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Stocks Off Sharply as Market Upheaval Grows

nytimes.com

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Re: Stocks Off Sharply as Market Upheaval Grows

#241

Post by AnimalMuppet »

MCRed wrote: post #84
sillygeese wrote: post #55

Earlier quoted context omitted.

> when you look at the US economy as a whole things are doing quite well To be more accurate, when you look at the propaganda spewed by the mainstream media, everything seems to be fine, because they keep spinning everything in a positive light. In the US, for starters, there's a huge bubble in stocks, and an echo bubble in housing. There's a massive property bubble in Canada and Australia, and so on. With interest r…

We have a democrat who is president, and who took over after a crisis during the term of a republican. (never mind that he was part of the cause of the crisis with his 1990s era "not lending to people who can't repay is racist" lawsuit against banks)... so the liberals of HN are highly motivated to believe that democrats are "responsible" and that they have "fixed the economy" after republicans "wrecked it". So when…

> if it weren't for government the bad banks would have failed in 2008-- and we would have had a real recovery afterwards.

We would - but at the price of a much worse crash. (Which doesn't mean that the result, today, would have been any better - the further down the bottom was, the better the recovery has to be to reach the same point.)

Re: Stocks Off Sharply as Market Upheaval Grows

#242

Post by api »

CWuestefeld wrote: post #234
dataker wrote: post #132

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.

A vanishing middle-class is not healthy. Everyone's been picking at all your claims except this one, so let me jump in on this part. You've been drinking too much of the kool-aid. It's certainly fashionable for talking heads to spout platitudes about the middle class, but it doesn't match the real world. The picture that's being painted is that the vast majority of us will be living lives as serfs, while a group of o…

I started reading and after the second sentence was waiting for a reference to AEI. I was not disappointed.

There's something very ironically Soviet about certain sectors of the American right. I'm sure at the height of Communism there were official mouthpieces that talked bout how everything was getting better, and I'm sure reading them was just as bizarre and vertigo-inducing like "what parallel universe do these people inhabit?"

Ideologies die hard. You can cherry pick statistics to attempt to argue anything, but the scenario you describe does not match the real world.

Re: Stocks Off Sharply as Market Upheaval Grows

#243

Post by jdmichal »

harmegido wrote: post #173
alyx wrote: post #149

Earlier quoted context omitted.

I'm interested to hear other people's experiences. I have a 100k trading portfolio and I have sold/bought nothing in the last week. Thoughts on who's doing all this downward trading?

Individual investors really don't impact prices. It's big funds that are able to do very large trades that have an impact on supply/demand. And I'd also point out that nothing has to be bought/sold for prices to move, although volume does spike when prices move downwards. I'm curious about your terminology. 100k is quite a bit for most people. Is that your 'trading' portfolio or your 'investing' portfolio? If it's th…

I'd actually be looking at buying with a big down move. Not with all my cash, because trying to time bottoms is a bad idea. Buy with 1/3 or 1/4 cash whenever there's a significant drop and you should average out pretty well without having to time.

Re: Stocks Off Sharply as Market Upheaval Grows

#245

Post by AnimalMuppet »

rsmckinney wrote: post #231
AnimalMuppet wrote: post #216

Earlier quoted context omitted.

> After pumping QE full throttle at $80B/mo? They did for a while. That part's over, though.

"Over"... i see no fat lady on stage

You see the Fed no longer pumping QE at $80B/month.

Re: Stocks Off Sharply as Market Upheaval Grows

#246

Post by 6stringmerc »

tertius wrote: post #232
rsmckinney wrote: post #196

Earlier quoted context omitted.

On earth, a zero interest rate indicates a sick or at least stalled economy. The rate cannot be held at zero for much longer without risking a deeper debt via evermore unhealthy credit expansion, yet the consequences of raising it, even a little, will likely crush global markets as investors react etc. There is no question this economy is quite sick and has been breathing with aid of the Fed's iron lung so long that…

By unhealthy credit expansion you mean unhealthy Fed balance sheet expansion? Very little of the credit created on the balance sheet has actually entered the market.

Well I think there's some pretty clear correlation that numerous large companies have been using cheap credit in the bond market to buy back shares at a rapid pace (billions) and further inflate the status of the equities market. That's the cheap credit that isn't doing anything other than fleecing the non-investor class. It's simply financial engineering dependent on access to cheap credit, from what I understand.

Re: Stocks Off Sharply as Market Upheaval Grows

#247

Post by jahewson »

digikata wrote: post #237
acconrad wrote: post #202

Earlier quoted context omitted.

We were also in uncharted territory when the stock market collapsed in 1929. The market had never crashed like that before. The market had also never crashed like 2000 because the internet tech sector had never existed like that before. The market had also never crashed like in 2008 because home loans had never been so lax in terms of lending such highly-leveraged loans to such low quality lenders. Every new crash li…

The crash (or correction) of 2015 might be because of student loans & labor participation rates of recent graduates. The load is such that many of them could not grow into the consumer role to the degree that the economy needed of them in order to grow. And reducing growth/recovery even further, stagnant wages further hold back consumption. 2008 and 2015 are economic events which feel to me like they're based in ineq…

New graduates are a relatively small slice off the overall workforce and they have a long time to pay of their loans. I don't see any mechanism there which would cause a crash. We've seen quite clearly that over-subsidising their debt burden simply causes them to take on larger loans - it doesn't help.

The problem for those younger people entering the market is not that they don't consume - in fact, they consume readily - but that they can't afford property and don't receive adequate pensions or other benefits.

Re: Stocks Off Sharply as Market Upheaval Grows

#248

Post by pbreit »

grellas wrote: post #238

People's investment philosophy will vary and tolerance for risk will play a major role in it all. My own view is this, and it is based on a lifetime of having made all the typical mistakes. Steady is the best way to go for your investable funds. That means, go with stocks for a decent segment of your investments but temper this with investments that will help preserve capital when things get rocky. Keep a ratio betwe…

Better: make a core position in Vanguard LifeStrategy.

Re: Stocks Off Sharply as Market Upheaval Grows

#250

Post by sillygeese »

forgetsusername wrote: post #182
dllthomas wrote: post #166

Earlier quoted context omitted.

"'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…

> were all just barely over 100% debt / GDP when things went bad? Indeed. It's amazing to me that people don't blink an eye at borrowing 8-10x their annual income to buy a home in California, but think the US economy, which can print its own currency, is going to fold with debt levels at 1x income and rates at historic lows.

Perhaps those are not the same people?

Bear in mind that printing currency is not without consequences either. It's not like each printed (and used) dollar is worth exactly as much as the previous one - otherwise hyperinflations could not happen.

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