Black Monday

[blobbles]

Nikkei down almost 6%, likely to breach that before end of trade.

[bull....]

imagine once NZ finishes dividend season a lot of our stocks will start to price in more reality coming our way. NZ heavily exposed to global trade and consumer behaviour

[bull....]

Nikkei down almost 6%, likely to breach that before end of trade.

europe looking like 6 - 7% falls tonight at the moment. us futures halted again cause 5% down. think if the markets fall 20% tonight the new rule is they close for the day

[BlackPeter]

It's all good, nothing gets in and nothing gets out of North Korea even Corona virus.

That's not what I've heard. The borderline to China is said to be pretty permeable ...

[Cadalac123]

Australian Crashing hard. Coronovirus invading ASX headquarters in Perth.
Stock brokers having to self-isolate. Marking selling off.

Predict stocks like xero to tank to $5 in 3 days.

[Ggcc]

I almost sold out of Summerset after the result, but I am frothing at the mouth with all these bargains available. Sorry for the people who lost out, but I am in a ready to reinvest my money

[Crypto Crude]

I almost sold out of Summerset after the result, but I am frothing at the mouth with all these bargains available. Sorry for the people who lost out, but I am in a ready to reinvest my money

Buddy,
This is going to be a long sustained and deep recession eclipsing the global financial crisis of 2008...
This is just the beginning...
Don't be in a gold rush sounds like your about to slice off a foot with that pickaxe... wait a few weeks hundos...
:cool:
.^sc

[ynot]

I almost sold out of Summerset after the result, but I am frothing at the mouth with all these bargains available. Sorry for the people who lost out, but I am in a ready to reinvest my money
I think we need to find a bottom before we consider reinvest, could be many months away.

[Ggcc]

I think we need to find a bottom before we consider reinvest, could be many months away.
That is why I am frothing. Be greedy when others are fearful. I bought a small amount of Turners but I am waiting for the rest

[Balance]

That is why I am frothing. Be greedy when others are fearful. I bought a small amount of Turners but I am waiting for the rest

So much $$$$ liquidity out there and governments are going to be pumping trillions $$$$ more soon - the bounce upwards may be tough to capture.

[couta1]

So much $$$$ liquidity out there and governments are going to be pumping trillions $$$$ more soon - the bounce upwards may be tough to capture. Exactly, and the wall of worry chart highlights this point.

[bull....]

10% fall looking like germany at the moment

[Valuegrowth]

Always there will be something to worry in global financial markets. Each time when there are some worries, investors and traders got marvelous moment to buy stocks. For example are 9/11, China’s 2015 stock market crisis and another occasion was sell everything in January and February. The latest one is Virus crisis. I am eagerly waiting for the post-virus scenario in global markets.

[Lewylewylewy]

The difference this time is that things are effecting business's profits. Of course, like everyone else, I'll be timing my buy at the perceived low.

[bull....]

7% circuit breaker on right at open

[Oberon]

I see I'm not the only one who stayed up for the US opening ...

[peat]

7% circuit breaker on right at open

they take all the fun out of it.

[bull....]

they take all the fun out of it.

wonder if we hit 13% breaker next

[peat]

wonder if we hit 13% breaker next

nah it looks like the PPT is coming in

AND its Tuesday now so we cant post on this thread right?

[bull....]

nah it looks like the PPT is coming in

AND its Tuesday now so we cant post on this thread right?

supporting the market for sure and fed added 50% more liquidity for today. probably means no flash crash low today

[King1212]

Mayday.. mayday...mayday...

[bull....]

I see I'm not the only one who stayed up for the US opening ...

are you still awake oberon

[King1212]

Been awake all night too..with my redbull...n cigar .....

[bull....]

Been awake all night too..with my redbull...n cigar .....

im jealous , chocolate and coffee for me

[King1212]

Will see NZX plunges 5%?

Hope not many people here trapped in the bear? Buying at the dips currently is a self suicide.. consider this is just the beginning of bear as it has n not completely impacted companies financial.

[bull....]

Will see NZX plunges 5%?

Hope not many people here trapped in the bear? Buying at the dips currently is a self suicide.. consider this is just the beginning of bear as it has n not completely impacted companies financial.

nzx way overvalued , all markets long way to go in this down swing yet

[blackcap]

nzx way overvalued , all markets long way to go in this down swing yet

The Dow just went under 2000 pts for the day again or down about 8%. Will be an interesting day in NZ for sure.

[bull....]

The Dow just went under 2000 pts for the day again or down about 8%. Will be an interesting day in NZ for sure.

orderly decline , still need like 20 - 30% decline in a day to make me interested in buying again. probably wont come until market is happy with pricing of outlook then they do the final woosh

[Leemsip]

Only thing I am thinking about today is some oil and gas. Woodside and oil search.

Maybe on Friday tho

[Bjauck]

The Dow just went under 2000 pts for the day again or down about 8%. Will be an interesting day in NZ for sure. Big oil producers are listed in the US and UK. The NZ market is not very broad based. Airlines and freight comnies will have cheaper input costs.

[blackcap]

Big old producers are listed in the US and UK. The NZ market is not very broad.based.

Agreed, you could see it yesterday too with Australia down 7% and NZ only 3%. But the Dow down 2,000+ points will still affect NZ in some way. There are flow on effects. I see FB, Amazon, Alpahbet are also down 4-8% and they are not oil producers so it is across the board.

[Bjauck]

Agreed, you could see it yesterday too with Australia down 7% and NZ only 3%. But the Dow down 2,000+ points will still affect NZ in some way. There are flow on effects. I see FB, Amazon, Alpahbet are also down 4-8% and they are not oil producers so it is across the board. True, it is still not going to be a pretty sight on the NZX today.

[Jim]

True, it is still not going to be a pretty sight on the NZX today.

Time to buy up large.

[winner69]

No profit warnings on NZX this morning

That’s good

[stoploss]

[QUOTE=Jim;797139]Time to buy up large.[/QUOTE

I think time is on your side .....

[skid]

Whats your hurry?

[King1212]

No profit warnings on NZX this morning

That’s good

Too early winner...not even a quarter. Wait till April May.....all will popping like balloons

[bull....]

Too early winner...not even a quarter. Wait till April May.....all will popping like balloons

your so wise

[peat]

PPT not doing their job properly, SP 500 hitting it opening lows again

[bull....]

PPT not doing their job properly, SP 500 hitting it opening lows again

plunging again long way to go down yet

[blackcap]

plunging again long way to go down yet

Come on lets not get all hyperbolic. -.45% is not plunging in my book.

[jonu]

The question for me is....did the ASX have the worst of it yesterday, and will it bounce on expectation of the FED acting, or an oil deal getting done?

[blackcap]

The question for me is....did the ASX have the worst of it yesterday, and will it bounce on expectation of the FED acting, or an oil deal getting done?

Australia called down 359 points or another 6% today. So could be ugly.

[Crypto Crude]

Dow jones looking like skin and bones...
:cool:
.^sc

[peat]

the weird thing is that last night I longed the SP500 and shorted bonds. Both bullish in a very bearish market.
got stopped on the stock index but the bond short is doing well and will more than compensate.

I have subscribed to this for a few months - its not bad. https://www.theboombust.com/ hopefully they get it right
they issued a red boom signal on 10y Treasurys. so when I saw the gartley I hit it


11103

[Balance]

Dow charging ahead.

The roller coaster ride continues!

Down towards the inevitable lower end point? :D

[winner69]

the weird thing is that last night I longed the SP500 and shorted bonds. Both bullish in a very bearish market.
got stopped on the stock index but the bond short is doing well and will more than compensate.

I have subscribed to this for a few months - its not bad. https://www.theboombust.com/ hopefully they get it right
they issued a red boom signal on 10y Treasurys. so when I saw the gartley I hit it


11103

10 year US bonds on a PE of over 200 suggests they not cheap

[bull....]

dow popped off bottom support last night at 23600 part of the giant range we have mentioned before. currently oscillating around in the range. will eventually breakdown i would think leading to another 17 - 20% move down to next support.

[Food4Thought]

dow popped off bottom support last night at 23600 part of the giant range we have mentioned before. currently oscillating around in the range. will eventually breakdown i would think leading to another 17 - 20% move down to next support.

I'm with you on this Bull. Thanks for the post 👌 it is not pretty

[Joshuatree]

Just the fracking shale Oil industry going to the wall will be enough imo along with trump reneging on releasing actual details re payroll tax removal etc. These days were his moment to shine , so far its been dismal and he is coming across as weak and ineffectual.

[Valuegrowth]

As some analysts expect, If infections peak by March or April similar to China in other countries, then we could have a return to normal economic activity in the second half of 2020. Monetary and fiscal stimulus can also help markets. The Spread of corona beyond China made markets nervous. However, it created some great opportunities as well. Many of the past month’s winners sit in the S&P 500's consumer-staples group.

