stock market crash

[BlasterBates]

I hate to say it but I agree with you.

This has echo's of the 2008 crash where all the rating agencies were not adjusting the risk ratings for the toxic mortgage debt. Could you imagine the fallout if the pension funds start adjusting to the new reality if the rating agencies actually reflected the current risk. Watch the last 20 minutes of The Big Short, for me it appears history is being repeated but on a scale where 2008 could be a minor blip.

The banks have much more capital than 2008. New regulations saw to that. They now have huge balance sheets.

[wattaj]

How is that even possible ??

My bet is that they think that there's a bottomless pit of free Government cash waiting in the wings. Again. Only this time it's not just the banks that need it; it's EVERYBODY.

Or that someone, somewhere, is propping up the market until the big players can get out.

[DealorNoDeal]

This pandemic thing is just a storm in a teacup.

At least that's how the markets are currently pricing it...

[scooterscot]

Remember what happens after a bull trap. If the bull trap is confirmed, then we'll have capitulation. This will be a total bloodbath.

[Paralytic]

Remember what happens after a bull trap. If the bull trap is confirmed, then we'll have capitulation. This will be a total bloodbath.

Who has the authority to "confirm" a bull trap and how is it any different to saying what happened in hindsight?

[rootsnall]

This isn't a new paradigm scenario, unless you count 'the Fed will ensure no crash' is in fact it. So it's not a normal bubble crash.

[BlasterBates]

The major economies are predicted to contract roughly 5-7% in 2020. That's what you need to use for your valuations.

The fact is though there will be sectors like travel which will be hit much harder than other sectors, such as toilet paper for example.

[DealorNoDeal]

This isn't a new paradigm scenario, unless you count 'the Fed will ensure no crash' is in fact it. So it's not a normal bubble crash.

Weren't the US markets overdue one of them anyway?

[DimPrawn]

The major economies are predicted to contract roughly 5-7% in 2020. That's what you need to use for your valuations.

The fact is though there will be sectors like travel which will be hit much harder than other sectors, such as toilet paper for example.

If you are correct, then this pandemic is just a storm in teacup and we will all be back to normal soon.

But what you need to consider is a lot of the bad news in terms of bad debt and defaults hasn't quite yet filtered through to quarterly results.

E.g. Barclays profit drops as bad debts surge in crisis | Sharecast.com
Banks to reveal significant increase in bad debt provisions
Deutsche Bank swings to net loss as bad debts surge | Sharecast.com

It is true the magic money tree will prop this up, but for how much longer?

Don't get me wrong, the winning trades now are almost all bullish, but consider when the music stops and the party ends, will you have taken your profits off the table?

[BlasterBates]

If you are correct, then this pandemic is just a storm in teacup and we will all be back to normal soon.

But what you need to consider is a lot of the bad news in terms of bad debt and defaults hasn't quite yet filtered through to quarterly results.

E.g. Barclays profit drops as bad debts surge in crisis | Sharecast.com
Banks to reveal significant increase in bad debt provisions
Deutsche Bank swings to net loss as bad debts surge | Sharecast.com

It is true the magic money tree will prop this up, but for how much longer?

Don't get me wrong, the winning trades now are almost all bullish, but consider when the music stops and the party ends, will you have taken your profits off the table?

Barclays made a profit. So they made less of a profit but still a profit and that is during armageddon.

Their share price reflects the drop in profit, i.e. profit 40% down, share price 50% down.