What Did You Buy Today?

[fenders53]

The rest of my oil is gone. I spread the ashes over the rest of my port into quality stocks that will actually pay the dividend and have a solid yield. I share my successes and it wouldn't be honest to conceal my failures. I really hate to capitulate and sell for a loss, and this was a significant loss. Wishful thinking is expensive. I don't know who was more delusional, myself or the unending bullish articles I read on S.A. and everywhere else stock nerds hang out.

[Otter]

If anything, the government and Fed are signaling a more overt embrace of Modern Monetary Theory (the Fed has been using it in practice for decades). Increases in liquidity to the private sector from the manager of the money supply appear to be the order of the day. The priorities for where that increased liquidity shifts may change under a new administration, but I doubt Biden would be looking to decrease liquidity to any particular sector of the economy.

[Otter]

I am actually encouraged that we do not appear to be making the same mistakes of 1929. Flooding the private sector with "helicopter money" is a good play when the major risk is 20% unemployment (Mnuchin's comments to Republican Senators yesterday), demand shocks, and a deflationary spiral.

Steer the car away from the cliff with no guardrail, and get back to worrying about inflation later once it is even a plausible risk. The liquidity balance can always be shifted through tax policy and bond issuance in the future.

[vbin]

Added KO, GD, RTN, SQ, STNE, UBER. Deployed some heavy money today.

Other than my KO purchase, all are down. Lol.

[vbin]

(03-18-2020, 11:50 AM)Otter Wrote: I am actually encouraged that we do not appear to be making the same mistakes of 1929. Flooding the private sector with "helicopter money" is a good play when the major risk is 20% unemployment (Mnuchin's comments to Republican Senators yesterday), demand shocks, and a deflationary spiral.

Steer the car away from the cliff with no guardrail, and get back to worrying about inflation later once it is even a plausible risk. The liquidity balance can always be shifted through tax policy and bond issuance in the future.

Did not get what exactly you were trying to say here. Lol. Sorry.

[fenders53]

(03-18-2020, 11:50 AM)Otter Wrote: I am actually encouraged that we do not appear to be making the same mistakes of 1929. Flooding the private sector with "helicopter money" is a good play when the major risk is 20% unemployment (Mnuchin's comments to Republican Senators yesterday), demand shocks, and a deflationary spiral.

Steer the car away from the cliff with no guardrail, and get back to worrying about inflation later once it is even a plausible risk. The liquidity balance can always be shifted through tax policy and bond issuance in the future.

We agree, and this is uncharted territory for interest rates.  And an election is coming so we need to get the train back on the tracks by summer lol.  As financially conservative as I am, this all sounds very insane, but I do think it has to happen and sort out the details later.

[fenders53]

(03-18-2020, 11:38 AM)vbin Wrote:

(03-18-2020, 11:34 AM)fenders53 Wrote:

(03-18-2020, 11:13 AM)saimash Wrote: Dont know if this has already been discussed here, but any idea why UTX is getting hamered... I'm thinking of putting a limit order around $65.1
Also thinking of putting a limit order on JETS @ 10.1 and hoping it would bite (although ive taken a beating in Boeing :-( )

My limit orders 100 shares of DIS @ 651. and 100 shares of AXP @ 75.1 just executed this morning.

Your thoughts ???

Threat of a recession, and they sell jet parts come to mind.  Not good for UTX.  They are about to merge with RTN and pick up significant defense contract exposure.

What are your thoughts and other folks on spending cuts on defence? I am eyeing GD, RTN, NOC, LMT but thinking that defense spending will be cut. We are coming out of Afghanistan and if Biden or Berny comes they will cut def spend. Healthcare will get a boost but don't see anything which has taken major beating in healthcare.

Cuts not happening soon, but the defense budget may have peaked.  Current defense budget is outrageous by any measure.  The world is dangerous and it's not going to return to the 1990s policy.  I'm comfortable with my defense stocks.  The contrracts are many years long and that adds to my comfort.

[Otter]

(03-18-2020, 11:53 AM)vbin Wrote:

(03-18-2020, 11:50 AM)Otter Wrote: I am actually encouraged that we do not appear to be making the same mistakes of 1929. Flooding the private sector with "helicopter money" is a good play when the major risk is 20% unemployment (Mnuchin's comments to Republican Senators yesterday), demand shocks, and a deflationary spiral.

Steer the car away from the cliff with no guardrail, and get back to worrying about inflation later once it is even a plausible risk. The liquidity balance can always be shifted through tax policy and bond issuance in the future.

Did not get what exactly you were trying to say here. Lol. Sorry.

When there is a serious risk of economic depression (unemployment over 15%), the key is to ensure that the private sector is as well-capitalized as possible to weather the storm. The government creates the money supply, and can expand it to prevent or mitigate the effects of deflation and to promote employment. Later, when the risk of deflation has abated, the government can suck excess liquidity back out of the system by raising taxes or issuing bonds, to avoid excessive inflation.

[fenders53]

I hope Powell has the guts to ease the rates back up when appropriate.  Hard to do your job when your boss is threatening to fire you publicly on a weekly basis.  The relationship is very distorted from how it's supposed to work.

[Otter]

(03-18-2020, 12:06 PM)fenders53 Wrote: I hope Powell has the guts to ease the rates backup when appropriate.  Hard to do your job when your boss is threatening to fire you publically.  The relationship is very distorted from how it's supposed to work.

I suspect that the U.S. will be in a lower rate environment for a very long time. Debt is unsustainable at historically normal rates, unless and until massive growth and corresponding (manageable) levels of inflation bring the debt burden down in real dollar terms. The Fed will just create money to buy bonds to cancel debt and maintain rates as needed. 

https://www.forbes.com/sites/nathanlewis/2019/02/21/the-problem-with-modern-monetary-theory-is-that-its-true

[vbin]

(03-18-2020, 12:00 PM)Otter Wrote:

(03-18-2020, 11:53 AM)vbin Wrote:

(03-18-2020, 11:50 AM)Otter Wrote: I am actually encouraged that we do not appear to be making the same mistakes of 1929. Flooding the private sector with "helicopter money" is a good play when the major risk is 20% unemployment (Mnuchin's comments to Republican Senators yesterday), demand shocks, and a deflationary spiral.

Steer the car away from the cliff with no guardrail, and get back to worrying about inflation later once it is even a plausible risk. The liquidity balance can always be shifted through tax policy and bond issuance in the future.

Did not get what exactly you were trying to say here. Lol. Sorry.

When there is a serious risk of economic depression (unemployment over 15%), the key is to ensure that the private sector is as well-capitalized as possible to weather the storm. The government creates the money supply, and can expand it to prevent or mitigate the effects of deflation and to promote employment. Later, when the risk of deflation has abated, the government can suck excess liquidity back out of the system by raising taxes or issuing bonds, to avoid excessive inflation.

Thank you. Got it.

[kblake]

I dont know when there are coming back but I just bought in heavy in WELL, MO, OHI, O, and MMM