It was my sense the Fed would be deploying new programs this time around. This report discusses some of them (still no direct stock market purchases as far as I can tell)....
The Federal Open Market Committee (FOMC) announced a series of steps this morning designed to support the flow of credit in the U.S. economy. The actions taken are breath-taking in their scope. Indeed, these steps surpass in breadth and depth the measures that the Fed created in the midst of the financial crisis a decade ago. If the Fed pulled out a monetary policy "bazooka" during that crisis, then the steps it announced this morning are the central bank equivalent of "going nuclear."
.....For starters, the committee announced this morning that it will be creating two facilities to support credit to large employers. The Primary Market Corporate Credit Facility (PMCCF) will support the issuance of investment grade corporate bonds, and the Secondary Market Corporate Credit Facility (SMCCF) is aimed at provide liquidity in the investment grade corporate bond market. This is the first time, of which we are aware, that the Fed has stepped in to provide direct support to the corporate bond market.
...the Fed created the Money Market Mutual Fund Liquidity Facility (MMLF) last week to support money market funds. The Fed has broadened the MMLF to include variable rate notes that are issued by municipalities. In addition, the Fed will also support municipal financing via its expansion of the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper.
Most incredibly, the committee announced that it will soon be releasing details on the Main Street Business Lending Program that is intended to support lending to small-and-medium sized businesses. This program will support efforts that are underway by the Small Business Administration (SBA) to keep credit flowing to businesses that rely primarily on bank lending for financing.
https://fxstreet.com/analysis/the-fed-goes-nuclear-202003231542

Did Trump just insure his re-election? No way Iran keeps quiet after this. The nuclear deal is off. Iran will do something for sure. US will go to war.
Everyone's retirement will be effed because of Artificial Idiocy. I always thought it would be Artificial Intelligence causing falling wages that would do it. I have another child fixing to go to college next year.
PS - probably should be changed to OT discussion (if possible)

FYI: It looks like a perfect storm. There’s talk of the President’s impeachment. The rumors, alone, could hurt global markets. Experts say a recession is coming. Several economic forecasts say inflation is on the rise. It could hit 12 percent or more.
Home mortgage interest rates might soon hit double digits. Tensions in the Middle East are heating up again. The Middle East is threatening to limit the sale of oil to the west. Some forecasts say fuel shortages might be coming. That could mean day-long lines to put gas in your car. There’s even risk of Nuclear war. At least one rogue nation is stepping up aggression.
These are uncertain times. Many people wonder how to protect their investments. Others haven’t yet started to invest. They’re afraid to commit because nothing seems stable.
Regards,
Ted
https://assetbuilder.com/knowledge-center/articles/how-should-you-invest-in-these-uncertain-times

@gmarceau I call what people do when they claim to be "pro-life" while ignoring climate change, being gung-ho to build up our nuclear arsenal, are pro-gun, pro-death penalty and want to deny sick kids health coverage and a decent education virtue signaling. I also call it virtue signaling when I see people waive American flags made in China at parades while seeking to cut back on veterans' benefits or when they claim to love American capitalism and hate "government handouts" but are happy to accept government bailouts for big banks, farm subsidies because tariffs are a disaster and want the government to pay for $5000 hammers from private sector military contractors and expect blue states to foot the tax bill because the red states have no infrastructure and are so poorly educated they can't produce enough revenue themselves to pay for anything.

