Prices not going down??

[Happ]

Originally Posted by CarinaPDX

Agreed, it is baffling. The pundits are claiming that there is a cash shortage right now, and in functioning competitive markets a limited supply and rising demand usually means an increasing price. Clearly the markets are being manipulated, but that is no surprise: that is the job of the Fed (for better or worse). There must be more to it, so any economists that can explain this would be welcome right now.

You are right about the oil. The Saudis have always been able (technically) to turn on and off the spigot without loss, and production costs are tiny. My understanding is that other wells lose capacity when turned off - it would be interesting to know if that is true for fracked wells. At some point we will have to accept Saudi's cartel pricing or they will run us and Russia out of the business. Of course that could be a favor if we simply tax carbon and move on to other power sources. Interesting times...

Greg

You really need to get out and learn a few things. To start with brokers will take a listing that the owner wants to much for with the hope that they can later talk the seller down when nothing is happening.

Your supply and demand is backwards. If there is limited cash then prices come down to get what little cash is available.

[Wallaby]

Originally Posted by alansmith

Saudi Kingdom playing hardball with USA and Russia. They have decided to go all in on their gambit to punish Russia for walking away from table at OPEC. I was looking at the numbers of how much fracking costs for USA and Canada versus what it costs them to pump crude out of the sand. My goodness it ain’t even close. The frackers are in for some tough times. I’m paying 2.89 for premium in N California. Haven’t seen that in a long long time. And if you don’t know petroleum products in America ... and why should you if you live on another continent... I pay one dollar less for diesel in Arizona per gallon than I do in California. And we have the harbors, infrastructure, and delivery setups. So that means tax add on and a factor I call ‘cause you can afford it more betta’ in California.

The Saudi Prince is trying to dislodge America as the number one oil exporter. He might succeed when the frackers have to shut down production because it is way more cost efficient to buy Saudi oil at a significant premium to their costly fracking. You can imagine the poor souls in the Dakotas stuck in real estate.

This isn’t politically directed at anyone but it looks like the printing presses will be running for upteen days with the stimulus pkg. it is staggering to imagine our debt. We are not alone. But I would say USA is number one debtor nation in this blue planet. If China wanted to destroy us all they would have to do is sell even a small portion of the debt instruments they’ve bought from us. I still can’t make the math work out why our interest rates on treasury bonds and T-bills haven’t climbed over the last years. How are we able to attract Capitol to finance debt with such poor returns? I am baffled. Any opinions are now being solicited and my ears are all yours.

The US is still the safe-haven country (for now). Other countries are buying dollars and US T-bonds. Bond prices increase, yields decrease. The FED is also cutting interest rates, scooping up capital at the same time as it pours 'money' into the markets. It is this cutting of rates etc. that stimulated/maintained the stock market post 2008. Companies could borrow and buy their own shares, instead of saving for a rainy day or investing in their actual business. Now comes the the day of reckoning.
Unfortunately, our dimwitted government and Fed Reserve are making the situation worse by creating ever more debt. At some point, interest rates go 'negative.'

[CaptainJohn49]

Originally Posted by geoleo

Dear Sailors, The $ dollar is supposed to be "KING" stocks have collasped, interest rates at all time lows, gold is down, the dollar is up UP on all currencies worldwide , the euro is headed for par with the dollar, the pound is way down too, oil is down 53% in 2 weeks. Yet marine stuff is same old high price. Defenders big sale is pathetic usually offering around 10-15% off a fake list price. Used sailboats are still way up there too and asking prices are the same. Why is this ? Is every seller hoping beyond hope OR is their business still doing great with old prices?

Hold on, gold is up - way up. Think of a boat in terms of once’s of gold. Today gold is about $1,620 per once. A few years ago you were lucky to get $1,200. Per once.

CaptainJohn49

[lestersails]

Originally Posted by robert sailor

The human being is an interesting animal. When faced with situations that no one has the answer for someone will make up a story and if promoted the masses will start believing it. We just can't accept that there are certain things we just don't know..That might help explain why there are over 4000 religions in the world.
So, no one knows when this virus issue will be over nor does anyone know how it will effect the economy ...no answer available, period!! There are stories we tell ourselves to make us feel better...carry on.

