The stock market and economy have parted ways • Hacker News Board

Re: The stock market and economy have parted ways

#211

Post by apta » Mon, Jul 13, 2020, 5:13 PM UTC

bryanlarsen wrote: post #102

apta wrote: post #76

Interest is one of the main reasons the economic and financial system is in ruins. It is an exploitative, parasitic practice and we've known that for thousands of years. But some people only care about their pockets.

So everything is sunshine and roses now that we have effectively 0% interest rates?

Not quite, because usury is deeply ingrained in the system, from bonds to CDs to buying debt for debt, etc. There are many usurious transactions that form the underpinning of the financial system that need to be abolished for things to be fair.

Re: The stock market and economy have parted ways

#212

Post by regularfry » Mon, Jul 13, 2020, 5:15 PM UTC

marcrosoft wrote: post #81

ed25519FUUU wrote: post #50

Earlier quoted context omitted.

I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this for food” But that type of mental exercise does not work well for many people. Especially imagining a system where our fiat currency is effectively useless.

You don’t need a complete meltdown to profit off of gold. You just need a little pandemic and some inflation to see a spike. The trick with gold is to rebalance it when it spikes. It’s not a very good “buy and hold forever” asset class.

In a meltdown you're not looking for a profit. At least, not traditionally. You're looking to have more-than-zero.

Re: The stock market and economy have parted ways

#213

Post by SpaceRaccoon » Mon, Jul 13, 2020, 5:17 PM UTC

patmorgan23 wrote: post #171

baron_harkonnen wrote: post #115

Earlier quoted context omitted.

You're thinking about your personal investments, not someone managing a large investment firm or hedge fund. This simple fixes for your personal investments would be seen as absolutely insane in the professional investment world. You can't just tell your clients "oh I put $100 Billion into some nearly 0% interest investments because I think the market is crazy", especially if the DJIA is having record months. Even th…

Then way are institutions buying negative rate bonds?

Which institutions? Some institutions are forced to keep a certain amount of money in bonds, not their fault the yields are negative.

Re: The stock market and economy have parted ways

#214

Post by bryanlarsen » Mon, Jul 13, 2020, 5:18 PM UTC

ianhorn wrote: post #114

danhak wrote: post #38

Earlier quoted context omitted.

This trope gets repeated over and over but it just makes no sense. Volatility is risk. What rational investor says "interest rates are too low, I MUST deploy my capital into a market that is seeing wild 30% gyrations from month to month instead of parking it safely while this global crisis plays out."

Month over month volatility is a poor reason to put money there. Long term average growth is a good reason. Over the 10-20 year periods in the last century, what widely available asset classes perform better?

If you invested into the German stock market in 1914, it would have taken over 100 years to get your money back.

The America of the past 100 years has been quite exceptional. Using its history to predict the future is not a good idea, IMO.

Re: The stock market and economy have parted ways

#215

Post by sroussey » Mon, Jul 13, 2020, 5:19 PM UTC

woeirua wrote: post #166

FlyMoreRockets wrote: post #152

Earlier quoted context omitted.

Very likely, yes. However, it is much less debilitating to get a shot every three months.

It's unlikely that would be sustainable for long for various reasons. You're talking about needing literally tens of BILLIONS of shots a year for the forseeable future? If immunity is not long lasting, then the only path out is global eradication. We have done it before with smallpox.

Don’t need it forever

Re: The stock market and economy have parted ways

#216

Post by woeirua » Mon, Jul 13, 2020, 5:21 PM UTC

Balgair wrote: post #191

woeirua wrote: post #160

Earlier quoted context omitted.

Without a doubt, the coming wave of evictions and foreclosures is going to pop the bubble. Once the tent cities (maybe we should call them "Trump hotels") start springing up in every metro area around the US, I think the market will finally lose this steam. The US is headed for a dire economic situation. At that point, the only thing that can save us is an effective vaccine that confers long lasting immunity. Anythin…

> ... start springing up ... What do you mean 'start'? The homeless camp right next to the new Apple spaceship just got a bathroom installed: https://www.mercurynews.com/2020/06/03/after-months-of-compl... This stuff has been going on for a few years now.

