Macro Weekly #2

What a crazy week that was.

If this is the first recession you have lived through since graduation, by now you have probably learned that bear market rallies can be brutal.

The Dow had the best week since the Great Depression, while unemployment worsened the fastest in all recorded history.

And this is probably the most ridiculous moment in the history of televised financial commentary:

Stuff for everyone

In fact, the number of jobs that were lost over the last 3 weeks is almost half of what it was during the entire 2008 GFC.

If you think that the bear market is over because World War V victory is in sight, think again. Of course beating the virus will give us confidence to reopen the economy. But in the past, when the unemployment rises this fast, the market takes on average more than a year to bottom.

But even then the the jobless claims number isn’t painting the whole picture:

Meanwhile, unemployment in India also surged…

Real estate development in China plunged...

China is selling reserves to pay debt, as exports plunged...

Oil demand in the US plunged...

CME is considering negative prices for oil to be valid, because if oil becomes worthless people have to pay others to store oil...

Retail sales plunged…

Businesses’ demand for loans skyrocketed...

I’m not trying to paint a picture of total economic collapse, but I simply cannot find any positive economic data.

Meanwhile, the average consumer is still expecting a quick rebound in the market:

Even Wall Street is still being too optimistic:

Not to mention yet another piece of evidence that the market was heading bearish regardless of the pandemic:

Stuff for experienced investors

But the Fed knows how bad the situation is.

Watch what they do, not what they say. J-Pow tries to look optimistic on TV, but his actions betray his words. He’s launching another bazooka:

I really can’t say I agree with this one. The Fed is playing God again, picking winners and losers. Not to mention they are breaking the spirit of the law by circumventing the Federal Act. At this point, no one should be surprised anymore if they decide to nationalize the stock market too.

And this might just be the trade you were looking for, that few people are talking about:

- Qiao

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