Showing posts with label Whitney Houston. Show all posts
Showing posts with label Whitney Houston. Show all posts

Sunday 29 March 2020

A World Awash In Liquidity

Whitney Tilson’s email to investors 


3) One of the reasons I'm bullish over a one-year horizon is that many macro factors are highly favorable. Here is an excerpt on this from part two of my report: "The Five Reasons We're Bullish on Stocks Right Now":
  • To be clear... we're surely already in a recession and the damage is already significant.
  • But our economy is gigantic and was doing quite well on the eve of this crisis...
  • American households have the least leverage since 1984 (measured by total liabilities divided by total assets)...
  • Interest rates are at all-time lows, providing unprecedented monetary stimulus...
  • It looks like Congress will soon pass a $2 trillion stimulus bill that President Donald Trump has promised to immediately sign into law, which will provide unprecedented fiscal stimulus. And if that proves insufficient, the government can easily borrow trillions more at minimal rates...

The Federal Reserve has dusted off the playbook it implemented during the global financial crisis and is injecting massive amounts of liquidity into the financial system. In particular, the stimulus bill includes $454 billion in funds for the Treasury to backstop emergency actions by the Fed. Since every dollar from the Treasury can stand behind $10 lent by the Fed, this translates into $4.5 trillion to keep credit flowing and make direct loans to U.S. businesses, in effect doubling the Fed's current $4.7 trillion balance sheet...
And don't forget that Trump views a recovery in stock prices as critical to his reelection hopes.
4) As further evidence that we're in a world awash in liquidity, see this chart that Compound Capital Advisors CEO Charlie Bilello tweeted:
Wild week

https://www.valuewalk.com/2020/03/ackmans-greatest-trade/