Author Topic: A few questions for our financial wizards here at getbig. (Read 2214 times)

Irongrip400 · « **on:** March 22, 2020, 03:35:17 PM »

I have a few questions that maybe could be answered as to the “why“ we could/could not do certain things.

1. If this thing is going to last a long time, with the shut down of businesses etc. why can’t we just suspend all debt payments and stock trading? I’ve gotten a few emails from some of my lenders already offereing deferred payments on loans without penalty or interest up to 120 days, so why not offer it on a larger scale for all Americans?

2. What would be the repercussions of closing the stock markets and “freezing” all values of stocks?

Part of me believes this thing is going to rattle on a while. I’ve been reading and listening to the words of the leaders and lobbyist in the industry who are trying to get construction pushed as “essential” work. This is leading me to believe that they’re trying to make sure that when, not if, the lockdown happens that at least we will be able to keep infrastructure projects going.

JustPlaneJane · « **Reply #1 on:** March 22, 2020, 04:16:23 PM »

Typically the definition of essential services includes construction, transportation infrastructure, financial institutions, shipping and “essential operations of residences” among the businesses that do not have to comply with the business shutdown rule.

che · « **Reply #2 on:** March 22, 2020, 04:20:27 PM »

Without money there is not construction, already happened in 2008-2009

Thin Lizzy · « **Reply #3 on:** March 22, 2020, 04:30:10 PM »

From what I’ve seen, no construction projects in Manhattan have stopped. I’m interested to see if this is the case tomorrow because there’s some new rules that go into affect. They generally affect small businesses. I’ll report back to this thread.

Under no circumstances will financial markets close. You can bet your life on that.

oldtimer1 · « **Reply #4 on:** March 22, 2020, 05:03:21 PM »

Suspending debt is something that will send a chill to lenders who will pass the potential costs onto the borrower. Imagine once that flood gate opens banks are going to be ultra cautious with lending hurting the economy knowing a politician can fuck them in a heart beat. If they do suspend mortgage payments, business, student and car loans the lenders will demand the payments plus interest lost be added to the payments owned. You would not be getting free money but a pause and probably added cost to the amortization of the loan. My 2 cents. I'm not a financial guy.

Irongrip400 · « **Reply #5 on:** March 22, 2020, 05:37:38 PM »

Quote from: oldtimer1 on March 22, 2020, 05:03:21 PM

Suspending debt is something that will send a chill to lenders who will pass the potential costs onto the borrower. Imagine once that flood gate opens banks are going to be ultra cautious with lending hurting the economy knowing a politician can fuck them in a heart beat. If they do suspend mortgage payments, business, student and car loans the lenders will demand the payments plus interest lost be added to the payments owned. You would not be getting free money but a pause and probably added cost to the amortization of the loan. My 2 cents. I'm not a financial guy.

I’m talking more of freezing the whole system I guess. Our economy can’t handle a shut down of more than a few months. If this thing goes on, just like it is now, in two months a lot of folks will be bankrupt.

Theoak* · « **Reply #6 on:** March 22, 2020, 05:47:42 PM »

Quote from: Theoak* on October 28, 2019, 07:18:50 PM

The problem for conservative/patriarchal Americans is that the strong dollar is going to choke exports, and then when the dollar peaks and starts to decline that will be economic collapse in the USA. This economic collapse can push left leaning, currently moderate progressives to align politically with the radical Left such as AOC.

We all know that economic hardship causes individuals to be more political resentful and aggressive (blame their plight on the rich for example). The blue collar workers in the Midwest could align with the radical left as their bankrupt State pensions exacerbate economic collapse. Additionally the Millennials will be in prime voting age and even GenZ will be of voting age (if they can be incited to vote by their horrible economic plight given the student loan debacle the Clintons created).

Theoak* · « **Reply #7 on:** March 22, 2020, 05:48:45 PM »

Quote from: Irongrip400 on March 22, 2020, 05:37:38 PM

I’m talking more of freezing the whole system I guess. Our economy can’t handle a shut down of more than a few months. If this thing goes on, just like it is now, in two months a lot of folks will be bankrupt.

