Agreed.

One thing that i'd point out is we are at a time in history like no others. There's literally never been a time in history when money was so cheap. The yield on a 10yr US bond is 1.17% as of today. That's unheard of and it makes absolutely no sense. My money market account that i can go liquidate at any time gives me more than that. So no one really wants to keep their money in risk free or low risk assets. 20 years ago when you can make 4-5% on US bonds you could be happy with that if you're risk averse now at 1.17? lol that doesn't even cover inflation.

So what happens is vasts amount of money has to go somewhere. If you're getting nothing in bond yields you have to go seek that yield in higher risk assets like stocks. So the issue today is there's literally trillions of dollars that have to park somewhere. So much money was going into stocks the last few years precisely because of this.

I think even now markets will be propped up because literally that money has no where to go. There's not enough gold, bitcoin, whatever else with high enough liquidity that can sustain the pools of money that need to be parked for something more than 1-2%, that's why i think stocks will remain relatively elevated for quite awhile after this corona virus stuff passes.

What we're seeing atm to me is the opposite spectrum of FOMO. In a few weeks the corona virus isn't going to be spammed as end of the world like some of the coverage these last couple days and stocks should catch a bid.

Power hour gonna be bloody

Economic growth is high in the US which occupies the increase in money supply, as production of goods and services has increased. If it wasn't, inflation would be out of control.

Besides, about 40% of the stock market is made up of passive index funds that track the market, so piling money into those assets instead of bonds would not have an impact on the value of stocks. Active buyers and sellers determine transaction prices.

Simply saying 'this money has to go somewhere' is a very facile statement.

Not enough yet. A 50% correction would be a good start and would open up prospects

This is the opposite of reality. Demand for US assets because of their overall safety and performance has certainly increased their price as more institutions, funds, investors pile into US markets. Index funds are made of individual stocks so whether someones buying the SPY index or buying SPY components of that index, the index is going up. Are you really trying to say individual components are somehow independent of the index they are part of or vice versa?

yo yoooo
LOL
might get dirty af in about 75 minutes LOL

yup agreed across the board. these funds can't just hold forever. my theory is that once BTC starts looking up we're gonna see a big spike and they'll dump short term in there, push it to like 11k and then sell off back down to 8kish in a massive drop. at least that's my hope

Feds announced they’re going to “support” the economy.

There's not enough liquidity in bitcoin. Bitcoin is valued at like 150 billion. Norway's sovereign wealth fund is 1 trillion dollars. That's one country, rich but fairly small. Now think about the type of wealth across all of Europe, China, HK, US, etc? Somewhere around 90 trillion dollars is in world markets. There's no where for that money to go, not crypto not gold. You either hold bonds yielding less than 2% or even negative in Japan or Europe or you hold stocks. Choice has been easy.



cool, probably 25 base point cut probably inject more USD in markets.

This post was edited by ofthevoid on Feb 28 2020 02:02pm