Topic: There's no way this is a "V-shaped" recovery... right? - page 3. (Read 1027 times)

That's it. I can't understand people who in 2020 are shouting that "all this is the collapse of the system we will not survive the new crisis!!!"
What is in the minds of these people? Five minutes on Google is too hard for these people to understand that a crisis is as normal as running out of a can of soda? Yes, it's over, but if you get your ass off the couch and go to the store, you'll have a can of soda again - and this is the same as how the economy works (super-simple example, but still).

Wait if I'm thinking about this right... the attraction is that investors will ONLY lose a certain amount? So like if they only lose 1% but purchasing power goes down 3% they're out ahead?

That's actually insane.

Here's a new twist on that idea: negative yielding bonds.

For the first time ever, the UK just sold government bonds with a negative (-0.003%) yield: https://www.theguardian.com/business/2020/may/20/uk-sells-government-bond-with-negative-yield-for-first-time-coronavirus

And the incredible thing? There is strong demand for them:


That's amazing to me, and sort of scary. If bond rates keep dropping (2-year US bond rates hitting all time lows now too) and there is still strong demand, that suggests dark days ahead for equities. Stocks and bonds draw on the same pool of investors which is why the two generally have a strong negative correlation. If investors want to pay for the privilege of holding government bonds instead of holding equities, there must be some serious fear about the economic outlook for the next 2-3 years.

Capitalism is the system that ensures faster growth and that certain will make the economic hardship to be overcome. Production is the mark of economic growth and many are opening back for work. Soon we are going back to normal with bitcoin recovery.

The simple answer is that people just have too much money that doesn't cost anything. The over-inflated financial sector has cracked under its own weight due to a series of unrelated events, triggering another classic period of crisis. Because there will be a depression and then the rise will begin as it has already been and more than once.
Think of it as an emergency weight loss before the summer - you suffer for a long time and in many ways deny yourself, torment yourself. But then again, you can afford to drink beer in the morning and eat in restaurants for weeks. The economy NEEDS crisis. Not so often, of course. This is the l normal and natural course of things under capitalism and there is nothing super-scary about it. We have always risen and this time we will also rise and it will be better than it was.

I just mean the stock market. I'm talking about March 2009 onward:



Then, same as now, the market is trying to price in an economic recovery before it actually happens. This time I'm less confident, but at the same time, it's difficult to argue with trillions and trillions USD injected into the markets. These are truly unprecedented times.


The consensus among scientists is yes. The market is expecting it to be better controlled next time given awareness, time to prepare, and possible treatments or even vaccines available by then. I'm worried the market is overly optimistic.

I think we need to see June or Q2 financials to get a real feel for how things are progressing.

Sadly, one of my businesses is a corporate event organizer that involves crowds, restaurants, hotels, transportation, etc. It is the biggest and got hit the hardest.

This year still no demand, Q2 2021 will be low demand, Q4 2021 new normal (not as high as pre-covid).
Just guesstimate, and I will be very happy if my prediction will be proven false in a good way.

Yeah it seems SPY is acting like a huge biotech stock right now. Did you see how it reacted to Moderna? Jeez.

There's talks of a vaccine being made sometime later this year - that's literally impossible right? From what I've read it seems that it will take at least 18 months at the best.


But the "recovery" in 2009 - we were still in the gutter for a while afterward right? Are you using an economical definition of recovery, as a return to previous highs?

I want to see how the market reacts in 2 weeks time as the nation reopens and data should be coming in soon. It seems pretty much confirmed at this point that a second wave will be coming, no?

That's the key. The smartest traders I know were all quick to point out in March/April that the stock market is not dependent on fundamentals. Fundamentals hardly matter at all. What matters is liquidity. Bears can't fight a Fed that is injecting trillions and trillions of dollars of liquidity into the market. They are even propping the market up by buying massive amounts of corporate junk bonds, shoveling endless money into failing companies.

That implies one of two things to me:

• A recovery like 1987 or 2009, which assumes money printing can solve all woes
• The economic damage is too great, buy side liquidity will disappear (except for the Fed) and we're looking at a summer/autumn 1930 situation

Very binary situation, and we really won't know for quite some time. The incredible amount of optimism and the actual economic numbers definitely make me feel bearish though. There is so much irrationality going on. So much of the market refuses to accept even the possibility of an economic depression. The Gilead and Moderna rallies made that all the more clear. Everyone is banking so hard on a fast resolution. What happens if later trials (the real test of treatments and vaccines) don't pan out? What happens if there is a second wave in the fall?

If there is no miraculous turnaround in GDP in the next 3 months or so, the markets are setting themselves up for massive disappointment and another liquidity cascade like March.

