A weekenddisputeoveroilpricesbetweenRussiaandSaudiArabiasparkedthesteepdropsRussiarefusingtorollbackproductionevenasdemandfallsamidtheCoronavirusoutbreak.
Inresponse, SaudiArabiaisrampingupitsownoutput, causing a supplyglutthat's bringingdownthepriceofoiltwosuperpowersthelargest, mostpowerfulcommoditygoingateachotherin a titfortattypefashion. 00:00:56.190 --> 00:01:4.970 Thatsortofsenteverythingyouknowinto a spiralkindoflike a perfectstore, addingtothatperfectstormbuildingCoronavirusfears. 00:01:5.050 --> 00:01:11.950 Withinthefirstminuteoftrading, theDowplummetedmorethan 1800 pointsandthe S and P droppedmorethan 7%.
Thattriggered a 15 minutepauseandtradingsoinvestorscouldstepbackandunderstandwhatwasgoingon.
Thereiscertainly a lotofconcernaboutthevirusspreading, especiallyafterCongressmanBradleyannouncedthatshewouldbeselfquarantiningbecausehermeetingtookplacein D.
Andsowhatyou'reseeing a lotofeconomistscallorsomekindofbiggerfiscalpolicyresponse, somesortofwillingnessbythegovernmenttosortofstepinandhelphouseholdssmoothedovertheirconsumption, spendinginwhatcouldpotentiallybe a tryingtimeahead.
Andso I thinkthosethosesortofrallyingcriesaregonnacontinueintothedaysandweeksahead, right?
Now, ontopofthat, banksareseeingtheircapitalrequirementsnotnecessarilydialedback, butcertainlymademorecertain. 00:12:55.020 --> 00:13:0.460 Andwhatwe'reseeingis a result, astheyhave a littlebitgreatercertaintyoverwhat's requiredofthemisthattheyareholding. 00:13:0.460 --> 00:13:2.880 LastmonthcapitalplanningThio. 00:13:2.940 --> 00:13:9.070 Andsothosechanges, alltakentogethercouldjustleavethesystem a bitmorevulnerablethanitotherwisewouldhavebeenon. 00:13:9.070 --> 00:13:26.890 I thinkthisisgoingtobeinterestingandimportanttowatchasweseewhatreallycouldbethefirstmajortestofthefinancialsysteminthefinancialsystemsafeguardsthatwe'vehadsincethe 2007 to 2009 crisisandGinatodaymarks 11 yearssincethecurrentbullmarketbeganin 2009.
Aretheirsizethatthebullmarketiscomingtoanendandifso, isthatpartof a normalkindofcycle?
Orarethereotherfactorsatplayhere?
I mean, itcertainlydependsonhowyoudefine a bullmarket, soifyouifyousortofdescribetothe 20% declineover a sustainedbasisdefinition, itiscertainlypossiblethatwe'regoingtoseethat I thinkwehavetoquit.
Wehavetowaitandseeif I'vesustainedbasisiscarriedout. 00:13:52.740 --> 00:14:1.040 Um, I thinktherialissueformarketsrightnowit's tryingtofigureouthowlongandhowextendedthiscurrentvirusimpactisgoingtobe. 00:14:1.040 --> 00:14:7.280 Andnowalsotryingtocameouthowextendedandhowmeaningfulthisdropinoilpricesisgoingtobe. 00:14:7.920 --> 00:14:18.400 Thosetwofactorstogether, iftheycontinue, couldreallybe a perfectstormwhere a lotofcorporation's earningsprospectslook a lotworsethantheywere, youknow, eventwoorthreemonthsago.
Andsoifyouseeaninstancelikethat, youcouldmake a casethatthestockmarketisgoingtocontinuehavingtoughtimesahead.
Youknow, ifweseeinfectionsreallyplateauandthiscomesundercontrol, thenyoucould, youknow, paint a muchmoreoptimisticpicture.