Wow - set, game, match. You nailed it. Or as I like to say, "No one actually believes in probability" - human beings hate uncertainty because our brains are dichotomizing machines. Give 'em a precise probability and they will immediately flip it into a 'It will' or 'It won't'.
Why stop with religions? It is the basis of all of politics as well to provide false assurances for the future. (And that is a TOTALLY non-partisan jab)

[Happ]

Originally Posted by alansmith

Where did all of prosperity that was built up go? Wealthy corporations and astute traders who shorted the market. If you don’t know markets .. or care about such things... you should. If you are a working stiff your 401k /403 is now worth 30% less than it was before this epic virus hit. That loss of value didn’t just vaporize. Your money just disappeared into another fella’s pocket through options or futures traders taking the opposite of the coin than your investment in things like Mutual Funds. It is a fundamental of the free worlds’s financial trading practices.

Up until recently I was only required about 800 dollars equity in my trading account to make trades in the E-mini S&P. It is at 9000 dollars per round trade for that contract now. I have never seen such volatility since I began in 1987. I have seen thousand point moves in 10 minutes on the Dow. Unbelievable movements of money. This doesn’t just feel like a correction due to the Covid. This feels like something more sinister. All trends come to an end. All.

We have a saying in the markets “ don’t try and catch a falling knife.” For those of you trying to time reentry through timing ( one fella was espousing this) be forewarned. Yes, Tesla might look like a value at upper 300’s now... but what if we have entered a true recession for the next 2-5 years?

During the big bust back in the late 90’s my coworker was heavily invested in the Nasdq. I’m a chartist. I kept telling him to get the F out. He said ‘ it is just a correction I will be okay.” I showed him the head and shoulders formation which is bearish as heck. He lost over 300 K in 3 months. I think it took over 15 years for the Deck to regain it’s losses. It required him to keep working many years past his planned retirement. It was quite sad to see his stubbornness.

I am not a doomsayer type of guy. But this volume of trading. This ferocity of trading. These insane movements of cash. This is different than any “correction” I have ever seen since the 80’s. Protect yourself now and sit on the side lines.

I will give you one more pearl of wisdom taught to me by a very good investor. He asked me... what is the number one rule to be a successful trader? I replied to make smart investments? He said.. partially correct. I then said buy low and sell high. He said partially correct. I said okay, what? He said the number one quality of a successful investor is ‘ Capitol Preservation’. I said, huh? He explained how some traders do well in sideways markets playing with oscillator tools that work quite well in such markets. Some traders are excellent in bearish conditions. Some are great bull traders. But he said the market is a perfect mechanism. It has a way to find “EVERYONES” chink in their Armour. If you are in the market and you are losing money hand over fist how long before you are wiped out? Can you play markets if you have been seriously damaged because you forgot about Capitol preservation?

I am not anyone’s financial advisor. I am just telling you fellas and gals... this feels different. That’s all I am saying.

Sorry to tell you the money is gone. Market value is based on what the perceived value of a stock is at that moment. To prove this point if you bought a stock at $100 and you still own it a month later but you can only sell it for $90 nothing has changed other tan the perceived value.

If you were talking about the Commodities Futures Market you would be correct because it is a zero sum game. If you buy a contract someone had to sell it to you. When the contract goes down a dollar the the person who owns the contract has a loss on their account and the seller has an equal profit.

[Island Time O25]

Originally Posted by hpeer

Island time,

Try this. You might like it.

Bertrand Russel, In Praise Of Idleness

In Praise of Idleness By Bertrand Russell

Think you hit the nail on the head. What to do with all that spare time?

Maybe this virus will provide some answers?

Currently, our economic model does not allow idelness. If you have $XXX in the bank and you think today it can last you 20 years without working or getting any add'l income you will realize very quickly how wrong you are.

On the other hand under the previous model, the precious metal standard, if you had XX amount of physical precious metal squirreled away and you figured out it will last you 20 years without any new income, it would most likely last that long as you could always convert it into nominal paper money as it became debased against metals.

Under the old system savings and thrift were encouraged at the expense of long term speculation. That may not have been good for what we today call "economic growth" but it was good enough for stability and individual prosperity, provided you were industrious and thrifty to begin with. Exactly the group which is today thrown under the bus of the Fed Reserve dominated expansionist economy in favor of insatiable borrower.

[lestersails]

Originally Posted by Happ

I think your history is wrong Roosevelt took office in 1933. He brought this country out of the depression.

Happ - don't waste your breath (electons).
Flat earthers
Holocaust deniers
Conspiracy theorists
Vaccine paranoids
These economics people are certain not only that FDR did not bring us out of the recession but that he destroyed their lovely free market.

