Capitalism means companies fail. This isn’t capitalism, it’s cronyism. As a capitalist myself, this market angers me.

Agree Jesse D. Free Market Capitalism is just truth. Central banks are jamming price signals left right and centre here. The truth still exists, but it’s getting harder and harder to hear it.

While I am hearing a lot of criticism about central bank actions, I am not hearing much about other better options available. What if central bank don;t print as many are saying and allow the system to sort this out itself. Credit will dry out and liquidity will be gone....what then. I think most impact of such a scenario will be on majority low income groups devastating their livelihoods. If we have to sacrifice theoretical capitalism to avoid that, I am all for it. Having said that, may be most of our anger emanates from the notion of central bank actions resulting in privatising the gains and socialising the losses. I really wonder are there no other options for FED to provide support to main street without involving the BIG team(big corporations doing buybacks, zombie companies paying big bonuses for executives, too big to fail hedge funds etc).

Really keen to hear Roger's take on this. what other options are available for central banks to be able to save the day without throwing price discovery out of the window and artificially propping up asset prices.

@Srisaila K. What got us here in the first place were central bank actions. Inflating the money supply always leads to bubbles. At this point you can't get out anymore without enduring much pain. As you say, people will lose their jobs, because all these zombie companies need to go bankrupt in order to clean up the system. Wages will fall, prices will fall, but at the same time lots of new companies will be created because labour is cheap again. If you look at the 1920-1921 depression it doesn't always have to be doom and gloom.

@Jan V. I am not debating why we are in this situation in the first place. While I agree with you on that central bank actions are contributing significantly to emergence of bubbles in the economy and it may be the case with recent actions, I am also not able to see, with my limited capability, what other options we have to better react to the current situation of unprecedented massive shock to economy that occurred in a very short span of time. I think, given the enormity of the shock, if not for the massive fiscal and monetary policies from FED and govt to support economy, we will end up in a much worse situation than the great depression, especially with our highly complex intertwined global economy. And I'm afraid, it will not be as simple as coming out of 1920-21 depression then, which was again facilitated by FED's monetary policy actions. I hope some of the debates here at RealVision will be able to shed some light on this aspect as well. Also on another node, I hope many here are also very keen, like me, to hear from likes of Roger and Ash on how actually the money flows from FED's balance sheet into various assets including equities creating bubbles and how and to what extent the passive investing is contributing to this as well. @Ash and @Roger hope you can touch on this in one of your next sessions. Thanks

Some research i found online about the 1920-1921 depression. Seems like an interesting topic to have a RVTV discussion about: "The conventional wisdom holds that in the absence of government countercyclical policy, whether fiscal or monetary (or both), we cannot expect economic recovery — at least, not without an intolerably long delay. Yet the very opposite policies were followed during the depression of 1920–1921, and recovery was in fact not long in coming. The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored. Instead of "fiscal stimulus," Harding cut the government's budget nearly in half between 1920 and 1922. The rest of Harding's approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third. The Federal Reserve's activity, moreover, was hardly noticeable. As one economic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction."2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923".

CEW ? Chilean peso 8.52% Taiwan dollar 8.48% Malaysian ringgit 8.45% Polish zloty 8.43% South Korean won 8.41% Mexican peso 8.38% China renminbi 8.38% Indian rupee 8.36% S. African rand 8.21% Israeli shekel 8.20% Brazilian real 8.10% Turkish lira 8.09%

Yes, that is a big story that isn’t being widely discussed. Please can we make this happen!?🙏

A slack channel would be brilliant.

Chinese 'students' even worse than Russians. All are either tacit supporters of the CCP (and fully vetted by them) or full on party members. Essentially many are spies. Meanwwhile they are up to 30% of the international student component at most US universities

Also didn’t it fail in Japan since 1989 to drive up stocks

Thanks Patrick - staying safe in deepest, darkest Suffolk!

