[KinAlberta]

Originally Posted by bdub

No doubt we are going to see lower rates coming, maybe by Monday. Powell just announced the Fed was ready to do whatever. We already have 17-20 trillion of negative yielding debt out there. What's a few more trillions. Negative rates are 3/4 of the reason we are seeing the amount of damage over the last week or so, to much risk and risk was not priced correctly.

And the whole thing with monetary stimulus is it isn't going to fix the problem of the bug and it's potential effects on earnings. It might slow the panic a bit, provide emergency liquidity but the market isn't buying it. We had a little pop off of Powells announcement but I don't think the market is buying it. They realize that the only option really left is to follow China's lead and take draconian measures to stop the spread or have a miracle happen. We are going to see earnings get crushed and the US and the rest of the world head into a global recession is how I see it most likely playing out. And no amount of Fed stimulus is going to get shoppers out and businesses investing when everyone crapping bricks and is afraid to move.

The States, Canada and the rest of the world should have payed closer attention to what the hell was going on in China back in January and used an abundance of caution instead of a minimum of caution in preventing the spread. The more information that pops up out of the USofA, the more you realize they have no idea of how far it's spread, their testing is faulty or not in place etc etc. But what's happened in Italy, Iran and S. Korea is probably a week or two away in the States and that's what the market is thinking right now.

WE also spent a decade or so of globalizing the economies of the world. The combined systematic risk of extreme debt levels and extreme interdependence of global supply chains is going to be severely tested. That we could easily have another 1928 or 2008 financial crisis I have no doubt. Hope not but its a good possibility I'm thinking.

Great post. Thanks.

And now everyone that’s over extended will expect the government / Fed to bail them out like 2008/09. Sad.