Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Dow Falls 2997 points worst drop since 1987 crash

mortgagerateguru.com

Post reply on HN
Print view View original

371–380 of 499 posts

Re: Dow Falls 2997 points worst drop since 1987 crash

#371

Post by rjbwork »

nodesocket wrote: post #60
whatshisface wrote: post #10

All of the return-seeking money that pushed up asset prices in the first place is still out there, because stock market crashes don't destroy money (they just redistribute it). I wonder who has it now, and I also wonder when it will end up back in the market.

Great point, all the "big boy" traders who have been raking in profits on put options, VIX volatility, and leveraged inverse etf's eventually will switch their trades to bull. However, keep in mind, a market down 30% requires a 43% gain to break back even.

Don't have to be a big boy trader to do that. I'm up nearly 200% since last Monday just trading on Robinhood. yeah I didn't get my max returns due to their system being fucked a couple of time but I'm steady making money.

Re: Dow Falls 2997 points worst drop since 1987 crash

#372

Post by lettergram »

seanmcdirmid wrote: post #194
lettergram wrote: post #26

Just my 2 cents - Take your assets out of the market. Until we (in the US) see a few senators, a justice or two and / or the VP/president/etc succumb to the disease we haven’t hit peak panic. ~50% of the workforce is about to be out of a job for a few weeks. A large portion of Restaurants are about to go bankrupt, daycares are about to go bankrupt. Houses are about to drop in price (no money, and elderly dying). The…

Looking through Wikipedia, only one congress person was known to die of Spanish flu ( https://en.wikipedia.org/wiki/Jacob_Edwin_Meeker ), so I don’t think the numbers will get up enough in this pandemic to effect someone high profile in government.

Spanish flu didn’t impact elderly nearly as much nor, at the time, was the government so elderly on average. The death rates for those in their 60s and above seem to be much greater than those younger

Re: Dow Falls 2997 points worst drop since 1987 crash

#373

Post by tinyhouse »

Traster wrote: post #243
tinyhouse wrote: post #125

Earlier quoted context omitted.

No one knows. You have the entire world working (mostly together) on ending this. I'm optimistic things will get much better in a month or so.

Could you define 'much better'? Because we actually do know what the incubation period of this disease is, and we know how the virus has spread. It's a practical certainty that the spread of Covid is goingto gte worse, not better over the next month and that the mitigation strategies are going to completely tank some companies over that time.

I cannot define it because I don't know. I'm hopeful that there will be much more testing done which would shed light on many things. We also have a couple of countries with more positive news about the virus spread and in some places the number of deaths is still zero despite having thousands of cases.

Re: Dow Falls 2997 points worst drop since 1987 crash

#374

Post by gte525u »

rnd33 wrote: post #363
joezydeco wrote: post #340

Earlier quoted context omitted.

Previous recessions were a lack of demand. What happens when it’s a lack of supply? We can’t go back to the way things were if the global supply chain is damaged or completely stopped. And that’s not even considering local businesses that may never come back after this is over.

How is there a lack of supply and not of demand right now? Most of China is already back to work, and we'll see lack of demand in the coming weeks/months when people isolate themselves and not going out buying things.

It's both - but the supply side could take up to a year to fix. I work a small company but our lead times have tripled.

Re: Dow Falls 2997 points worst drop since 1987 crash

#375

Post by dragandj »

dictatorsunion wrote: post #320
rnd33 wrote: post #317

Earlier quoted context omitted.

Are all bear markets the same? If there's a clear signal when to start buying why isn't everyone doing it? To me technical analysis of the stock market is the modern equivalent of a shaman predicting next year's harvest. It sounds very convincing but there's little scientific evidence that it can predict anything accurately.

It's as though you think everyone is rational. If they are they should be selling, but no, they are buying.

for someone to be able to sell, another one has to buy.

Re: Dow Falls 2997 points worst drop since 1987 crash

#376

Post by 9nGQluzmnq3M »

svara wrote: post #213
Reedx wrote: post #118

Earlier quoted context omitted.

Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Have underlying fundamentals changed longer term? South Korea, China, Singapore are encouraging and seeing a return back to (almost) normal life. Granted, we're not dealing with this nearly as effectively and there may be a 2nd wave to come. But at this point they seem to make the case for optimism.

Singapore is an interesting one. Their outbreak looks really benign, but actually they are on an exponential trajectory as well. The rate is just much lower, something like 7% daily. It doesn't register compared to the countries with fast growth, but if it stays like that, they will reach high numbers too. It translates to 10x per month. See https://studylib.net/coronavirus-growth

The majority of Singapore's cases for the past week plus have been imported, not local transmission. They already imposed mandatory 14 day quarantines on most visitors a few days ago, plus Malaysia just unilaterally sealed the only land border, so those will go down soon.

