Ever since the coronavirus escaped containment in China earlier this year, Wall Street’s economic projections have been plagued by misplaced optimism. In the first week of February, the investment management company Invesco projected that by summer the U.S. economy wouldn’t merely have recovered from a coronavirus-induced slowdown, it would be growing even stronger than it was before this pesky virus reared its ugly head.S&P Global predicted the outbreak would “stabilize globally in April 2020, with virtually no new transmissions in May.” On February 12, ten days after the New York Times published a report headlined “Wuhan Coronavirus Looks Increasingly Like a Pandemic, Experts Say,” the three major U.S. stock-market indexes hit all-time highs.On March 13 — two days after the World Health Organization officially declared the coronavirus a global pandemic — JPMorgan projected that the U.S. economy would shrink 2 percent in the first quarter and 3 percent in the second. Goldman Sachs, meanwhile, predicted 0.7 percent first-quarter growth, followed by zero percent growth in the second three months of the year.Ladies And Gentlemen, please welcome COGNITIVE DISSONANCE TO THE STAGE!Economists at the Federal Reserve Bank of St. Louis projected Monday that job losses from the coronavirus recession would reach 47 million and push America’s unemployment rate to 32.1 percent — more than 7 points higher than its Great Depression–era peak. Just 2 weeks after releasing the numbers above, Goldman Sachs has revised their projections. They believe the world’s largest economy will shrink an annualized 34% in the second quarter. Unemployment will soar to 15% by mid-year, up from a previous forecast of 9%, they wrote. It took two weeks to go from wholly optimistic to absolute doom.As I often say, common sense is the best tool we have when looking at news and markets. Using your head makes it wildly entertaining to watch the "experts" run around like chickens with no heads at all. The world economy is shut down - there is neither supply or demand. Of course nations will suffer economically in this situation.Hope is a wonderful emotion - just not in economics.The amazing part is that the stock market has continued to rise over the past week, in the face of all of this bad news and horrid projections. This is all likely a combination of misplaced optimism, stimulus and technical relief bounces. For me, I will continue to short these large bounces and fade the rally with my trading portfolio. As an investor, I am not buying yet (outside of my DCA side strategy). Price is still WAY below where I sold the portion that I did.Huge bounces ALWAYS HAPPEN in bear markets. This is not unusual, or a sign of reversal. It is a sign of instability and emotion.It is important to point out that markets bottom before economies do, which is something that many have argued is the case now. I personally do not buy it, and I do not believe the bottom is in. But that is entirely a personal opinion, and you should form your own when approaching markets and your own investments.All I know for a fact is that things continue to get worse with the virus, unemployment and the actual economy. Common sense tells me that there's no reason for anything to presently rise in value for long.To my free members (I love you!) - paid members receive emails like this at least 2 times a week - sometimes up to 5. Every Thursday I chart any request sent by my paid members. I do my best to add real value to anyone who subscribes. If you would like to join the paid side, you can do so here:https://www.getrevue.co/profile/TheWolfDen/membersThis will give you access to everything that I have ever written. If you cannot use a credit card, please contact me directly to pay with crypto.I would like to offer a special thanks to Voyager for sponsoring both my podcast and the newsletter! More information on them below.I would also like to thank my newest sponsor, PHEMEX, which is the only leverage exchange that I feel comfortable trading on moving forward. As you know, endorsing a leverage exchange is a huge step for me. You can read about why below.What’s in this issue?Bitcoin Thoughts And AnalysisPhemexThe Wolf Of All Streets Podcast Ft. Gabriel JiménezAltcoin ChartsLegacy MarketsThe Worst Take Of The YearMicrosoft + Mining + Body Activity?Voyager10 Things Every Beginner Crypto Trader Must KnowMusic CornerLast Week's Rant
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The Wolf Den #37- BTC, Stocks, Terrible…
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Ever since the coronavirus escaped containment in China earlier this year, Wall Street’s economic projections have been plagued by misplaced optimism. In the first week of February, the investment management company Invesco projected that by summer the U.S. economy wouldn’t merely have recovered from a coronavirus-induced slowdown, it would be growing even stronger than it was before this pesky virus reared its ugly head.S&P Global predicted the outbreak would “stabilize globally in April 2020, with virtually no new transmissions in May.” On February 12, ten days after the New York Times published a report headlined “Wuhan Coronavirus Looks Increasingly Like a Pandemic, Experts Say,” the three major U.S. stock-market indexes hit all-time highs.On March 13 — two days after the World Health Organization officially declared the coronavirus a global pandemic — JPMorgan projected that the U.S. economy would shrink 2 percent in the first quarter and 3 percent in the second. Goldman Sachs, meanwhile, predicted 0.7 percent first-quarter growth, followed by zero percent growth in the second three months of the year.Ladies And Gentlemen, please welcome COGNITIVE DISSONANCE TO THE STAGE!Economists at the Federal Reserve Bank of St. Louis projected Monday that job losses from the coronavirus recession would reach 47 million and push America’s unemployment rate to 32.1 percent — more than 7 points higher than its Great Depression–era peak. Just 2 weeks after releasing the numbers above, Goldman Sachs has revised their projections. They believe the world’s largest economy will shrink an annualized 34% in the second quarter. Unemployment will soar to 15% by mid-year, up from a previous forecast of 9%, they wrote. It took two weeks to go from wholly optimistic to absolute doom.As I often say, common sense is the best tool we have when looking at news and markets. Using your head makes it wildly entertaining to watch the "experts" run around like chickens with no heads at all. The world economy is shut down - there is neither supply or demand. Of course nations will suffer economically in this situation.Hope is a wonderful emotion - just not in economics.The amazing part is that the stock market has continued to rise over the past week, in the face of all of this bad news and horrid projections. This is all likely a combination of misplaced optimism, stimulus and technical relief bounces. For me, I will continue to short these large bounces and fade the rally with my trading portfolio. As an investor, I am not buying yet (outside of my DCA side strategy). Price is still WAY below where I sold the portion that I did.Huge bounces ALWAYS HAPPEN in bear markets. This is not unusual, or a sign of reversal. It is a sign of instability and emotion.It is important to point out that markets bottom before economies do, which is something that many have argued is the case now. I personally do not buy it, and I do not believe the bottom is in. But that is entirely a personal opinion, and you should form your own when approaching markets and your own investments.All I know for a fact is that things continue to get worse with the virus, unemployment and the actual economy. Common sense tells me that there's no reason for anything to presently rise in value for long.To my free members (I love you!) - paid members receive emails like this at least 2 times a week - sometimes up to 5. Every Thursday I chart any request sent by my paid members. I do my best to add real value to anyone who subscribes. If you would like to join the paid side, you can do so here:https://www.getrevue.co/profile/TheWolfDen/membersThis will give you access to everything that I have ever written. If you cannot use a credit card, please contact me directly to pay with crypto.I would like to offer a special thanks to Voyager for sponsoring both my podcast and the newsletter! More information on them below.I would also like to thank my newest sponsor, PHEMEX, which is the only leverage exchange that I feel comfortable trading on moving forward. As you know, endorsing a leverage exchange is a huge step for me. You can read about why below.What’s in this issue?Bitcoin Thoughts And AnalysisPhemexThe Wolf Of All Streets Podcast Ft. Gabriel JiménezAltcoin ChartsLegacy MarketsThe Worst Take Of The YearMicrosoft + Mining + Body Activity?Voyager10 Things Every Beginner Crypto Trader Must KnowMusic CornerLast Week's Rant