During 2000-2003 the US economy was impacted by multiple negative forces including a recession, a 49% decline in the S&P500, and the shock of 9/11, but US house prices grew at a 9% annual rate during this period. Thus, macro-economic distress needn’t always lead to falling home prices. However, we think the present situation differs from that of…[Read more]

Goldman Sachs: The market has shed a significant amount of risk in the past month, but I wouldn’t characterize as an all clear just yet. unpacking this:

i. index positioning is considerably cleaner than it was a month ago. length held by the systematic trading community has moved from near-record levels to essentially zero. while not all e…[Read more]

On Fox Treasury Secretary Mnuchin outlined 5 key points of Crisis Bill that is in final stages of negotiations. The devil is always in the details that are yet to be announced, but so far the assistance to the economy and financial system is going to be massive:

Small Business Retention (Forgivable) Loans.
Two weeks of payroll and overhead…[Read more]

GS: markets bottom when you can put limits on the tail risks

To think about the conditions for a market trough, we need an explanation for what drives market recoveries in crises. The core insight is that while conditions are deteriorating rapidly, markets find it hard to be confident in the limits of the damage and so put heavy weight on deep…[Read more]

CHINESE OFFICIALS BRIEF MEDIA ON THE IMPORTANT ROLE AND EFFECTIVE DRUGS OF TCM AGAINST COVID19

JPM’s Marko Kolanovic: On the structural flow side we think conditions will however improve. With large option expiry tomorrow, a meaningful portion (~1/3) of short gamma will expire. This should reduce the chop and volatility going forward. Also given the weekly market seasonality (see here), post expiry week reversion should be a net positive…[Read more]

The White House’s top economic adviser, Larry Kudlow, said the administration may consider asking for an equity stake in corporations who want coronavirus aid from taxpayers.

“One of the ideas is, if we provide assistance, we might take an equity position,” Kudlow said Wednesday at the White House, adding that the 2008 bailout of General Motor…[Read more]