FYI: The Dow Jones Industrial Average dropped almost 500 points Wednesday as worries about a slowdown in the U.S. economy rattled markets to start the fourth quarter.
Concerns about slowing global growth have resumed this week, shaking a bet among U.S. investors that the trade war-induced slowdown overseas wouldn’t hit the domestic economy with the same force. That bet was upended after data Tuesday showed a gauge of U.S. factory activity contracted for the second consecutive month, falling to its lowest level since June 2009.
Wednesday’s private-sector jobs report, which showed the pace of job creation has slowed, added to the concerns about the health of the economy.
The stock market’s declines were broad and accelerated through the morning. All 11 sectors in the S&P 500 fell, as did all but one of the 30 blue-chip stocks in the Dow. Among the biggest losers were shares of big industrial and technology companies.
Delta Air Lines declined 6.8%, while aluminum parts manufacturer Arconic fell 4.6%. Apple and Google lost 2.4% and 2.3%, respectively.
“It feels like one thing after another the last couple of days,” said David Laffertry, chief market strategist at Natixis. While Wednesday’s jobs report from ADP was soft rather than outright weak, he said, “within the context of other bad macro data the last couple of days, it’s sort of piling on.”
The Dow industrials fell 494 points, or 1.86%, following a 1.3% decline Tuesday. Those declines put the index on pace for its worst start to quarter since the depths of the financial crisis in the fourth quarter of 2008, when it fell 19%.
The S&P 500 fell 1.79%, putting it in danger of falling more than 1% in consecutive sessions for the first time this year. The last time the broad equity gauge dropped that much on back-to-back days was Dec. 24, 2018, when an end-of-year selloff nearly ended the long-running bull market. The Nasdaq Composite lost 1.56%.
The selloff heightens the anxiety for two other consumer-focused reports this week—the Institute for Supply Management’s services sector report Thursday and Friday’s payrolls report.
Wednesday’s ADP National Employment Report beat muted expectations—the private sector added 135,000 jobs in September, versus estimates for 125,000 jobs. But the firm cut its August estimate by nearly 40,000, and the three-month average of 145,000 is down from 214,000 a year ago.
Altogether, it was the latest sign that businesses are turning more cautious in the face of a weakening global economy.
If the manufacturing slowdown spreads to the services sector, this would increase pressure on the Federal Reserve to cut rates again in October, said Stefan Schilbe, HSBC Germany’s chief economist.
The market odds of another Fed rate cut this year rose to 86% Wednesday morning, up from 73% a week ago, according to data from CME data show.
Markets overseas continued to react to disappointing economic data. The Stoxx Europe 600 fell 2.7%, with Germany’s DAX down 2.8%.
In Asia, South Korea’s Kospi was down nearly 2% following news that North Korea fired at least one missile off its east coast. The move, seen as a show of strength, came after Pyongyang said it would resume official nuclear talks with the U.S.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-02/your-evening-briefing
AP:
https://apnews.com/a7bdc0d7aa6b4263ac9885dda5464fa9
MarketWatch:
https://www.marketwatch.com/story/dow-futures-skid-170-points-lower-as-wall-street-awaits-adp-jobs-report-2019-10-02/print
WSJ:
https://www.wsj.com/articles/global-stocks-fall-amid-rising-fears-of-economic-slowdown-11570004904
Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-01/stocks-in-asia-to-slide-as-u-s-data-disappoints-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-lows-599-point-plunge-dow-stock-jnj/
CNBC:
https://www.cnbc.com/2019/10/02/dow-futures-trump-trade-manufacturing-data-wall-street.html
Reuters:
https://www.reuters.com/article/us-usa-stocks/wall-street-eyes-steepest-slide-in-nearly-six-weeks-on-growth-worries-idUSKBN1WH1A0
U.K:
https://uk.reuters.com/article/uk-britain-stocks/uk-shares-in-tailspin-as-global-woes-deepen-brexit-angst-lingers-idUKKBN1WH0M9
Europe:
https://www.reuters.com/article/us-europe-stocks/wto-trade-threats-sink-european-stocks-idUSKBN1WH0L6
Asia:
https://www.cnbc.com/2019/10/02/asia-markets-october-2-global-economy-oil-currencies.html
Bonds:
https://www.cnbc.com/2019/10/02/us-treasury-yields-rise-indicating-tentative-rebound-in-sentiment.html
Currencies:
https://www.cnbc.com/2019/10/02/forex-markets-us-manufacturing-in-focus.html
Oil
https://www.cnbc.com/2019/10/01/oil-markets-us-oil-output-opec-in-focus.html
Gold:
https://www.cnbc.com/2019/10/02/gold-markets-us-manufacturing-data-in-focus.html
WSJ: Markets At A Glance:
https://markets.wsj.com/us
Major ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitor
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures:
https://finviz.com/fut

Watch out while you're there in the home of the Zags, @Crash. You may not realize it's time to zig and fail to sell timely. LOL. Enjoy your travels.

