Who else thinks the Sharemarket is going to tank much further?

Discussion in 'Shares & Funds' started by GoneFishing, 1st Apr, 2020.

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  1. timetoact

    timetoact Well-Known Member

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    Well said.
    FWIW I reckon your crystal ball is on the money.
     
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  2. Big A

    Big A Well-Known Member

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    Why thank you sir. I will let my crystal ball know you agree. :p
     
  3. Sackie

    Sackie Well-Known Member

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    But you promised!!
     
  4. Sackie

    Sackie Well-Known Member

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    I think your likely to be right..
     
  5. Big A

    Big A Well-Known Member

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    NO. My crystal ball did not me. Take it up with the ball. :D
     
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  6. Brumbie

    Brumbie Well-Known Member

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    Pretty complicated but I listen to the bond guys first. I have(had) a large wholesale portfolio but fortunately only had 2 bonds left as they all matured in the last few months. Big liquidity problems at present. Lot's of downgrades coming soon pushing investment grade businesses into junk. The Fed cannot bail out junk, only IG. This will then lead to Super funds, bond managers etc with IG mandates only to dump bonds into an illiquid market. Leading to huge capital losses for the biggest market in the world. This will also lead to credit not being offered to anyone not very high up the tree. e.g Western Asset has asked for more time to avoid a fire sale of newly rated junk bonds that were investment grade yesterday. HSBC and alot of other banks announcing dividend suspensions. They have flagged low interest rates, higher credit losses, funding valuation adjustments etc etc as reasons. European banks are in BIG trouble.
    The rolling world shut down is having an unbailable domino effect of consequences. China is 'back to work'. Yeah great. Sitting around twiddling their thumbs as they have no customers for at least another 2 months. So that is China with 6 months lost income. This is going to roll around the world like a bowling pin taking out all the excesses built up.
    But then again it may all go just dandy. I got off the phone shaking.
     
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  7. George Smiley

    George Smiley Well-Known Member

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    Further falls to come imo. I see a U shaped recovery with the flat part of the U being quite long indeed. Look at the hangover from the GFC with low inflation and wage growth haunting OECD economies for over 10 years. It's probably a mixture of recency bias mixed with my economic illiteracy, but it's hard to see a post corona world with the robust wage growth and higher, in certain contexts healthier, interest rates.
     
  8. LeeM

    LeeM Well-Known Member

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    Like Japan?
     
  9. snoopy

    snoopy Well-Known Member

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    Agree - last week has been the biggest dead cat bounce I have ever seen..... actually there have been a lot of things I have seen for the 1st time ever just in the last 2 weeks
     
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  10. datto

    datto Well-Known Member

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    Maybe the worst case scenario has already been factored into the markets? Could be why they are starting to pick up.
     
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  11. Brumbie

    Brumbie Well-Known Member

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    I think the next wave down is starting already. SPY could not break the downtrend line or resistance at 2636. Futures down another 3% at present. AUD down over 1% tonight. Macro wise the US is about to enter a really tough period with deaths. They are saying two weeks. Nope. Think again. There are so many hotspot cities and they are not synchronized in this outbreak. This is going to be at least a month probably way longer.
    It is very difficult to get your head around this situation, its so foreign. The penny is finally starting to drop how serious this is.
    And Europe is accelerating still apart from Italy. Italy still has another good month to go with this as well. So we are looking at least 3 months of multicontinent devastation. May god have pity on all our souls.
    And if we get a locust plague after this I will go to church, pray to Buddha, Islam and Scientology.
     
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  12. vbplease

    vbplease Well-Known Member

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  13. Brumbie

    Brumbie Well-Known Member

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  14. paulF

    paulF Well-Known Member

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    Would you think that a Covid-19 treatment can changes the direction of the markets?
     
  15. Brumbie

    Brumbie Well-Known Member

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    For sure. Big time rip your face off bounce that would break records. But is it too late? It would have to be really soon and I think the damage is manageable. If it comes in 12-18 months. Meh...too late.
     
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  16. datto

    datto Well-Known Member

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    And you will lose all your money lol.
     
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  17. PeterW

    PeterW Well-Known Member

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    The crystal ball is right. All hail the ball. I really don't think we've seen capitulation yet when it feels quite obvious we should. I am having a hard time with the patience aspect.
     
  18. Kangabanga

    Kangabanga Well-Known Member

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    Its just short covering. Wait till the credit crunches start rolling around.
     
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  19. Kangabanga

    Kangabanga Well-Known Member

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    Yep as I always say, China is gonna end up as Japan 2.0 ;D just a matter of time now..
     
  20. timetoact

    timetoact Well-Known Member

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    A lot of what you said here about bonds and debt was part of my initial thoughts on how this would play out. i.e. a virus downturn spiralling into a debt fuelled recession.

    I am not so sure now...

    Governments are rolling out all kinds of never-before-seen stimulus and counter measures.
    I'm not saying they will allow purchase of junk bonds (I'm not saying they won't) but expect there to be new and innovate solutions to avoid businesses going bust.
    GFC showed Govs they can throw more and more money at problems and they go away...
    The total global stimulus by the time this is over will be eye watering.

    Dividend suspensions and delays of capital expenditure are prudent in this environment and may become the norm. The Cap Ex part of this will clearly have flow on effects to GDP.

    Yes, European banks are screwed, the only saviour here is that I understand US (and OZ) banks have little exposure this time around.
     
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