271–280 of 499 posts
SPY puts printed today. Up 110%, sold before Trump had his press conference. I think there's going to be a little bit of a bounce tomorrow and then resume drilling.
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I'm pretty sure banks aren't going to start folding. The Fed is ahead of the curve this time (or at least not nearly as far behind it as in 2008). They seem to be pretty serious about doing whatever is needed to keep things from falling apart.
I said I wouldn't be surprised, not I think they will. For reference, I work at a bank. The opinion is my own. The problem has to do with a run on the bank. All banks are currently reporting negative earnings. Most banks rely on credit, and revenue from said credit. If that breaks down (because people can’t pay). They collapse. I think the fed can bail them out. I also think that requires printing money so inflation…
That's not what you're describing:
> All banks are currently reporting negative earnings. Most banks rely on credit, and revenue from said credit. If that breaks down (because people can’t pay). They collapse.
That isn't a bank run; it's not having a hedge against credit default risk.
A bank run would be all of the depositors trying to withdraw cash at the same time. But there's no reason for them to do that because their deposits are insured; even if the bank fails, their money won't go away.
> I think the fed can bail them out. I also think that requires printing money so inflation will be high.
The Fed is already printing money; they restarted quantitative easing along with the latest rate cut. I agree that this will cause inflation--in fact, if the printed money ends up, in effect, guaranteeing people's insured deposits, it will most likely cause more inflation than the previous rounds of QE did, since that money will likely be spent (whereas in those previous rounds of QE most of the printed money just sat in the banks' accounts at the Fed, since the banks were unwilling to lend it out).
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Most of the SP500 movements come from small number of companies too. Dow Jones is bad index but the narrow number of companies is not the worst part. DJIA is price-weighted index which is completely arbitrary and there is no reason for that. They can't add Berkshire Hathaway into the index without completely changing the rules. BRK-A price is so high. Index would track only BRK-A after that.
I'm not sure why they don't add BRK-B though.
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Absolutely. I'm 21 -- I have 30 to 40 years to weather this storm. For people of similar age, you could not ask for a shallower entry into the market, albeit a tumultuous one.
29 here Entered the workforce right after 2007, in my 16, after moving to Singapore from small town Russia as an exchange student. Financial fortunes of my patents went nowhere, and I had to keep myself afloat for pretty much 2.5 years. Made not so bad money selling low end electronics to the third world on Alibaba, and such. Then, my parents made me dump all my money on the best things since sliced bread: "Business…
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What lack of urgency are you talking about?
The US lags just about every developed country on testing for Covid-19 disease.[0] ‘It’s Just Everywhere Already’: How Delays in Testing Set Back the U.S. Coronavirus Response[1] [0]: https://www.vox.com/science-and-health/2020/3/12/21175034/co... [1]: https://www.nytimes.com/2020/03/10/us/coronavirus-testing-de...
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If anyone could predict the stock market they wouldn’t be telling you.
The issue is not prediction, is expectation. The market moves on expected outcomes, not on reality. The reality may change down the road, but the expectation is to go down a lot more.
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I said I wouldn't be surprised, not I think they will. For reference, I work at a bank. The opinion is my own. The problem has to do with a run on the bank. All banks are currently reporting negative earnings. Most banks rely on credit, and revenue from said credit. If that breaks down (because people can’t pay). They collapse. I think the fed can bail them out. I also think that requires printing money so inflation…
> I said I wouldn't be surprised, not I think they will. Fair enough. > I think the fed can bail them out. I also think that requires printing money so inflation will be high. If things go that way, I don't think it has to result in inflation. The thing is that, when a bank collapses, some money disappears (because of fractional reserve banking). If the Fed prints exactly the right amount of money to counterbalance t…
The money doesn't disappear when the bank collapses. It disappears if the loans that defaulted and caused the bank to collapse are written off instead of being assumed by some other party. If the borrower's inability to pay is only temporary, the loan probably won't be written off; it will just be restructured, and the money won't disappear.