Hi Shiu – the big question is whether we can have a Great Depression AND the S&P500 at 4000. I outlined this central bank dynamic in an episode of The Big Conversation for Refinitiv: “Do Corporate Earnings Matter Anymore” on Real Vision’s Youtube channel on 13th November 2019. https://www.youtube.com/watch?v=W579JGw2eko&list=PL2-78gs9nRfOw_IyF802Pg9UeuwZ-UMed&index=4&t=16s In the second part (The Chatter) I further outlined why I thought this dynamic would drive equity markets higher into year end and the beginning of 2020, when many analysts were bearish of equities. This was obviously pre-COVID, but this dynamic may now be on steroids today, due to the scale of the central bank response. This is why I am torn between the historical perspective in which an economic bust of this magnitude has historically always led to a major sell off, then a 50%-62% rebound and then a fall back below the initial lows, versus the potential today for central banks/the Fed to now drive equity prices higher.

Also curious as an Australian as to RV's macro perspective. My humble opinion from an ultra long term charting perspective is still very bearish due to a massive multi decade top despite the substantial rally from 0.55 to 0.65. From a boots on the ground perspective, there appears to be a bit of optimism that we will come out of this lockdown earlier than initially thought. I work in mining and there's optimism that we'll be able to get people back on site soon, and people in Perth are saying things are starting to get back to normal a bit more in the CBD (they can even have an entire 10 person maximum on gatherings now!) General attitude seems to be that once we are out of lockdown, we don't have to worry too much about a second wave; I have no idea why given there's no vaccine/treatment and we are entering winter, would have thought this would be a bigger issue. Not to mention probably only 10% of people are wearing masks... Would love to hear everybody's thoughts...

Thomas I agree. I think people are believing what they want to believe and not what might be the reality. Not that I know anything about viruses but people said it might get better in summer but would we know since the entire world shut down? Best to hope for the best and prepare for the worst it seems but nobody seems to be thinking logically. Except in some areas like Singapore and Vietnam it seems. Our country (USA) seems more concerned about its inept and unacceptable leader. I wish we had more direction in a time like this.

It feels to me like Australia’s not dissimilar to an EM economy, sans the cheap, eager labour force & zest to improve... I’m uber bearish too. I hope we don’t slide into some kind of socialist UBI induced economic coma. Everyone (left and right) seems enamoured with the idea that a government, any government, will save us.

on https://www.eri-c.com/ there is an article on how China may peg the Hong Kong dollar to the CNY and no longer to the USD and in this way avoid devaluation for a bit

***from full Bearish to natural***

“Full bearish to neutral”

Epic. And totally unplanned. Very challenging to keep a straight face and continue the show...

Isn't RealVision a macro investing channel?

u call a 30-40% move in all the major indexes what u want, but to me, that’s Macro my man.

I think this is an interesting point. I love Real Vision's content - it is the best out there without doubt. But I appreciated Roger's comments today that he can't rule out the Fed's unprecedented stimulus (and potentially more of it in the future) as being sufficient to prop the market up, however artificial that may appear from a historical or fundamental point of view. I think Real Vision have made an effort in recent weeks to have guests on various programs for a diverse range of opinions and it always frustrates me when people down vote those presenters or scream from the rooftops about the quality of them. I personally would have liked to have seen a bit more of it early on. I believe a skill to investing is being able to juggle competing ideas in your mind, without absolutely dismissing either. Roger's example above demonstrates that point. Cheers.

Great comment. I think he started with wine bottles and worked up, DLS

We need to wait until 100% of the population is infected to be sure. I hope you are right. As we end lockdown, we may get a better handle on this. DLS

The boomers from all over the world were spending money all over the world. I agree with you that this does not look good on many fronts with the virus stalking the earth. As Mr. Harrison said a couple of days ago, he and his family will be vacationing closer to home. Hopefully, boomers will do the same and put some money back into the economy. DLS

Yes, this segment got interesting in the last 3rd, especially. Well done.

Thanks, Ernesto.