A Unpleasant Macroview:
1. guys/gals, I know this is a TSLA board but sometimes things are much larger than TSLA ,...this is a big picture post...I know many people think this is all about Corona but that was just the impetus but not the true cause for what's about to happen...you will see things that you couldn't even imagine over the next 6-18 months...this is about deflating the biggest credit/debt bubble in human history.
Bond mkt's gave defcon warnings months ago...I know people think the Fed's control the interest rates but they don't...they just react and follow 3 month treasuries yields if you graph this out its clear as day.
2. I was harping about Nasdaq 7300 for weeks on this board cause that was the potential stopping point for a int term bottom...when i see levels on charts get broken, I see recessions, another level breaks I see unemployment rates sky rocketing, another level i see a full on depression...unfortunately I see odds fairly high for a depression now...something we haven't seen in our lifetimes...wish this thing was just going to be a severe recession but I dont think this is the case now.
3. We have never had a systemic shut down of most businesses before...2008 was about the banks deleveraging and real estate imploding right before that...this is about deleveraging everyone and their grandmother this time...the Feds can barely put a bandaid on this wound but can't stop this avalanche ...during bears like this sure every stimulus will cause a gap up and rise for few days but then reality sets and the selling will resume.
GDP will shrink 25-30% next quarter, something that has never happened in modern times....unemployment may hit 20-25% within next 3 months...during 2008 when things were so bad unemployment prob only got to 10-12%....think about this for a moment.
4. I see SPX heading towards 1900 level and this doesn't hold(not likely to hold), that will confirm the depression scenario in my mind and we will head towards 1100-1300...if this happens, life will change as you know it.
-when pensions implode retired teachers, cops, fireman will protest hand to hand angry about the broken promises...many will go back to work
-many many small business will go out of business...yes the govt will try to bail out many businesses as they can but they can't bail everyone out...there are 100K's of small businesses that were barely making it during the good times.
-the larger sectors with paid lobbiests(airlines, Boeing, hotels, cruise lines) will get their money, but smaller businesses are not in this club
-food lines will be seen
-protests in the streets will be common place...the military will be involved unfortunately...govt of new york already calling for a military presence cause he knows what's coming.
Why do I say all this?...not to be over dramatic or to be fear mongerer, but everyone needs to hunker down and get ready for something they have never seen before ...the people that will be critical of this type of post are people who are not prepared or not ready to try to prepare...yes this is anxiety provoking...to try to just avoid these realities will be a very costly mistake.
I think this tragedy will bring people together as people who are doing well will need to help out family members and friends.
Could the govt have prevented this?...maybe yes, but now its too late...if we would have adopted Singapores corona policy where everyone wears a mask and abides by social distancing rules, then we wouldn't have needed to shut down the economy like this leading to probable depression...businesses could have stayed open imho...many will say there are no N95 masks hence we cant...thats BS...Elon just made 250K N95 masks over the past week...this is warfare and many factories could be making N95 masks and gloves...this would stop the virus if everyone abided by these rules...look at the rates of Corona in Singapore and Hong Kong....why go to lockdown or SIP when people could wear masks and gloves???...there will be huge irreversible repercussions to shutting down towns for weeks to months.
But in the US we(govt) didn't take it seriously fast enough, we didnt have tests available fast enough or in enough quantity...even today hospital workers will prob die cause they prohibit med workers in hospitals from wearing masks!...we only test people who need to be admitted and the 80% of the people with corona told to stay home and not come into the med clinics ...hence whatever number the news claims you have to multiply by at least 20!...I hope we are not italy where if your over 65 or have other underlying disease, they will not tube you and save you...you will be left to die if you get ARDS.
Yes what the Fed will do is inflationary but that pales in comparison to the loss of wealth/equity from mom and pop so overall, we are headed into a deflationary environment.
I hope I am dead wrong about all of this...final point, I would mentally prepare for something really ugly and frightening cause this isn't just another recession that I am certain of.
. I'm not going to respond to that post because "you will see things that you couldn't even imagine over the next 6-18 months...this is about deflating the biggest credit/debt bubble in human history" is ridiculous. In the matter of months, we could make enough masks to start providing masks to every employer to get at least some of the workforce active again. Will it be weird to be served food by someone with masks and gloves. on? Sure. But you will be served food.