[Crypto Crude]

Joshua tree,
All that happens is they shut the wells in and pump crude when prices are more favourable... Some will have forward contracts locking prices up, and exchange rates....
...
Asian markets have struggled today and DOW futures looking down 600points...
Lots to be fearful about Corona virus spreading fast now...
Gona be some heavy sell days going... swing trading wont be profitable ... need to get trades moving 10% before they even profitable...
:cool:
.^sc

[King1212]

Let's hope uncle Trump does not catch the virus like UK minister. Otherwise the world will be kaput totally..

[Valuegrowth]

I think fears are overdone. Nearly 80% of people have a minor illness. With coronavirus, it will burn itself out in the end. On the whole, the greater the fall in the markets, the greater the bounce back eventually. We are being bombarded by the media.

[RupertBear]

I think fears are overdone. Nearly 80% of people have a minor illness. With coronavirus, it will burn itself out in the end. On the whole, the greater the fall in the markets, the greater the bounce back eventually. We are being bombarded by the media.

Those are my thoughts as well, and average age of the people that are dying is 80y

[Oberon]

I think fears are overdone. Nearly 80% of people have a minor illness. With coronavirus, it will burn itself out in the end. On the whole, the greater the fall in the markets, the greater the bounce back eventually. We are being bombarded by the media.

Yep. Ubiquitous social media and news feeds all bombarding everyone into a panicked frenzy. I don't think it will be too long - once infection rates peak in the hardest hit countries - that we'll see the desire to normalcy supersede the ongoing fear and anxiety.

[bull....]

bearish flags everywhere intraday

[bull....]

heres a good article on how maths can be used to model covid. take the maths and model on economic outcomes

At a 10% hospitalization rate, all hospital beds in the U.S. will be filled by about May 10. And with many patients requiring weeks of care, turnover will slow to a crawl as beds fill with Covid-19 patients

https://www.statnews.com/2020/03/10/simple-math-alarming-answers-covid-19/

[couta1]

The Doom and Gloom brigade will be all over this place again today, have fun wallowing.

[bull....]

goldmans sach in the US has just come out and say they see the market falling another 15% soon

Coronavirus stock selloff means bull market will ‘soon end’, says Goldman — sees S&P 500 falling another 15%
https://www.marketwatch.com/story/goldman-says-coronavirus-will-end-bull-market-for-stocks-sees-sp-500-falling-another-15-2020-03-11

[Cadalac123]

Nice! Cases rose 20percent in the UK to 400, that’s such a large number for a country like the UK who has a population of 500 people /s

[ratkin]

Nice! Cases rose 20percent in the UK to 400, that’s such a large number for a country like the UK who has a population of 500 people /s


You just displayed your ignorance of how powerful exponential growth is.

[Cadalac123]

You just displayed your ignorance of how powerful exponential growth is.

Actually the number of cases are probably significantly more than 400, I have no doubt thousands harbour the virus but don’t know. I’m more outlining the approach the media are taking to heighten fears.

Don’t attack me with your broscience

[bull....]

this person saying how corona could cause a financial crash bigger than GFC

COVID-19 may be more destructive than the Lehman crisis
https://www.afr.com/policy/economy/covid-19-may-be-more-destructive-than-the-lehman-crisis-20200311-p548z7

[dobby41]

this person saying how corona could cause a financial crash bigger than GFC

COVID-19 may be more destructive than the Lehman crisis
https://www.afr.com/policy/economy/covid-19-may-be-more-destructive-than-the-lehman-crisis-20200311-p548z7

And to be fair the world has been looking for a reason for a drop for a while.
COVID-19 is a good catalyst.

[Joshuatree]

Its official a Bear mkt in USA down 1467 points today now 20% off its high.

[skid]

The Doom and Gloom brigade will be all over this place again today, have fun wallowing......I was reading that for the last hundred something years whenever there has been a massive sell off day(the original)...the next day there was a bounce......you decide whether to sell into the bounce...what happens after is not quite so certain.......Lets face it ...this thing(virus) is going to have to play itself out,regardless of those trying to manipulate fiscal tools.......its been a good run though...and Im sure alot who sold even now would realize profit

[skid]

Its official a Bear mkt in USA down 1467 points today now 20% off its high......In some ways this is a comment on the leader of USA thinking he can control everything with fiscal tools......at some point the bull**** doesnt fly any more....should be working on the core of the problem..

[winner69]

"...............

[winner69]

The Doom and Gloom brigade will be all over this place again today, have fun wallowing.

Human behaviour an odd thing eh Couts

[Balance]

Human behaviour an odd thing eh Couts

Such is life - it's one of those things which make investing and being on this site so fascinating, exciting and a perfect place to study human psychology - especially the classic investment emotions of greed, fear and hope!

Today will be all about fear with some hope thrown in.

[Joshuatree]

.....In some ways this is a comment on the leader of USA thinking he can control everything with fiscal tools......at some point the bull**** doesnt fly any more....should be working on the core of the problem..

Yep just watched Trumps meeting with bank CEO's all round him.I was almost embarrassed for him. All the banksters were saying how wonderful he was and we will get through this blah blah blah.Trump was saying vague platitudes, he was so exposed naked and puppet like imo. At the very end he fielded a question from the audience that had a less then fawning tone that the banksters had used. He immediately shut down the session saying CNN , fake news.lol.

8pm tonight USA time trump reveals his solutions to the current economical/virus problem. We will see.

[Balance]

QE 5 on the way ... trillions of $$$$ to be pumped into economy.

[Joshuatree]

"President bush created a task force on Pandemic deseases President obama built on that ,Trump scrapped it
They had Osha(sp?) which was charged with protecting americans health and safety that now has the fewest numbers of health and safety inspectors in its history.

They spent $24 billion on immigration enforcement last year but only $2 billion on protection of workers and now trump has come up with anew standard that weakens protection for workers on the front line.

There was a workplace standard to protect workers from contagious diseases, it was ready to be issued. It would have required employers to have a plan to educate their members and provide them with protective equipment. Trumps admin scrapped it " Richard trumka on CNN

[bull....]

QE 5 on the way ... trillions of $$$$ to be pumped into economy.

fed trying hard to stop a total collapse they pumped record money into the repo markets last night to keep things turning

[blackcap]

"President bush created a task force on Pandemic deseases President obama built on that ,Trump scrapped it
They had Osha(sp?) which was charged with protecting americans health and safety that now has the fewest numbers of health and safety inspectors in its history.

They spent $24 billion on immigration enforcement last year but only $2 billion on protection of workers and now trump has come up with anew standard that weakens protection for workers on the front line.

There was a workplace standard to protect workers from contagious diseases, it was ready to be issued. It would have required employers to have a plan to educate their members and provide them with protective equipment. Trumps admin scrapped it " Richard trumka on CNN

Whats that got to do with Black Monday. Keep on topic JT and not go on a political rant on this thread please.

[Joshuatree]

Someone send blackcap a join the dots colouring book, thank you.

[Joshuatree]

Joshua tree,
All that happens is they shut the wells in and pump crude when prices are more favourable... Some will have forward contracts locking prices up, and exchange rates....
...

:cool:
.^sc

Need to look a little deeper.

Debt is the problem. The U.S. oil and gas industry has about $86 billion of rated debt due in the next four years, according to Moody’s. Nearly all of that debt is either junk rated, or rated just above junk. Fifty-seven percent of that is due in just the next two years. As oil prices fall and credit markets tighten, many companies won’t be able to refinance their debts or extend maturities.
Time is the only friend many companies now have. Most energy debt isn’t due until 2022, so some producers may be able to hang on, hoping for a turn. But if a turn doesn’t come, it will be brutal. Energy executive Dan Pickering tweeted out Friday, “Maturities are a bit further out .. 2021/2022 will be Armageddon if current environment holds through 2020.”
It’s a greater risk than just oil. While energy stocks make up a paltry 4.4% of the S&P 500 weighting, energy related debt is 11% of the popular junk bond ETFs HYG and JNK. It makes up a big portion of corporate debt, which matters to banks both large and regional. The energy debt web is complicated and it is costly.Putin just sparked an oil price war with Saudi Arabia — and US energy companies may be the victims (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=2ahUKEwjWk8rqspPoAhWM7HMBHb4rAsYQ0PADMAB6BAgJE AU&url=https%3A%2F%2Fwww.cnbc.com%2F2020%2F03%2F08%2F putin-sparks-an-oil-price-war-and-us-companies-may-be-the-victims.html&usg=AOvVaw279a-BtQa31gi_aswmgyRn)

[Ggcc]

QE 5 on the way ... trillions of $$$$ to be pumped into economy.
Slowly nibbling at all stocks with my Summerset cash. Come to papa. Aiming to hold long on what I buy.

