Black Monday

**Crypto Crude** · 15-04-2020, 12:20 AM

Give a man a gun he will rob a bank...
Give a man a bank and he will rob the World... !!!

cc

**Raz** · 15-04-2020, 04:41 AM

Originally Posted by Crypto Crude

Give a man a gun he will rob a bank...
Give a man a bank and he will rob the World... !!!

cc

All that I have concluded during this lockdown is with QE and Governments prepared to do anything to keep economies afloat I expect a disconnect between share markets and the real economy. Volatility is a traders paradise, who does that suit... The only thing that is clear to me is entrepreneurship is thin on the ground in New Zealand and although infrastructure projects will mask some of the loss in GDP there will be a lot of private wealth destruction out of all of this, New Zealand Inc. and this group in particular will wealth wise be way poorer. I can't see the economy and employment levels bouncing back per Treasury's scenarios, but personally it is time to reset, decide how much cash you need to set aside for a rainy day and look for opportunities, short and longer term, otherwise in real terms you will fall behind.

**kiwico** · 15-04-2020, 09:01 AM

Originally Posted by Traderwannabe

I did try to open a NAB trade account a while ago but couldn't due to the fact I couldn't give an Australian address. I will try again.

Do you have a NAB account? If not I'd go for that first and then add the NABTrade account. I had no issues getting both with only an NZ address but then I did open them when on holiday in Oz (which isn't really feasible at the moment...)

**kiwico** · 15-04-2020, 09:03 AM

Originally Posted by bottomfeeder

Bank fees are high in Aussie, but I spread my term deposits around all the banks, so at least if they start to topple, my so called haircut as specified by the RBNZ won't be as much.

There are no fees on my NAB account. The CBA account has a A$5 monthly fee but it is easily avoided by moving A$2000 between accounts each month, or to and from my NAB account.

**Balance** · 15-04-2020, 10:35 AM

Originally Posted by Raz

All that I have concluded during this lockdown is with QE and Governments prepared to do anything to keep economies afloat I expect a disconnect between share markets and the real economy. Volatility is a traders paradise, who does that suit... The only thing that is clear to me is entrepreneurship is thin on the ground in New Zealand and although infrastructure projects will mask some of the loss in GDP there will be a lot of private wealth destruction out of all of this, New Zealand Inc. and this group in particular will wealth wise be way poorer. I can't see the economy and employment levels bouncing back per Treasury's scenarios, but personally it is time to reset, decide how much cash you need to set aside for a rainy day and look for opportunities, short and longer term, otherwise in real terms you will fall behind.

Whichever things go, one thing is for sure - interest rates are going to go below the floor as trillions of dollars of stimulus (printed out of thin air with no corresponding productive activity)

so

it really is a matter of time before investors sitting on cash are going to panic (as markets recover - which they will) and flee the cash market in search of yield.

In NZ, there are currently term deposits of $171 billion and saving deposits of $82 billion- total cash of $253 billion*

Imagine what will happen to stock prices when the bank depositors wake up to the drastic drop in interest income and attempt to get better yield - if just 20% of the term deposits ($50 billion) attempt to get better yields via the stock-markets.

* RBNZ - https://www.rbnz.govt.nz/statistics/...sits-by-sector

**Bobdn** · 15-04-2020, 12:36 PM

Best 15 day period for the S&P 500 going back to 1933. Can't imagine how bad it would be being 100 per cent cash at the moment. Would make me so twitchy.

The late great Jack Bogle said you should never be completely out of the market. He was no market timer but I remember him saying in an interview that before the dot com crash in 2000 he was only 25 per cent in shares. He had some doubts about the nutty prices but also had serious health issues at the time and was preparing for the worst.

I wish he was still alive, would love to know what he would think of the current state of affairs.

**ScrappyO** · 15-04-2020, 12:46 PM

Originally Posted by Bobdn

Best 15 day period for the S&P 500 going back to 1933. Can't imagine how bad it would be being 100 per cent cash at the moment. Would make me so twitchy.

Never go "FULL CASH"