Markets: How Far is Down?

Even if you don’t subscribe to our Aggregate Index and other work on our  Peoplenomics subscriber site, here’s a chart that may set your hair on fire:

We will have an update tomorrow morning on the PN side.  Do remember, though that a close of our Aggregate down into the zone of (i) up on the left would protend the arrival of The Big One.

And already there’s a certain similarity – but let’s see how the crowd inside the paper-backed theatre plays out the afternoon…


20 thoughts on “Markets: How Far is Down?”

  1. minnup .. hasn’t even started .. and they want gold eh .. funny bloke that dalio and all his mates

  2. I tell yah now .. you get more useful knowledge here than any of those snake oil shows or gold sprucking dumps like 321 or kitco anyday .. everyone should bookmark my mate George .. yep yah cant beat experience . minnup

  3. Much depends upon the Supply Chain issue. IF the supply chain in China doesn’t start moving again one can safely say “It IS Different This Time”. Once the last boat then arrives from China and the domestic warehouses start to empty … well there WILL be panic throughout the American Business community since no matter how much money the FED pumps into the system one can’t USE money as items on store shelves or as parts for manufacturing items domestically.

    If Chinese workers return to work … but then end up catching the Corona Virus at work and the plant thjey are at then has to shut down again,well the Supply Chain issue is still NOT solved.

    Americans are about to wake up to issue that we have offshored to China so much BASIC manufacturing and raw material manufacturing/sourcing that without China getting back up and producing the US economy is going to take a terrific hit, even if we somehow manage to avoid a major infection situation domestically.

    If a major infection situation actually hits the US in addition to the shut down of the China Supply Chain … well the US is going to experience somthing it hasn’t gone through since 1918-1920 (the Spanish Flu event), and the people who lived through that disaster have now all passed on and can’t give us any insights as to what we may be facing, not just as a country but also on a community level and on a family level.

    • The inevitability of a single point of failure should have been obvious to the corporate geniuses that got us into this mess. Or was it all part of the plan? Thanks to George reaffirming my gut instincts I’ve had since the 80s I hope we’re in a much better position to weather the coming storm. I just hope the thoughts I’ve had about a mass grave in our local cemetery never comes to be. That’s a historical repetition I hoped I’d never see.

    • Unfortunately with offshoring basic manufacturing…we did it long enough that those with the skill sets needed to retool and train have also passed on.. the last report I read had an estimate time to retool train and manufacture was between five to ten years.

    • A real killer would be an EMP while China has their factories closed and a pandemic going on. Not only are they ten years plus behind on manufacturing replacement parts the USA would be the last place they would be concerned over. A war or catastrophic event would catch everyone with their pants down.
      Theres no question that We screwed ourselves.

  4. 2300UTC trend shows US Futures up ~.5% across the board. I don’t usually bother with daily trends until 0900UTC but I’ve been offline so I dropped in on Bloomberg so see how bad the Tuesday blood-letting had been. It’ll be interesting to see the 4am futures…

    COVID-19 worldwide deaths @2708, recovered @27905, per J-H tracker at 2/25/2020 2300UTC. By MY reckoning, that yields a 9.7% death rate.*

    *My way of reckoning is the ratio of dead to recovered, where the medical and government interests use a ratio of dead to total infected. I discount this “methodology” as a dishonest exercise in “statistical license” because everyone currently infected is neither dead, nor recovered, and in-theory, every single one of them could either die, or recover. Since every single person infected is either going to recover or die, until they do one or the other, they are in-limbo, and of no statistical significance.

    • That there was an article recently posted that indicated that the fatality rate among those individuals hospitalized with coronavirus pneumonia was a full 61%. This means that if you are hospitalized, you have only a about a 1 in 3 chance of walking out the door alive. The Chinese are not counting dead people they find on the side of the road, or in apartments, so that 9.7% is really a best case estimate. Any better estimate than that is simply propaganda, or lack of accounting acumen. Stu’s nosty little prediction isn’t necessarily out of bounds.

      With PM’s holding pat or drifting down and bitcoin selling off, in addition to the equity rout, raises the spectre of a runaway credit deflation episode. Bond and treasury rates are going down, so there is still some cash and liquidity out there. Nevertheless, the violence of the equity swing is likely to put a lot of margin accounts and unconventional margin buying at risk. As I warned some time back, if you are an individual buying on margin, it is best to rethink that strategy.
      All of this makes perfect sense, if you understand the history of manias and credit deflation. Credit deflation episodes tend to erase all credit: the good, the bad and everything in between. If you can get out of debt, this is a really good time to make your move. Having modest property which you can live on may well be the best current investment.

      • It was.

        Using my (IMO honest) methodology, J-H indicated a “kill rate” of over 60% as of 2/17. I honestly expect this to drop further, maybe into or below 6%, as more cases occur in more places where advanced medicine exists and infection rates don’t massively overload the system, ad they are doing in Hubei Province. Still, an expectation of 400mln deaths from this bug, this year, is nothing to celebrate…

    • Now I wish I’d invested in that Dillon Precision reloader a while ago. RCBS is too slow but more precise.

    • The CDC Briefing was reportedly held similar to the Intelligence community briefing this last weekend, without notice to the White House or any other cabinet level officials.
      Further the briefer “Nancy Messonnier, M.D., Director,
      National Center for Immunization and Respiratory Diseases” conveniently is the Sister of none other than former Dep. AG Rod Rosenstein.
      Dr. Messonniers briefing in contradiction of the Trump/Azar/Fausti briefing, attempted to press the panic button, and was picked up by NYT, WaPo, and the rest of the MSM including Fox, to paint the situation in as bad a light as possible. Hence, yesterdays 900 pt drop.
      So, what else is new?

  5. Dear Mr. Ure,

    It’s news to me that according to the “South China Morning Post” of Feb. 23, Chinese authorites had begun tracking down numbers of “recovered” covid-19 patients as early as the period of Feb. 9 to 11 in some regions because they were found to be carrying the virus again. Doctors remained uncertain if the reappeared virus is contagious or not, so the individuals in question were being rounded up for a further 14 day quarantine in locations other than hospitals. So it sounds like the current disposition on the supposed 35000 recovered individuals is “maybe not…and, what next?”

    • I meant to include mention in the above that the CBC has an analysis/opinion piece out today from one of their senior producers, Don Pettis. He was previously a forest fire fighter and an Arctic Ranger, so he knows when stuff is heading the way of the fan. Basically the short story within his longer story is stock up on grocery staples gradually before the bigger virus wave gets here. The report’s end-links lead to various related items including a link to the federal Government of Canada publication “Your Emergency Preparedness Guide”.

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