MCR - When I talk about liquidation and credit events on this forum, Im talking about the front lines of the credit markets, the repo markets, the short term financing markets - the cogs that make the engine go. The plumbing so to speak of the machine. We just saw massive, and I mean massive, fed monetary action to provide liquidity and backstop those markets. Now the Commercial Paper market needs more, and they will get it. All of this is to contain and mitigate a credit event, that could occur with a liquidity dry up. So the fed basically said, ok, lets take the huge credit event risk off the table and make sure we add oil to the cogs that make the global machine work. Without that, everything else collapses behind it. So that had to happen.
Now, personal and small/mid size corporations liquidating - This will be interesting. I guess the question is, how bad do you need the money? This is when those that have to sell, continue to sell and hit the bid whereever it may be. If I was seller today with the luxury of not having to sell right now, I would strongly consider taking my property off the market. How will govts make good on the people here? How will govt fiscal policy protect those that cant work, taking paycuts, fired, small companies, mid side companies, etc etc, how will the bridge the gap to get to the other side here? Thats the question - I think handouts are coming, question is how much and to who and is it enough to bridge the gap. It will get worse before it gets better, but I also think in 6 months from now, we got a handle of the curve of this thing, which is what health officials are hoping for right. This is where American ingenuity and innovation, especially those scientists working on vaccine and treatment, will hopefully shine through. Outside of the virus/health questions, next question is, are we at peak fear yet for this and what is the duration of this social/economic shutdown
Buyers today who are pricing in these risks and getting their lower bids hit, in long run (think 3-5 years please), I think they will be happy with their purchase levels.