Re: Dow Falls 2997 points worst drop since 1987 crash

#377

Post by pbourke »

endorphone wrote: post #364
Reedx wrote: post #118

Earlier quoted context omitted.

Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Have underlying fundamentals changed longer term? South Korea, China, Singapore are encouraging and seeing a return back to (almost) normal life. Granted, we're not dealing with this nearly as effectively and there may be a 2nd wave to come. But at this point they seem to make the case for optimism.

There is going to be a wave of airline bankruptcies. There is going to be a wave of retail bankruptcies. Add in cruise lines, tourism, restaurants, etc. Now add the secondary effects and most indicators are flashing red. A significant cause for the massive drop today is that indicators out of China are that the disruption is much, much larger than anyone accounted for. A few days ago there was a guy talking about ref…

> Over the past couple of days the federal government has done more to try to fix the markets than they did during the entire housing crash, but compressing it all into a weekend.

One minor point the Federal Reserve has pulled all of their levers to keep credit moving.

The Federal Government has yet to do any fiscal stimulus, which is what's really needed here. If the US government decided to go into $2T+ of debt over the next few weeks and directed that spending at individuals instead of industry bailouts, then I predict the economic consequences of this event would be much shallower than it would be otherwise. They can borrow this money at damn near zero interest right now.

> And here we are, staring into the abyss.

Just in the Seattle area, we've had 10's of restaurant closures announced. The Tom Douglas restaurant group has laid off a good portion of its 800 employees. So the Seattle area alone has probably lost >2,000 jobs already. That's probably seriously on the low side.

I truly think we're looking at a staggering number of unemployed in this country within a few months. Like, great depression staggering. The GFC was terrible, but every neighbourhood service business did not suddenly have 75% of their business disappear or were forced to close. This is much, much different. These jobs will go away in a flood and come back in a trickle. Without a vaccine, we will need to hold some level of countermeasures for up to 18 months - nobody will go out to eat, etc.

Re: Dow Falls 2997 points worst drop since 1987 crash

#378

Post by engineeringwoke »

rupert1234 wrote: post #240
underbluewaters wrote: post #189

Earlier quoted context omitted.

Sorry to single you out, but the fact that people still don't understand that a 1 month+ long lockdown is a certainty means we are nowhere near the bottom. By April the US is going to look a lot like where Italy is at now.

Sorry to single you out, but the stock market usually trades in anticipation of recessions. It's not a proxy for the current GDP, it's an expectations market. The stock market could start a slow rise tomorrow and go until the end of the year and the entire year could be in a recession.

As a European it seems like the US markets are a step behind and seemed to trade pretty optimistically last week and especially the week before even though the situation was bad in Italy, for example.

Re: Dow Falls 2997 points worst drop since 1987 crash

#379

Post by Sukotto »

mgolawala wrote: post #11

To put it into perspective, the last time the market behaved like (multiple drops of this magnitude) this was 90 years ago, in 1929, and it was at the start of the Great Depression. Today was the second largest percentage drop for US Markets in history. Now is not a good time to sell your stock holdings (at least not anymore). This smells of a panic right now. I think a severe recession is all but guaranteed at this…

One edge case to consider.

If you have stocks in a pre-tax retirement account like a traditional IRA in the US (or RRSP in Canada?), now could be a good time to sell them, move the money into a post-tax account like a ROTH IRA (or TFSA?), then buy the equivalent number of stocks there.

You will pay reduced taxes because the value of the stocks is relatively low, then pay no tax when you finally withdraw from the ROTH. (All else being equal and imho, the market is likely to recover over time)

That is, if you don't mind the risk that the market might massively rebound in the middle of the transaction.

There are a bunch of assumptions here. Do your own research and don't blindly believe a stranger on the Internet. Make sure you understand the taxes, fees, penalties, or whatever you will have to pay.

Re: Dow Falls 2997 points worst drop since 1987 crash

#380

Post by deanmoriarty »

iMuzz wrote: post #309
kradroy wrote: post #268

Earlier quoted context omitted.

I have never thought about all-out selling during this. In fact I'm buying more with each dip. I feel that securities are a bargain right now. With select selling I'll also be taking advantage of tax loss harvesting for years to come.

Be weary of catching falling knives. I've made that mistake before.

Why, exactly?

If you have a healthy emergency fund in cash to cover your liabilities for 6 months (or even 1 year to be more conservative in this environment), what is the problem in throwing every bit of cash that comes your way (paycheck savings, ...) and you won't need for a few years, at the stock market as it goes down? Over decades the stock market has had an IRR or 8%+, and that IRR includes crashes like these.

Post reply on HN