The average lifespan of a fiat currency is 27 years and all economically incompetent individuals will soon figure that out. The wealth transfer is inevitable, it's only a question of what percentage each alternative to them like metals and bitcoin get. I don't know about you, but I'm front running the biggest bankruptcy in the history of the world - lot's of irredeemable paper IOUs with no cost to create.

Campeon Del Mundo · « **Reply #8 on:** March 22, 2020, 08:31:18 PM »

We are going in to a massive depression with 30% unemployment. This is all done by design to usher in a new world economic
order where the banks own and control all aspects of our lives.

Hypertrophy · « **Reply #9 on:** March 22, 2020, 10:33:31 PM »

Quote from: Campeon Del Mundo on March 22, 2020, 08:31:18 PM

We are going in to a massive depression with 30% unemployment. This is all done by design to usher in a new world economic
order where the banks own and control all aspects of our lives.

Sure we are...

People have to eat. The economy will recover as soon as the virus runs its course ( about another 6-8 weeks) and people realize it’s not the zombie apocalypse.

FitnessFrenzy · « **Reply #10 on:** March 23, 2020, 01:07:59 AM »

Quote from: Irongrip400 on March 22, 2020, 03:35:17 PM

I have a few questions that maybe could be answered as to the “why“ we could/could not do certain things.

1. If this thing is going to last a long time, with the shut down of businesses etc. why can’t we just suspend all debt payments and stock trading? I’ve gotten a few emails from some of my lenders already offereing deferred payments on loans without penalty or interest up to 120 days, so why not offer it on a larger scale for all Americans?

2. What would be the repercussions of closing the stock markets and “freezing” all values of stocks?

Part of me believes this thing is going to rattle on a while. I’ve been reading and listening to the words of the leaders and lobbyist in the industry who are trying to get construction pushed as “essential” work. This is leading me to believe that they’re trying to make sure that when, not if, the lockdown happens that at least we will be able to keep infrastructure projects going.

1. the president of NYSE said recently they will not close the stock market

2. they closed the stock market recently in the Philippines because of corona. When it opened again, there was a huge drop because everyone was panic selling when it opened again.

If you close the markets you deny people access to their own money, regardless of how much stocks fall.

Dave D · « **Reply #11 on:** March 23, 2020, 01:17:49 AM »

Quote from: Hypertrophy on March 22, 2020, 10:33:31 PM

Sure we are...

People have to eat. The economy will recover as soon as the virus runs its course ( about another 6-8 weeks) and people realize it’s not the zombie apocalypse.

You dont think theres not going to be economic fallout?

What happened during the housing collapse from 07? Did people need to eat less back then?

FitnessFrenzy · « **Reply #12 on:** March 23, 2020, 01:31:36 AM »

Quote from: Dave D on March 23, 2020, 01:17:49 AM

You dont think theres not going to be economic fallout?

What happened during the housing collapse from 07? Did people need to eat less back then?

I agree with you here, Dave. I think the economic fallout is going to be dramatic and possibly also worse than 2008.

Both in USA and Europe, the military are being sent in to guard cities and military vehicles and tanks are also being prepped to be deployed.

honest · « **Reply #13 on:** March 23, 2020, 02:36:31 AM »

Huge market correction that needed to happen, everyone knows its not the end of the world, treatment already working in many non EU countries and vaccines already at trial stage, plus the fact that many of the dead were almost there anyway,. I dont think we will see a real deep long recession, just sharp and quick, probably too quick for the correction to drag property down far enough to find any real bargain value there , but theres no doubt theres a nice bounce in stocks once the bottom is found. But in saying that the stock market was a good 10-15% over valued at least, but still down enough for a nice bounce.

Theoak* · « **Reply #14 on:** March 23, 2020, 04:20:36 AM »

Quote from: Hypertrophy on March 22, 2020, 10:33:31 PM

Sure we are...