...It was indeed a great vacation with my best friend. So far away, but it's just a plane ride away, too. The birches in the southern interior of B.C. and Alberta have all turned. Bright golden color on the leaves. Lovely. And the sumac is nuclear red. My friend got lucky at a few different casinos. Small stakes, but coming away with a profit from places like that takes some doing. Toronto-Pearson Airport was my going and returning stop. My official review of YYZ is that it is a total cluster-fuck. Never again. At the Calgary Airport, there are all kinds of volunteers in cowboy hats to assist, and they helped us in a big way. Kudos to them. The Calgary Airport (YYC) is not a cluster-fuck.
Roads throughout southern B.C. and Alberta are being worked on, extensively. Even in the shadow of the Rockies, and up around latitude 50, the road conditions are fabulous compared to Massachusetts. When will we learn? BTW, the weather forecast for Calgary on Friday, 27 Sept. includes rain/snow showers. Jeez. Even so, it's too early to stick to the ground and the roads. But it will be a chilly 26 F. out there, that night.
LINKS:
https://en.wikipedia.org/wiki/Nelson,_British_Columbia
https://en.wikipedia.org/wiki/Kimberley,_British_Columbia

Howdy folks,
The Chinese do not want to lose face. The Fed raising rates 25 bps, gave Trump cover to raise the tariffs on the Chinese. They must respond or lose face. Weaponizing the currency and stopping the purchase of Roundup ready Soybeans enables them to save face. Now Trump loves this because he WANTS to devalue the dollar because in his economic world view this would be a good thing - sort of like trade wars and higher tariffs are good things.
We're spiraling down the rat hole and hopefully, all y'all realize the Chinese nuclear option is to sell Treasuries . . . of which they own a whole steeenking pot full. Geez, that might also devalue the dollar.
Tariffs are a tax on your people and trade wars have ALWAYS ended in economic disaster - at least for the last 2,500 years or so. Read the Frogs some time about a government debasing their currency.
Idiots,
and so it goes,
peace,
rono

The fact is you don't want stupid people in charge of any government agency but for obvious reasons this Fed appointment is getting the most attention. I am far more concerned about idiot Trump appointees in charge of for instance the Department of Energy which is responsible for our nuclear arsenal or the Department of Agriculture responsible for food stamp and food safety or the Department of Education: https://vanityfair.com/news/2017/07/department-of-energy-risks-michael-lewis
That said, if the U.S. were to lose its world reserve currency status I think it would be game over for us as a superpower and our markets would crash, especially the ones we often view as the safest--Treasuries.

Trump’s decision to consider close political allies for the central bank comes at a sensitive moment for the world economy and the IMF.

When isn't it a sensitive moment? The problem is having nationalists in charge of the world's most powerful country when we're now living--and have for at least 100 years-- in a global economy in which everything is intricately linked.

Hi @hank Might " the Coriolis force" be descriptive to actions in DC? Does this work the same way in the southern hemisphere, except an opposite direction?

@Catch. There have been a number of banana republics in the southern hemisphere..
But I don’t think any were / are nuclear armed.
Sleep well,
Regards

Who was first in discovering the 4% drawdown rule is not significant to me. My number one purpose in my submittals on this topic was to introduce Monte Carlo simulators
Obviously not significant to you, as you didn't introduce Bengen. Rather, you injected a claim that the 4% rule was based in part on Monte Carlo analyses. As you stated above, your purpose in submitting this false statement was to bridge from the WSJ article to what you wanted to write about.
Even the last reference you quoted acknowledged its usefulness.
Already addressed in my post prior to the one I'm responding to here. Useful, yes, it's better than a poke in the eye.
.
All tools have identical limitations
If all tools have identical limitations, then why push just a single tool? Previously you claim to have identified a shortfall in tools that use historical data. Shortfall, limitation. What's the difference? It seems tools don't all have identical limitations.
I am not an unsophisticated user of this fine modeling concept. ...
I am an experienced user of Monte Carlo analyses. In the nuclear engineering discipline (one of my masters degrees is in that field), it is a frequently used tool.
How does the fact that a tool is used in an engineering discipline built on physical rules make it an effective tool in a field (financial planning) that lacks a similar foundation? The observation that you and some engineers frequently use this tool (regardless of the domain) is not is a good argument that it is well suited for the unsophisticated, inexperienced user.
From my perspective it seems like an ideal tool.
Ideal, yet something with faults that could be eliminated: "I generated my own Monte Carlo code to aid in the decision process. I recognized the shortcoming of ..."
To summarize, starting with a false statement, you suggested that people use tools with model shortcomings that you found unacceptable for your own use. Tools that make sense to you, because you have a masters of nuclear engineering.

