No, and I wish there was a way to put a large wager on this against
Gundlach. The short answer is (yes I could get much more detailed):
1) All of the drop is completely justified on the effect of virus alone
(and we've still not completely priced in the downside). *Just look at the
massive drops across the world, Sanders is not running for election in all
those countries.*
2) Global economy (except parts of emerging Asia) has been on life support
since 2008 on Fed money and fiscal debt spending. This asset bubble was
sustained and driven higher by extraordinarily low rates (negative?!?) and
its secondary effects (buybacks, etc.)
3) The bubble was always one waiting to be popped by a catalyst (see Euro
debt, 2015 China debt, trade war, etc.) and this has the greatest potential
to pop it, because it doesn't respond well to the old stimulative tricks
(that's why none of the central banks have cut yet, because it would be
wasting ammo without much effect for now). And everyone on Wall St. knows
the next market crash will be worse than 2008.
4) Trump's whole reelection strategy was based on juicing the market, and
to a lesser degree the economy. All the corporate tax cuts, stimulus, and
pressuring the Fed was designed for a near-term benefits, with costs paid
for down the road.
5) Trump basically had the election locked down until this virus scare.
The Wall Street oligarchs may not like Trump, but they hate Sanders even
more. With the virus and a market meltdown, two elements to victory
suddenly emerges for Sanders:
a) healthcare reform as people realize many can't get affordable care in a
pandemic
b) railing against the greed and excesses of Wall St. and establishment
interests (which has at least some merits)
6) The causal relationship is actually the reverse. Gundlach is not so
much scared of market crashing due to Sanders, but Sanders winning due to
the virus and market crashing.
7) Sanders' effect on stocks is more complicated. He would likely be in
favor of continuing the current debt spending and easy monetary policy. But
he will likely have tougher policies on corporations and the wealthy.
Healthcare sector stocks will take a hit. Though all that will be
complicated by political gridlock and the crisis from an economic meltdown.
8) If Trump is smart and want to get re-elected, he needs to put full
focus on dealing with this pandemic in the US and coordinating with Europe
and Asia. The usual political theater and Fed tweets won't cut it.
*This bull market has been a mirage for a long time. Even if we bounce back
this time, it will just end up being a bigger bubble to be popped.*
-Charles
On Fri, Feb 28, 2020 at 9:21 AM Jeff Brinkman <j7brinkman@xxxxxxxxx> wrote:
Yes I agree the Bernie rise is a negative to the markets on the surface
but he won't be able to get much done, nothing extreme, should he win.
It makes for a good sound bite and scapegoat which trump and co will
utilize.
As long as we get an adult come November it's a positive for this country
and the world given truth and the rule of law no longer exist in the
current administration.
Keep an eye on VIVO, the local medical outfit that's still cheap even with
the bounce pre-market, it's an interesting small cap that is ignored.
~Best
On Fri, Feb 28, 2020 at 7:29 AM Bob T <bobtsgt@xxxxxxxxx> wrote:
It seems that we have enough negative things that are finally clicking at
the same time.
Sent from Mail <https://go.microsoft.com/fwlink/?LinkId=550986> for
Windows 10
*From: *Alan Shrock <alan.shrock@xxxxxxxxx>
*Sent: *Friday, February 28, 2020 6:10 AM
*To: *cincysmi@xxxxxxxxxxxxx
*Subject: *[cincysmi] Re: What's behind the market decline
And of course the Fed pumping trillions of dollars into the repo market
has nothing to do with anything.
The largest banks are sitting on tens of trillions of dollars of
derivatives, but that is a non-issue.
In many ways we are right back where we were in 2007-2009.
There are sectors, if not the entire market, that are effectively in a
bubble.
At some point the Bigger Fool Theory fails to continue working.
On Thu, Feb 27, 2020 at 11:00 PM L. Feldman <dmarc-noreply@xxxxxxxxxxxxx>
wrote:
Dear Friends,
There has been a lot of speculation that the bad news about the
coronavirus has been responsible for the stock market decline. But, as
this article states, "DoubleLine Capital CEO and “Bond King” Jeffrey
Gundlach thinks something else is on investors’ minds: the rise of Bernie
Sanders in the Democratic primary race."
What do you think?
Jeffrey Gundlach Blames Market Sell-Off on Bernie Sanders' Rise
<https://moneyandmarkets.com/?p=18880?post_ids=18585,17586,18830,18660,18519>
Jeffrey Gundlach Blames Market Sell-Off on Bernie Sanders' Rise
DoubleLine Capital CEO and "Bond King" Jeffrey Gundlach thinks the rise
of Bernie Sanders was the cause for the ..
--
Alan W, Shrock
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West Chester, OH 45011-9419
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