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

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

#481

Post by Consultant32452 »

majewsky wrote: post #149
steveeq1 wrote: post #108

Earlier quoted context omitted.

There are considerable financial incentives to "fudge the numbers" regarding corona. It's to the point where if someone has a stroke, and he has corona, it will be counted as a "corona death".

What kind of incentives are we talking here? Honest question; I don't have insight into the medical care sector.

I might have the numbers off a bit, but it's something like...

If you have a patient at your hospital and you are able to give them a covid diagnosis, you get $8k from the federal government. If you can put them on a ventilator for a few minutes, you get $35k from the federal government. This is intended to help offset the costs of care for covid patients to healthcare providers. You can get a covid diagnosis by having some of the sympoms... like coughing, weakness, shortness of breath, etc. I imagine it's difficult to die from anything without some weakness or shortness of breath. So it is very easy to say the patient had "covid-like" symptoms, and put covid as the cause of death.

Now, keep in mind that at the same time, healthcare providers are furloughing and laying off workers. Since "non-essential" care is on hold, there's not enough work for people to do in most places in the country. This places healthcare providers in a difficult moral position where they can inflate a number and keep their employees on payroll, or strictly follow it and lay everyone off.

One easy way to help with this data issue is to simply differentiate the deaths where a person had covid-like symptoms vs a death where a person actually tested positive for covid.

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

#482

Post by CamperBob2 »

Glyptodon wrote: post #426
JKCalhoun wrote: post #128

Earlier quoted context omitted.

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.

Yeah, people always say "Why should I pay more in taxes? It's not fair, they should be flat and the same for everybody!" and I'm always like "Do you have just as much to lose in a French Revolution scenario? You should be happy to pay more if it leads to more social stability."

How is that any different from the proposition offered by your local Mafia muscle?

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

#483

Post by rewgs »

Hydraulix989 wrote: post #50
magicsmoke wrote: post #9

> And as has often been the case in recent years, investors find themselves faced with few attractive alternatives if they opt out of betting on stocks. The problem is so familiar it has its own acronym: TINA, or There Is No Alternative to stocks. Cash: Gets eaten away by inflation. Although the CPI doesn't indicate high inflation it only measures consumer goods. Inflation is there in the price of investments. If you…

Why are stocks inaccessible to so many Americans? There are fractional shares, and you do not have to be an accredited investor.

In addition to everything else said in this thread -- all good stuff -- it's worth noting that there's often an upfront expense that's hard to overcome in order to invest in the stock market in any sort of meaningful way. For example, some of the stocks recommended by the likes of Mr Money Mustache require a $3,000 minimum first-time investment. That's a big hurdle for some, myself included. I'm in music and media, not tech, and while my income is pretty solid, my overhead is absurdly high relative to it. Putting aside $3k on top of doing the financially responsible things like maintaining rainy day funds, saving for retirement, etc, is just tough.

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

#484

Post by DSingularity »

fladrif wrote: post #478
changchuming wrote: post #87

Earlier quoted context omitted.

Megacaps don't just print money out of thin air. If you have a faltering middle class, who's gonna be there to spend money? Unless you institute some kind of universal basic income, I don't see people's buying power staying the same. Remember, 70% of the economy is driven by people buying shit.

What's the last 30%?

My guess is government and corporate spending.

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

#485

Post by peterangular »

Consultant32452 wrote: post #471
tinco wrote: post #451

Earlier quoted context omitted.

It's the classic Trump small loan of a million dollars scenario. Sure not many are as lucky as Trump was. But even t hese examples of blue collar success have a bunch of luck in them. Not everyone can start a machine shop with their dad, or own or even operate a taco restaurant. You need to be at the right place, the right moment, have the right amount of money and or the right equipment, interests and skills. And on…

For the common person it's a lottery just to be allowed to work at Taco Bell and do what the Taco Bell handbook tells you? And then, once you become a manager to save your pennies until you have a down payment on your own store? Gimme a break man.