[Joshuatree]

What if they keep going down and you run out of cheese?

[winner69]

At least property prices are booming


Median house prices across New Zealand increased by 14.3% in February to a new record median price of $640,000, up from $560,000 in February 2019. This was the largest percentage increase in 53 months according to the latest data from the Real Estate Institute of New Zealand (REINZ)



https://www.reinz.co.nz/Media/Defaul...ary%202020.pdf

[Entrep]

Can confirm that property is going mental right now in Auckland

[winner69]

Can confirm that property is going mental right now in Auckland

Number of sales up more than 40%

That’s phenomenal

[mondograss]

Can confirm that property is going mental right now in Auckland

I agree, my wife and I have been looking, got outbid to the tune of $500k on one place and we thought we were going to be close to the upper end of the valuation. We are noticing though that it's very specific. Anything that a developer might ordinarily go for as a knockdown or small subdivide job is tending to hang around like a bad smell and according to the agents they're only getting lowball offers. Which implies that the developers are not seeing a lot of upside in current prices.

[bull....]

US futures tanking again. will get a big woosh down if current supports fail

[causecelebre]

US futures tanking again. will get a big woosh down if current supports fail

On the back of Trumps address

[mondograss]

US futures tanking again. will get a big woosh down if current supports fail

Trump just suspended all travel from Europe for 30 days (excl UK). That's gonna hurt.

[bull....]

Trump just suspended all travel from Europe for 30 days (excl UK). That's gonna hurt.

least hes making some tough decisions , short term pain

[Balance]

least hes making some tough decisions , short term pain

For once, good on DT - a little late but this is what is required to try & bring the situation under control.

[BlackPeter]

Trump just suspended all travel from Europe for 30 days (excl UK). That's gonna hurt.

Probably just wants to protect the Europeans. Nice guy :):

[Beagle]

least hes making some tough decisions , short term pain

WOW that is going to seriously hurt the airline industry !

[mondograss]

Tom Hanks is probably better off in Aus:
https://www.nzherald.co.nz/entertainment/news/article.cfm?c_id=1501119&objectid=12316157

[bull....]

WOW that is going to seriously hurt the airline industry !

probably but the health of the consumer is more important.

[dr_]

WOW that is going to seriously hurt the airline industry !

DOW Future is dropped 800pts after the ban..... Going to be wild ride...Be surprise how many Airlines will go under

[bull....]

DOW Future is dropped 800pts after the ban..... Going to be wild ride...Be surprise how many Airlines will go under

might get one of the expected 10% falls tonight

[Beagle]

Limit down on the futures is only 5%, not far off the current 800 fall, (about 1200 fall). If the futures hit that limit in the next few hours that's a very ominous sign for the US market tomorrow !

Circut breakers on the physical trading market on US markets are 7% downward movement in S&P 500 - 15 minute suspension, 13% downward movement, another 15 minute suspension and below that if the S&P 500 falls 20% trading is suspended for the rest of the day.

Edit - We are not far off limit down on the futures now at just over 1000 points down on the DOW !

[bull....]

thin air now down to next supports 15% fall till then

[couta1]

Lol only the Trolls left on here to talk to each other, no surprises there.

[bull....]

Lol only the Trolls left on here to talk to each other, no surprises there.

lol why you here then hows the a2 going

[Bjauck]

Trump just suspended all travel from Europe for 30 days (excl UK). That's gonna hurt. Actually the travel ban extends to the 26 Schengen area EU countries.

Ireland, Cyprus, Bulgaria etc. as well as UK are not (or were not in the case of the UK) in the Schengen zone. And of course Norway and Switzerland are outside the EU along with other European countries.

[causecelebre]

Lol only the Trolls left on here to talk to each other, no surprises there.

lol permabulls too busy staring at red numbers?

[couta1]

lol permabulls too busy staring at red numbers? Red numbers mean nothing unless you materialize them.

[couta1]

lol why you here then hows the a2 going Just to keep you lot in check and yes we have plenty of A2 in the fridge, thanks for asking.

[causecelebre]

Red numbers mean nothing unless you materialize them.

true. same as green ones

[peat]

Red numbers mean nothing unless you materialize them.

I prefer (not the best word under the circumstances) to mark to market.
I think one should 'stay real'.

[winner69]

Red numbers mean nothing unless you materialize them.

Yep, just like Beagle always told us with Summerset ...you don’t book profits (or losses) until things are sold (thus the underlying earnings argument)

[Cool Bear]

Probably just wants to protect the Europeans. Nice guy :):
:) Yes, the community spread in USA is probably no better than some or many of the EU countries. The low USA numbers are just due to the low number of testing done.

[Cool Bear]

least hes making some tough decisions , short term pain
Finally a tough decision from him. But correct one? A better one would be to drastically increase testing, implement mandatory quarantine procedures and ramp up the medical resources.

[bull....]

Finally a tough decision from him. But correct one? A better one would be to drastically increase testing, implement mandatory quarantine procedures and ramp up the medical resources.

i think thats in the democrats bill moving thru the house? food stamps , sick pay etc

[skid]

Slowly nibbling at all stocks with my Summerset cash. Come to papa. Aiming to hold long on what I buy.

as long as you hold long......but I think its logical to think the virus is a major part of this scenario....so its relivent to think about how long it will take for that to work itself out....at this stage I dont think we can realistically separate it from stocks and the economy....but who knows.......Im sure Trump will try his best in the States(with the stockmarket--not the virus)
Toiletm paper and mask manufactutrers must be doing well

[skid]

Lol only the Trolls left on here to talk to each other, no surprises there.

This is understandably difficult.....but it(futures) is whats happening ....they are just relaying information...(ok ..with a bit of gloomy predictions).....But this is most likely going to be not good for everyone...even if they are not invested in shares......It would be constructive to look at what are good defensive shares....and which are better to avoid...like Airlines...and rest homes,tourism. Things that get exported to China are maybe not looking so bad (If they are on the way to opening up again?)..China is a brighter spot on a gloomy day....number of cases are falling

[mondograss]

Actually the travel ban extends to the 26 Schengen area EU countries.

Ireland, Cyprus, Bulgaria etc. as well as UK are not (or were not in the case of the UK) in the Schengen zone. And of course Norway and Switzerland are outside the EU along with other European countries.

According to Stuff:
These countries include Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland.

https://i.stuff.co.nz/national/health/coronavirus/120237585/coronavirus-what-you-need-to-know-about-trumps-us-travel-ban-from-europe

[bull....]

circuit breaker , looking for 10%

[Crypto Crude]

The DOW jones 2000 off on open...
:cool:
.^sc

[bull....]

The DOW jones 2000 off on open...
:cool:
.^sc

blood on the street , asx might be a 10% fall today

[ratkin]

Looking like biggest one day fall ever which is good news, qicker we get to the bottom the better, wherever that is.

[bull....]

Looking like biggest one day fall ever which is good news, qicker we get to the bottom the better, wherever that is.

bottom might be some way off. who knows the ultimate outcome of all this so prices would have to build in a big uncertainty and when you think about it we are hardly down in the overall big move from 2009

[bull....]

fed just came in with massive liquidity

[Raz]

In LA, people just taking enough money off the table for a couple of years living...more yet to happen, will not be that bad in the general US of A attitude still prevails :)

[ratkin]

bottom might be some way off. who knows the ultimate outcome of all this so prices would have to build in a big uncertainty and when you think about it we are hardly down in the overall big move from 2009

It really about fear of the unknown, pretty unprecedented.
The trick will be realising when things are becoming known again, before most others.

[couta1]

It really about fear of the unknown, pretty unprecedented.
The trick will be realising when things are becoming known again, before most others. Well some of us don't have to cause we're already all in, that's only a Lemming problem.

[bull....]

