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Wall Street sell-off turns 'ugly' as US recession fears grow

independent.co.uk

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Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#161

Post by stego-tech »

YZF wrote: post #139
stego-tech wrote: post #82

Earlier quoted context omitted.

Stocks in the modern context are little more than speculative instruments - the equivalent of buying a blind bag of chips from a casino and betting they'll increase in value by the time you attempt to redeem them. They rarely correlate to long-term company health anymore, and often correlate to little more than the psychological state of the market at the moment of any given transaction. Remember that prices are a pr…

I don't think this is completely true. Other than some small portion of companies with weird ownership structure (which the market should have punished but doesn't always) stock ownership is ownership of the business. There's probably a broader participation in the market (re: few people) than most of history, both direct and indirect. That can be good and bad. There's definitely a speculative component but it's noth…

> stock ownership is ownership of the business.

I hate that argument, because it's the equivalent of my saying I won a board game by preventing too many people from playing it with me, starting with most of the resources already in my possession, and changed the rules so it's harder to spend those resources than to acquire new ones.

As of 2022, Vanguard owned two-thirds of US companies by outstanding shares. That's one institutional investor controlling much of the marketplace. Literally everyone else - other institutional investors, retail investors, governments, corporate employees, etc - is competing for the scraps. If we're talking people, the top 10% of Americans own 93% of US equities according to a 2024 study - again, everyone else is competing for scraps.

So while you are technically correct in that stocks represent ownership, your detractors are more "spiritually" (as in, the spirit of the argument) correct in that it's an irrelevant point when the vast majority of US Equities are held by a fraction of the population. The argument falls apart completely when you consider Capital Gains are treated more favorably by taxation than wages, which is intentional.

So to John Q Public? It's a casino. They have zero hope of actually investing or having a say in corporate outcomes.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#162

Post by tombert »

relaxing wrote: post #158
tombert wrote: post #154

Earlier quoted context omitted.

Isn't the majority of US debt held by Americans by means of bonds and treasury bills? I think it's about 2/3 of the total US debt, if I'm reading that right. https://en.wikipedia.org/wiki/National_debt_of_the_United_St... I would really hope that Trump doesn't start nuking the US.

No, it’s like 1/3 foreign, 1/3 domestic, 1/3 the Fed and other money moving between federal agencies. Presumably the latter would be a wash. Then of the domestic holdings, a big chunk is state and city holdings. Institutional investors would be mad. Citizens with saving bonds and/or money tied up in t-bills thanks to reddit are a tiny fraction.

Even still, if we assume that the fed is a wash, that suggests that half of the remainder is domestic. I don't think that the orange idiot would start nuking the US. Oh god, I really hope that he's not quite that stupid.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#163

Post by throw0101b »

immibis wrote: post #146
ARandumGuy wrote: post #60

Earlier quoted context omitted.

That's why the phrase "don't try and catch a falling knife" exists. We have no idea if prices will rebound shortly, or continue to take a nose-dive. Trying to time the market is a gambling strategy, not an investment strategy.

Buying the market at all is a gambling strategy. You cannot be in the market without timing it. For example, just last week, I realized I had a bunch of money sitting in my crypto exchange that I thought was in Bitcoin, so I traded it for Bitcoin. Now it's worth 80% as much.

> Buying the market at all is a gambling strategy. You cannot be in the market without timing it.

If you buy a little every pay cheque automatically, without looking whether things are up or down, how much are you really "timing" versus simply investing? (Especially if you buy a globally diversified fund like VT.)

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#164

Post by jaybrendansmith »

ethan_smith wrote: post #157
cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

This isn't just about policy uncertainty. Looking at the hard data (Atlanta Fed GDP forecasts, rising delinquency rates on industrial equipment leases, and major retailers' warnings), there are actual economic indicators flashing red. While sentiment certainly matters in markets, we're seeing legitimate signals of weakening fundamentals beyond just reaction to policy shifts. We live in a world that is way more fragme…

So everything was going great, with some of the best employment and GDP numbers we've ever had, and now suddenly every economic indicator is flashing red. But let's not ignore the elephant in the room: That the President and his administration is behaving erratically, scaring the free world, breaking with 75 years of foreign policy, threatening abusive tariffs, threatening people's livelihoods and ability to stay working in this country. And let's not ignore the fact that the most damaging 3 things you can introduce to an economy are: Political instability, a harmful Fiscal Policy, and Tariffs.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#165

Post by ac29 »

panarky wrote: post #46
cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

It's surreal watching all the analysts stumble around trying to explain market behavior with half-baked explanations. One says it's tariffs, another says it's "uncertainty", a third worries about "recession", others say "inflation" or "stagflation". But none of them show logically or quantitatively how tariffs or "uncertainty" or vague, unsubstantiated worries about recession reduce the present value of future cash f…

> selective default on government obligations

Which obligations has the government defaulted on?

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#166

Post by ac29 »

xnx wrote: post #133
cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

> If stocks can drop that fast in a couple weeks, they can also (hopefully) rise just as fast, “Trust takes years to build, seconds to break, and forever to repair”

The average bear market lasts less than a year and we aren't even in a correction.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#167

Post by ac29 »

antisthenes wrote: post #79
DonnyV wrote: post #52

Earlier quoted context omitted.

But they haven't kept up with inflation.

Not sure why you're being downvoted. None of the wage growth has kept up with inflation, for any quartile of workers. Wages are still down 0.5 to 1.5 % from pre-Covid times adjusted for inflation.

Median real wages are higher than pre-covid: https://fred.stlouisfed.org/series/LES1252881600Q

Do you have a source for your claim that they aren't?

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#168

Post by ac29 »

jandrewrogers wrote: post #103
nabaraz wrote: post #22

S&P 500 is barely down (~9% as of this post) after returning 23% and 24% respectively in 2023 and 2024. I wouldn't call it ugly, as someone who lived through recession.

A major correction also isn't that surprising. I started planning for it six months ago. The current market behavior is what I'd call "in model". It can always get much worse but this isn't that.

A correction has a specific meaning (drop of >10%). We aren't there yet with regards to the SP500. I think it would be more accurate to call this above average volatility.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#169

Post by disqard »

ta1243 wrote: post #23
knowaveragejoe wrote: post #15

That's weird. I was assured that the adults are in charge now.

> the adults are in charge now. The adulterers maybe. They're acting like a bunch of kids smashing up the toys so nobody else can play.

Maybe they're shit-scared of the bully from two streets over, who made them promise to break all of their own toys, or else...

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#170

Post by verzali »

relaxing wrote: post #153
tombert wrote: post #140

Earlier quoted context omitted.

Yeah, apparently he's talked about "negotiating down the national debt"? [1] How the fuck would that even work? Would he just tell all the Americans holding treasury bills that they're only going to get half of their money back? I think that would completely erode any confidence in the US economy, both domestically and internationally. [1] https://www.nytimes.com/2016/05/07/us/politics/donald-trumps...

Yes, and it will work, because we’ve got the nukes.

So did the USSR and things worked out great for them.
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