I figured 25% when I saw the OPEC news, just pretty ballsy move considering SA and Russia have to sell at that price too. It’s been burning the candle arm bith ends. No pun intended.
Main issue is the plunge protection is using increasingly more ammo each and every time they don’t be let markets function.
Main issue is the plunge protection is using increasingly more ammo each and every time they don’t be let markets function.
I think it'll just come down to what the fed is willing to do in the short-term to prevent pain.
I feel pretty confident they won't let the system flush as we have ample evidence at this point they will prop at all costs just like I said at the beginning of the thread.
They will let the balance sheet hit 10-15 trillion before they let a deflationary death spiral start.
Unless they can't stop it, and at that point it is all dust anyway.
Best way to play all this is reflation trades since doing all this w/o lighting USD on fire seems difficult, no?
I don't know what the Fed would do. Powell is the first trying to fight the virus with monetary policy.
When the economy was in free fall in 2008, Bush sent everyone a check $600 - $1200 each to boost consumer spending. Oil market shot up to $148/b in response. Bush stimulus effort fell flat, consumer could barely afford gaz price for a brief period. All stimulus checks went straight to the Saudis bank account.
We're in a reversed situation, sustained lower gaz price / mortgage payment equivalent to a tax rebate for the US consumers, it would give consumer spending a boost in normal time. This is not. There are too many unknowns compounding in a short time frame and no one knows when this will end, until there is some clarity about Covid-19 treatment/vaccine...etc, we're in for more pain.
Something occurred to me. It's a conspiracy theory but I think plausible if I understand the oil market (which I don't completely for sure).
Is it possible that the Russians and Saudis are colluding to f'ck the new world's biggest energy producer, the good old USA? Creating a double black swan that could really screw things up here, creating a deep recession, and put a second Trump term in jeopardy. They do fear the guy and his policies and would be much better off with a Dem in office. Could we somehow add China into the conspiracy mix or is that just beyond credibility?
Is it possible that the Russians and Saudis are colluding to f'ck the new world's biggest energy producer, the good old USA? Creating a double black swan that could really screw things up here, creating a deep recession, and put a second Trump term in jeopardy. They do fear the guy and his policies and would be much better off with a Dem in office. Could we somehow add China into the conspiracy mix or is that just beyond credibility?
Cutting isn't how they will backstop this, large scale asset purchases (QE) is.
Without gov't intervention this bubble is cooked just like it always was no matter who told you it is the greatest economy in history, but that is another story for another time.
They can step in whenever they want, it is just a hell of a bullet to fire. But they will sooner than later.
Saudis hate the Russians. The Russians dont have the financial strength to cut off a couple of arms and think it is a good thing. This is an opportunity for the Saudis to put some hurt on the Russians. In the process it might not be helping the world. Normally lower gas prices would result in more consumer spending. Buying and spending by consumers is going to go down no matter what the price of gas.
