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The stock market and economy have parted ways

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Re: The stock market and economy have parted ways

#521

Post by aaronblohowiak »

charwalker wrote: post #508
aaronblohowiak wrote: post #328

Earlier quoted context omitted.

This is the most important and often under-looked thing in this whole thread. This will further lead to wealth gaps and difficulty for working people to "get ahead".

And that is on top of the mismanagement of PPP funds after the IG over that was fired and replaced with a loyalist. We are only starting to see where billion of tax dollars went including a large chunk to churches and millions to Kanye West and campaign donors/supporters. If one has an issue with looting by protestors, they really need to look at the looting by the wealthy. Not just PPP loan abuse but also historical…

This is an inherent problem with need-based things -- they are ripe for abuse. If you have universal things, the abuse is part of the design ;) IOW: if instead of PPP being only for certain kinds of companies or institutions it were all of them then a) there is far less to administer b) they get more support and c) you dont have moralistic temptations or arguments. UBI vs SSI, universal healthcare vs medicare, etc etc.

Yes, this means wealthy people will get the same checks as the poor -- but that is a feature, not a bug. Sorry for the soapbox.

Re: The stock market and economy have parted ways

#522

Post by tanzbaer »

whycombagator wrote: post #458
hitpointdrew wrote: post #20

> “I’m not sure what will trigger a sustained sell-off in stocks, but surging [virus] infections and another round of more business closures will be difficult for investors to ignore much longer.” An alternative place to put investments will trigger it. When your options are savings accounts paying 0.25% interest, and treasury notes paying nothing, and CD's being garbage, what are your alternatives for investing? If…

Noob here, but doesn't this comment assume stock markets and investments outside the US do not exist? Surely large investment funds aren't entirely in on US stocks alone and are diversified. So isn't one option to just move some money elsewhere? i.e out of the US market - to a place(s) deemed more stable or with better upside.

Which place is that?

Re: The stock market and economy have parted ways

#523

Post by beervirus »

apta wrote: post #519
beervirus wrote: post #516

Earlier quoted context omitted.

You have some very peculiar ideas about morality.

You agree that loan sharks are immoral, but when banks do the same they're not immoral? It's literally the same behavior, but in a way that is "blessed" by the government (which includes bribery, I mean lobbying). Hopefully it made people think about the current corrupt system we live in. They put band aids on the problems they have, without addressing the actual underlying causes, which means that things won't get s…

I didn’t agree that loan sharks are immoral. Even a loan shark makes his borrowers strictly better off by giving them an option they otherwise wouldn’t have.

Re: The stock market and economy have parted ways

#524

Post by pas »

mwfunk wrote: post #276
cephaslr wrote: post #146

Earlier quoted context omitted.

Is part of the issue that there is just too much money has been printed and hoarded and its creating some weird effects? The government has been printing money for a long time, to stimulate the economy, provide spending money, etc. Due to 80/20 rule, rich get richer effects, etc, a large portion of money the government prints ends up in the hands of a relatively small group who doesn't spend it but rather tries to in…

Have they been printing money? Has more USD been created, physically or virtually? This is something I don't understand, I'm hoping someone here can explain it. I was under the impression the last 40 years of US deficit spending has been mostly financed by selling US bonds to China, Japan, etc., while counting on growth and inflation to take the edge off when they come due. And selling more bonds instead of defaultin…

Generally lowering the interest rate causes inflation only if the economy is already at capacity.

Printing money to keep up with economic growth is also an important function of central banks.

Deficit spending is ultimately simply financed by paying off the debt in the future via taxes. (And the growing economy and the stable but low inflation helps with this.)

Re: The stock market and economy have parted ways

#525

Post by pas »

charwalker wrote: post #509
pas wrote: post #502

Earlier quoted context omitted.

Why is it a problem that they are still on the balance sheets? The instruments that have maturity will eventually vanish on their own, and the Fed can sell off the rest later. It's better to do QE than "wait out" a recession, or wait for Congress. (Plus QE keeps the national debt service costs down too.) The asset bubbles are not the real signs of inequality. After all, if every US citizen would have some savings and…

I think the comment above is suggesting that, either instead of or alongside, current Fed cash injections and distributions by the Treasury we need to push for and implement programs that leverage us out of the QE cycle. A universal healthcare system, student loan forgiveness and free or reduced cost education, a basic income over complex safety net benefits, that sort of thing. As it stands, QE is preventing a massi…

I'm all for universal and single-payer healthcare, education reform, basic income (negative income tax is the best version of UBI), and so on.

But still, QE might be here to stay. It's hard to stay, I know very-very little about these things. (Even compared to - let's say - healthcare costs [see https://randomcriticalanalysis.com/ ].)

