How can Wall Street be so healthy when Main Street isn’t? • Hacker News Board

Re: How can Wall Street be so healthy when Main Street isn’t?

#31

Post by ed25519FUUU » Wed, Aug 19, 2020, 2:00 PM UTC

jshaqaw wrote: post #20

ed25519FUUU wrote: post #14

Earlier quoted context omitted.

And state and city governments went ahead and took 80% of their covid money to pay themselves or their sinking pensions, etc. > As part of the Coronavirus Aid, Relief and Economic Security Act signed in March, Sacramento County received $181 million to fund necessary programs or expenses tied to the COVID-19 pandemic ... Of the nearly $148 million that the county has already spent in the last few months, more than $1…

You mean to pay for teachers, first responders, etc...? Yes it takes humans to provide services.

Weird, how did they pay these people without emergency covid funding??

Re: How can Wall Street be so healthy when Main Street isn’t?

#32

Post by williesleg » Wed, Aug 19, 2020, 2:01 PM UTC

Because everyone is investing except you.

Re: How can Wall Street be so healthy when Main Street isn’t?

#33

Post by bradstewart » Wed, Aug 19, 2020, 2:03 PM UTC

SketchySeaBeast wrote: post #17

CalRobert wrote: post #5

Where else are you gonna put your money? Stable governments are paying ~0 or negative interest. I'm actually asking, right now I'm just paying off debt but would be curious what people think. If I didn't have the debt I'd probably buy equities (index fund, etc.) like everoyne else.

After years of squirreling away my cash like someone who spent their entire 20's working minimum wage jobs or in school I finally bought into some index funds. I too don't know what to do with my money - you can't save it (even in less crazy times it's eaten up by inflation), you can't buy bonds right now, so I said to hell with it, I'm not going to time the market, I'm just going to buy in to funds that try to match…

Long term, index funds. Short term, money market (or high-yield savings accounts that do the money market stuff for you).

Re: How can Wall Street be so healthy when Main Street isn’t?

#34

Post by jshaqaw » Wed, Aug 19, 2020, 2:03 PM UTC

The bull case is that by mid-1Q we have a vaccine and the crisis is over. Government fiscal and monetary keeps the economy on life support until that happens. If you value a business bottom up and you think 2021/2022 sort of revert back to 2019 then by now in 2020 you are basing your valuations on those numbers and decreasing the equity value where necessary for businesses that took on debt to get through 2020. The Fed has said it will keep rates low for longer and overshoot 2% which is an average target not a ceiling. If your money has to go somewhere (and it does) then fixed income duration at paltry yields looks like a bad bet if we get a tick up in inflation. In an inflationary environment stocks aren't great but they will preserve purchasing power better than bonds. Sure you can play with commodities and bitcoins but are you as say a middle-aged saver with a family going to put your entire liquid net worth into gold bullion and bitcoin (of course this being Hacker News I expect a good number of "of course" responses!)

For my two cents I was embarrassingly late the the bull party and couldn't believe the rally back so fast. There will of course be a jobs recovery from the lows as the virus threat ebbs but I suspect a decent number of the jobs lost are structural and employment won't quickly rebound to sub 5%. Gun to my head I'd say high single digit unemployment could linger a while which is pretty painful. If the Federal government remains deadlocked then state and municipal austerity will multiply the economic pain.

Re: How can Wall Street be so healthy when Main Street isn’t?

#35

Post by giantg2 » Wed, Aug 19, 2020, 2:05 PM UTC

robjan wrote: post #22

giantg2 wrote: post #12

Earlier quoted context omitted.

Commodities could be another option. I think gold and silver aren't great choices right now, but maybe platinum is. Along this same line, real estate has real value to it.

Other articles are saying that the US is sitting on a foreclosure timebomb. Not sure if real estate is safer than index funds right now..

I should have been more specific. Viewing it as a commodity, you can buy raw land and sell it to a developer in the future. It'd be a long hold and not a good idea in every region, but might be a good option as compared to government bonds or a savings account. Definitely riskier than an index fund.

