I planned on making a longer entry here on another topic. THEN I planned on making a usual length in this series. Unfortunately, time is against me, as there is a ton going on at work these days, to no one’s surprise. So, we will give some quick hits.
So, what the hell is going on with that. I recommend the Daily on this, but in brief, Coronavirus + Russia taking on the world in Oil. In previous posts, I predicted an economic blowup to be completely unrelated to the actual issues effecting the market.
Is it starting? Is it the Great Market Adjustment? ehhhhhhhhhhhhhhhhhhhhhhh Probably not. Desk Traders don’t want that, otherwise the market would have tanked by more.
A few things to watch.
1. Does the Coronavirus get worse? Yes. But how much worse. Headlines are pretty bad, but everyone out there is freaking out. However, like everything in the world, stability only exists based on the faith of people. Like religion. If a major Coronavirus outbreak happens. It could get real stupid real fast. So far, all the precautions and cancellations is just preventing The Great Freak Out. Which is a good thing. We all rely on the world continuing to spin. We aint LDS; we ain’t ready for mass chaos. So, if perception or reality get worse, prepare for more days like today.
2. Watch the Federal Funds Rate Cause we have no where else to go
The primary tool the federal government has to stimulate the economy is the rate by which the government. The immortan HATED how high the previous administration had the interest rates. They were that high for a reason. The fed has literally no where to go from here to stimulate the economy. And now there is no where to go. You can only give away free money for so long before the money itself becomes worthless. The bond market is already freaking out. Expect more of this.
3. Watch China. Wuhan has begun to stabilize. Supposedly. Its hard to trust anything Winnie the Pooh says, but the indications seem to be them emerging from the outbreak. This should give you some indication of how long this will take. Considering it started in January, I would expect a few more months of this.
At this point, things would have to get EVEN MORE stupid for the markets to actually completely collapse. Not saying it may not happen. But, a bunch of people are invested in them not collapsing.
Buy some canned goods. Be excellent to others out there. And keep watching the skies.