One of the greats just warned huge supply price shocks are coming.  Also, here is why you should expect wild swings today in markets, plus a look at gold.

The Faster We Shut Down, The Quicker We Reopen
March 20 (
King World News) –
Peter Boockvar: 
Whether it was the Governor of Florida essentially telling spring breakers to do their beer funnels in the comfort of their parents house alone rather than at the beach or California announcing to all that they need to stay home, they are the further needed steps to get in control of this virus spread. Again, the faster we all shut down, the quicker we reopen.

Goldman Sachs is giving a stab at what next week’s jobless claims number might be and it is alarmingly but the unfortunate reality. After printing 281k yesterday for the week ended Saturday, they expect it to get to 2.25mm next week. 

Huge Price Supply Shocks Are Coming
I’m going to extend our economic and financial imaginations to when this virus has passed and our daily lives resume hopefully when it’s seen that the virus is seasonal, spring/summer does calm it down and one of these therapies really do work. And I’m just talking out loud here but what are all these central banks going to do when it comes time to pull all this easing back? Be sure they will overstay their welcome. So we’ll have huge price supply shocks just as the world’s economy gets back on its footing along with all this liquidity ocean deep. I know, a conversation for another day. First things first. Not just look at gold and silver to buy, the TIPS market is bombed out in terms of inflation expectations

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The Fed is going big today with its recharged QE purchases, buying over $100b today alone with about 3/4 of that in Treasuries and the balance in MBS. We have sovereign bonds rallying again around the world with all the QE going on.

China Playing Things Differently
The PBOC in contrast to the extreme easing everywhere else held its loan prime rate unchanged for both 1 yr and 5 yr paper unexpectedly. Their strategy is NOT to encourage a whole new level of levering up and is instead trying to deal with their economic contraction in a more targeted way. 

It wasn’t just oil that bounced hard yesterday and again today but commodity and EM currencies are finally getting some footing. The Canadian $ is up by 2% and the Aussie $ is higher by 3.3%. The JPM Asia dollar index is up .5% after 4 days of losses which took it to the lowest level since 2004.

Expect Wild Swings Today In Markets
Ole Hansen, Head of Commodity Strategy at Saxo Bank:  “Quadruple witching – today is the expiry date for four types of futures and options contracts on all US financial products including equity and treasury futures, which could mean wild swings in the market as options holders hedge their position into the official expiry.”

Bullion Banks And Paper Gold
Alasdair Macleod: 
“By smashing the gold price, bullion banks have reduced their short positions on Comex by $35 to $40 billion. If OI (Open Interest) had continued to rise from mid-Jan some of them would be bust. This is what it is all about. Is the smash over? Maybe. But the paper market game will never be the same.”

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