I mean, large scale tent encampments. Right now, you have relatively small encampments in some metro areas. I expect to see tens of thousands of people living in tent cities in every major metro area by October.

Re: The stock market and economy have parted ways

#217

Post by ed25519FUUU » Mon, Jul 13, 2020, 5:24 PM UTC

secondcoming wrote: post #183

ogre_codes wrote: post #80

Earlier quoted context omitted.

And for that matter, assumes you will be able to find safe places to trade gold for anything. Unless we go back to a gold-rush style economy where there are scales all over the place you can trade gold by the gram, the smallest tradeable gold will be coins which are worth $1600+ each. Try taking that to the local grocery store.

Half Sovereigns are ~$300 https://www.atsbullion.com/gold-half-sovereign-coins/

Also many people who "invest" in physical bullion also invest in things like silver. A 1 oz silver eagle is basically a $20 bill. Gold can be traded down to silver if the economy is in that state.

There's also 1/10 ounce coins and other things.

Re: The stock market and economy have parted ways

#218

Post by sershe » Mon, Jul 13, 2020, 5:27 PM UTC

catalogia wrote: post #172

FlyMoreRockets wrote: post #152

Earlier quoted context omitted.

Very likely, yes. However, it is much less debilitating to get a shot every three months.

Could they really manage to make a new version of the vaccine four times a year? For influenza they only do it twice a year and the vaccines are often only 50% effective (or worse.)

I would assume this is because of how fast flu is evolving and how many strains there are, with different ones predominant in any given year. Covid is (relatively) stable, so you'd just use the same one.

Re: The stock market and economy have parted ways

#219

Post by sershe » Mon, Jul 13, 2020, 5:36 PM UTC

Conspiracy theory time! I don't really believe either of these with any non-trivial degree of probability, but I figure at worst I'd get downvoted, and maybe I'd get some insightful takes.

There was an opinion expressed after '08 that the crisis was used by "elites" to conveniently get rid of (as in fire, mostly) a bunch of people that were, to them, superfluous. Like, that was long overdue and there was a good excuse to fire and not rehire a lot of people, decimating small towns, etc.

So, here comes COVID. Seems like a convenient excuse to get rid of the pesky "main street" businesses. Hence, the corner store is going out of business, but people still need stuff. Yes, the pie might get smaller, but more importantly it gets redistributed much more towards Amazons and Walmarts of the world (don't get me wrong, personally I am fine with Amazon and don't care about corner stores). Amazons and Walmarts are the ones being traded as stocks. Hence, stocks go up!

Re: The stock market and economy have parted ways

#220

Post by beagle3 » Mon, Jul 13, 2020, 5:37 PM UTC

rwmj wrote: post #190

beagle3 wrote: post #98

Earlier quoted context omitted.

It is actually very hard to get real gold (especially in a form that you can convert back to cash in the future). Just try to get delivery of a gold bullion. And if you succeed, try selling it into the system again, without losing 30%. Paper gold is a bet no different than a stock; it is a bet that the system and your counterparty will both be solvent when you need them.

Not that I'm advising anyone to get them, but what would be the counterparty risk with gold ETFs? You don't believe their guarantees that they are backed up with actual gold? eg: https://etf.invesco.com/gb/private/en/product/invesco-physic...

Personally, I don’t. The audits are few and far between, and I haven’t followed it closely, but there were several instances in time where the (gold ETF + physical future commitments + whatever else they counted) required more gold than was known to have been mined and not used in industry.

What this means is that, at moment in time, if the music stopped, someone would be left without gold - though with the distributed nature of everything, it’s hard to say who.

Fake bars are routinely discovered in storage, collateral, etc, see e.g. https://www.nasdaq.com/articles/chinas-kingold-shares-tank-o... for the most recent high profile (but by no means unique) example.