If they could out stimulate the financial crisis, without even having the global synchronized stimulus, they can out stimulate the virus with global synchronized stimulus. Especially since they are going to stimulate much quicker and more aggressively now than they did in 08 when it was still an untested strategy. Your point about last year just places an exclamation point on this. Why was the market up 30% last year? Because the Fed cut rates and started providing liquidity to the Repo markets (let's not also forget that the year started down almost 20%). There is no other reason. They have the power to out stimulate this easily.Cortopassi wrote: ↑Fri Feb 28, 2020 8:47 amThe market went up nearly 30% last year. Why do you think it can't fall 40-50%?
If this gets out of control in the US, and everything right now points to that, I don't care what kind of stimulus is out there, if people are staying home, schools are closed, travel is limited, etc, isn't going to make one bit of difference to me if interest rates are at 0% or if Trump gives me $1000 to spend. I'm not leaving my house!
By the way I have now officially put my money where my mouth is. My full bonus (10% of my yearly salary) was just put into the market since it was my lowest asset in my GB. This feels panicky and overdone in the short term (and from a dark arts perspective, we are bouncing off an important support line so far this morning), and while things could get uglier in the medium term, in the long term I know this will be a blip on the radar. I fully believe we will be back at all time highs by the election.