Daily FI discussion thread - April 03, 2020

The sub is still full of comments about this being 'not that bad', but I think we're in very early days of this recession.

It feels like March 2008, right after Bear Sterns collapsed. The mortgage crisis had been unraveling for over a year, some mortgage companies like New Century Financial had collapsed, but 8 months after the Fed Chairman said the crisis was 'contained' to subprime mortgage debt, the economy was still shaky. Over the next 6 months the stock market recovered until Lehman Brothers collapsed and global credit markets had a heart attack in September 2008. The stock market didn't bottom until March 2009.

Today I think the market is still expecting a V-shaped recovery with effective government intervention, and I don't think its priced in the more permanent economy-warping damage that's going to be wrought over the next few months as companies go bankrupt and debt gets hit when businesses and individuals stop paying their mortgages/rent and loans.

I also think folks saying this is a market bottom are really premature. We're a couple of weeks away from 1000 people a day dying in New York City alone, with sick but treatable people being turned away to die at home because there aren't enough resources to treat everyone. I just can't imagine the stock market increasing or even staying flat in that environment.

/r/financialindependence Thread