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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?

#801

Post by ethbro »

davidw wrote: post #783
nostrademons wrote: post #72

Earlier quoted context omitted.

If the U.S. collapses so does the whole world. Many regions in the globe (eg. Israel & the Middle East, Eastern Europe, the East Asian archipelago) are stable because of the threat of U.S. intervention if a large regional power decides they want to dominate the region. Take away that threat and you're going to get some very quick invasions as local powers seek to take advantage of the situation. Plus the U.S. dollar…

There are just too many "unknown unknowns" for me to really do a good job of contemplating any of it. We might end up like Venezuela, Hungary or Russia, with some of the trappings of a democracy, but not the real thing. If he loses the election and there is violence, who knows how that goes, how much of it there is, and where... Feels weird to write all this. I'm not much one for "wild" sounding theories, but all thi…

I'd recommend reading US political history. Specifically in the 1850 - 1920 period.

The amount of batshit antics that passed for democracy gives a healthy perspective on current events.

The Union endures.

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

#802

Post by ethbro »

shibeouya wrote: post #790
war1025 wrote: post #102

Earlier quoted context omitted.

One interesting possibility is that the people most likely to get infected (different from most vulnerable if infected) are going to get infected this first round. What that potentially means is that they will act as effectively a fire-break for the broader population. Basically a burning of the highest throughput avenues for mass spread. If true, that would mean we get lots of localized outbreaks, but the probabilit…

There are recent research papers supporting that theory, and lowering the threshold for herd immunity much lower to 30-40% If that is the case then places like NYC are probably pretty close.

Any links?

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

#803

Post by chii »

listenallyall wrote: post #763
chii wrote: post #664

Earlier quoted context omitted.

> buying an index fund or Amazon stock and having a few irrelevant proxy votes on decisions already made, is the definition of "stashing" it away with zero utility. that's absolutely not true. The buying stocks (or indirectly via index funds) must mean somebody else is selling. The person who sold the stocks will put the money obtained from the sale to use somewhere else. It moves capital just like any other economic…

Yes, obviously, stock markets are essential and efficient capital allocators, in aggregate. Perhaps I shouldn't have simplified. But a single retiree's $500k purchase of some megacorp's stock will have effectively zero impact, like a drop in the ocean. As you say, it's up to someone "eventually down the chain" to actually deploy the capital. Investing in an index fund adds even more layers. In contrast, a community b…

i would argue that money invested in stock market has an even higher investment velocity than a bank deposit.

after all, a bank cannot invest in risky assets. "eventually down the chain [of stock investments]" is very fast in terms of timing, and i guarantee you it is faster than a bank's loan process for small businesses.

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

#804

Post by lokl »

seibelj wrote: post #200
lokl wrote: post #143

Several comments here about alternatives to stock, the poor returns of bonds, and cash being eaten by inflation. If you've been thinking about this and are a U.S. investor, read about I Bonds. Or, if you aren't worried about inflation and are investing for 20+ years from now, don't forget about EE Bonds.

IBonds are linked to the government-approved CPI and the basket no longer represents “true” inflation which, in my opinion, should include the increasing cost of housing, education, medical insurance, etc. rather than cheap stuff outsourced to foreign countries to manufacture.

I am also concerned about this, especially medical costs. What alternatives better track this type of inflation?

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

#805

Post by lotsofpulp »

blaser-waffle wrote: post #786
lotsofpulp wrote: post #260

Earlier quoted context omitted.

Comparing US wages to countries that have far greater social safety nets and healthcare is impossible. And volatility of wages and the insecurity of not knowing if you will have stable work (and hence healthcare) or not is a more important metric, although also impossible to measure. But not impossible to feel and see the results of.

> Comparing US wages to countries that have far greater social safety nets and healthcare is impossible. No, it's not impossible. I'm from the US and live in Canada and it's essentially comparing the lower US tax rate + health care premiums and expected unemployment benefits. For the record, the US is clearly cheaper for a slim 30 something with no kids and no medical issues -- like ~27,000 bucks or so per year, when…

Yes, for high earners in STEM in high demand of their labor it’s a no brainer.

But for others, the volatility of income is much higher and muddies the calculation. Losing your job is much less stressful when you don’t have to worry about your healthcare also.

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

#806

Post by jowiar »

partiallypro wrote: post #615
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.

I want to know why this "guillotine" thing has become so big recently? It has largely been Bernie/DSA people. I find it a bit disturbing. I've seen even very innocent things like simply being a landlord as "guillotine" worthy on social media. This is pre-COVID. While most landlords are actually middle class people trying to make a side income. I don't think people actually know what they are asking for, they want rev…

> While most landlords are actually middle class people trying to make a side income

Maybe elsewhere in the country, but in New York, the entire real estate industry is a bunch of blood-sucking insects. Landlords are corporate scum (or Russian scum). Brokers are almost as bad. All have bought the city gov't to ensure that nothing happens that actually helps regular people.

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

#807

Post by jowiar »

CamperBob2 wrote: post #482
Glyptodon wrote: post #426

Earlier quoted context omitted.

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?

There aren't regular Cosa Nostra elections.

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

#808

Post by throwaway743 »

gvjddbnvdrbv wrote: post #780
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.

Given the effects of Covid on the age range of people wanting to join the military this policy seems rather pointless. Very few people will be affected.

For sure in that regard. I'm more curious about why though? Is it because of the unknowns? Or is there a known that's being held back to avoid panic?

Regardless, who knows? I'm just curious to know

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

#809

Post by softawre »

ethbro wrote: post #571
treyfitty wrote: post #427

Earlier quoted context omitted.

Can you define what this bifurcation in ETFs look like? I can’t grasp how this situation will crumble the ETF market- aren’t ETFs in theory safer than stocks?

Happy to be corrected, but I believe it would be more accurate to say that ETFs are less volatile than stocks. They accomplish this by bundling together like stocks, such that each's individual volatility balances out others. This essentially allows you to buy "oil stocks" or "retail stocks" or "all large-cap US companies." However, what goes into those buckets are any companies that meet the criteria. Hence why ETF…

No. I want to hold the "will survive in the future" bucket. Can you sell me that ETF?

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

#810

Post by Supermancho »

mrep wrote: post #765
Supermancho wrote: post #611

Earlier quoted context omitted.

That was a later program. You're misunderstanding because he used the word "stimulus". There were multiple rounds. The first, was a huge corporate giveaway.

The first one was .4% the size of the cares act and it was for healthcare, not corporate giveaways: More than $3 billion for "research and development of vaccines, as well as therapeutics and diagnostics" $2.2 billion "in public health funding to aid in prevention, preparedness and response efforts — including $950 million to support state and local agencies" Almost $1 billion for "medical supplies, health-care prepa…

You are correct. The original commenter was incorrect in the assertion of the order of the bills "passing" - "it didn't even take a week before the government passed the largest stimulus ever".

I'm referencing the CARE Act.

https://en.wikipedia.org/wiki/Coronavirus_Aid,_Relief,_and_E...

Granted the one you reference was passed prior, the CARE Act was introduced first. The CARE Act was never in danger of being dropped, as the market was counting on it (it is filled with pork).

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