Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

wsj.com

Post reply on HN
Print view View original

851–860 of 898 posts

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

#851

Post by Natsu »

kart23 wrote: post #732
Natsu wrote: post #607

Earlier quoted context omitted.

I don't see how they would help. There's a common refrain among Reddit socialists and whatnot about the rich sitting on some mythical "pile of resources" that needs to be redistributed, but even if you suppose that we guillotine the rich I don't think the poor can eat stock certificates. What are they going to do if they dismantle, say, Wal-Mart? Now all the people who worked there have no jobs and the people who sho…

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.

But their capital isn't idle. For the most part it consists of ownership via the stock market in large conglomerates that employ huge numbers of people and provide goods and services to significant portions of the planet.

That's why I don't see what good "dismantling" them does. Say someone offs Google tomorrow. The website dies and we're left with a bunch of people who have no job and some servers and buildings and whatnot that are less useful to anyone than when you started.

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

#852

Post by Natsu »

KozmoNau7 wrote: post #768
chii wrote: post #660

Earlier quoted context omitted.

each small store will have little bargaining power when it comes to their suppliers. therefore, each little store will end up paying "market price". Eventually, the small stores join up together to bargain for a wholesale price lower than market price to their suppliers, and thus earn a higher margin. ala, what you see at walmart today.

What you see with Walmart is singular entity, owned by an obscenely rich family, who can strong-arm any supplier into accepting their terms. They have the massive capital to build a megamart anywhere they want, and have it run at a loss for however long it takes to drive everyone out of business. This absolutely kills local businesses and funnels money out of the area, leaving only the low wages paid to the local Wal…

Efficiency always drives out competition. There's still room for small merchants for anyone who doesn't mind paying the premium to shop there. But not many people are willing (or able) to pay that much extra to be greeted by a familiar local face.

And no, I don't think the supply chains are actually more robust for local stores. I've had better luck at the local Wal-Mart than at other stores for TP and other hard-to-get items. If anything, early on, some people weren't checking the smaller stores, but after they got wiped out, they've yet to recover and yet Wal-Mart has.

There are still supply chain issues, don't get me wrong, but mostly they're upstream a bit from the customers. Think of things like meat packing plants having trouble finding any way to operate safely or having a lot of production that had to shift from commercial packaging to retail packaging and distribution.

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

#853

Post by closeparen »

ericd wrote: post #696
karatestomp wrote: post #322

Earlier quoted context omitted.

My wife’s side pressure her (me) to “upgrade” her wedding set every few years. WTF. They’re terrible with money, of course, and constantly make passive-aggressive comments about who’s spending what. I don’t think they even realize they’re doing it, it’s just a really, really awful and deeply middle-class-anxiety attitude they’re stuck in.

Heh I had to look up what a wedding set was. Upgrade... wedding rings? Isn’t a big part of the symbolism the permanence factor of the rings? The symbolism of upgrading the ring seems a bit unfortunate... Anyway, sorry to hear, that probably gets really old.

The stone itself is supposed to be permanent; the band and the setting (receptacle for the stone) are less weird to change.

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

#854

Post by JoshuaDavid »

matthewdgreen wrote: post #326
ryansmccoy wrote: post #274

While there are some good explanations already mentioned, the bottom line is that stock prices are forward-looking in the sense that investors buy and sell stocks not based on what happened yesterday or what is happening today, but rather based on their expectations for the future (6-12 months ahead). So, basically, the market is signaling that on a whole (i.e. weighted average growth of all the companies in the S&P…

The stock market is signalling that it believes 6-12 month revenue expectations for the S&P 500 today [14.7% official unemployment, consumer spending trashed, entire sectors facing months of uncertainty] are roughly the same as they were in October 2019 [3.6% official unemployment, consumer spending rising]. This does not seem a logical conclusion, and so people (in this thread) are asking whether the market is funct…

Where are you getting the "6-12 month" number for how the revenue expectation ties to stock price?

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

#855

Post by Tiksi »

mcv wrote: post #737
malandrew wrote: post #595

Earlier quoted context omitted.