People have to eat. The economy will recover as soon as the virus runs its course ( about another 6-8 weeks) and people realize it’s not the zombie apocalypse.

Debt based fiat requires infinite growth to not collapse. Without growth, interest rates would need to be set to zero, which is what we already have...and what Japan has had for a long time. Interest rates are actually negative vs inflation. Regardless, it's impossible for borrowing to not have a carrying cost. Trying to nig rig no carrying costs is just a temporary can kicking ploy that creates epic levels of malinvestment, which then implodes the system in a much bigger crash than having just left interest rates at their normal levels.

You then run into another problem. The monetary unit literally is debt. Interest generating loans and the currency itself (which also generates interest) are erroneously classified as assets and used as collateral when debt is always a liability and never collateral. The prolonged 0% interest rate is guaranteed to create a malinvestment bubble which will bust and create massive deflation and collapse the system when it does from all crosslinked loans going bad because the banks cannot handle any form of deflation.

Fiat dollars are considered assets because if you have enough of them, they can (at some times) generate a lot of interest for you. If interest rates are zero because growth is impossible due to peak working age demographic in every nation that matters, and peak energy use - because energy is what powers the economy and the world doesn't have infinite energy to give - then fiat is no longer an asset and then turns into a liability.

Irongrip400 · « **Reply #15 on:** March 23, 2020, 05:44:30 PM »

Quote from: Theoak* on March 22, 2020, 05:48:45 PM

The average lifespan of a fiat currency is 27 years and all economically incompetent individuals will soon figure that out. The wealth transfer is inevitable, it's only a question of what percentage each alternative to them like metals and bitcoin get. I don't know about you, but I'm front running the biggest bankruptcy in the history of the world - lot's of irredeemable paper IOUs with no cost to create.

Can you give examples of this 27 year average lifespan? Haven’t we been on the same currency much longer? Why were we so lucky?

Mayday · « **Reply #16 on:** March 23, 2020, 06:06:15 PM »

Quote from: Irongrip400 on March 23, 2020, 05:44:30 PM

Can you give examples of this 27 year average lifespan? Haven’t we been on the same currency much longer? Why were we so lucky?

Time isn't always going to be the same throughout history. The phase is boom, debt, print.

Printing meaning huge QE is the last phase of a monetary system.

We are at the start of that last phase having exhausted the debt mechanism during the GFC up until now.

They will print and after a time they will have to overhaul everything.

Irongrip400 · « **Reply #17 on:** March 23, 2020, 07:04:21 PM »

Quote from: Mayday on March 23, 2020, 06:06:15 PM

Time isn't always going to be the same throughout history. The phase is boom, debt, print.

Printing meaning huge QE is the last phase of a monetary system.

We are at the start of that last phase having exhausted the debt mechanism during the GFC up until now.

They will print and after a time they will have to overhaul everything.

So this virus is the overhaul? Why not just import cheap labor, put more people in the workforce, and let the old people die? Oh wait

tres_taco_combo · « **Reply #18 on:** March 23, 2020, 07:06:36 PM »

Quote from: honest on March 23, 2020, 02:36:31 AM

Huge market correction that needed to happen, everyone knows its not the end of the world, treatment already working in many non EU countries and vaccines already at trial stage, plus the fact that many of the dead were almost there anyway,. I dont think we will see a real deep long recession, just sharp and quick, probably too quick for the correction to drag property down far enough to find any real bargain value there , but theres no doubt theres a nice bounce in stocks once the bottom is found. But in saying that the stock market was a good 10-15% over valued at least, but still down enough for a nice bounce.

solid post
the Fed is pumping tons of dollars in the bond market (corp and treasury notes) to keep the liquidity going.

we will see nasty BKs, foreclosures etc that will occur around the same which will be hard to deal with.

