tl;dr - Bank of Japan raised rates and people borrowing Yen and converting to USD assets are now totally F'd
+ NVDA production problems
+War in middle east
+buffett selling Apple
+weaker jobs data
+de-inversion of the yield curve
+election toss up again after being settled on a trump admin. Market doesn't like surprises.
+ regular August weakness
Seems like a straw that broke the camel's back sitch - just one thing after the next, with Japan being the match that lit the fire. Could have survived 3-4 of these but all put together was too much.
VIX 62! That's a very very high number. Utter terror out there, firms willing to pay whatever it takes for protection. Which means a lot of fools are buying protection at any price and will have to buy stocks very quickly in size...if stocks can get a foothold.
This post was edited 29 seconds after it was posted.
Douglas A. Boneparth @dougboneparth · 1h According to the VIX, the worst market events of our lives were the 2008 financial crisis, COVID, and the Bank of Japan raising interest rates by a quarter percentage point.
Douglas A. Boneparth @dougboneparth · 1h According to the VIX, the worst market events of our lives were the 2008 financial crisis, COVID, and the Bank of Japan raising interest rates by a quarter percentage point.
Japan's raising rates clearly noteworthy, but I am hearing the reason most sited as fear of a US recession and this stems largely from Friday's weak jobs report.
This has been generating a fairly widespread critiicism that the Fed is waiting too long to lower rates, and should have done it at their meeting last week. Now talk that a double rate cut may be in store for Sept.
Noteworthy that the trend today has been to start really low but generally upward since then.
Oh wait...no I'm not. Kind of what happens when you invested enough as you should have and paid off all your debts. I could not care less about today's big dip. 10 years ago I would have been excited about such a thing as it is a great buying opportunity, but today I don't need to even thing about that let alone any paper losses today. Meh.
Douglas A. Boneparth @dougboneparth · 1h According to the VIX, the worst market events of our lives were the 2008 financial crisis, COVID, and the Bank of Japan raising interest rates by a quarter percentage point.
Japan's raising rates clearly noteworthy, but I am hearing the reason most sited as fear of a US recession and this stems largely from Friday's weak jobs report.
This has been generating a fairly widespread critiicism that the Fed is waiting too long to lower rates, and should have done it at their meeting last week. Now talk that a double rate cut may be in store for Sept.
Noteworthy that the trend today has been to start really low but generally upward since then.
well I'm buying. Not all at once, but from the open and steadily.
Can't look away from a VIX 62 with a strong underlying economy and no immediate obvious major crisis.
Good call, and appreciate you adding some perspective.
I've been selling slowly, small amounts, steadily and gradually over the last few weeks. Today feels like a capitulation and in that vein, I am holding/neutral.
I go by that old trading proverb about not trying to catch a falling knife, and instead, look for a rebound of sufficient duration - like 2 or 3 days at least - before buying in.
With that said, overnight futures and the opening were ugly, to say the least.
Douglas A. Boneparth @dougboneparth · 1h According to the VIX, the worst market events of our lives were the 2008 financial crisis, COVID, and the Bank of Japan raising interest rates by a quarter percentage point.
Japan's raising rates clearly noteworthy, but I am hearing the reason most sited as fear of a US recession and this stems largely from Friday's weak jobs report.
This has been generating a fairly widespread critiicism that the Fed is waiting too long to lower rates, and should have done it at their meeting last week. Now talk that a double rate cut may be in store for Sept.
Noteworthy that the trend today has been to start really low but generally upward since then.
I don't buy that. A double rate cut would be insanely bullish and if that was being priced in over this then you wouldn't see this level of carnage.
I think Modern Monetary Theory can now be dismissed as nonsense. It remains to be seen if traditional stock valuation measures will become a thing again.
Japan's raising rates clearly noteworthy, but I am hearing the reason most sited as fear of a US recession and this stems largely from Friday's weak jobs report.
This has been generating a fairly widespread critiicism that the Fed is waiting too long to lower rates, and should have done it at their meeting last week. Now talk that a double rate cut may be in store for Sept.
Noteworthy that the trend today has been to start really low but generally upward since then.
I don't buy that. A double rate cut would be insanely bullish and if that was being priced in over this then you wouldn't see this level of carnage.
I hear you, but I think the angle being voiced here is that the Fed missed their opportunity, the economy is taking a hit consequently, and they (the Fed) will need to play catch up at Sept. meeting with a half point rather than quarter point cut. But the damage is done, so therefore, lack of bullishness, even with the likelihood of a larger cut.
* and adding to this train of thought, I just did a quick search and here's one of those articles about a larger rate cut in Sept. becoming a growing belief
And in checking, I see mentions now of the idea of an emergency rate cut as a possiblity being floated, and I see a headline to this effect even in the NY Times. That would be before the Sept. meeting.
I doubt that would happen, and frankly, if it did, it would spook the markets big time.
I think Modern Monetary Theory can now be dismissed as nonsense. It remains to be seen if traditional stock valuation measures will become a thing again.
Igy were you saying that back when Covid was rocking? The Dow had an annualized return of 12% during the Trump presidency. The Nasdaq much higher. When do you just throw in the towel and admit you were wrong?
I don't buy that. A double rate cut would be insanely bullish and if that was being priced in over this then you wouldn't see this level of carnage.
I hear you, but I think the angle being voiced here is that the Fed missed their opportunity, the economy is taking a hit consequently, and they (the Fed) will need to play catch up at Sept. meeting with a half point rather than quarter point cut. But the damage is done, so therefore, lack of bullishness, even with the likelihood of a larger cut.
Well, there was some action in long bonds. My 20-year's went up nicely.
I wonder how much of the equity liquidation today is from overseas (JPN ) holders.