The US Fed launches Mother of all QEs

[thriftfabulous]

@montse811

Deaths: 20,000

We've gone from 3,300 deaths on March 5 to 6,500 deaths on Mar 15

Doubt it will be that low in 1.5 months

 

[rosegarden]

@thriftfabulous I just wanted to reply and say that we're at 10k deaths now so the light scenario is out of the picture. I estimate base scenario to be about 80% at this point.

 

[montse811]

@vikkik Strange that during a pandemic everyone looks to the finance ministry rather than health ministry. Nirmala Sitharaman gets tagged on more tweets about CoronaVirus than the health minister.

 

[resjudicata]

@vikkik I think FIIs will continue to rush out of EMs and into USD for safe haven assets.

IMO, it’s not that the virus hasn’t spread in major EMs, it’s just that it’s not being reported or tracked with the granularity of China/Italy/US.

 

[kenjisan70]

@resjudicata US is underreporting cases by a huge factor. We can never know about Chinese figures as well.

 

[montse811]

@kenjisan70 It's not just under reporting, People aren't taking it seriously either.

This is from Disney's Magic Kingdom yesterday night (Disney is going to close down from today)

https://twitter.com/i/web/status/1239351087741702145

 

[denisovic]

@resjudicata They're better off not investing anywhere until we have more clarity

 

[resjudicata]

@denisovic This is kind of true but sitting in cash is also pretty bad for them. It signals panic to the retail investors and a shows a general lack of confidence in the markets, which could trigger redemptions for mutual funds, and severely limit inflows

IMO, the mindset from a funds would be to spread out the bets in the hopes that 2-3 big wins can even out the overall losses.
- After the crisis, everyone will be in the red so a bad performance during this period will be justifiable/excusable
- The funds that have 2-3 winning bets can go crazy with marketing saying “we have experts who predicted this and blah blah blah, so we made X% profit. Our overall portfolio is in the red but that’s okay because everyone is in the red”
- The funds who sat on cash can say we withdrew the cash and kept it safe instead of taking risks but that’s not sellable/marketable simply because as a customer you don’t pay an active fund manager to sit on cash
- These managers are competing with other managers AND passive/index investments which means that the bar is set higher for them to be able to justify their existence. When the market recovers, they have to do better than the index funds to justify their fees. With that much pressure on them, I think they’ll be pushed to make more risky bets in the hopes that the wins even out the losses

 

[william96]

@vikkik India has already announced a dollar sell / rupee buy swap last week. That coupled with this second unexpected policy easing by the Fed in the past few weeks, may help the rupee recover some ground.

 

[williemac]

@vikkik This ain't a problem that can be solved by throwing more money at it. When QE was launched in 2008, it was done to bring back liquidity in the system - that isn't the issue right now. By doing so, Fed is using its ammo too soon & I'm not sure what they'll be able to do if/when this gets worse from here.