50 bps interest rate cut by Fed

Are things worse than we think? What do you think? :face_with_monocle:

Powell has been spending a lot of time with the WHO and CDC so dare I say they know more than we might?

EUR/USD stayed rangebound despite the move though - so, I think we can anticipate other CB’s following.

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So do you think the virus would deepen and push U.S. and the world into recession?

I guess the rate cut or QE won’t solve the problem anyway.

The central banks are out of ammunition and the downturn is even not here yet! The monkey is in the banana patch, I repeat, the monkey is in the banana patch. It’s time to head for the exit!

Better run then!! :monkey: Is there gonna be 2008’s episode II? Exogenous shocks expose bad leverage. Curious to know who’s been swimming naked.

i wish PA was still around, would like his level headed analysis

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If I recall correctly, Frankenstein’s monster (in the 1931 movie) was level-headed.

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i’m going to bump this. sicne mortgage rates just hit an all time low with data stretching back to 1971. if you have any type of property. now is the time to refinance and pay as much points to lock it for as long as possible.

Agree with you. Anyway, I guess Mr. Goldman Fed is updating Bubble 2.0. Here we come at a point where debt outpace growth.

Could they go even lower?

Really trying to buy a house right now.

It may depend on the inflation level in a certain extent l think

In my opinion, if the inflation level is higher, the space to cut the interest rate is narrower, if the inflation level is lower, they may have more space to continue cutting the interest rate in order to stimulate the economy.

In order words, l think unless the negative interest rate situation happen or close to happen, it is possible to cut the interest rates. Whether they will cut or not depend on themselves and their expectation of the future economic trend. But only by cutting the interest rate to stimulate the economy may not be an excellent solution in the long run, maybe they will come up with some new solutions later on.

In the current situation, it is the golden time to refinance the bond if you issue them at a higher interest rate.

One need only ask—why is the establishment terrified of a recession? :thinking:

To the original question; things are as bad as the system thinks. We call this signaling theory; liars tell us what they know with their actions.

“To be useful, signals must impose more costs on those who use them to send false messages than any gains to be had from lying.“

100% we are in the late stages of the business cycle and the Coronovirus has been a catalyst that has brought forward the expectations of a recession.
Markets - especially the US, have been overextended from a valuation perspective for quite some time so I suspect all we’ve seen so far is some mean reversion. A true bear market level is a lot further below where we are currently at.


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Indeed. Even after yesterday’s fall the S&P500 is still 21x P/E (as reported). It would need to fall to 2000 (40% from prior high) before being 15x.

we are in a recession. they prolly wont call it that until a year from now. always a delay in these things.

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