In LA, people just taking enough money off the table for a couple of years living...more yet to happen, will not be that bad in the general US of A attitude still prevails :)

having a little cash on hand always a good idea. I find it strange some huge companies in the US are drawing down there whole of credit lines this week , do they know some think we dont. add in the fed today is doing massive liquidity nearly 1 trillion for the rest of the week , must be some serious s..t happening

[Raz]

having a little cash on hand always a good idea. I find it strange some huge companies in the US are drawing down there whole of credit lines this week , do they know some think we dont. add in the fed today is doing massive liquidity nearly 1 trillion for the rest of the week , must be some serious s..t happening

I totally agree, we have max. out our credit line for the business and parked as a defensive measure and changed main trading bank accounts from suppliers with direct debit access to accounts. Our CFO is looking rather tired and his team has been run ragged on the collection front and changing terms of trade . We are just a medium sized business. Perhaps I should buy him a beer on friday night? :)

[skid]

Well some of us don't have to cause we're already all in, that's only a http://googleads.g.doubleclick.net/pcs/click?xai=AKAOjstD5ZuG6C9KIICdAdtvFOOImomyVVgwc6MG sUVuaI_OhYg26wbveLCB460_OG5hWk0X_YCav8dxlrstR1ZfeI wg95io_2_AZyB94VPeP60Gap02IFgC33AIuW-ZO43oGCIYIgHWUUKUdsPkXKqoU38MMFiGiTJP-yJQdvgHLB0xZLrYLfLacEvZcSv4p1HkwBaEs9TQfAq49I5Sf1C 31xB7FMKU4Sqsz-Vf0dsuCVOknU22E5Hfte6QcWA25W9ZjoQglhSC&sig=Cg0ArKJSzFfVvARXQXGL&adurl=http://www.intelligentinvestor.co.nz/&nx=CLICK_X&ny=CLICK_YLemming problem.

were you around in the last GFC? cant remember as it was a while ago ..... debt is becoming an issue

[bull....]

got the 10% move down we were expecting , hate to say but generally closing on lows is not normally good

[blackcap]

got the 10% move down we were expecting , hate to say but generally closing on lows is not normally good

Agreed. And post close, futures were down another 100 pts within 15 seconds, only to rebound and go up 100 about 2 mins later. And now 3 mins after close futures are down 50 again. What a volatility.

[Balance]

Short & big sharp falls - that's the way I like them.

The alternative of the markets falling 2% every week for 4 months will be like torturous slow death from a thousand cuts.

Another 10% tonight in US on the cards.

[Entrep]

Does the fastest bear in history mean the fastest recovery?

[dr_]

Another 10% tonight in US on the cards.

DOW closed 10% down

-2,352.60-9.99%

[bull....]

Does the fastest bear in history mean the fastest recovery?

no in my opinion . why your get bounces , dont look at them as start of another bull market probably be bear rallies.
when you get a bear it takes time to build a base even after the virus cure found or what ever ( companies downgrades take time to come thru and profits lost are not necessary regained)

[Beagle]

Well some of us don't have to cause we're already all in, that's only a Lemming problem.

Yesterday's Lemming is today's prudent person who took steps to protect themselves and not just in the markets. Good example is with the preppers who have been storing up long term food stocks in case we go into shutdown. Lots of people thought they were crazies and just the other day the US CDC (centre for disease control) came out and recommended that at risk people stock up and prepare for the possibility of long term self isolation at home.

[dobby41]

Yesterday's Lemming is today's prudent person who took steps to protect themselves and not just in the markets. Good example is with the preppers who have been storing up long term food stocks in case we go into shutdown. Lots of people thought they were crazies and just the other day the US CDC (centre for disease control) came out and recommended that at risk people stock up and prepare for the possibility of long term self isolation at home.

So you got your toilet paper in then?

[blackcap]

So you got your toilet paper in then?

I have been stocking up the last few weeks with non-perishables so that if we are ever in a lockdown situation then you will be fine. As Nassim Taleb mentioned, you are not crazy for stocking up on non-perishables in these zero interest rate environments. There is no cost to holding so what is the problem?

[BlackPeter]

Does the fastest bear in history mean the fastest recovery?

That's an outstanding question. I guess, we will see, but I suspect not. Much easier to destroy trust than to rebuild it.

[dobby41]

There is no cost to holding so what is the problem?

I don't see a problem.
It's a matter of risk - there is no real downside to stocking up a bit on things you will use over time.

[bull....]

Agreed. And post close, futures were down another 100 pts within 15 seconds, only to rebound and go up 100 about 2 mins later. And now 3 mins after close futures are down 50 again. What a volatility.

falling quite hard now - 350 on the dow for tonight already

[blackcap]

I don't see a problem.
It's a matter of risk - there is no real downside to stocking up a bit on things you will use over time.

The question was not really aimed at you, more a generic what is the problem to stockpiling in general. I totally think that when discount rates were above 8% in this country then stockpiling has a huge opportunity cost issue. But now there is none whatsoever. The Mrs and I also stockpile non perishables when they are on good specials at the supermarket regardless. It really makes sense if you can afford it.

[blackcap]

falling quite hard now - 350 on the dow for tonight already

Make that 400 now. 450. 550.

[bull....]

Make that 400 now. 450.

500 now they are all saying theres big issues in the credit markets. europe looking very ugly again too 4% implied for tonight already

[Joshuatree]

Termination of ETF'S!!! Termination of UBS exchange traded fund ETF 2 pages 140.5KB (https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02213833) citing insufficient scale etc. Investors have until May to sell out. so maybe not a sign of things to come and a bit alarmist.

[Tomtom]

I don't see a problem.
It's a matter of risk - there is no real downside to stocking up a bit on things you will use over time. Indeed I would encourage people to buy lots of things. If consumers stop spending we'll be in real trouble. That's why I wholeheartedly support helicopter money and UBI payments.

[Mr Slothbear]

Termination of ETF'S!!! Termination of UBS exchange traded fund ETF 2 pages 140.5KB (https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02213833) citing insufficient scale etc. Investors have until May to sell out. so maybe not a sign of things to come and a bit alarmist.


ouch.

thats going to really hurt a lot of people being forced to cash out at much lower values. Sounds just like people told me 1987 was like

[Hoop]

Indeed I would encourage people to buy lots of things. If consumers stop spending we'll be in real trouble. That's why I wholeheartedly support helicopter money and UBI payments.
Bring back Ben :t_up:

[blackcap]

ouch.

thats going to really hurt a lot of people being forced to cash out at much lower values. Sounds just like people told me 1987 was like

Not really though, because people having to sell can get into like ETF's at the same price. So no real value lost. If you are long, you have already lost. So termination although never nice, in this case will not hurt the holders.

[Bjauck]

I am not sure how much of the share market rout is driven by individual investors. Perhaps this would be more so in the US and UK. However a great proportion of the private investors are of the older age groups. I wonder if this has made this particular market bear even worse. For the older age groups, the virus has been revealed as posing more of a threat of serious illness and indeed an existential threat.

[Balance]

ouch.

thats going to really hurt a lot of people being forced to cash out at much lower values. Sounds just like people told me 1987 was like

$78m turnover so far - hardly the stuff of 1987!

Think of ice cream on a hot summer day, or a lovely warm log fire in a cabin with snow drifting down outside.

Unless of course you are in a highly leveraged or highly speculative stock - in which case, get out at all cost imo.

[Mr Slothbear]

Not really though, because people having to sell can get into like ETF's at the same price. So no real value lost. If you are long, you have already lost. So termination although never nice, in this case will not hurt the holders.


true, my mistake I overlooked they could still sell and swap into other etfs

appreciate the concern but I’m neither leveraged or owning speculative shares. Lucky to be “well positioned” as our percy would say.

[bull....]

emergency meeting in japan , they been buying up heaps of equities and bonds debt etc over the years so all this tanking might be bad news for them.

looks like forced liquidation going on in bitcoin to raise funds , even gold

[BlackPeter]

... looks like some people did beat me to it. Pity it is not possible to delete spare posts anymore.

[bull....]

companies with to much debt on there balance sheets probably at high risk of going bust now as credit drys up soon

[peat]

companies with to much debt on there balance sheets probably at high risk of going bust now as credit drys up soon

yes the fear brings about its own consequences ….
I watched Jim Cramer the other night and he was banging on about the big difference between this crisis and the GFC is that this is a health crisis not a financial crisis.
Watch that change....

[bull....]

yes the fear brings about its own consequences ….
I watched Jim Cramer the other night and he was banging on about the big difference between this crisis and the GFC is that this is a health crisis not a financial crisis.
Watch that change....

morphing into a health crisis as well as a GFC china has just come out according to bloomberg and saying virus spread worldwiide will slow there return to work

[Aaron]

companies with to much debt on there balance sheets probably at high risk of going bust now as credit drys up soon

Isn't debt and liquidity fairly unlimited if central banks buy up bonds??

[peat]

Isn't debt and liquidity fairly unlimited if central banks buy up bonds??

maybe in a very general sort of way but banks will still exercise tighter control over their lending

[bull....]

yea make sure you dont own any companies with bad balance sheet debt in exposed industries things might get rough for a lot of companies

[Aaron]

Hey Bull what do futures say about what will happen overnight in the US?

[bull....]

Hey Bull what do futures say about what will happen overnight in the US?

not good at the moment down 3% , but things change all the time and its a friday who wants to be long over the weekend

[blackcap]

Hey Bull what do futures say about what will happen overnight in the US?

Down 685 at this stage.

[bull....]

