Dow jones plunges 512 points in one day; nasdaq down 136; s&p down 60

Absolutely, positively, without question. That $2 trillion ain't going to last for more than 2-3 months. And we will be nowhere near fully back to work by then. Not just the U.S., the whole world. We can pretend all we like that we control our own fate, because that's what we do as Americans, but that ain't happening with this thing.

 

Indeed.
As I earlier posted financial measures only work when the crisis has a financial origin. This virus is something that isnot part of the economic formulas in our computers. It's an external event that doesnot go away by throwing money at it.
If I knew how to spread fake news I could make a fortune by buying call options and spreading the fake news a cure has been found.

 

Then they'll pass another 2 trillion giveaway in a few months. It turns out that we always had the money anyway, we just didn't want to spend it.

 

Spending is for Republicans.

 

No, the money never mattered. MMT FTW.

 

Not only the Down Jones plunges

https://www.marca.com/en/football/international-football/2020/03/30/5e81c9af46163f579b8b45ca.html
Transfers will lose 28 per cent of their value
Pogba's value set to drop to 35 million euros

https://en.as.com/en/2020/03/30/football/1585563951_163078.html



CORONAVIRUS

Coronavirus: Football's transfer market values have plummeted
CIES have published a study that says team values have dropped by a staggering amount with Manchester City, Real Madrid and Barcelona affected.
Market value loss according to CIES
Club Dropped value in euro % lost
FC Barcelona -366 31.30%
Liverpool -353 25.10%
Real Madrid -350 31.80%
Paris St-Germain -302 31.40%

 

The nobody knew argument from the Coronavirus thread, moved to its proper spot.

1) The stock market hit its record high on February 12th, 2020.

2) If even a small portion of the money in the global stock markets recognized the economic effects caused by the virus, stock would have been falling, not rising.

3) Thus, to a first approximation of the truth, on February 12th, nobody knew. At least, not people with the assets to move stock prices.

I don't think any finance professor would disagree with that.

 

I don't disagree.

 

From a market perspective:

The nobody knew argument does not equal the nobody understood argument.

They are very different.

 

But that's more the, "Nobody in the market really believed" argument than the "nobody knew" argument, isn't it?

 

For me, if you don't believe something that happens to be correct, then you don't know. But maybe we use the words differently..

At any rate, this February 25th NYT excerpt gets at the root of our discussion -

This will be a good topic for future academics, assessing the level of the stock market's efficiency (or not).

 

Copied this from the other thread:

Options get expensive, when the market moves fiercely in a certain direction. When the market isnot volatile the options are not expensive. Just look up what a put costed in februari:

At that moment nobody had a clue what was going to be the impact of the virus. A gamble for a couple of hundreds to bet on a downturn in march would have bought you quite some contracts.

The option prices, look them up and the stock market movement contradict what you post.
Just look at the dow graph I posted up.

The collaps started the 21st of februari. A couple of days earlier it still rose.
Markets take in the info available to move in the direction that info is providing.
Nobody took the info in januari as serious. The reason? The WHO etc. were plain stupid in their predictions what would happen. They underestimated big time what was going to happen and the markets were faring on that compass.

I posted in another thread begin februari suggesting the posters to fill their cupboards with supplies and was made fun of. However I, while recognizing the looming disruption, didnot anticipate the total collapse. Otherwise I, as trading options, would have gone massively in with put options.
So I'm the living proof of the fact you can foresee a health scare, but miss the potential impact on the economy.

 

Again though, their is a distinct difference in the argument in not knowing about something and not understanding something.

You can know and see the healthcare crises, but not understand it's impact on markets.

Those are different perspectives.

 

It's not about not understanding it. It's about faring on info by the WHO and other medical professionals, parotted by certain politicians it's not going to be a health problem. If you're fed this info by those who should know what they're talking about, it's not a matter of not knowing, but a matter of garbage info in, garbage preparations as financial pro's out.
The minute the truth became clear the markets reacted with a vengeance.

 

I was quite aware of the virus in China and followed the events in Wuhan, including the night the lockdown was announced. Wondered why no one was posting about it here.

Looking back, I knew it would get here but I didn't think it would be that bad. I assumed when cases got here we'd find them through testing and tracing and control the outbreak. Maybe that just wasn't possible because of how contagious the virus is. But I continued to be very disappointed in the CDC. They had a very good reputation, but it's trash now.

 

The situation was bad, but the real impact of the virus at that time most likely was tuned down in the media feeds. As the WHO is a lap dog of the Chinese gouvernment they either are complicit in putting a veil over the real numbers or just took the words of the Chinese at face value without checking themselves and spreading it with the hush words into the world.

 

Of course it's about understanding.

The WHO said on January 30 "The outbreak was declared a Public Health Emergency of International Concern"

They knew what they were likely dealing with at this time. So did many in intelligence circles.

It was US politicians who continually downplayed this, until they could no longer.

The markets as a whole did not really understand and come to terms with what this meant until at least 4 - 6 weeks after this stage.

 

That's not the alarm bell. They only in march sounded the alarm bells:

Coronavirus confirmed as pandemic by World Health ...
www.bbc.com › news › world-51839944

Vertaal deze pagina
11 mrt. 2020 - The coronavirus outbreak has been labelled a pandemic by the World Health Organization (WHO). WHO chief Dr Tedros Adhanom ...

 

That wasn't my experience. I thought the story received a lot of coverage. There were videos of horrible scenes in Wuhan. But of course that's what I was looking for, so that's what google showed me.

Two of the more memorable videos:

 

Ebola was declared by the WHO as a Public Health Emergency of International Concern. These sorts of things routinely occur, and the financial markets routinely are unaffected by them. Until this time. This is quite literally the only time that U.S. stocks have been affected by a health issue. (The Dow Jones went up during the first two years of the Spanish flu.)

 

Watch the coincidence of the WHO finally admitting they were wrong and calling it a pandemic and the moment the stock markets crashed.

 

A January article from reputable source here in Canada.

https://beta.ctvnews.ca/national/health/2020/1/24/1_4781995.amp.html

Or this from months ago.



I'm not a conspiracy theorist at all. But even i was getting very nervous in January.

I posted this to my friends FB's timeline on on January 24
"Interesting. Now, I'm usually a heavy skeptic on 90% of videos/articles I read on random links. I'm very wary of confirmation bias and conspiracy theories. Having said that, I do think this is worse than most of the world outside China understand. The Chinese have a strong reputation for burying the truth. And, even with the conservative numbers being reported, the infection rate and rapid spread of this is...unnerving to say the least. And that's just based on conservative estimates. SARS was something like 8,000 global cases confirmed, but that occurred over many, many months. We're already at ballpark 4,500 cases here and that's in mere weeks."

Edit: Oh, and that same week, China started work on a new 1,000 bed hospital strictly for COVID -19 patients (although it wasn't even known as COVID 19 then). That was built in 10 God damn days. You better believe that should have raised some eyebrows.