@MikeM- Thanks, Mike. I completely agree that Monte Carlo surely can't hurt, and if that's all that you can use, it's much better than doing nothing.
@MJG: "facility failures that you identified were caused by shortfalls in their design as completed by nuclear engineers with a propensity for Monte Carlo analyses."
No sir, not at all. Merely indicating that a masters in nuclear engineering is a guarantee of exactly nothing. Incidentally, I may be expecting too much here, but I would at least hope that a nuclear engineer would anticipate "erosion" and design against that possibility.
@Ted: Not sure what you mean. I've certainly never suggested that MJG is either a clown or an "id--- !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!" The only MFO poster that I've ever called a clown is that guy who thinks that the rules are for everyone but him, cheats so as to kick undeserving posts into the "Comments +" category, and then leaves footprints that a kid could detect. But you already knew that.
Regards,
OJ

Hi Old Joe,
Your most recent post clearly implies that somehow the sad facility failures that you identified were caused by shortfalls in their design as completed by nuclear engineers with a propensity for Monte Carlo analyses. That's a huge and unsupported extrapolation even for you. Evidence does not justify your claim. Systems erode over time.
If you don't recognize the benefits of Monte Carlo analyses (and there are instances when it is not appropriate) that's ok for me. I do and still use that tool. As I have consistently said: we each get to choose our own poison.
Mistakes happen and I am surely not immune to making my fair share of them. Monte Carlo tools have become a common tool these days in the investment community, They have the potential to reduce investment decision errors. My reference to Vanguard is just one of many serious advocates for deploying Monte Carlo as part of the investment decision making process.
Best Wishes

"I am an experienced user of Monte Carlo analyses. In the nuclear engineering discipline (one of my masters degrees is in that field), it is a frequently used tool."
@MJG: I expect that the nuclear engineers responsible for 3-mile Island, and Chernobyl were also "experienced user[s] of Monte Carlo analyses".

Hi msf,
Who was first in discovering the 4% drawdown rule is not significant to me. My number one purpose in my submittals on this topic was to introduce Monte Carlo simulators to those MFOers who might not be familiar with this powerful decision enhancing tool.
Even the last reference you quoted acknowledged its usefulness. In the opening statements they said: "Monte Carlo simulations will illuminate the nature of that uncertainty, but only if advisors understand how it should be applied – and its limitations". All tools have identical limitations and misusing a tool is certainly dangerous stuff. Nothing new to these constraints.
I am an experienced user of Monte Carlo analyses. In the nuclear engineering discipline (one of my masters degrees is in that field), it is a frequently used tool.
When making my retirement decision I generated my own Monte Carlo code to aid in the decision process. I recognized the shortcoming of using a Normal distribution for returns (it's not too bad but it is imperfect) so I coupled that distribution with my model for much less frequently occurring fat tails. I am not an unsophisticated user of this fine modeling concept.
There are many strategies when investing. We are different investors because of numerous critical factors including our needs, our timeframes, our knowledge, and our risk aversion. Different strokes for different folks certainly applies here.
A Monte Carlo code is one way to approach the uncertainties of market returns. From my perspective it seems like an ideal tool. You take issue which is ok by my standards. That's what makes for a vibrant marketplace.
I especially like Monte Carlo simulations because what-if scenarios can be postulated and evaluated in just short minutes. That's powerful stuff given the uncertainties of market returns. Nobody can forecast future returns with any accuracy and/or consistency. Monte Carlo helps to quantify the impact of such uncertainty on portfolio,survival odds.
Apparently you are not a fan of the Monte Carlo based approach. I am. Again, different strokes for different folks. In investing we get to choose our own poison.
Best Wishes

It's not really germane to the point of the story, but SCANA is a regulated electric utility and natural gas company based in South Carolina. (The "SC" is pretty much a dead giveaway.)
How did the Fortune authors get it wrong? The second author, an undergraduate who "provided research assistance" will probably get the blame.
SCANA is to be bought by Dominion Energy, after the partnership with SCE&G to build nuclear power plants encountered huge cost overruns (and lots of political turmoil in South Carolina).
I don't think I'd be buying Dominion stock right now.