Down 685 at this stage.

grim alright and with virus starting to go exponential in the US and things starting to close and sports stopping states going into state of emergency over there the market could still get very ugly very quickly. still not that far down from 2009 - 2020 run. look at the ftse down too 2012 levels now and the us markets are still at 2018 odd levels for a comparison

[blobbles]

companies with to much debt on there balance sheets probably at high risk of going bust now as credit drys up soon

This has had to happen for years. Zombie companies propped up by cheap borrowing, no wonder there has been near zero productivity.

[bull....]

futures positive now

[ratkin]

What happened on the Aussie market, crazy. everything was about 8% down, went to the shop and came back and saw some up over 10% Amazing turnaround

[allfromacell]

I genuinely believe in 6 months you're all going to be kicking yourselves for not taking advantage of this fire sale. Talk of great depressions lmao please.

http://www.israelnationalnews.com/News/News.aspx/277216

[peat]

What happened on the Aussie market, crazy. everything was about 8% down, went to the shop and came back and saw some up over 10% Amazing turnaround

Its time for the quote

"Stocks will fluctuate"

:)

[allfromacell]

US futures spiked up aggressively at around 4.30/5 so the very oversold Aussie stocks got pounced on.

Futures have since calmed down a bit, tomorrow being a Friday in the states will be interesting!

[Leftfield]

I genuinely believe in 6 months you're all going to be kicking yourselves for not taking advantage of this fire sale. Talk of great depressions lmao please.
http://www.israelnationalnews.com/News/News.aspx/277216

Interesting article... thanks for sharing.
FWIW I don't hold for the armageddon theories and share your thinking.

[Beagle]

I genuinely believe in 6 months you're all going to be kicking yourselves for not taking advantage of this fire sale. Talk of great depressions lmao please.

http://www.israelnationalnews.com/News/News.aspx/277216

What fire sale ? Market was on a record forward PE of 32.5 so has probably come down to about 30, (taking into account earnings decline from the recession we're probably already in). Ten year average is only 18. This is only a fire sale for people who don't have the perspective to understand normal metrics that aren't inflated by a decade on central bank intervention and support.

There are people on here who have no idea what a real fire sale is.

[Beagle]

What happened on the Aussie market, crazy. everything was about 8% down, went to the shop and came back and saw some up over 10% Amazing turnaround

Many base metals rallied today from oversold level's. Aussie market has been a real underperformer...just got a bit oversold today and corrected. Plenty more to come to the downside in the months ahead in my opinion for all markets.

[allfromacell]

What fire sale ? Market was on a record forward PE of 32.5 so has probably come down to about 30, (taking into account earnings decline from the recession we're probably already in). Ten year average is only 18. This is only a fire sale for people who don't have the perspective to understand normal metrics that aren't inflated by a decade on central bank intervention and support.

There are people on here who have no idea what a real fire sale is.

But that central bank intervention isn't going anywhere, expect even more if it. Do you not think the reason we got here in the first place can not be one of the reasons we'll stay? Cash may be king for now but it's got to go somewhere and I expect once the panicking has subdued a lot of it will find it's way back into markets.

P.S congratz on your timing, you really did nail this one.

[Beagle]

Thanks. Central banks have no choice but to continue the policies that got us into this overpriced mess to start with but I don't think interest rate cuts will do any good as we're so close to zero it won't matter. Fiscal stimulus is the answer but it needs to be carefully targeted.

Lets be honest, nobody knows how long it takes for things to get back to normal but its extremely unlikely to be anytime in the very near future. My core investment thesis when I sold out in early February was that it was highly likely the market as a whole would be materially lower three months from then. I still hold that view, despite the falls to date. At this stage my strategy is a fairly simple one and that revolves around minimising downside risk on reentry and being very selective about ensuring reacquired companies have a robust balance sheet and business franchise that can withstand difficult economic conditions.

Stay in cash and short term deposits for the immediate future and seeing as future earnings are difficult to predict in this environment, let the market tell me when its likely a bottom may be in for the stocks I want to reacquire. I'll probably use the 30 day MA as my core TA indicator.

There was already one very good looking opportunity that presented itself today that I very nearly pulled the trigger on, but I reminded myself to ignore the sexy looking blonde with the very short skirt that could get me in huge trouble and stay married to the discipline of ensuring I take a careful approach to de-risking my reentry properly.

[peat]

Many base metals rallied today from oversold level's. Aussie market has been a real underperformer...just got a bit oversold today and corrected. Plenty more to come to the downside in the months ahead in my opinion for all markets.
Aall sectors participated in the rally which accelerated after our market closed, and the market actually closed positively. . US SP 500 futures continue to rally at this point after midnite NZ time. Unless the US tanks again tonite then there will be a very strong rally on Monday in NZ. Eg WBC NZ closed at $NZ17 whereas WBC AU closed at $A18

[bottomfeeder]

I think there will be a lot of sell offs and rallies, before this is over. It so difficult to pick the bottom for anyone. I see this going on until the coronavirus has been eradicated.

[ratkin]

Not much of a bounce today so far. Was expecting more. Maybe the DOW will close strong, although I guess many are learning there can be lots of bad news over the course of the weekend

[ratkin]

I think there will be a lot of sell offs and rallies, before this is over. It so difficult to pick the bottom for anyone. I see this going on until the coronavirus has been eradicated.

Think best time to buy will be when the virus starts peaking in the US and UK, that will be maximum gloom, Asia already starting to look promising, do not want to wait too long as the market will soon be looking ahead past this thing, and the scared money may largely already have left.

It will be better to buy on the bad days, rather than the good ones, but it is not easy as goes against human nature. There were times in 2008 where forcing myself to buy was literally painful. It just felt so wrong, but it turned out it was very right.

Am planning to start dipping my toes back in next week, but not into the NZ market.

[Crypto Crude]

Yes the price we want to be buying our investments back is when we feel that coronavirus is fully valued into the asset...
It would be interesting to do some sharetrader surveys or discussions on when we feel this might happen....
:cool:
.^sc

[ratkin]

Yes the price we want to be buying our investments back is when we feel that coronavirus is fully valued into the asset...
It would be interesting to do some sharetrader surveys or discussions on when we feel this might happen....
:cool:
.^sc

I will be drip feeding into it from next week, and will do so for a few months. The timing does not have to be perfect, I learnt that last time, a little too late and a little too early are ok. Just have to avoid much too late and much too early. Trying to pick the absolute bottom to put all the money back in is too hard to pick and more risky. I feel the NZ market not the best as the virus is not here yet. More profits to be made from markets that are being battered due to the presence of the virus.

[Crypto Crude]

I will be drip feeding into it from next week. The timing does not have to be perfect, I learnt that last time, a little too late and a little too early are ok. Just have to avoid much too late and much too early. Trying to pick the absolute bottom to put all the money back in is too hard to pick and more risky. I feel the NZ market not the best as the virus is not here yet. More profits to be made from markets that are being battered due to the presence of the virus.

Yeah well next week sounds much too early...
You would be better off to attack yourself with a chainsaw than to start re buying next week...
Have you totally lost your marbles...
:cool:
.^sc

[ratkin]

Yeah well next week sounds much too early...
You would be better off to attack yourself with a chainsaw than to start re buying next week...
Have you totally lost your marbles...
:cool:
.^sc

Will only be around 5% of funds going in next week, maybe much too early, but can see a few green shoots

[Snoopy]

What fire sale ? Market was on a record forward PE of 32.5 so has probably come down to about 30, (taking into account earnings decline from the recession we're probably already in). Ten year average is only 18. This is only a fire sale for people who don't have the perspective to understand normal metrics that aren't inflated by a decade on central bank intervention and support.

There are people on here who have no idea what a real fire sale is.


Quote right Beagle.

Just because a share is trading at a price 20% where it was a month ago does not make it cheap. However, I feel I should make a counter warning about your cash in the bank strategy.

Right now NZ is one of the few countries in the world without term deposit, or cash insurance. NZ is planning to adopt a strategy.

https://www.stuff.co.nz/business/money/102385754/critics-want-changes-to-new-zealands-bank-rescue-plan?rm=m

But even if this is adopted, NZers having a cash nest egg worth more that $50k could be liable for a 'haircut'. A haircut in this sense means the bank will confiscate a proportion of your term deposit money to recapitalize itself. And in order to save the everyday voter from this (most people), the rate of confiscation could be very high: think 90% of all your balance of money over $50k in any one account. A market will bounce back. But if your cash in the bank is confiscated it is gone forever. Even stuffing your mattress with cash is not safe. Remember how India declared all bank notes over a certain denomination to be worthless in an effort to stamp out black market activities,

Food for thought for those who consider 'cash' a safe haven in times of real trouble. Ironically I find myself more cashed up in relative terms than I have ever been as a result of the RBD partial takeover in 2019. However, I do have a coherent plan to reinvest this money over the next couple of years and I won't be waiting for a 'market bottom', and the increased risk of cash confiscation, to do it. My plan is to seek out a variety solid dividend paying shares with a yield consummate with their risk, in weakly correlated sectors. I have increased my holdings in TRA, HGH and PGW, albeit modestly, since the 'coronacrash'. So far I have lost some money on all of these reinvestments. But I am imagining in my own mind the market to be closed for the rest of year (for selling anyway). I am fairly sure that come December 31st, these top up purchases I have made will be looking more savvy. Must away to plan some more purchases next week.