Primemuscle · « **Reply #19 on:** March 23, 2020, 07:14:13 PM »

Quote from: oldtimer1 on March 22, 2020, 05:03:21 PM

Suspending debt is something that will send a chill to lenders who will pass the potential costs onto the borrower. Imagine once that flood gate opens banks are going to be ultra cautious with lending hurting the economy knowing a politician can fuck them in a heart beat. If they do suspend mortgage payments, business, student and car loans the lenders will demand the payments plus interest lost be added to the payments owned. You would not be getting free money but a pause and probably added cost to the amortization of the loan. My 2 cents. I'm not a financial guy.

I think I heard that lenders cannot add fees and penalties. Anyway, they don't have much in the way of alternatives. With such a large number of people unable to pay, it would be a colossal mistake to begin repossessions and foreclosures. Unoccupied properties cost lenders billions of dollars. Same with unpaid loans. It is possible that bankruptcy attorneys and courts are going to have a serious overload.

I also read that Trump is getting nervous about the shutdowns and wants to put an early end to them regardless of what's happening with the pandemic. Look at all the support he has on Getbig, the main reason people support him is that the economy has been good. It's like Soulcrushers main/only argument in favor of Trump. People are fickle. Should the economy continue to decline or even stay flat at this point. It looks like Trump has a tough road ahead of him.

Oregon's governor Brown expanded the stay at home directive today to include a bunch more nonessential businesses. When I checked, the gym I was going to last week is still open. Fitness clubs was one of the nonessential businesses specifically mentioned in Brown's announcement. Hope they don't end up with a huge fine or even jail time as was promised violators today.

One thing is certain. I am bored shitless. It was raining today. So, gardening wasn't a good option for me. I'm tired of watching the news whether local or national. I don't feel like working out. I tore my bedroom apart yesterday and did a top to bottom spring cleaning. Hadn't moved the bed in awhile, man were there a ton of dust bunnies on the floor under the headboard. SF1900 asked it he could sleep in my bed. I can't have him thinking I am a bad housekeeper. LOL!

Mayday · « **Reply #20 on:** March 23, 2020, 07:24:25 PM »

Quote from: Irongrip400 on March 23, 2020, 07:04:21 PM

So this virus is the overhaul? Why not just import cheap labor, put more people in the workforce, and let the old people die? Oh wait

The virus is an event that has triggered off a need for a large economic response.

It is events that create the breaking point. Think of it like a bone. You can keep applying pressure on it and nothing happens and then SNAP! The virus and lockdowns is the bone snapping.

We already have cheap labour. It is all the offshore services. That is our global economy.

Mayday · « **Reply #21 on:** March 23, 2020, 07:35:34 PM »

Quote from: honest on March 23, 2020, 02:36:31 AM

Huge market correction that needed to happen, everyone knows its not the end of the world, treatment already working in many non EU countries and vaccines already at trial stage, plus the fact that many of the dead were almost there anyway,. I dont think we will see a real deep long recession, just sharp and quick, probably too quick for the correction to drag property down far enough to find any real bargain value there , but theres no doubt theres a nice bounce in stocks once the bottom is found. But in saying that the stock market was a good 10-15% over valued at least, but still down enough for a nice bounce.

It isn't a correction because they have already announced QE. Inflation is coming.

As for whether it's a short and sharp recession, that boils down to the length of the shutdown.

The longer the shutdown, the more QE required, the more inflation.

gib · « **Reply #22 on:** March 23, 2020, 10:05:05 PM »

BTC’s time may be coming.

Teutonic Knight 1 · « **Reply #23 on:** March 23, 2020, 10:14:46 PM »

Quote from: gib on March 23, 2020, 10:05:05 PM

BTC’s time may be coming.

Wiggzy told us that too

SOMEPARTS · « **Reply #24 on:** March 23, 2020, 10:44:42 PM »

Quote from: gib on March 23, 2020, 10:05:05 PM

BTC’s time may be coming.

Deflation for a while = KING DOLLAR. I'm ready to buy real stuff for a discount.