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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?

#821

Post by kart23 »

friendlybus wrote: post #759
kart23 wrote: post #732

Earlier quoted context omitted.

It's not about dismantling walmart. At least from the 'socialist' point of view, its redistributing capital that is just sitting idle. For example, take away the majority of zucks and bezos stock, and just give it away evenly to the people. That's not dismantling the company, its just a redistribution of wealth that has been earned off the backs of middle class.

The middle class signed up for the trades offered by zuck/bezos. Why are they owed?

I don't really agree with it, I'm just trying to explain the viewpoint.

They're not owed in a fully capitalist system, but I can see some merit for the idea that inequality has gotten so bad that there needs to be external intervention to fix that, and redistribute the wealth that is currently concentrated in the top 1%. Giving normal people that money would be a good thing for the economy, and I can see some benefit to it.

Now of course in practice it wouldn't be legal and getting that money from them would be near impossible, but its interesting in theory.

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

#822

Post by friendlybus »

kart23 wrote: post #821
friendlybus wrote: post #759

Earlier quoted context omitted.

The middle class signed up for the trades offered by zuck/bezos. Why are they owed?

I don't really agree with it, I'm just trying to explain the viewpoint. They're not owed in a fully capitalist system, but I can see some merit for the idea that inequality has gotten so bad that there needs to be external intervention to fix that, and redistribute the wealth that is currently concentrated in the top 1%. Giving normal people that money would be a good thing for the economy, and I can see some benefit…

If you give them money, they'll spend it at Amazon and bezos will get it back. What's the point?

The rich are the first to encourage a witch-hunt against the rich. It drives up business.

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

#823

Post by scelerat »

friendlybus wrote: post #759
kart23 wrote: post #732

Earlier quoted context omitted.

It's not about dismantling walmart. At least from the 'socialist' point of view, its redistributing capital that is just sitting idle. For example, take away the majority of zucks and bezos stock, and just give it away evenly to the people. That's not dismantling the company, its just a redistribution of wealth that has been earned off the backs of middle class.

The middle class signed up for the trades offered by zuck/bezos. Why are they owed?

I don't see how you can you say too many people "signed up" for the system we have. 99% are simply born into it with little to no understanding or bargaining power whatsoever.

To the extent that consumers do have a choice, that is somewhat true, but the examples of Facebook and Amazon are as much incredible luck of being in the right place and the right time, exponential explosion of brand new modes of communication and commerce, and all kinds of unintended consequences. Again, to say the middle class "signed up" for this is hardly the case.

At the very least there are issues of power and information imbalances. Take the example of someone comparing the price of something at Amazon and the same thing at a local bookstore and deciding that it's worth the $0.50 savings to go with Amazon. It is easy -- and incorrect -- to say, "well, they signed up for the massive corporate supply chain consolidation and the dissolution of many local economies' autonomy that transactions like this will precipitate when performed at a large scale."

The average consumer simply doesn't have the access to data that corporate boards and politicians do, nor do they have the historical and statistical training to make an educated analysis of their implications.

Finally, even though there are people and organizations who urge alternative consumer patterns, the reach and the volume of their message pales in comparison to the marketing, PR and advertising armies employed by large corporations and their political allies.

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

#824

Post by LinuxBender »

mvkel wrote: post #795
Dumblydorr wrote: post #44

Earlier quoted context omitted.

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 be…

If you would like to keep an eye on mutations, some of them are tracked here [1]

[1] - https://nextstrain.org/ncov/global

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

#825

Post by kennywinker »

WalterBright wrote: post #753
kennywinker wrote: post #659

Earlier quoted context omitted.

$100 in stocks is a meaningless "investment" e.g. https://www.cnbc.com/2018/01/18/few-americans-have-enough-sa... > Only 39% of Americans have enough savings to cover a $1,000 emergency So you're part of the 61% of americans with less than $1k on hand, but you put it into the stock market, congrats! At the end of the year you have $999 + 6% roi = $1059. Best case scenario you're looking at less than $10k for retireme…

A career spans 45 years. $1000 at 6% ROI compounded annually yields $13,747. Now consider adding $1000 to that each year.

If you only have $1000 in the bank, it’s not because you can save $1000 / year - it’s because that’s all you can save.