SNOOPY

[James108]

Historic P/E ratios are a bit out dated when the risk free rate of return is so much lower now.

[ynot]

Quote right Beagle.

Just because a share is trading at a price 20% where it was a month ago does not make it cheap. However, I feel I should make a counter waning about your cash in the bank strategy. Right now NZ is one of the few countries in the world without term deposit, or cash insurance. NZ is planning to adopt a strategy.

https://www.stuff.co.nz/business/money/102385754/critics-want-changes-to-new-zealands-bank-rescue-plan?rm=m

But even if this is adopted, NZers having a cash nest egg worth more that $50k could be liable for a 'haircut'. A haircut in this sense means the bank will confiscate a proportion of your term deposit money to recapitalize itself. And in order to save the everyday voter from this (most people), the rate of confiscation could be very high: think 90% of all your balance of money over $50k in any one account. A market will bounce back. But if your cash in the bank is confiscated it is gone forever. Even stuffing your mattress with cash is not safe. Remember how India declared all bank notes over a certain denomination to be worthless in an effort to stamp out black market activities,

Food for thought for those who consider 'cash' a safe haven in times of real trouble. Ironically I find myself more cashed up in relative terms than I have ever been as a result of the RBD partial takeover in 2019. However, I do have a coherent plan to reinvest this money over the next couple of years and I won't be waiting for a 'market bottom', and the increased risk of cash confiscation, to do it. My plan is to seek out a variety solid dividend paying shares with a yield consummate with their risk, in weakly correlated sectors. I have increased my holdings in TRA, HGH and PGW, albeit modestly, since the 'coronacrash'. So far I have lost some money on all of these reinvestments. But I am imagining in my own mind the market to be closed for the rest of year (for selling anyway). I am fairly sure that come December 31st, these top up purchases I have made will be looking more savvy. Must away to plan some more purchases next week.

SNOOPY

Smartshare NZ bonds could be an option here. NZB

[Snoopy]

Smartshare NZ bonds could be an option here. NZB


Bonds lose capital value when interest rates rise and gain capital value when interest rates fall. Do you think putting money into a bond fund when interest rates are at record lows sounds like a good capital preservation strategy? Personally I am staying well clear of bonds at this stage of the investment cycle. Thanks for the suggestion though, as finding out what others see as a good way to preserve cash in a real down cycle is useful. Should I just buy a gold bar and stash it under my bed?

SNOOPY

[Aaron]

Bonds lose capital value when interest rates rise and gain capital value when interest rates fall. Do you think putting money into a bond fund when interest rates are at record lows sounds like a good capital preservation strategy? Personally I am staying well clear of bonds at this stage of the investment cycle. Thanks for the suggestion though, as finding out what others see as a good way to preserve cash in a real down cycle is useful. Should I just buy a gold bar and stash it under my bed?

SNOOPY

No buy several I really would like to see the price of gold rise.

[youngatheart]

Seemed the market liked Trumps speech finally declaring a national emergency on the CV virus. Dow closed up at 9.3%... Expect a mighty dead cat bounce on Monday... Even if its short lived, well done to those that bought 'cheap' NZ shares on Friday...

[Biscuit]

....well done to those that bought 'cheap' NZ shares on Friday...

A weekend is a long time in a coronacrash...

[ratkin]

That rally was so annoying, every time I sharpen my pencil there is a massive overnight rally.
I do not believe the buying opportunity will last much longer, Asia is past the inflection point and starting to ramp up.
The market may not be that scared of dead bodies as much as it was dead production

[Leemsip]

A couple of weeks ago my plan was to wait for maximum despair. Definitely not there yet, this will occur when schools close, contractors can't find work etc. Giving it a month.......

Actually finding all this pretty stressful. The 10% rally in the dow today....ffs.

[Tomtom]

I think you are, very belatedly, starting to see patchy monetary and fiscal support arrive as well as measures to contain the spread of the virus itself. The challenge will be got keep consumers spending while not attending events and fiscal measures would help a lot in that regard.

[Balance]

That rally was so annoying, every time I sharpen my pencil there is a massive overnight rally.
I do not believe the buying opportunity will last much longer, Asia is past the inflection point and starting to ramp up.
The market may not be that scared of dead bodies as much as it was dead production

Starting point is not to sell unless you are trading.

[King1212]

Not too fast with the rally gentleman!..sixth coronavirus patient just added....Taft time ahead as we are heading to colder weather ahead with morning chill n afternoon hot n humid. This the perfect time to get sick n virus in the air

[TobyPascoe92]

Not too fast with the rally gentleman!..sixth coronavirus patient just added....Taft time ahead as we are heading to colder weather ahead with morning chill n afternoon hot n humid. This the perfect time to get sick n virus in the air

Watch Jacinda shut the borders to the US now for 7 - 14 days, this is when it gets real for the likes of AIR - huge proportion of their international income.

[Balance]

Watch Jacinda shut the borders to the US now for 7 - 14 days, this is when it gets real for the likes of AIR - huge proportion of their international income.

She and many in NZ will be trying to find a way not to shut the border on US - remember that American shxt don’t stink as far as they are concerned.

Never mind the fact that US has allowed the virus to run rampant over there - acknowledged by themselves with the state of emergency.

A President who had minimized the problem, blamed others for highlighting it and described it as a hoax, curtained surveillance and health resources so US is badly placed to handle the outbreak - all pointing to a disaster which per H1N1, US will export to the rest of the world and NZ will not be spared.

[ynot]

Smartshare NZ bonds could be an option here. NZB
I was thinking bonds if a fast bank exit was suddenly imminent. 90% haircut if you stick with a shaking bank, or take your chances with bonds. I know what I would do.

[Snoopy]

I was thinking bonds if a fast bank exit was suddenly imminent. 90% haircut if you stick with a shaking bank, or take your chances with bonds. I know what I would do.


Lest I be accused of scaremongering, a few more details on this topic

The Open Bank Resolution system, or OBR for short, which Grant Roberston has assured NZers is coming, is not in place yet. The legislation is still in the consultation phase and policy details are being worked through. The 90% haircut figure I brought up was meant to refer to the amount of cash confiscated over and above a safe threshold of $50,000.

As an example if you had $100,000 in an account then $50,000 would be able to be accessed as normal and the other $50,000 would be first suspended and then be able to be drawn on by the bank at a rate of 90% on that incremental amount. So as a 'worst case' scenario' you might lose $45,000 of it. That means the potential maximum loss on your $100,000 would be $45,000 in total or 45% (not 90%).

Now I have an admission to make. That 90% figure I pulled out of my memory in relation to what happened in the 2012-2013 bank crisis in Cyprus. It turns out my memory wasn't perfectly accurate.

https://www.forbes.com/sites/timworstall/2013/03/31/theres-something-very-strange-about-the-cyprus-bank-haircut-very-strange-indeed/#6bf717086359

"Account holders in Laiki Bank, the country's second largest, stand to lose up to 80pc of their money as the lender is wound down and insured deposits transferred to Bank of Cyprus."

Other bank holders did not lose quite so much, although in Cyprus there seemed to be a minimal threshold to avoid confiscation (unlike what is proposed here) and the banks there did have some deposit insurance (our banks don't). In this case losing 80% of everything is actually worse than losing 90% of half what you have. But all of this assumes that there is some deposit insurance and , right now, in NZ there is none.

SNOOPY

[ynot]

Nevertheless, if you held 1 mill in the bank, some form of haircut could apply to 950k.
The Ausi banks milk us for all its worth, and the icing on the cake is no guarantee.meanwhle back in Aus they are guaranteeing 250k.
I believe here you can have multiple accounts at different banks but still a pia.

[lawson]

What would happen if you had a million held in 20 banks accounts with 50K in each? Is it based on bank account balance per account or total held by each person?

I doubt things will get quite this dire but I suppose one option might be to open a CBA account (easily done from NZ) and pop 250K in it as we're almost at parity so there'd always be the chance of a forex gain when bringing it back.

[Crypto Crude]

What happens is the banks take out high risk investments, often heavily leveraged instruments like options or futures and also have other wild horse investments all packaged up ready to write off... so that when it goes bad we the consumer pay through all the bailouts to banks or losing money like in the examples above... and when it goes good the banks just keep all the high risk returns all to themselves.....
So to start with you never really have a bank that really cares want to succeed anyway...its gona make the big money and its gona get bailed out... perfect business to be in really...
:cool:
.^sc

[ratkin]

What would happen if you had a million held in 20 banks accounts with 50K in each? Is it based on bank account balance per account or total held by each person?