How many people do you think working the counter FT at Taco Smell can save enough money to afford their own franchise location?

> The cost of opening a new Taco Bell restaurant is between $1.2 million and $2.6 million. Taco Bell also charges a $45,000 franchise fee, an ongoing royalty fee equal to 5.5% of gross sales, and a marketing fee equal to 4.25% of gross sales.

https://www.businessinsider.com/what-it-costs-to-open-a-taco...

Give ME a break man. LOL.

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

#486

Post by peterangular »

thechao wrote: post #278
peterangular wrote: post #238

Earlier quoted context omitted.

> or envision themselves as (somehow!) becoming part of the top 10% I don't disagree with you but want to add some insight to this... My entire life I've been told the lie that if I "just work harder" I can be rich etc. Most of America thinks about themselves in this same way, and it's taken me years of traditional employment + risky startup opportunities to realize that no, success is not guaranteed if you "just wor…

The original formulation of the statement of “work hard and you’ll make it” was created in the context of 17th-19th c. Europe, where no matter how hard you worked, if you weren’t landed gentry, you simply could not make it. The idea was that any opportunity existed. The universalist position you described is a rosy reimagining of a history that never was.

This is super interesting to me and I would actually love to learn the origins of this... do you have any resources you may be able link? Books, articles etc.

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

#487

Post by vecinu »

everybodyknows wrote: post #224
Hydraulix989 wrote: post #50

Earlier quoted context omitted.

Why are stocks inaccessible to so many Americans? There are fractional shares, and you do not have to be an accredited investor.

For small investors, I suggest US Treasury I-bonds: inflation protected, liquid after one year. This of course is, after paying off all high-rate debt, and maxing out 401k contributions.

Yeah check the rates on I-bonds right now, they went down 1% this month. It's not even worth it anymore. I was earning 2.55% APY now it's barely 1.5%. You can get the same return in an AMEX savings account.

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

#488

Post by aianus »

listenallyall wrote: post #475
eanzenberg wrote: post #455

Earlier quoted context omitted.

Which is a good thing to me. I’d rather people “work” to earn rather than easily collecting rent through interest. Work in quotes since applying capital in risky investments is work compared to stashing money in an interest bearing account.

What? Putting money in an index fund, or buying Apple stock, or a 401k, is "work"? Companies don't even get the money from secondary stock purchases, so the invested money is doing absolutely nothing. Banks use deposits to create loans whose funds go directly to the companies receiving those loans. Banks which interview the loan applicants, review financials, ask for references, and which themselves tend to be pillar…

> Companies don't even get the money from secondary stock purchases, so the invested money is doing absolutely nothing.

There would be no IPO market without a secondary market. Almost nobody is interested in buying a stock at IPO and holding it forever without being able to sell it.

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

#489

Post by closeparen »

refurb wrote: post #384
closeparen wrote: post #270

Earlier quoted context omitted.

Because the priority order is: a) Consumption spending b) Real estate c) Stocks When middle class people hit diminishing returns on electronics and vacations, they upgrade their houses. Appetite for remodeled kitchens and bigger, nicer, better-located houses is voracious, so relatively few people satisfy it and fall through to stocks. Making sacrifices on housing in favor of your stock portfolio is of course possible…

This is very true! I know plenty of people who when they have extra money, investing or saving is the last things on their mind.

Housing is arguably an investment, or at least the people doing it think it is.

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

#490

Post by [deleted] »

dragonwriter wrote: post #314
throwaway743 wrote: post #309

Earlier quoted context omitted.

> Also, we still don't really understand this disease enough to know what effects it has on the body. This is especially worrying, now that the US military is barring previously hospitalized COVID survivors from enlisting and not allowing waivers.

> This is especially worrying, now that the US military is barring previously hospitalized COVID survivors from enlisting and not allowing waivers. That's almost certainly a temporary policy because of the lack of information enacted with the expectation that it will be evolved based on future information, not something that should make the lack of information more worrying.

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