Carnage in homebuilder sentiment following a record collapse in homebuyer sentiment means it really should not be a total surprise to see Housing Starts crash 22.3% MoM (the biggest drop since 1984)...
"Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis." - James Gorman
"The economic reality and corporate earnings reality, at some stage, needs to reconcile with the markets. The market hasn’t fully factored in the uncertainties or potential risks in terms of earnings downgrades."
On today’s Real Vision Daily Briefing, Roger Hirst and Ed Harrison discuss FX markets, high yield credit, and EM fixed-income through the lens of Brent Johnson’s “dollar milkshake theory” and Mike Green’s thoughts on the concentration of capital. Harrison and Hirst analyze the impact that the Fed’s yield curve control will have on net interest margins for banks and whether central banks will draw a “line in the sand.”
If the US banking sector is facing $100BN in loan losses, then the Fed will have no choice but to once again step in and bail out the US financial sector.
"I believe we tried that from the 1930s up to 1991 (“We pretend to work and they pretend to pay us”) and it didn’t work out so well for those on the receiving end of it."
"2800-3027 is the big battle line resistance that may offer a powerful source of supply as those who bought the SPX in late 2019 seek to get out of the market closer to even."
... feeding at the trough of U.S. taxpayer generosity with a sense of arrogance and entitlement... As a country, we will either live with the short-term pain of discipline or the long-term pain of regret...
