revenue and all the unemployment funds would get exhausted. Then what?

Not to mention a lot less money going into the SSA coffers but the same amount coming out. That 2034 date would have to be moved up for sure.

I will say that giving loans to big businesses sounds good to me, rather than no strings attached money.

Agreed.

At least the independent Federal Reserve has been injecting trillions of dollars into the national economy (which in turn is being lapped up by the rest of the world). Meanwhile, congress members cannot find the doorknob to the bathroom. They passed an $8 billion dollar package a few weeks ago, even though this crisis was covered in the news starting in January. When they finally do get around to giving hardest hit Americans a paltry $1,200 in April THREE MONTHS AFTER THE START OF THIS WORLD CRISIS, they will be breaking their own arms patting themselves on the back.

Now imagine what those countries without the benefit of a world reserve currency or good health care system are facing.

Buckle up - its gonna get ugly out there.

 

[Amethyst]

Evidently a great many people are afraid of anarchy, chaos, home invasions...guns and ammo are getting as scarce in some stores as TP.

https://www.12news.com/article/news...break/75-2425673f-2338-419d-b299-3867de57a94e

 

[gwraigty]

I am a engineer, not worker in one of the service industries which will be losing jobs left and right. Maybe I could work on the next generation ventilators.

Being upset at somebody getting a job is a bit like me being mad you sold off your stocks and helped cause the market to drop.

You're comparing apples to oranges. Not the same thing at all. I shouldn't have to explain it.

 

[dd564]

No one is paying for it.

It's not like any of us are going to get taxed at a higher rate where we're paying a substantial portion.

This is free money now for the promise of paying a tiny portion down the road.

It's the main reason our economy grows. Debt, debt, debt.

 

[Clone]

They will not dare tax you, nor me! They will have to tax that person there- behind that tree!

 

[dd564]

They will not dare tax you, nor me! They will have to tax that person there- behind that tree!

Our taxes might tick up or tick down, but it's hardly like it's a direct response to this.
Taxes go up and down with every administration.

People complain far too much about taxes as if it really matters.

 

[Markola]

1) Corporations cry and lobby for massive tax cuts so that they can create jobs, driving up the federal deficit and debt.
2). Corporations instead spend tax savings on executive compensation, stock buybacks and dividends.
3). A pandemic or other shock hits and corporations are found to have no cash reserves to weather it.
4) Congress acts to shore up corporations, picking winners and losers, driving up the federal deficit and debt.
5) Corporations are saved, start earning money again.
6). See #1.