I doubt things will get quite this dire but I suppose one option might be to open a CBA account (easily done from NZ) and pop 250K in it as we're almost at parity so there'd always be the chance of a forex gain when bringing it back.

Do overseas customers have the same rights as Australians if the CBA failed?


This is quite interesting
https://pursuit.unimelb.edu.au/articles/is-it-time-to-rethink-our-banks-being-too-big-to-fail

[ynot]

Do overseas customers have the same rights as Australians if the CBA failed?


This is quite interesting
https://pursuit.unimelb.edu.au/articles/is-it-time-to-rethink-our-banks-being-too-big-to-fail

From memory it's Ausi Citizen only.

[Snoopy]

What would happen if you had a million held in 20 banks accounts with 50K in each?


Then you would get away 'haircut free'.



Is it based on bank account balance per account or total held by each person?


Based on each single bank account balance



I doubt things will get quite this dire but I suppose one option might be to open a CBA account (easily done from NZ) and pop 250K in it as we're almost at parity so there'd always be the chance of a forex gain when bringing it back.

Yes I think that would work too,

SNOOPY

[ratkin]

Then you would get away 'haircut free'.



Based on each single bank account balance



Yes I think that would work too,

SNOOPY

where does this 50k figure come from?

[Snoopy]

Do overseas customers have the same rights as Australians if the CBA failed?


I would think yes, because, like Australians, they pay the same bank deposit insurance in Australia, which takes the form of receiving lower interest rates than they otherwise would.



This is quite interesting
https://pursuit.unimelb.edu.au/articles/is-it-time-to-rethink-our-banks-being-too-big-to-fail

Some would argue that the Australian Government imposed (from 1st July 2017) 'banking levy' that now applies to the big four banks is a way of paying for some of the 'implied government guarantee' of a bank that is too big to fail.

The smaller banks in Australia think the Australian banking levy, a non trivial amount of $388m for Westpac in FY2009 - for example, is a great idea because they don't have to pay it!

SNOOPY

[Snoopy]

where does this 50k figure come from?

From Grant Robertson

https://www.interest.co.nz/banking/103059/finance-minister-grant-robertson-says-government-will-introduce-deposit-insurance

"Finance Minister Grant Robertson says the Government will introduce deposit insurance of $50,000 per individual per financial institution"

SNOOPY

[peat]

A weekend is a long time in a coronacrash...
Yeh I agree I actually had a profitable long but made sure I got out before close

[ynot]

From memory it's Ausi Citizen only.

I stand corrected. Can see no reference to non Australian individual.

The FCS does not apply to the following accounts:

accounts with funds that are not in Australian dollars
accounts kept at foreign branches (located overseas) of Australian banks, building societies and credit unions
credit balances on credit card facilities or other loans
pre-paid card facilities or similar products
‘nostro’ accounts and ‘vostro’ accounts of foreign corporations that carry on banking business or otherwise provide financial services in a foreign country

[ratkin]

https://www.gfmag.com/magazine/november-2019/50-safest-commercial-banks

Here is a list of the worlds 50 safest commercial banks according to global finance magazine.

Only One New Zealand bank features

[Aaron]

https://www.gfmag.com/magazine/november-2019/50-safest-commercial-banks

Here is a list of the worlds 50 safest commercial banks according to global finance magazine.

Only One New Zealand bank features
I could be wrong but the Australian banks all listed quite high up the list own their nz subsidiaries

[Bjauck]

https://www.gfmag.com/magazine/november-2019/50-safest-commercial-banks

Here is a list of the worlds 50 safest commercial banks according to global finance magazine.

Only One New Zealand bank features All the big banks operating in NZ are not actually NZ owned. Westpac, NAB, ANZ & CBA are all in the top 20.

NZ has encouraged investment in residential land as its main "pension scheme". Only 10% of KiwiSaver funds are invested in NZ shares. So we do not hold on to our big and/or successful companies very well.

[bull....]

the huge 6 - 7% rally in the us markets on friday in the last 30 mins was a computer driven short squeeze

[kiora]

From Grant Robertson

https://www.interest.co.nz/banking/103059/finance-minister-grant-robertson-says-government-will-introduce-deposit-insurance

"Finance Minister Grant Robertson says the Government will introduce deposit insurance of $50,000 per individual per financial institution"

SNOOPY

So then "Based on each single bank account balance" would not apply? ie different accounts in the same bank wouldn't be covered for $50,000? Only one of the accounts?
What about joint accounts?

[Snoopy]

So then "Based on each single bank account balance" would not apply? ie different accounts in the same bank wouldn't be covered for $50,000? Only one of the accounts?


"Under the scheme, deposits held by New Zealanders will be protected up to a total of $50,000 at a single deposit taker"

I read that as saying that for each deposit taker, your accounts would be aggregated to see whether you had funds in excess of the $50,000 guaranteed balance.



What about joint accounts?


If the joint account is held by two people, then half of the joint account balance would be assigned to each holder for account aggregation purposes.

SNOOPY

[ynot]

Woops I ment

[ynot]

the huge 6 - 7% rally in the us markets on friday in the last 30 mins was a computer driven short squeeze

Not too surprised by that. It sure looked like something besides market sentiment was driving it !

[kiora]

Thanks Snoopy for the clarification

[Crypto Crude]

Thanks snoopy...
:cool:
.^sc

[ratkin]

Thanks Snoopy for the clarification

So, have we established he NZ branches of the Australian banks are not as secure as the Actual Australian banks?
If so does this leave Kiwi bank as being really the safest of the New Zealand banks?

And what of Rabodirect? It seems to be quite similar in that it is just a subsidiary of the main Rabobank which I guess means it is also not as safe as the main Rabobank?

[lawson]

I would think yes, because, like Australians, they pay the same bank deposit insurance in Australia, which takes the form of receiving lower interest rates than they otherwise would.



Some would argue that the Australian Government imposed (from 1st July 2017) 'banking levy' that now applies to the big four banks is a way of paying for some of the 'implied government guarantee' of a bank that is too big to fail.

The smaller banks in Australia think the Australian banking levy, a non trivial amount of $388m for Westpac in FY2009 - for example, is a great idea because they don't have to pay it!

SNOOPY

Thanks Snoopy and all who have contributed to this conversation very interesting. I wonder if the NZ scheme will still go ahead the legislation was due to be introduced mid 2020 I guess time will tell.

[Aaron]

Thanks Snoopy and all who have contributed to this conversation very interesting. I wonder if the NZ scheme will still go ahead the legislation was due to be introduced mid 2020 I guess time will tell.

I guess they could hurry it through to try and put confidence in the banks if things deteriorate further.

[Jerry]

Judge for yourself on the Reserve Bank website Dashboard which has all the NZ banks and their parameters.
https://bankdashboard.rbnz.govt.nz/capital-adequacy

[kiora]

So, have we established he NZ branches of the Australian banks are not as secure as the Actual Australian banks?
If so does this leave Kiwi bank as being really the safest of the New Zealand banks?

And what of Rabodirect? It seems to be quite similar in that it is just a subsidiary of the main Rabobank which I guess means it is also not as safe as the main Rabobank?

My view is the NZ govt would need to stump up with the $50,000/account in all the banks & nationalize them? just like SCF ? Otherwise there will be a stampede. Didn't Greece do something like that?
https://time.com/3949353/greece-bank-shutdown-eu/

[Grimy]

So what about funds in brokers accounts? There must be a lot of people with a lot more than $50K sitting in their Direct Broking/ASB/whatever account. And these are held with banks I take it. Does everyone have a safety net of $50K, or is it lumped together as a DB account which only has $50K total?
Safer to be in shares if that's the case.

[kiora]

So what about funds in brokers accounts? There must be a lot of people with a lot more than $50K sitting in their Direct Broking/ASB/whatever account. And these are held with banks I take it. Does everyone have a safety net of $50K, or is it lumped together as a DB account which only has $50K total?
Safer to be in shares if that's the case.

It doesn't seem very clear at Craigs
"CIP Cash Management Nominees Limited, a subsidiary of Craigs Investment Partners, was established in 2010 to hold funds as a bare trustee on your behalf. (see Terms and conditions) CIP
Cash Management are these held as arms length trustee accounts?
Remember Hallifax
https://www.sharetrader.co.nz/showthread.php?11410-Halifaxonline-co-nz-in-administration-(dedicated-thread)&highlight=hallifax

[JBmurc]

So what about funds in brokers accounts? There must be a lot of people with a lot more than $50K sitting in their Direct Broking/ASB/whatever account. And these are held with banks I take it. Does everyone have a safety net of $50K, or is it lumped together as a DB account which only has $50K total?
Safer to be in shares if that's the case.

