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

Re: The stock market and economy have parted ways

#331

Post by bpt3 » Mon, Jul 13, 2020, 8:01 PM UTC

subsubzero wrote: post #288

toomuchtodo wrote: post #257

Earlier quoted context omitted.

Only half of those over 55 have any retirement savings [1], the other half have no retirement pennies to speak of. While not great for online discussion, I can understand where the sentiment comes (the evidence is clear older generations strip mined the country economically [and continue to do so], pulled the ladder up behind them, and then are shocked when younger citizens are resentful). [1] https://www.gao.gov/ass…

I don't know, maybe I am out of touch but almost all boomers I know are extremely well off, they started as scientists or other typical professional occupations and now own assets in the millions, basically housing in California and other areas. Prop 13 has helped them(their prop. taxes do not go up) as well as dirt cheap college costs when they went to college. Housing was rather cheap as well considering salaries,…

The boomers you know (white collar professionals in the Bay Area apparently) are not a representative sample of the entire population. The group you mentioned has done well in every generation in modern times.

Re: The stock market and economy have parted ways

#332

Post by pc86 » Mon, Jul 13, 2020, 8:01 PM UTC

toomuchtodo wrote: post #257

pc86 wrote: post #249

Earlier quoted context omitted.

Imagine referring to an entire generations' life savings as "their little pennies."

Only half of those over 55 have any retirement savings [1], the other half have no retirement pennies to speak of. While not great for online discussion, I can understand where the sentiment comes (the evidence is clear older generations strip mined the country economically [and continue to do so], pulled the ladder up behind them, and then are shocked when younger citizens are resentful). [1] https://www.gao.gov/ass…

Edit: Disregard the below because I can't do math. But leaving it for context given the response.

Boomers by definition are going to be in their late 70's at the absolute youngest.

You're talking about their children, who have comparatively little (and is coincidentally why a lot of people hate the Boomer generation).

Re: The stock market and economy have parted ways

#333

Post by bpt3 » Mon, Jul 13, 2020, 8:02 PM UTC

mlthoughts2018 wrote: post #297

baron_harkonnen wrote: post #109

Earlier quoted context omitted.

I think you are absolutely correct and the reason that the stock market is being so weird is quite simply "what else are we doing to do with that money?" The solution for individuals: cash, gold, options, etc, aren't viable solutions for institutional investors. Imagine that you're in charge of a $1 billion fund, what are you going to do? You can't put that into gold, cash or treasury notes. But all sectors are affec…

I think you are massively incorrect. Equities right now are at a pretty massive discount to future value. If anything I think the coronavirus effect on the economy has just demonstrated that economic growth is fundamentally not impacted much by around 1/3 of all jobs. The labor product and consumption activity of that 33.3% just doesn’t matter. The implications of this seem mostly sociological to me. Is that a good s…

> Equities right now are at a pretty massive discount to future value.

Using what metric?

Re: The stock market and economy have parted ways

#334

Post by bennyg » Mon, Jul 13, 2020, 8:03 PM UTC

marvin wrote: post #154

atlgator wrote: post #10

Earlier quoted context omitted.

Or real estate circa 2006. When your cab driver starts offering unsolicited stock tips, that's the time to get out.

Where are you getting out to? A 40% inflated money supply of US dollars?

Property

Re: The stock market and economy have parted ways

#335

Post by gefh » Mon, Jul 13, 2020, 8:03 PM UTC

baron_harkonnen wrote: post #115

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."

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…

"As long as the music is playing, you’ve got to get up and dance."

--Charles Prince, Citigroup CEO, 2007

Re: The stock market and economy have parted ways

#336

Post by nikanj » Mon, Jul 13, 2020, 8:03 PM UTC

3pt14159 wrote: post #302

pjc50 wrote: post #157

Earlier quoted context omitted.

> There's a flight to safety that happens when countries really start printing This is normally great for the dollar. Where else are you going to go? Switzerland has had a "negative rates, please go away" policy for a while now.

In a stock market flight to safety you go to the greenback because the USG is the worlds primary reserve currency and is backed up by the power of the American financial system. I'm not talking about a stock market flight to safety. I'm talking about a hypothetical scenario that I do not think will come to pass: They keep running the printers even after the real economy is breaking down. They won't do it. They will l…

Presently the glorious leader might not accept the stock market retracting, and would happily sacrifice the future of the USD to prop up the market short-term

Re: The stock market and economy have parted ways

#337

Post by AnimalMuppet » Mon, Jul 13, 2020, 8:05 PM UTC

cephaslr wrote: post #324

Quinner wrote: post #246

Earlier quoted context omitted.

Printing money has not had much impact on consumer prices. But it seems very plausible that it is causing inflation of asset prices, including equities, and that that is a distortion of the market that could have negative long-run repercussions.

This seems likely to me, lots and lots of money injected and consumer prices are stable yet art, real estate in desirable urban locations, equities, and some categories of luxury goods/experiences are soaring. Am I wrong?

Yes and no. You're right about what happened in the aftermath of 2008, though it took a while to get there. You're wrong (so far) about what's happening in 2020. Currently, the market (or at least the Dow) is down about 10% from its high.

Re: The stock market and economy have parted ways

#338

Post by jimbokun » Mon, Jul 13, 2020, 8:06 PM UTC

snoshy wrote: post #305

subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

Your speculation doesn't appear unfounded to me, but I think you're painting the picture with too broad of a brush here. AMZN, TSLA, and AAPL (just to limit the discussion to the ones you explicitly mentioned) are tech stocks, but have fundamentally different business dynamics that I would expect to be affected quite differently by the effects of COVID. * AMZN: huge swaths of new and existing are customers moving the…

> I can see more of this money being channeled to iPhones.

And maybe games and other online content, juicing Apple's "services" revenue?

Re: The stock market and economy have parted ways

#339

Post by blaser-waffle » Mon, Jul 13, 2020, 8:07 PM UTC

subsubzero wrote: post #278

There are some very strange happenings goings on with a small number of stocks. AMZN, TSLA, AAPL and a few others have seen stratospheric gains in the past few months with especially Tesla with no clear reason why. Not trying to knock tesla but there is something that I have never seen happening and given store closures, spiking covid cases and virus antibodies that seem to last months and in some cases weeks these a…

> #3 Given sports are mostly shut down(primarily in the US) sports betters are putting money into stocks instead and betting there so to speak.

> #4 People are using their stimulus checks extra unemployment money to invest in stocks.

Retail investors aren't going to drive prices that much.

Just a few weeks ago we looked at oil futures going negative here on HN, and there were thousands of retail investors getting into that -- and the prices didn't budge.

Re: The stock market and economy have parted ways

#340

Post by doh » Mon, Jul 13, 2020, 8:08 PM UTC

Here is what I believe it's the cause.

1) More than a half of assets are now passive [0] 2) People with some money are bored at home and with no sports, they moved their betting to stocks [1] 3) Most trading is now hugely amplified by HFT [2]

[0] https://qz.com/1623418/index-funds-now-account-for-half-the-... [1] https://www.bloomberg.com/news/articles/2020-02-26/reddit-s-... [2] https://www.bundesbank.de/en/tasks/topics/high-frequency-tra...