Coronavirus

Amid the Chaos, Fire Insurance

Submitted by Chris Ducret on Sun, 03/15/2020 - 19:31

With the chaos unfolding hourly, keeping your eye on the ball can be hard through all of the noise.  Take Boeing, taping their $13B credit line to keep the lights on. With US Corporate debt at all time highs, time to make list of who is in for a collapse. Small, mid, and large caps it is all the same issue. Borrowing of money for stock buyback or pay dividends to juice stock prices will not hold up anymore.  Simple issue the businesses  do not justify the prices, but taking stock out of the market sure helps.  

Who's got the biggest Balls of them all in Government Budget

Submitted by Chris Ducret on Thu, 03/12/2020 - 01:59

With the onset of a pandemic. The medical community is at the forefront. Money is moving into the government agency that will be tackling the problem (Department of Health & Human Services).  The additional budget they are receiving makes them the doll at the ball.  But before Coroanavirus, DHS already is the biggest of them all. I am sure looking at the budgets of HHS and SSA, DoD only wishes that had that kind of money.

HHS is 2x of DoD's budget
HHS is 58x the budget of NASA
And due to the unfolding events, DHS will extend its lead.  

Japan's ETF FEDish

Submitted by Chris Ducret on Tue, 03/03/2020 - 02:25

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?

Zombies Slayed by Coronavirus?

Submitted by Chris Ducret on Fri, 02/28/2020 - 13:26

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?

 

Virus Induced Frozen Credit Market

Submitted by Chris Ducret on Thu, 02/27/2020 - 02:24

The impact of Coronavirus continues to expose interesting scenarios.  One that pops out is the corporate bond market is now frozen. 

Chris DucretThe first 3 weeks of February bonds in the US and Europe combined for $150B+ in new bonds.  These bonds fund everything from M&A to factories to paying off other high interest rate debt.

Going Viral

Submitted by Chris Ducret on Thu, 02/20/2020 - 18:48

Regardless of the medical severity of COVID-19, the economic impact unfolding in China will have be seen in the next 60 to 90 days when products not on the shelves.  But looking beyond what is right in front of us, looking at shipping from China to the US will give the exact time interruptions will begin to hit the US.  Just in time manufacturing demands not keeping inventory on hand to make or sell. Tech is going to take the big hit (not services tech per say but equipment tech), like Apple's announcement. The chip companies are going to get slammed and their supply chain.