Re: The stock market and economy have parted ways

#526

Post by apta »

beervirus wrote: post #523
apta wrote: post #519

Earlier quoted context omitted.

You agree that loan sharks are immoral, but when banks do the same they're not immoral? It's literally the same behavior, but in a way that is "blessed" by the government (which includes bribery, I mean lobbying). Hopefully it made people think about the current corrupt system we live in. They put band aids on the problems they have, without addressing the actual underlying causes, which means that things won't get s…

I didn’t agree that loan sharks are immoral. Even a loan shark makes his borrowers strictly better off by giving them an option they otherwise wouldn’t have.

A loan shark makes his money literally by feeding off the poor, I don't see how that is not immoral. The moment a proper support system is in place, they'll disappear.

Re: The stock market and economy have parted ways

#527

Post by fatbird »

saganus wrote: post #501
fatbird wrote: post #500

Earlier quoted context omitted.

I think it's more that a ring or necklace is more easily scratch tested for hardness, harder to counterfeit, and less valuable individually. If I show up with a gold krugerrand (1oz, approx. $1,800 at today's prices), expecting to get that value or even half, you're not going to give me that value without somehow testing it. A basic density test involves both scales and beaker with water for volume--who's going to ca…

Makes sense. I guess this is one of those things that sound good 'on paper' , but after deeper analysis it's not so straight forward. Like others said, it's probably easier to trade toilet paper, cans of food or cigarettes than ounces of gold.

The main prepper whose account I read had a great post-mortem on his first prep effort, that basically went "lots of chocolate and DVDs and other small luxury items". Gold jewelry wasn't even the thing he was investing in to exploit the black market: a massive DVD collection was. Accessible luxuries like a movie you haven't seen are gold in those conditions. People can sock away 100 kilos of rice, but after six month's eating only that, they'll kill their own children for a bit of chocolate.

Re: The stock market and economy have parted ways

#528

Post by empthought »

sudosysgen wrote: post #510
empthought wrote: post #505

Earlier quoted context omitted.

No, I came to my conclusion by putting away $100 every month for 40 years. $48000 is put in, $114000 is present at the end with a (historically unprecedented low) 4% overall return. Exactly the same amount of money is put away in the last 25 years as in the first 25 years. The shift in risk should be accompanied by changes to the portfolio mix, of course.

But it's not how people save. The average person has too many expenses and not enough income at age 22 to save up as at age 45. And in those later years, the returns diminish. Sure, if you have sufficient income to be able to save up enough for retirement just as soon as you get a job, that works. But that's not the reality for the average person. Most people don't get a high-paying job straight out of school.

I am not sure what you are arguing. Someone said that retirement works “on paper”, and you get 20% more. I pointed out that “on paper” you get more than double what you put in.

All of these other issues you raise have nothing to do with the financial illiteracy leading to the idea that you save for retirement just to get an incremental return rather than a multiple (or two, really, depending on timing) of what you put in. Perhaps if this were more well known, people would invest more at age 22.

tl;dr we’re talking about “on paper” here, investment works as advertised (In fact, much much better than the original poster believes it advertised). All of the things you bring up here are about scenarios that aren’t “on paper” any more.

Re: The stock market and economy have parted ways

#529

Post by beervirus »

apta wrote: post #526
beervirus wrote: post #523

Earlier quoted context omitted.

I didn’t agree that loan sharks are immoral. Even a loan shark makes his borrowers strictly better off by giving them an option they otherwise wouldn’t have.

A loan shark makes his money literally by feeding off the poor, I don't see how that is not immoral. The moment a proper support system is in place, they'll disappear.

That’s hardly his fault.

And if the loan shark weren’t there providing his service, his clients would be strictly worse off. He’s not forcing them to borrow money—he’s offering, and they’re free to say no.

Re: The stock market and economy have parted ways

#530

Post by fomine3 »

marvin wrote: post #492
mhuffman wrote: post #453

Earlier quoted context omitted.

>There is also the significant risk that you are wrong. I haven't seen this mentioned; maybe it's obvious and you've considered that aspect too. Yes! This is maybe the most likely outcome! However, to date I have not heard a good reason why Tesla should be valued higher the the other leading car companies combined. There is no moat for them. Anything they are doing, all of the other car companies can easily retool to…

I can give it a shot. Maybe you've heard some of these before, it's just a list of claims. Tl;dr is there's a probability Tesla will become a tech behemoth with a tech moat that's Google/Apple/Amazon oligopoly-level unassailable. Not just in cars, but also in autonomous driving and maybe energy distribution. Dunno if I'd invest at the current valuation, but it's not obviously insane. Established automakers are struct…

> Software is eating the world, established automakers don't have the culture for it. I remembered that WeWork was evaluated as Software company but not. For Tesla?
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