+/- 1000 point swings. Once day, we are back, next day we are sunk, rinse and repeat. Repo rates are over subscribed. Nearly $300B in the last few days issued. Why the liquidity problem. The Feds not QE4 will have pumped nearly $1T in 6 months. And still not stabilizing. Bonds heading to zero and catching up with friends in Japan & Europe when the US hits negative yields.
To get a glimpse of what's in store, take a look of Japan. The land of a stagnated economy since 1990s to spurring the greatest points jump in history. How, Japan's love affair with ETFs on the Tokyo Exchange. Yesterday BOJ bought nearly a $1B worth of ETFs. Don't pay attention to the fact that BOJ already owns over 80% of Japan's ETFs. How can an argument be made that there is a functioning market when a central bank like BOJ owns the market?
The announcements from Japan to Seattle of schools being shut down. Travel being restricted, stay away from crowds etc. is it all misdirection. The stock market (that is on a pedestal as the true state of the economy) is going down a black diamond hill right now. Zombies should be fearful, companies low on cash will be getting squeezed.
The real impact is the break in the supply chain. Even a few days or weeks delay will not show up in many cases for months down the road. Hyundai has shut down, Land Rover on the cusp of shutting down due to missing parts.
Is it possible that the outbreak of the Coronoavirus may actually be a zombie killer? Over a decade companies have been able to hide behind low interest rates and free money to make up for the lack of a brain, and functioning organs.
With supply chains shutting down around the world due to Coronoavirus, will it be head shot that is needed to clear out the zombies?
If Coronoavirus does cause these zombies to fall, there will be a long fall from where things are today.
Find the zombies and short it all?