[369thegoose]

Inautia

[oldfordcrap]

Originally Posted by geoleo

Dear Sailors, The $ dollar is supposed to be "KING" stocks have collasped, interest rates at all time lows, gold is down, the dollar is up UP on all currencies worldwide , the euro is headed for par with the dollar, the pound is way down too, oil is down 53% in 2 weeks. Yet marine stuff is same old high price. Defenders big sale is pathetic usually offering around 10-15% off a fake list price. Used sailboats are still way up there too and asking prices are the same. Why is this ? Is every seller hoping beyond hope OR is their business still doing great with old prices?

Because until people start struggling and it hits home nobody is buying used boats in this situation you will be able to buy 2or 3 boats for less than the price of one. marine stores will have to drop prices also remember toys are the first thing to go in a recession !!!!!!

[Happ]

Originally Posted by Lake-Effect

I'm an investing dummy, so our retirement funds are managed. We're down close to 22% on paper, so I guess we're doing better than some.

Anyway, I know about shorts and other games for making gains on market losses. But, correct me if I'm wrong - the majority of the on-paper loss in this downturn is indeed value just vapourizing, no? A stock worth $100 in December is now worth $70 or less today because of sentiment; there's less desire to buy it, and only a little of that $30/share loss was scooped up in shorts etc... Is this accurate?

Again, based on my limited understanding, this big downturn was triggered by COVID-19, but the market was also considered overheated and a correction was overdue anyway. I don't know whether it is possible to quantify the losses from each cause separately, but it's been explained to me that the coronavirus 'part' of the loss should come back relatively quickly once the uncertainty and shutdowns around coronavirus are gone. The correction we were expecting anyway will have a longer impact, as it would if this were just a normal correction without the virus.

But we are also in new territory, and I haven't yet seen any analyses about how all the current and planned government interventions will shape the recovering market. I'm hoping that the bulk of the intervention flows to workers and small business, as opposed to just the big corporations like in 2008.

People who actually know this stuff are welcome to school me, and favour us with their take.

For reference a correction is around 10%.

[Cisco 37c]

People are bringing their boats out of winterization and preparing to Shelter in Place on the water. Marine businesses that “can” work are busy and the suppliers are seeing an uptick in sales.....so, why lower the prices?

[Happ]

Originally Posted by Island Time O25

What is lost in the discussion is how did we get here?

The abolition of Ellis Island type of quarantine, which worked fairly well up until the time it was discontinued, is the primary cause of our current predicament. Sure it would be akward, unwieldy, arbitrary and perhaps even somewhat discriminatory on surface. But it is the only way to keep a healthy society healthy and away from introduced epidemics.

Each cruiser is more than superficially familiar with the idea of quarantine when entering foreing ports. Why is not the same procedure apply to all entrants? Is arriving by croweded plane with 100s of other passengers any more safe from the medical POV then arriving by private yacht with a small crew or even by one's self?

We have traded caution and common sense for expediency and mighty profit. And don't get me started on the wisdom of letting the prisoners out into the general public. This idiocy not only supports the idea of term limits but also (more importantly IMO) the idea of some kind of ongoing mental health test for any political office holder.

You are absolutely incorrect. My grandfather came through Ellis Island and he was processed and left. All in the same day.

[mstrebe]

In any economic shift, the prices of extremely liquid assets (cash, stocks, bonds, etc.) change rapidly, but illiquid assets (things that must be sold) change both more slowly and in proportion to how difficult they are to transact. The harder it is to sell an asset (i.e., the longer the average time on the market is) the slower the price will change due to economic change.

Because we don't know how the economy will ultimately be affected by the COVID19 crisis, all sellers who do not have to sell immediately are going to wait until they become certain that a new valuation is justified. Because the average market time to sell a large boat is longer than the expected time that this crisis will last, you can expect that there will only be a small proportion of panic sellers (<10% overall) who have to get out of their boats for some reason, whereas the majority of sellers will simply wait.

Once the crisis is over, the economic damage is assessed, and we see where the recovery bounce plateaus, sellers will begin to re-price their boats accordingly.

Bottom line: Don't expect to see major changes in price until late summer except for a few one-off deals, but expect boats to ultimately drop about 15% overall due to the loss of a selling season, the carrying costs for what amounts to another year, natural depreciation, and the lower overall economic pace after recovery.

If you see a boat you like, offer the owner 20% below ask. A rational owner would take it.

