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Stocks Off Sharply as Market Upheaval Grows

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Re: Stocks Off Sharply as Market Upheaval Grows

#161
post #96

Earlier quoted context omitted.

Staggeringly unequal benefits distribution makes for an unhealthy economy. We don't describe the economy of Mexico or Brazil to be healthy even when they are at high employment and growing GDP mostly because the burgeoning economy doesn't produce a similar ripple in their societies.

> Basket case economies are reflected in bond yields. The US pays little to borrow money because it is a safe haven. Or because it uses its huge military might to make sure it is so.

and don't forget about the petrodollar that's financing this military superpower.

The USD enjoys an unfair competitive advantage over its peers and this distorts the financial markets immensely and more importantly the balance of power in international relations esp. in times of political crises and military conflicts.

Re: Stocks Off Sharply as Market Upheaval Grows

#162
post #7

Broadly speaking the US economy is quite healthy and people were expecting a correction in the stock market for some time. Within tech, it will have some negative impact on the plans of some companies as it will be harder to get lofty valuations based on 'fluff'... during such times investors want to see hard facts and real results to back-up value--but that's a broader trend thats been slowly developing for some tim…

Unfunded liabilities (money that is owed, but not currently on-hand) in the United States are said to be greater than $127T:

http://www.forbes.com/sites/realspin/2014/01/17/you-think-th...

This does not account for unfunded liabilities owed by the states. The situation there is very difficult as well.

You also mention that China is rampant with corruption. In my view, with respect to politics and cronyism, I think the United States government is also highly corrupt.

I would like to share your optimistic outlook, but unfortunately, I'm not able to do so given all that I see going on around me.

Re: Stocks Off Sharply as Market Upheaval Grows

#163
post #143

Earlier quoted context omitted.

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

You're on such a roll with truth, I'll add too it. Wholesale orders are falling off a cliff, huge backlogs of oil, railroad shipments down sharply, container shipments down sharply, chinese currency re-set, etc.

#TRUMP2016 Let's make America great, again?

Re: Stocks Off Sharply as Market Upheaval Grows

#164
post #162
post #7

Broadly speaking the US economy is quite healthy and people were expecting a correction in the stock market for some time. Within tech, it will have some negative impact on the plans of some companies as it will be harder to get lofty valuations based on 'fluff'... during such times investors want to see hard facts and real results to back-up value--but that's a broader trend thats been slowly developing for some tim…

Unfunded liabilities (money that is owed, but not currently on-hand) in the United States are said to be greater than $127T: http://www.forbes.com/sites/realspin/2014/01/17/you-think-th... This does not account for unfunded liabilities owed by the states. The situation there is very difficult as well. You also mention that China is rampant with corruption. In my view, with respect to politics and cronyism, I think th…

The US government does not lie about growth, nor does it threaten money managers with prison time for selling stocks.

Re: Stocks Off Sharply as Market Upheaval Grows

#165
post #109
post #57

Stocks are rebounding. Someone made it off like a bandit this morning.

Disney stock was down almost 10% this morning. HOW POSSIBLY can it be rational for Disney stock to drop 10% because of a single day of rough trading in the Shanghai market, especially given how much Disney has dropped already in the last few months? I considered that the buying opportunity of the year. (knock on wood...)

Well, it will really depend on how well Star Wars does.

Re: Stocks Off Sharply as Market Upheaval Grows

#166

Earlier quoted context omitted.

> QE is not healthy QE is over (though, I wouldn't be shocked to see more). > 0% interest rate for several years is not healthy. Why not? > 100+ % debt:GDP ration is not healthy. Why not? I mean, I wouldn't call the US economy "flourishing" or anything. But it's not sick, and relative to the rest of the world it's looking pretty good (as the strong dollar and low rates imply).

QE is 'over'(for now), but it has shaped today's economy. There may have QE4. Artificially low interest rates is the main cause of most malinvestment and inflating assets. Usually ends with a pretty rough recession. For debt, I could just say 'Greece/Argentina/Brazil/Japan/...', but(yes) these aren't the world's reserve currency. U.S could just pay its debt to China by 'printing money' Still, it also severely hurt Am…

"'Greece/Argentina/Brazil/Japan/...'"

... were all just barely over 100% debt / GDP when things went bad? I don't recall that being the case.

It is surely true that there can be unsustainable levels of debt. You have not made the case that those are anywhere near 100% GDP. I would be surprised if there were any fixed number of GDP where it goes from good to bad - it's going to at least depend on the cost of borrowing that money, and that also looks much different between the US and many other countries (very much including the countries you listed).

Re: Stocks Off Sharply as Market Upheaval Grows

#167
post #109
post #57

Stocks are rebounding. Someone made it off like a bandit this morning.

Disney stock was down almost 10% this morning. HOW POSSIBLY can it be rational for Disney stock to drop 10% because of a single day of rough trading in the Shanghai market, especially given how much Disney has dropped already in the last few months? I considered that the buying opportunity of the year. (knock on wood...)

Investors are not rational.

EDIT> Why would you choose Disney over Google, given the choice? FYI I own both.

Re: Stocks Off Sharply as Market Upheaval Grows

#168
post #6

I think it's a bad sign when they can write an article and get it out in under 25 minutes...but by the time they release the article, the market has gone up by half the amount it fell on opening. This market is severely flawed.

Futures were off bad before the market opened. People look at futures, think the sky is falling, flood the market with sell orders that cannot be filled until market opens, price temporarily crashes, then quants and smart money bring them back.

Re: Stocks Off Sharply as Market Upheaval Grows

#169

Earlier quoted context omitted.

Staggeringly unequal benefits distribution makes for an unhealthy economy. We don't describe the economy of Mexico or Brazil to be healthy even when they are at high employment and growing GDP mostly because the burgeoning economy doesn't produce a similar ripple in their societies.

There's no real reason a 'staggeringly unequal benefits distribution' should lead to an economic crisis, unless you believe in proletarian revolution or something.

Let's say all the wealth in the world, minus a few percent, belonged to 400 people. Can you think of some ways that would wreak havoc on the economy, even without triggering a "proletarian revolution?"

Re: Stocks Off Sharply as Market Upheaval Grows

#170

Earlier quoted context omitted.

> QE is not healthy QE is over (though, I wouldn't be shocked to see more). > 0% interest rate for several years is not healthy. Why not? > 100+ % debt:GDP ration is not healthy. Why not? I mean, I wouldn't call the US economy "flourishing" or anything. But it's not sick, and relative to the rest of the world it's looking pretty good (as the strong dollar and low rates imply).

QE is 'over'(for now), but it has shaped today's economy. There may have QE4. Artificially low interest rates is the main cause of most malinvestment and inflating assets. Usually ends with a pretty rough recession. For debt, I could just say 'Greece/Argentina/Brazil/Japan/...', but(yes) these aren't the world's reserve currency. U.S could just pay its debt to China by 'printing money' Still, it also severely hurt Am…

>"Artificially low interest rates is the main cause of most malinvestment and inflating assets."

Rates aren't "artificial" (there is huge demand for treasuries) and malinvestment occurs at any time. Sure, it makes it "cheaper" to spend money stupidly, but it's also cheaper to spend money "smartly" -- to take risks and chances to do big things. You know, what places like SV are all about. I'm agnostic as to what the rates are, because our economy requires lenders and borrowers. Right now it favors borrowers.

>"Wages don't keep up with inflation and assets are inflated"

Who owns all these inflated assets, the houses, the stocks?

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