Re: How can Wall Street be so healthy when Main Street isn’t?

#36

Post by the-dude » Wed, Aug 19, 2020, 2:05 PM UTC

jshaqaw wrote: post #34

The bull case is that by mid-1Q we have a vaccine and the crisis is over. Government fiscal and monetary keeps the economy on life support until that happens. If you value a business bottom up and you think 2021/2022 sort of revert back to 2019 then by now in 2020 you are basing your valuations on those numbers and decreasing the equity value where necessary for businesses that took on debt to get through 2020. The F…

AIDS never got a vaccine, SARS and MERS neither.

Re: How can Wall Street be so healthy when Main Street isn’t?

#37

Post by thieving_magpie » Wed, Aug 19, 2020, 2:06 PM UTC

throwaway_USD wrote: post #3

Easy Congress put on bandannas and robbed the tax payers of about $18,000 each. Congress then turned around and gave taxpayers $1,200 each, of their own money, that total amount can be doubled that to account for the temporary unemployment benefits increase. The rest of the taxpayer money went to the FED so they will guarantee the prices of shit stock...the market can't lower because as many rich CEOs and investors c…

I'd really like to read more about how tax payers are paying $18,000 each but all I can find as a source is some twitter comment and a reddit thread where the claim is disputed. Do you have something more substantial I could read? At first glance it seems extremely exaggerated so I'd like to get my head around it.

Re: How can Wall Street be so healthy when Main Street isn’t?

#38

Post by jshaqaw » Wed, Aug 19, 2020, 2:07 PM UTC

ed25519FUUU wrote: post #31

jshaqaw wrote: post #20

Earlier quoted context omitted.

You mean to pay for teachers, first responders, etc...? Yes it takes humans to provide services.

Weird, how did they pay these people without emergency covid funding??

Tax revenues which have been decimated by the crisis. Unlike the Federal government which can effectively borrow/print whatever it needs, states and municipals are limited by the real world and either have balanced budget requirements or de facto requirements imposed by the bond market/fiscal realities. The equation is simple. Tax revenues have plummeted while expenses have risen due to the costs of coping with the crisis (unemployment, medical services, etc..). Am I saying all of these tax dollars are spent with great efficiency? Of course not. But imposing unnecessary austerity in the middle of a crisis has proven time and time again to do nothing but prolong and deepen economic pain. It would be arbitrary and destructive if say US defense spending can remain immune because it has access to infinite credit while our school district and firefighters will be cut because they are state/local funded.

Re: How can Wall Street be so healthy when Main Street isn’t?

#39

Post by SketchySeaBeast » Wed, Aug 19, 2020, 2:08 PM UTC

bradstewart wrote: post #33

SketchySeaBeast wrote: post #17

Earlier quoted context omitted.

After years of squirreling away my cash like someone who spent their entire 20's working minimum wage jobs or in school I finally bought into some index funds. I too don't know what to do with my money - you can't save it (even in less crazy times it's eaten up by inflation), you can't buy bonds right now, so I said to hell with it, I'm not going to time the market, I'm just going to buy in to funds that try to match…

Long term, index funds. Short term, money market (or high-yield savings accounts that do the money market stuff for you).

The money market is high risk, right? And looking at the high yield savings accounts - based upon a quick google the best option if you're American seems to be 1%?

Re: How can Wall Street be so healthy when Main Street isn’t?

#40

Post by badwolf » Wed, Aug 19, 2020, 2:08 PM UTC

giantg2 wrote: post #12

CalRobert wrote: post #5

Where else are you gonna put your money? Stable governments are paying ~0 or negative interest. I'm actually asking, right now I'm just paying off debt but would be curious what people think. If I didn't have the debt I'd probably buy equities (index fund, etc.) like everoyne else.

Commodities could be another option. I think gold and silver aren't great choices right now, but maybe platinum is. Along this same line, real estate has real value to it.

Lumber has been having quite the ride the last several weeks