@LewisBraham. I did not do any analysis. Matter of fact, I cannot imagine anyone saying I did some analyis, especially you whose opinion I respect a lot. I don't think I even did any ANALysis. But I will try THAT now.
When certain professions die off, people find other jobs. We don't move around in horse carriages today. We have an automobile industry. Time travel to 2418, everyone might have a hovercraft. People, professions, change, die off. All good.
Philadelphia Steel workers out of job. Is it because we discovered some other metal instead of steel? Or is it because we no longer need steel? No. We just took their professions away. Who benefited? If all of those Steel workers are working in the Silicon Valley today, I'm wrong, and we can stop right here. There is a difference between advancement through obsolescence, vs progress (sic) through transfer of wealth reducing the population of the 1% which is not a good thing.
Now the question is - Is Coal more like a horse carriage or is it more like Steel? Maybe somewhere in between, or maybe my ANALogy does not apply at all. If America gets rid of all Coal jobs and replaces them with all Nuclear (yikes!), Wind, Solar, Algae jobs and keeps all those Coal Miners employed at NOT $8/hour jobs, let's do it immediately. However if all we are doing is change a Coal Mine Owner Millionaire to a Algae Millionaire where machines generate energy, then as long as we can keep feeding the Coal Miners and given them a sense of self worth, let's do that too.
At the risk of digressing, did anyone ever think about downsizing congress? How hard is to code a bot that has ONE Rule implemented - Vote for everything with Trump's signature. What jobs will those career politicians have, then? Why don't we talk about ending their jobs like we talk about ending Coal jobs. BOTH are allegedly detrimental to society.
I work in the IT sector (oh why oh why oh why). I'm okay with any advancement for the benefit of society at large. Just looking at employment numbers is not sufficient. You know I'm in Texas which is conservative poster child for job creation. Most jobs created in Texas are low paying jobs. I'm sure you will be able to find the stats for that.
If at every turn of tech/biotech/etc advancement, people are getting alternate jobs at lower standard of living it is not solving the issue and increasing the wealth gap. If I'm saying please keep an eye out for the Coal Miners, does not make me a Trump supporter. IMO it just makes me a normal human being.
I said "Steel Workers" and didn't say "Horse Carriage ". Getting rid of Steel jobs and Manufacturing jobs did not help American society. Those jobs still exist, only they moved elsewhere. Getting rid of horse carriages did benefit ALL society assuming you can co-relate the efficiencies and productivity enhancements with pollution from gas guzzling automobiles. I will let someone smarter than me solve the equation for Coal.

The following is excerpted from a Washington Post article and substantially edited for brevity. It is classified as a "Fund Discussion" because Ted has ruled that this is appropriate if there are funds that trade in the subject under discussion.
President Trump on Friday invoked emergency powers granted under Cold War-era legislation to halt the shutdown of ailing coal and nuclear power plants. One likely plan, laid out in a 41-page draft memorandum would favor certain power plants owned by some of the president’s political allies in the coal industry.
Environmental groups, natural-gas producers, and Republicans and Democrats who have pushed for greater competition in electricity markets all condemned the plan and noted that the coal and nuclear power plants that would benefit have failed to compete against natural gas, solar and wind. Many of the plants have operated far longer than anticipated when they were built.
The subsidy would be a major victory for FirstEnergy, whose top lobbyist last year was Jeff Miller. Miller was campaign manager for the presidential campaign of Rick Perry, now energy secretary. Trump attended a private dinner with Miller and a handful of political advisers in early April.
The White House made no further comments regarding draining of the Washington swamp.