> our infrastructure is unmaintained Bernie supporters are generally the least likely to get their hands dirty and do the kind of work necessary to build and maintain infrastructure. Pretty much everyone I meet that does that kind of work is Republican. Not saying this is a universal truth, but it's a somewhat accurate generalization. Source for party affiliation by a sampling of occupations: http://verdantlabs.com/p…

That list actually does a good job comparing related professions. For example, while home builders lean Republican, architects lean Democrat. Plumbers Republican, carpenters Democrat. I don't see this support your assertion at all. Road workers or bridge builders are not listed at all.

> Road workers or bridge builders are not listed at all.

If you scroll past the 1:1 comparisons and hit expand all, there's a much bigger list of occupations, many of which would fall under the "people building infrastructure" umbrella.

Looking at those jobs it seems like it leans a bit right, but overall is fairly balanced.

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

#856

Post by smegma2 »

zapita wrote: post #832
smegma2 wrote: post #525

Earlier quoted context omitted.

Of all things, nepotism seems like an odd thing to single out. Do you have any numbers for this claim? It would be useful to hear e.g. what percentage of people secure positions through referrals/family members.

Why do you find it odd?

Many people make the claim that the fundamental problem of the US is wealth inequality, or no social safety net, or disdain for the poor. I believe these claims are much more common (and in my opinion could be considered more fundamental) than the claim that nepotism is the fundamental problem.

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

#857

Post by Rury »

smegma2 wrote: post #856
zapita wrote: post #832

Earlier quoted context omitted.

Why do you find it odd?

Many people make the claim that the fundamental problem of the US is wealth inequality, or no social safety net, or disdain for the poor. I believe these claims are much more common (and in my opinion could be considered more fundamental) than the claim that nepotism is the fundamental problem.

Well, symptoms of problems tend to be more evident than their root cause, so commonality of claims is not a particularly good reason to rule out nepotism being a problem.

Evidence would be nice to have though.

As for me, I've had enough anecdotes to think it's plausible. Just recently we hired a new CTO at my company, and he got the job simply because he was friends with our CEO and he needed a job. Turns out he's completely incompetent...

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

#858

Post by ergocoder »

mrep wrote: post #362
ergocoder wrote: post #252

I notice that modern companies don't pay dividend anymore. They optimize for growth and survival, which makes sense. Google and Apple have so much cash that they wouldn't really need to make money for years, and they would still survive. Paying dividend is kinda okay, at best. Buying back stock is a bit better. The best is to just keep th cash. Don't get me wrong. As a shareholder, I like it. But it's bad for the com…

What? Most companies do return money to shareholders and for your 2 examples, Apple returned 81 billion dollars to shareholders last year [0] and Google started a 25 billion dollar buyback last year [1]. [0]: https://www.barrons.com/articles/apple-stock-buyback-dividen... [1]: https://www.businessinsider.com/google-2q-earnings-beat-stoc...

Buying back is still better than dividends. Because you get stocks back.

The point is companies now save a lot of money for growth and survival.

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

#859

Post by kerkeslager »

crazygringo wrote: post #210
kerkeslager wrote: post #99

Because the stock market doesn't represent the economy as most people experience the economy. First, a lot of companies don't pay out dividends or buy back stock these days, so as time passes, removing their stock price from the price at IPO, their stock price becomes based on perception--not even perception of the reality of the company's value, but perception of the stock's value, which is increasingly just specula…

> First, a lot of companies don't pay out dividends or buy back stock these days, so as time passes, removing their stock price from the price at IPO, their stock price becomes based on perception--not even perception of the reality of the company's value, but perception of the stock's value, which is increasingly just speculation. This is a common trope to hear, but it's just so fundamentally untrue. At the end of t…

> But the farther away any trader gets from fundamentals -- e.g. buying something they already think is overvalued because they think it will continue to climb -- the statistically riskier it is and the more likely they'll lose money.

How? By what mechanism?

The fact is, as long as shares of the company don't actually get removed from the market entirely, the price of the shares is what people are willing to pay for them.

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

#860

Post by masnao »

glofish wrote: post #294
masnao wrote: post #286

Earlier 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.

even if you account the unofficial inflation, name one single country that had similar (or even close) to the US ratio of printed money to total economy, since the the 1970s. after 2008 was just the cherry on top.
Post reply on HN