If the fed backs the market up to the point of total civilization collapse then makes sense to keep backing the market since if it gets to the point market fails money will lose its value anyway??
Why is the stock market rallying when the economy is so bad?
791–800 of 898 posts
Re: Why is the stock market rallying when the economy is so bad?
#792Earlier quoted context omitted.
There's still a real possibility that there might actually be a full recovery - what's closing is small businesses, not megacorporations. The rich seem to do just fine even now. Even if most individual restaurants close, some will open back up, and more chains will move back in. In every scenario I can imagine, one thing seems inevitable - most people in this world are going to get poorer and suffer more. But I'm not…
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.
UBI doesn't produce goods, though. You still need companies (open and) employing people to make the goods that people buy. Both need to be present.
Re: Why is the stock market rallying when the economy is so bad?
#793Earlier 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.
I think we're going to see just how small the mom and pop sector of the economy is.
There was a survey that went out that said 80% of small businesses can't afford more than 3 months under the current economic climate. If that's true, does that mean we will see all small business evaporate before the end of 2020?
Re: Why is the stock market rallying when the economy is so bad?
#794Earlier quoted context omitted.
That cuts both ways, so to speak. Drones and even more advanced technology can replace guillotines as easily as it can be used to have a smaller police force of the kind you mention. I think some people don't quite understand what people are capable of when they are truly desperate. Right now, in most of the western world, people aren't at that point. But when they get there, billionaires' ability to hide on islands…
System controls internet, phone network, electricity, food and oil delivery. IF you want to stop a revolution in 21st century just shutdown everything and blockade roads. How long till people start dying? A week? What are the rebels gonna do? Assauls tanks and machine guns? Or starve/freeze/cook to death without electricity/oil/food? The American delusion of aremd citizens defending constitution is just that - a delu…
This "delusion" is also mostly a straw man in my opinion. Most people who talk seriously about armed rebellion in connection with the second amendment are not talking about attempting a coup, marching on the capital, engaging the military.
They're talking about holing up in scattered rural dwellings and ignoring the law, with maybe the occasional terror attack mixed in. The Taliban has made a decent go of such a strategy so I don't it's an altogether risible position as you're implying.
Re: Why is the stock market rallying when the economy is so bad?
#795Earlier quoted context omitted.
Even if there is a second wave, there will be a time after Corona eventually. There won't be any new players by then so the market shares will almost be unchanged. Stock prices are discounted future profits for about 15 to 20 years. Those profits are still there when Corona is over. From that perspective, why should share prices fall by more than 5-10% for every year that Corona is locking down the economy? *edit: If…
How do you know there will be a time after Corona? In all likelihood, it is here to stay like influenza and rhinovirus and other respiratory illnesses. The only way we recover the economy is by gaining herd immunity such that 25-50k yearly die, not 200k. That comes with vaccine and with wide scale exposure, which I'd wager is by 2021 summer. But even then, old folks will still die by the thousands each year due to co…
It's helpful to use Spanish Flu as a proxy. It was almost completely overlooked by historians, mostly due to it coming on the heels of WWI, but look at what 1921 and beyond looked like. Back to normal. That's with the same social distancing and mask-wearing measures we see today. But no vaccine.
What's clear is society now seems to be willing to let COVID run its course (and kill discriminately) as long as we keep below hospital capacity. If we allow that to happen, then we'll reach herd immunity, regardless of vaccine availability, within a couple of years.
Let's just hope it doesn't mutate.
Re: Why is the stock market rallying when the economy is so bad?
#79690% of all stock trading the last 19 years was company buybacks. The fed has one job: liquidity.
Mark Blyth's various commentries the last few weeks are very enlightening.
Re: Why is the stock market rallying when the economy is so bad?
#797Earlier quoted context omitted.
System controls internet, phone network, electricity, food and oil delivery. IF you want to stop a revolution in 21st century just shutdown everything and blockade roads. How long till people start dying? A week? What are the rebels gonna do? Assauls tanks and machine guns? Or starve/freeze/cook to death without electricity/oil/food? The American delusion of aremd citizens defending constitution is just that - a delu…
This "delusion" is also mostly a straw man in my opinion. Most people who talk seriously about armed rebellion in connection with the second amendment are not talking about attempting a coup, marching on the capital, engaging the military. They're talking about holing up in scattered rural dwellings and ignoring the law, with maybe the occasional terror attack mixed in. The Taliban has made a decent go of such a stra…
The Taliban live in a failed state with barely any civilization for decades already. What's to lose?
I highly doubt average American will be OK with that.
Re: Why is the stock market rallying when the economy is so bad?
#798Earlier quoted context omitted.
>That means you _chose_ not to participate in the market You can’t invest money you don’t have.
May I suggest examining "if 0.1% of your savings is in the market" again? Like what happened with the other 99.9% of your savings?
Without sperging out about the specific percentage: a situation where people have a tiny amount saved for retirement, and almost all their net worth in a house and car, is actually quite common.
Re: Why is the stock market rallying when the economy is so bad?
#799Earlier quoted context omitted.
> cash: eaten by inflation. americans haven't had real inflation since the military backed greenback. it will be very interesting to see how much that outdated system can hold after being stretched so much by the feds (fed and federal govt).
not true at all. The inflation has been gigantic, when expressed in as the price of owning a home or getting educated. the traditional measures of inflation expressed in the price of other goods are not capturing the real story. Those good are much cheaper today and mask the actual decrease in purchasing power.
I can't find it at the moment, but I remember a graph that showed the price of goods over a period of something like 30 years. Things like clothes, food, gadgets, cars, etc., we're shown to have decreased in price. Things we actually need like education, medical care, and housing had risen astronomically. So even if the dollar itself doesn't inflate much, it still can have significantly less buying power, as you say. What's worse is the cheapness and ubiquity of gadgets serves to mask the problem by making everyone think they have more wealth than they really do.
Re: Why is the stock market rallying when the economy is so bad?
#800The explanation is very simple. The pandemic is not nearly as bad as people thought it would be in March. Models were predicting hundreds of thousands of deaths in the USA over the next few months, with lockdown. Many people were predicting hospitals would be widely overrun in New York City, parts of California, etc (again, with lockdown). These models and predictions, of course, were wrong. Printing money and stimul…
We are going to cross that 100k death toll by June, and there will be an acceleration in 2-4 weeks as we see the effects of reopening efforts on transmission rates. [1]
Brooklyn funeral homes have trailers full of bodies waiting for burial. Just because it’s not happening where you can see it doesn’t mean it’s not happening. [2]
1. https://projects.fivethirtyeight.com/covid-forecasts/?ex_cid...
2. https://www.google.com/amp/s/www.nytimes.com/2020/04/29/nyre...