Vaccine seems to be a long way out for now, of course there are some tests going on right now and thankfully there was couple of drugs that was used that showed some improvement and since that was discovered we are using that to basically heal people but there is no one cure that you can just inject with a needle and suddenly you are better. So, what we have right now is good because even if its slow and even it is a treatment instead of a cure, at least it shows us what helps people and what doesn't, we know a path. That is better than nothing if you ask me.

However all the tests, all the formulations, all the stuff just on paper (well computer these days) could even take months, after that we are going to need a lot more on top of that in order to reach the vaccine level.

Yes got my words tangled up there. And if you don't mind asking, what kind of business do you run? Is it a restaurant, or something else that is directly affected by the pandemic? How do you see your business operating in the future.

A W shape would be nice - was playing with options and should've not gotten greedy and sold out near 2300...

Chances are crypto's has its own patterns of chart movement we don't even know about.
So it could be "W shaped recovery" or whatever there isn't

I think the v shape recovery is what we are seeing because money seem to be flowing into the economic now as the economy itself is coming back. There is no need to be pessimistic because the economy is getting back in a gradual way.

I dont believe at all in the "V shaped recovery".

I believe there is still quite a lot of risk off sentiment and this will prevail despite the coordinated efforts by Western central banks to print more money and support the various asset classes.

Isn't it a marvel when an entity can issue 'bonds' and the same entity can issue money to buy those bonds (because no one else is buying)?

I don’t think that we should wait for the cryptocurrency prices to rise immediately after the events that are happening now, since other problems will begin immediately after these events. We must be ready for a long cold winter!

It will take a whole lot of time to recover so it will definitely not be pointed at the bottom. Depending on the speed of development and degree of success of this current virus' vaccine researches, we might actually be seeing a sort of a downward ladder.

If the economy will respond positively and quickly to the lifting of restrictions and lockdowns-- which is a huge risk and therefore highly unlikely to produce the desired results-- it might somewhat be a V-shaped graph, but then it will eventually fall down once again sans a COVID vaccine, and possibly turn even worse after that.

I'm not cash heavy right now, I never was. As far as my crypto portfolio is concerned, it is actually far smaller that it was a few years ago.

To be honest I don't believe in V shape recovery. Having in mind current situation and some predictions for fall such rapid recovery would be too optimistic to expect.
It's yet to see all the consequences that economies have suffered and at this moment we can't see the whole picture. That also reffers to cryptocurrency market that will also have some indirect consequences and the whole impact is still hard to determine.

I'm following this scenario. The current, apparent status of the economy is honestly looking too good to be true for what happened since the beginning of the year. The artificial pumps and desperate attempts to hide the ugliness of what's to come is making me believe that once they stop everything they're doing to cover the real side of the economy, hell will unleash.

This PDF has a chart at page 5 that clearly shows the fact that short-time working is predicted to be for 2020 in Germany on a more-than-double increase in comparison with 2009 which is alarming. To me, the worldwide economy looks like an insane bubble they're still trying to protect from bursting.

Look at the worldwide debt - do you think it'll just increase forever and money will be printed continuously and everything will artificially increase to quadrillions of dollars in debt?

These measures they're taking to protect against a crisis can't go forever. They have to stop one day - wonder what'll happen after they do. I felt a crisis was inbound for years, but never did I expect what we're witnessing right now. I just ask myself many times of the day what comes after health crisis, and I sure do hope the answer isn't food shortage.


Yes. I was planning to slowly accumulate PMs and crypto in the following 1-2 years, but now I'm on fast forward.

I have seen 'L shape' bandied about which is even less appealing.

The thing about this event that's impossible to call is that economies are basically in suspended animation. It's only when they come out of that that we get a sense of the actual damage. The workers lucky enough to be in countries that are paying their wages probably feel relieved at the moment. They may be less relieved not realising their job is withering and dying off screen and may not be there when the subs end.

And you can have a market that appears healthy and a real world economy that bears little to no resemblance to it. That's what it's been like in recent years already. If you were heavily involved in the markets there've been high after high. If you were working an actual job you would've noticed your cost of living going ever up while your quality of life was slowly sliding downwards.

There might be an even more stark delineation after this of that nature.

It does not matter how recovery will look like. Governments are printing money and increasing country's debts. Economy will recover. It will recover sooner or latter unless the debt bubble will burst. Debt bubble will definitely burst. Covid-19 lockout helped adding a lot more hot air in the balloon. But e have no ideas when the big bang will happen. It can happen this year it can happen next year or in 10 years time. Latter it will happen more ready Bitcoin will be.