And I used 30 years because 61% of americans aren’t 20 years old right now.

And this is still the scenario where you don’t have a >$1000 emergency any time during that 45 years.

My point is not that investing doesn’t work, my point is that most people don’t have enough capital to be a part of that system.

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

#826

Post by nate_meurer »

ethbro wrote: post #802
shibeouya wrote: post #790

Earlier quoted context omitted.

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?

https://arxiv.org/abs/2005.03085 - The disease-induced herd immunity level for Covid-19 is substantially lower than the classical herd immunity level

https://www.medrxiv.org/content/10.1101/2020.04.27.20081893v... - Individual variation in susceptibility or exposure to SARS-CoV-2 lowers the herd immunity threshold

This effect will be amplified if the initial vaccinations are given (as they should be) to the potential superspreaders, like healthcare workers and essential manual laborers.

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

#827

Post by rglover »

Jommi wrote: post #306
rglover wrote: post #255

Earlier quoted context omitted.

This is the alarm that keeps going off for me from getting too optimistic. If it's accurate that 78% of the U.S. was already living paycheck to paycheck [1] and many haven't made a dime in two months, it doesn't matter if there's pent up demand for things. There's just no money to buy them. [1] https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-i...

This often mis-repeated paycheck to paycheck statistic needs to die. Do you even read your sources fully? > 51 percent of those making less than $50,000 usually or always live paycheck to paycheck to make ends meet This is from the lowest income bracket in the 2017 survey. It tells us 0 about how many are in the "usually" category. It tells us 0 on does this account for investments or not.

What's the alternative statistic?

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

#828

Post by loco5niner »

kennywinker wrote: post #825
WalterBright wrote: post #753

Earlier quoted context omitted.

A career spans 45 years. $1000 at 6% ROI compounded annually yields $13,747. Now consider adding $1000 to that each year.

If you only have $1000 in the bank, it’s not because you can save $1000 / year - it’s because that’s all you can save. And I used 30 years because 61% of americans aren’t 20 years old right now. And this is still the scenario where you don’t have a >$1000 emergency any time during that 45 years. My point is not that investing doesn’t work, my point is that most people don’t have enough capital to be a part of that sy…

> If you only have $1000 in the bank, it’s not because you can save $1000 / year - it’s because that’s all you can save.

But at least we all have our big screen TV's and iPhones, right?

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

#829

Post by aeturnum »

WalterBright wrote: post #755
callalex wrote: post #657

Earlier 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?

Asking about the other 99.9% is a good point! Mostly I was pointing out how meaningless the idea of "participating" is for evaluating the material impact of the market on an individuals' financial wellbeing.

We can go back and forth about how theoretical people could invest theoretical savings, but unless you have another source, it seems like the reality we live in is one where 90% of the country share 16% of the stock market. Whether that 90% have low savings (all of which are in the market) or better savings (little of which is in the market) - either way their financial health doesn't seem very tied to the market.

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

#830

Post by aeturnum »

chii wrote: post #662
aeturnum wrote: post #437

Earlier quoted context omitted.

I mean, if 0.1% of your savings is in the market, you're "participating" in some sense, but not with any real impact. My sense is that, for the great majority of people in the United States, the stock market's value doubling would mean little for their financial health. Having a retirement fund that goes from $10,000 to $20,000 (or even $100,000 to $200,000) has a relatively small impact on the prospect of retiring […

> you're "participating" in some sense, but not with any real impact just like voting has no real "impact" right? Participating has an impact. The impact may not be as big as you'd want, but it's there. and it's better than not participating.

I agree that participating is always better than not, but I think you're making an inappropriate comparison. The question I was trying to talk about is the connection of the market to the wealth of most americans. I'm saying that it's fully possible for everyone to "participate" in the market without significantly benefiting from it (though, as you say, it's better than nothing). If the market were to double in value, mostly wealthy people would get wealthier and, I think, few middle and working class people would have their lives changed significantly.

The reason I don't think the voting metaphor holds up is that everyone who's elected does so by "getting" the most votes. Obviously there are forces at work here (turnout, voter suppression, get out the vote efforts, etc), but there's no official alternative way to be elected. The voting comparison would make sense if the stock market was the only possible way to gain money - in which case I would agree! But it's not. There are lots of other ways we can ensure people gain wealth.

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