Why is the stock market rallying when the economy is so bad?

Post by tinco » Sun, May 10, 2020, 11:39 PM UTC

Consultant32452 wrote: post #379

coliveira wrote: post #370

Earlier quoted context omitted.

The issue is not that these cases exist, but that they are sold as being the standard, which they're clearly not. To became wealthy coming from a poor background requires a lot of effort, sense of opportunity, and frankly, luck. But all this is sold as something at grasp to anyone in this country, which is clearly false.

Of course luck plays a role in everything. It's merely luck that I've never been run over by a bus, or any number of other problems. But can you help me understand how a lot of effort and a sense of opportunity is not available to the common person?

Post by legolas2412 » Sun, May 10, 2020, 11:41 PM UTC

listenallyall wrote: post #428

erik_seaberg wrote: post #396

Earlier quoted context omitted.

It's mostly the latter. Looks like 32% have 401(k) plans and 13% have pensions. They may not have a big share of the total market cap, but a stock market crash would blow up a lot of retirement planning.

>> a stock market crash would blow up a lot of retirement planning The low interest rates we've experienced over the last decade, which have only gotten lower as of late, have actually blown up retirement plans. Used to be, $500,000 saved at 8% meant you could retire off the $40k interest + social security. It also meant that growing a savings account into $500,000 was not out of reach, even on a modest income. This…

Post by eanzenberg » Sun, May 10, 2020, 11:44 PM UTC

listenallyall wrote: post #428

erik_seaberg wrote: post #396

Earlier quoted context omitted.

It's mostly the latter. Looks like 32% have 401(k) plans and 13% have pensions. They may not have a big share of the total market cap, but a stock market crash would blow up a lot of retirement planning.

>> a stock market crash would blow up a lot of retirement planning The low interest rates we've experienced over the last decade, which have only gotten lower as of late, have actually blown up retirement plans. Used to be, $500,000 saved at 8% meant you could retire off the $40k interest + social security. It also meant that growing a savings account into $500,000 was not out of reach, even on a modest income. This…

Post by tinco » Sun, May 10, 2020, 11:45 PM UTC

jjoonathan wrote: post #117

lumost wrote: post #90

Earlier quoted context omitted.

How much of the TINA phenomenon could be due to lack of capital formation throughout the economy? e.g. if 90% of America is too capital poor to form businesses or dream up new economic needs, then wouldn't it follow that printing money into existing asset classes would simply raise their price with no viable places to invest the money?

Yes. I'm sure plenty of Theranos / WeWork style opportunities will emerge to pick up the slack. It's a fundamental problem of capitalism: the market's notion of "value" is weighted by wealth, without growth to stir things up wealth concentrates, and those looking to create value are increasingly forced to search for marginal "rich people problems" rather than tackle obvious "poor people problems." You wind up in a pa…

Post by eanzenberg » Sun, May 10, 2020, 11:48 PM UTC

JKCalhoun wrote: post #128

bb2018 wrote: post #13

Earlier quoted context omitted.

I agree. Also, I know it is hip to say that Wall Street is short-sighted, but in reality it is one of the the few fields where people routinely think decades at a time. If you run a large pension fund or investment account you were already risk-weighted and if the cash isn't needed for 10+ years you'd much rather own a slice of the world's largest companies ten years from now instead of gold or cash under a mattress.

I feel like there is a decade of guillotines in the future that they are either not seeing or are looking way past. But then I've always been cynical about the growing divide between the uber-wealthy and the other 99% of this country.