/biz/ - Business & Finance

I can't be the only one on here who is really interested in the macro economic picture of the US economy right now. So I wanted to create a general to discuss. I think at this point you can't separate Macro from Fed and Fiscal support, so I'm just going to post some news that I think is relevant.

>https://twitter.com/The_Real_Fly/status/1304589935480107010 - Marco Rubio says there will not be any additional stimulus until after the election.
>Additional unemployment not available in most states as they cannot meet the necessary $100 requirement (see pic related).
>Major indices (especially the NASDAQ) seem to be in a sustained downtrend
>https://www.cnet.com/personal-finance/new-national-eviction-moratorium-for-the-rest-of-2020-what-you-need-to-know/ - Eviction moratorium extended until the end of 2020.
>September FOMC next Tues/Weds, Negative Interest Rates (Nominal) still off the table but Yield Curve Control may be in the works.
>https://realeconomy.rsmus.com/pandemic-economics-prospects-for-permanent-job-losses-rising/ - Overall joblessness decreasing, however continued unemployment claims and permanent job losses flatlining and increasing respectively.

In the short term hard to see how we're not setting up for another big deflationary crash. With no stimulus, no direct payments, unemployment out of reach for many, PPP based hiring coming to an end, and interest rates already at zero with going negative off the table, I don't see how it's avoidable. Am I wrong? If so, why?

>>22328222
A few things.

>1. The only thing keeping the market up was tech stocks, we now know that was at least in significant part due to Softbank intentionally gamma squeezing the entire market
>2. While fed action has been significant, the fiscal side (congress) has been lacking. The current 'skinny' bill being debated by Republicans doesn't even have another round of direct payments. Let's be clear, without income replacement, the economy (and yes, even the stock market) to a much more serious and much longer degree than what has already been passed, we WILL have another March style crash.
>3. Not only is fiscal support seemingly not coming to any serious degree, but it might not be coming at all. I've been under the impression for a while that politicians in DC don't seem to understand that they are standing on a cliff, and the only thing keeping them from tumbling over is investor confidence and an economy living on the vapors of the last stimulus package. Before, everyone was assuming that regular multi-trillion dollar stimulus packages were a given, now it's unclear if the Republicans would be willing to do that even if it's clear the economy will collapse without them.
>4. Trump's "extended unemployment" is basically useless. See pic related.

That all said, if we do get another collapse, and the Fiscal side is unwilling to come to the table, it will be very good for younger people. You will be able to buy stocks at P/Es of under 10, you will be able to afford housing as boomers are forced to liquidate vacation homes since their 401ks aren't going to enable them to retire, and your dollar might actually be worth something.
This all comes down to DC. Are they going to print the problem away or not? The only "bullets" the Fed has left is YCC and NIRP. They've already committed to not doing NIRP, and if they do YCC that will maybe buy them a few months of minor market pumps before more fiscal will be needed anyways. It's in congress' hands not the Fed's.

>>21515826
I'll give you the arguments for and against another dip.

Argument for a dip to $22:
>silver and gold correcting off a new parabolic run to ATHs
>they only go up because of reckless money printing, and currently the federal govt is in gridlock where they can't agree how to spend the money/how much to spend
>also silver is currently just recovering into non-overbought on the RSI, but in the past every time silver hits overbought it has to go back to near oversold or oversold before it starts rising again and we haven't hit oversold yet

Argument against:
>the govt will eventually figure out how to start spending more money, if they don't the Fed will or Trump will unlock the TGA
>we are just now beginning to see what happens when suddenly all federal stimulus gets removed from the economy (both stock market and the real economy, pic related)
>things are clearly going to get way more chaotic the closer we get to the election, and chaos always good for gold and silver

Personally in the short term I'm bearish. I think we need to spend August going slightly down and to the right in a long consolidation before shit pops off in september again. We just went too high too fast we gotta cool off a bit. But mid term (past september) and long term? Couldn't be more bullish. You know they're not going to stop printing money, what more do you really need to know?

>>21498631
Alright boys markets open in 29 minutes, let's hear those predictions. Some factors to consider:

>Recent treasury option was an absolute shitshow with not enough bidders leading to rising yields.
>Warren Buffet's Berkshire Hathoway buys a $500m share in Barrick Gold.
>Stimulus talks currently deadlocked with the Senate on recess. Deflationary for sure, but good for gold or bad? Who knows?
>Unemployment Insurance by Trump is a smart political move, but with many states unable or unwilling to pay the 25% cover they have to chip in to participate, we may be about to see the complete and sudden withdrawal of all Federal fiscal assistance from the majority of Americans. (Pic related)

Personally I may buck the trend but I think this coming week is going to be slightly red. The Buffet news is good but everything else in the short term as it reads right now points towards deflation which should be bad (but not terrible) for gold.

>>21413483
I am writing off most of August as a crab month. UNLESS there's another crash or stimulus.
Admittedly I do think the chances of another market crash are pretty high. Trump's $400 UI is cool, but most states are either unable or unwilling to actually make it happen since they have to contribute 25%. If you look at pic related, NY & CA are already saying they just functionally cannot actually meet the contribution necessary, which means everyone in those states is just fucked. That's like a fifth of the US population, and that's before you realize that most other states are saying "we are not sure if we are going to be able to do this".
So what's going to happen when suddenly an economy that even the mainstream acknowledges was only chugging along because of stimulus, is suddenly and completely cut off from it? I think another flash crash like in March. That will force the politicians to come to some sort of agreement on new stimulus, or at least a new big buying program from the Fed. Whether that will happen in August or we can chug along on vapors for another two weeks before it happens, who knows? My guess is probably not though.

I highly recommend everyone who can sit on the side with some dry powder. I'm not selling my gold or miners right now, but I am trying to get as much cash ready as I can to buy the next big dip.