[Wallaby]

Originally Posted by alansmith

Where did all of prosperity that was built up go? Wealthy corporations and astute traders who shorted the market. If you don’t know markets .. or care about such things... you should. If you are a working stiff your 401k /403 is now worth 30% less than it was before this epic virus hit. That loss of value didn’t just vaporize. Your money just disappeared into another fella’s pocket through options or futures traders taking the opposite of the coin than your investment in things like Mutual Funds. It is a fundamental of the free worlds’s financial trading practices.

Up until recently I was only required about 800 dollars equity in my trading account to make trades in the E-mini S&P. It is at 9000 dollars per round trade for that contract now. I have never seen such volatility since I began in 1987. I have seen thousand point moves in 10 minutes on the Dow. Unbelievable movements of money. This doesn’t just feel like a correction due to the Covid. This feels like something more sinister. All trends come to an end. All.

We have a saying in the markets “ don’t try and catch a falling knife.” For those of you trying to time reentry through timing ( one fella was espousing this) be forewarned. Yes, Tesla might look like a value at upper 300’s now... but what if we have entered a true recession for the next 2-5 years?

During the big bust back in the late 90’s my coworker was heavily invested in the Nasdq. I’m a chartist. I kept telling him to get the F out. He said ‘ it is just a correction I will be okay.” I showed him the head and shoulders formation which is bearish as heck. He lost over 300 K in 3 months. I think it took over 15 years for the Deck to regain it’s losses. It required him to keep working many years past his planned retirement. It was quite sad to see his stubbornness.

I am not a doomsayer type of guy. But this volume of trading. This ferocity of trading. These insane movements of cash. This is different than any “correction” I have ever seen since the 80’s. Protect yourself now and sit on the side lines.

I will give you one more pearl of wisdom taught to me by a very good investor. He asked me... what is the number one rule to be a successful trader? I replied to make smart investments? He said.. partially correct. I then said buy low and sell high. He said partially correct. I said okay, what? He said the number one quality of a successful investor is ‘ Capitol Preservation’. I said, huh? He explained how some traders do well in sideways markets playing with oscillator tools that work quite well in such markets. Some traders are excellent in bearish conditions. Some are great bull traders. But he said the market is a perfect mechanism. It has a way to find “EVERYONES” chink in their Armour. If you are in the market and you are losing money hand over fist how long before you are wiped out? Can you play markets if you have been seriously damaged because you forgot about Capitol preservation?

I am not anyone’s financial advisor. I am just telling you fellas and gals... this feels different. That’s all I am saying.

Partly true. What we are seeing is the destruction of fiat debt--debt that was never the result of saving from excess 'labor.' Instead, banks created it using the reserve ratio on deposits, the government by funding its deficits, and the Fed Reserve by its actions generally.

Of the $250 trillion of debt in the world, lets assume $100 trillion is fiat debt. That will disappear, deflating all assets. In a sense, it vaporized (imploded) because it was always fiat. It did not come from creating anything of real value.


As for discussions of analytical methods, markets are driven by fundamentals and human behavior. Using patterns in the past presumes the past predicts the future. Good luck on that. The method tends to work in rising markets--but every one has the same model. UNless you have some special insight/skill you will do no better than the rest.

[CaptainJohn49]

Originally Posted by Island Time O25

As a business owner this happens often enough. Some months are great others not so much. One adjusts accoridngly and learns to live with these fluctuations.

This is the problem with our economy last 100 or so years. It used to be that all up and down the economic chain the prices would fluctuate according to economic supply and demand factors. Not stay rigid or only go up due to the political pressures or our own lack of flexibility.

If my income gets cut by 30% it only makes sense that my loan rate should also be cut by 30% and in turn I can price my services or products 30% lower, etc, etc. This way the market will quickly find equilibrium and realtive prices/costs will adjust to the actual demand and supply. And not stay artificially rigid. It's that rigidity in one sector or another which necessitates layoffs and makes for recessions/depression.

I bet you if the empolyers could easily cut wages 30% they would have less need/incentives for layoffs. And IMO anyone is better off getting 70% of his former wages than 0%. In the long run unemployment insurance and minimum wage schemes make for bad economics. But of course help politicians to get elected.

You are obviously not a UNION man. Unions would rather choke a business to death and see it go out of business then take a reduction in wage. Ask any former union worker in Pennsylvania, Michigan of Minnesota what happened to their job.
Now unions have found the perfect employer - governments.