Yes I remember watching a clip from Gloom, Boom & Doom Report Editor Marc Faber prob around a year ago ... stated shares in good companies will be hit less worse than cash in banks + bonds ..Gold silver will reach new highs etc ... I see waits on silver bullion at the NZ Mint 4-6wks at present ...

[kiora]

Even gold & silver being hit to find liquidity at moment
https://finance.yahoo.com/quote/GC%3DF?p=GC%3DF

[Valuegrowth]

Even gold & silver being hit to find liquidity at moment
https://finance.yahoo.com/quote/GC%3DF?p=GC%3DF

I also saw that. Gold is also not safe. The most safe place is where they(investors) can understand. In other words, invest in simple business that we can understand easily.

https://www.thebalance.com/invest-in-what-you-know-356334

[JBmurc]

Even gold & silver being hit to find liquidity at moment
https://finance.yahoo.com/quote/GC%3DF?p=GC%3DF

Yes in the paper market thats leveraged 100:1 to the real metal .. try buy a large amount of the real metal currently long waiting list ... if it was truely being dumped why can't we all be loading up in cheap below spot price bullion ?? worldwide at present premiums are pushing 30%+ over spot price

Now I think the paper price may well continue down i the very short term ...but I don't think we will see real metal Gold Silver Bullion in mass amount getting dumped I for one am moving funds into the biggest SILVER Bullion ETF on the ASX and buying more bullion

Just watch what Central Banks do they won't be dumping real metal ... but creating money from fresh air and buying more like they have been doing in record amounts for years now.

Negative rates are coming

[Traderwannabe]

I haven’t read all the posts just lately so this may have been covered but what about the Public Trust term deposits and call accounts- website says that they are both government guaranteed. What do people here think about this as a safe option?

[kiora]

Investing is all about liquidity for now,looking for returns comes latter
https://finance.yahoo.com/news/nightmare-wall-street-liquidity-110000984.html

This is somewhere like where you need to be
https://www.barrons.com/articles/our-semi-retired-columnist-isnt-worried-about-the-market-crash-heres-why-51584143639?siteid=yhoof2&yptr=yahoo

[bull....]

Reserve Bank of New Zealand to make unexpected announcement
The Reserve Bank is making an unexpected announcement at 8am, the bank announced this morning

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12316891

guess if they drop rates its purely symbolic as the banks probably wont pass on anything to mortgage holders and at the end of the day its not going to make people go out to restaurants , movies etc and spend more in a virus riddled society.

[Balance]

Reserve Bank of New Zealand to make unexpected announcement
The Reserve Bank is making an unexpected announcement at 8am, the bank announced this morning

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12316891

guess if they drop rates its purely symbolic as the banks probably wont pass on anything to mortgage holders and at the end of the day its not going to make people go out to restaurants , movies etc and spend more in a virus riddled society.

Will reallocate spending though as savers (tend to be older and so spend less on certain services & products) will get less interest income while borrowers (tend to be younger & more inclined to spend) will get more income.

[bull....]

Will reallocate spending though as savers (tend to be older and so spend less on certain services & products) will get less interest income while borrowers (tend to be younger & more inclined to spend) will get more income.

yes but as the economy goes down the toilet this year mostly younger people will lose there jobs , so rate cut wont help them

[Balance]

yes but as the economy goes down the toilet this year mostly younger people will lose there jobs , so rate cut wont help them

Let’s see what is in the stimulus package tomorrow first, ok?

Not ready to throw in the towel on NZ yet despite the best efforts of the Jacinda government to sink us.

[bull....]

RBNZ in full panic mode

Reserve Bank cuts official cash rate to 0.25 per cent for 12 months

[winner69]

RBNZ in full panic mode

Reserve Bank cuts official cash rate to 0.25 per cent for 12 months

Was Adrian still in his pjs when making that announcement.

[bull....]

Was Adrian still in his pjs when making that announcement.

he might climb back under the covers now and hope it all goes away. no ammo left now 75 bp cut they really must think things are bad

[Oberon]

he might climb back under the covers now and hope it all goes away. no ammo left now 75 bp cut they really must think things are bad

I'd be happy to go back to bed and wake up next year at this rate...

[Balance]

https://www.stuff.co.nz/national/health/coronavirus/120299051/reserve-bank-expected-to-cut-the-official-cash-rate

Right move by RBNZ.

Will provide relief to indebted companies and householders when they most need it, and

Lower NZ$ will aid our export sector to cushion the downturn.

Well done, Adrian Orr! :t_up:

[King1212]

Will we see our mortgage interest down?

[bull....]

https://www.stuff.co.nz/national/health/coronavirus/120299051/reserve-bank-expected-to-cut-the-official-cash-rate

Right move by RBNZ.

Will provide relief to indebted companies and householders when they most need it, and

Lower NZ$ will aid our export sector to cushion the downturn.

Well done, Adrian Orr! :t_up:

well only if the banks pass on the cuts to householders. then term deposits will drop if they do

[Raz]

RBNZ in full panic mode

Reserve Bank cuts official cash rate to 0.25 per cent for 12 months

Not impressed, nothing on deposit insurance or OBR...go hard go early...with a dose of stupid seems the approach. This will not passed on to to small businesses who will be assessed as more risky...pathetic. Given fixed rate lock up...delayed impact...for now a bank benefit package!

[stoploss]

Will we see our mortgage interest down?
If you are on a floating rate somewhere between .5 to .75 would be my guess .
Fixed rate have to wait for your refix .

[Balance]

https://www.stuff.co.nz/national/health/coronavirus/120290540/coronavirus-financial-markets-doomsday-scenarios-rarely-come-to-pass-says-sam-stubbs

Have a read,

don't just take notice of what the doomsday merchants write,

get comfortable with your investment exposure

and enjoy the day - the sun will rise tomorrow.

Things will get worse but a year from now, many will wonder like with other crises why they did not take advantage of some fire-sales coming up.

[Balance]

Not impressed, nothing on deposit insurance or OBR...go hard go early...with a dose of stupid seems the approach. This will not passed on to to small businesses who will be assessed as more risky...pathetic. Given fixed rate lock up...delayed impact...for now a bank benefit package!

That's what China did (go hard and go early when the Central government took responsibility) with containing the coronavirus while you and a few others were busy spreading wild rumors and conspiracies about why and while China was doing it.

Zero credibility = Raz.

[bull....]

Not impressed, nothing on deposit insurance or OBR...go hard go early...with a dose of stupid seems the approach. This will not passed on to to small businesses who will be assessed as more risky...pathetic. Given fixed rate lock up...delayed impact...for now a bank benefit package!

yep will improve bank margins the most , if businesses and householders get anything it will be a token amount but savers will have to pay for it

[bull....]

https://www.stuff.co.nz/national/health/coronavirus/120290540/coronavirus-financial-markets-doomsday-scenarios-rarely-come-to-pass-says-sam-stubbs

Have a read,

don't just take notice of what the doomsday merchants write,

get comfortable with your investment exposure

and enjoy the day - the sun will rise tomorrow.

Things will get worse but a year from now, many will wonder like with other crises why they did not take advantage of some fire-sales coming up.

lol and the sun will come crashing down later in the week

[Balance]

yep will improve bank margins the most , if businesses and householders get anything it will be a token amount but savers will have to pay for it

As one with savings in the bank, small price to pay - happy that RBNZ has taken the step, rather than do nothing.

Impressed myself so far with the job that Adrian Orr is doing - he tries to stay ahead of the curve and is very transparent vs the behind the curve Brash & Bollard.

[Balance]

lol and the sun will come crashing down later in the week

Only for you, bull....

Rest of us will be enjoying the sunshine - you choose what you do, right?

[stoploss]

As one with savings in the bank, small price to pay - happy that RBNZ has taken the step, rather than do nothing.

Impressed myself so far with the job that Adrian Orr is doing - he tries to stay ahead of the curve and is very transparent vs the behind the curve Brash & Bollard.
If he was ahead of the curve he would have cut at the last OCR meeting .... ( when many were picking a cut )
Now has been forced to get with the program with an emergency cut .
Also not so ahead of things now he is delaying the introduction of the new bank capital rules .
Not to mention he has said we are not prepared for negative rates ..... Why ?

[bull....]

Only for you, bull....

Rest of us will be enjoying the sunshine - you choose what you do, right?

exactly people do whats right for you

[Raz]

That's what China did (go hard and go early when the Central government took responsibility) with containing the coronavirus while you and a few others were busy spreading wild rumors and conspiracies about why and while China was doing it.

Zero credibility = Raz.

As usual you get personal as you can't counter an actual argument, China did it so it must be good or is the US involved must be bad! You should ask around here and find out about your credibility lol