Catch, A great write-up. Thanks.
- Catch said: I've become more of a technical investor with a big dose of leftover "what are the fundamentals of this investment world today"?
I never understood technical analysis, but respect those who invest based on moving averages, etc. and appear to do well. Fundamentals is hard to access. However, Europe seems to have pulled out of its multi-year slump. Japan is finally seeing some inflation and stock market rebound following a decades long bear market. Interest rates remain low at home and abroad. Larry Summers, speaking on Bloomberg recently, suggested some of the global market gains are due to people shifting money out of the U.S. due to our current banana republic political atmosphere. (Things like pledges to arrest / imprison your opponent if you win the election).
- Catch said: Does the market place remain a hugh pile of other folks money seeking profits, or does some real value exist, somewhere? Is this just a chase, chase, chase?
My sense, having invested for 50 years, is that there’s a whole lot of “chase chase” going on. That doesn't mean the equity markets can’t continue to spiral upwards for many more years. It does mean that as a 70+ year old retiree, I’m not willing to put a large amount of money at risk. So much depends on one’s situation and time horizon.
- Catch said: It is apparent that the really big money does much care one way or another about what is going on in politics, in general, yes? The U.S bombing North Korea or North Korea bombing Guam; well, that might change a few things for a week or so, eh?
Catch lists more potential black swans than I care to dissect. Most have been out there for years. But don’t you love “The law of unintended consequences” ? So many threats emanating from Washington to reign down fire and fury on the Korean Penninsula that it has driven the two nations there closer together. Some real dialogue is taking place between the two adversaries. Some revolves around the 2018 Winter Olympics in South Korea. Neither country wants to partake of all out nuclear war on their peninsula.
- Catch said: Interest rates (still touchy/feely as to central bank actions) remain low, inflation remains low and the yield spread between the 10 and 30 year Treasury's has continued to shrink.
The HY spread doesn’t surprise me. There is often a strong correlation between the equity and junk bond markets. What happens to rates depends on the health of the world economy. Low rates have boosted the global markets higher following the near depression in ‘08. As the punch bowl is gradually taken away, do we achieve orbit or careen back to earth in flames? Nobody knows for certain. However, higher short term rates could actually help longer dated bonds if a recession were to occur as a result. For that reason I’m averaging a bit into a GNMA fund - the equivalent of taking a parachute along with you on a flight. A lot of dead weight - but priceless in an emergency.

In a bit of good fortune, the nice little run-up has bumped two of my funds in the IRA to hit the dollar threshold for a haircut...RPMGX along with GPGOX. These are up 20% and 24% respectively YTD. The harvested profits will simply go into a slot for 2018 IRA distribution, so it's nice to get that taken care of before year end.
Maybe it's only me, but the market seems to be inching up way too easily. The chatter about our administration's decision next week regarding whether to certify the Iran nuclear agreement may serve to throw a monkey into the wrench. I'm happy to take some profits off the table before that decision is announced.

Hi @johnN,
John thanks for posting the article on utilities. Eventhough utilities account for about 3% of the S&P 500 Index they currently make up about 7% of Old_Skeet's holdings. I'm thinking of raising my utility sector weighting by about (1%) by adding a mutual fund (AWTAX) that's theme centers around water.
Think about it ... the two or three things we widely use in our homes are electricty, natural gas and water (at least they are in mine). Heck, I even have and maintain a standby power generation system should there be a power outage at my home. Then there is the phone and internet that kinda follows utilities.
It is a bum deal for the rate payers in South Carolina that (Summner) a nuclear power plant will most likely never be completed. I'm thinking that the power companies owe the rate payers a refund for this power plant folly of their making. Instead the power companies want the rate payers to pay more for a plant that looks like it will never be brought on line. I look for things to heat up in South Carolina over this in the coming months as hearings take place in Columbia. While in North Carolina Duke Energy wants it's rate payers to pay for coal ash pond clean up that the utility mishandled through the years and are going to be very costly to clean up. Hearings are underway in Raleigh as I write concerning this.
If the rates payers wind up having to pay for these failures and follies of the utility companies ... I'm increasing my allocation in the utility sector. In a sence, I'll collect what I have to pay out through an increase in utility rates with their payment of dividends back to me as I own homes in both states.
For me, it is a no brainer ... own some utilities as the rate payers most likely will have to pay up.