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Dow Falls 2997 points worst drop since 1987 crash

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Re: Dow Falls 2997 points worst drop since 1987 crash

#381

Post by amiga_500 »

styren wrote: post #367
amiga_500 wrote: post #63

Earlier quoted context omitted.

Why don't the fed just print money, a program could order stuff on amazon and they could deliver it to a land fill (obviously the landfill would have to be automated by robots). for services they could just automate making bookings with a deposit and not show up. or a little zoomba vacuum thing could show up. wouldn't be inflationary as cash is being destroyed like mad as we are all replaced by robots, so that won't…

Okay lets see if anybody else has a suggestion

Nope, because hacker news wants to believe that capitalists are adding more value than they take out.

Re: Dow Falls 2997 points worst drop since 1987 crash

#382

Post by makomk »

willyt wrote: post #326
makomk wrote: post #277

Earlier quoted context omitted.

The person described in that Vox article - upper respiratory symptoms, no direct contact with someone with confirmed Covid-19 - wouldn't meet the criteria for testing anywhere that I know of off-hand. Certainly not in the UK or Australia, probably not in South Korea (though they allow people who don't qualify to buy testing out of pocket), not in a whole bunch of EU states, and Italy has much bigger things to worry a…

You are wrong about South Korea. Their testing has been incredibly effective from the beginning, patient 31 in South Korea had no known contact and was told to take a CV test by her doctors, but didn't take the advice until a 2 days later. https://graphics.reuters.com/CHINA-HEALTH-SOUTHKOREA-CLUSTER...

Patient 31 was told to take a test despite not meeting the criteria because her doctors had a hunch, as I understand it.

Re: Dow Falls 2997 points worst drop since 1987 crash

#383

Post by engineeringwoke »

appleflaxen wrote: post #75

This is only the first round. The second round will be over-leveraged investments being uncovered, as any leverage they had in stocks evaporates. Given that the over-leveraged loan situation was out of control during the 2008 GFC, and nothing structural was done to change behavior, it's extremely likely we're going to see some secondary changes.

Correct. Let's wait and see where the path of least resistance takes us. It goes somewhere from the commercial paper market to anyone levered, all the usual TBTF suspects.

Re: Dow Falls 2997 points worst drop since 1987 crash

#384

Post by _bxg1 »

joezydeco wrote: post #340
_bxg1 wrote: post #291

Earlier quoted context omitted.

The thing with dotcom and GFC is that they both revealed fundamental problems in the marketplace. Dotcom was over-hype around internet startups, GFC was the financial house of cards around subprime mortgages. There was no "going back to the way things were" in those cases. In this case, on the other hand, the primary mechanism is "people can't work/aren't going out and buying things". That's absolutely going to "go b…

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.

I think this one is more about demand than supply. White-collar workers are of course being productive from home, but even manual work - in an employer-controlled environment - could conceivably be made safe. Amazon just announced that they plan to hire 100k warehouse and delivery workers.

Public spaces on the other hand (retail, restaurants/bars, travel destinations), are just totally infeasible to make safe until things are fully over with. That's a serious cut to demand that just has to be waited-out.

Re: Dow Falls 2997 points worst drop since 1987 crash

#385

Post by aantix »

Sukotto wrote: post #379
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…

You’d have to be sitting on a cash savings equal to the value of the retirement account? Because you couldn’t use the proceeds from the retirement sale?

Re: Dow Falls 2997 points worst drop since 1987 crash

#386

Post by _bxg1 »

aguyfromnb wrote: post #366
_bxg1 wrote: post #291

Earlier quoted context omitted.

The thing with dotcom and GFC is that they both revealed fundamental problems in the marketplace. Dotcom was over-hype around internet startups, GFC was the financial house of cards around subprime mortgages. There was no "going back to the way things were" in those cases. In this case, on the other hand, the primary mechanism is "people can't work/aren't going out and buying things". That's absolutely going to "go b…

> That's absolutely going to "go back to the way things were" China printed money in the past 10 years on a scale we've never before seen in history (300% Debt-to-GDP). They remain in a trade war with the US, are being blamed for the virus and their economy has shut down. Things aren't "going back to normal".

I said that with a very specific meaning and you're taking it out of context.

Re: Dow Falls 2997 points worst drop since 1987 crash

#387

Post by aguyfromnb »

coliveira wrote: post #119
pyrrhotech wrote: post #66

Earlier quoted context omitted.

Your first two paragraphs are severe contradictions. If this is anything like 1929, the bottom will be around 340, after retesting highs from 1987. In that case, 2400 SPX is a bargain sell and still getting out near the top in the scheme of things. Even if this is only a relatively mild recession like 2000 or 1973, we'll be seeing 1600 - 1700 SPX or at least 30% below today's close.

Goldman Sachs already said they expect a further drop of 20%. Of course, this is just the beginning.

>Goldman Sachs already said they expect a further drop of 20%. Of course, this is just the beginning.

In November, Goldman Sachs was calling for 3.5% Global GDP growth. They are guessing, like the rest of us.

Re: Dow Falls 2997 points worst drop since 1987 crash

#388

Post by AQuantized »

celdon25 wrote: post #168
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…

> Now is not a good time to sell your stock holdings (at least not anymore). This smells of a panic right now. I'd love to make large buys of stocks at a time like this, but I have no idea whether my job/company/industry is safe. Last time I was laid off from work was particularly rough for me, and I'm only just now getting back on my feet. The uncertainty of the situation is probably making many others think twice b…

Nobody can tell you what will happen for sure, but it might be a good idea to look for businesses with large market caps and capital stores to deploy that will make it much more likely they will survive this period.

Re: Dow Falls 2997 points worst drop since 1987 crash

#389

Post by microcolonel »

qooleot wrote: post #304
_bxg1 wrote: post #291

Earlier quoted context omitted.

The thing with dotcom and GFC is that they both revealed fundamental problems in the marketplace. Dotcom was over-hype around internet startups, GFC was the financial house of cards around subprime mortgages. There was no "going back to the way things were" in those cases. In this case, on the other hand, the primary mechanism is "people can't work/aren't going out and buying things". That's absolutely going to "go b…

Are you sure COVID-19 didn't partially prick a systemic issue that was hard to see on the rise (as many also missed the housing crisis before the fall)? For example, the amount the stock rise was attributed to stock buybacks in an unsustainable manner caused by late stage government policies (tax cuts, low rates). There has been some pretty extreme levels of corporate debt that correlates with this.

You don't get to bundle criticism of a basic income tax reduction with these other economic policies, just because there's a crisis.

Re: Dow Falls 2997 points worst drop since 1987 crash

#390

Post by aguyfromnb »

_bxg1 wrote: post #386
aguyfromnb wrote: post #366

Earlier quoted context omitted.

> That's absolutely going to "go back to the way things were" China printed money in the past 10 years on a scale we've never before seen in history (300% Debt-to-GDP). They remain in a trade war with the US, are being blamed for the virus and their economy has shut down. Things aren't "going back to normal".

I said that with a very specific meaning and you're taking it out of context.

>you're taking it out of context

You claimed the the GFC and dotcom bust "revealed fundamental problems in the marketplace", but "In this case...the primary mechanism is "people can't work/aren't going out and buying things". That's..going to "go back to the way things were"

To which I explained to you there are fundamental issues with this as well, mainly the world's second largest economy is messed up, royally. What context did I miss?

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