Stocks Off Sharply as Market Upheaval Grows • Hacker News Board

Re: Stocks Off Sharply as Market Upheaval Grows

#151

Post by pvnick » Mon, Aug 24, 2015, 3:23 PM UTC

dataker wrote: post #132

code4tee wrote: post #7

Broadly speaking the US economy is quite healthy and people were expecting a correction in the stock market for some time. Within tech, it will have some negative impact on the plans of some companies as it will be harder to get lofty valuations based on 'fluff'... during such times investors want to see hard facts and real results to back-up value--but that's a broader trend thats been slowly developing for some tim…

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

Agreed. The stock market has been propped up by the FED for the past 6 years with free money from near-0% interest rates. Great for the folks close to the money supply (bankers, rich folks with lots of investments, etc), not so great for the middle/lower class. The best thing that can happen is to bite the bullet and raise interest rates.

Re: Stocks Off Sharply as Market Upheaval Grows

#152

Post by acjohnson55 » Mon, Aug 24, 2015, 3:24 PM UTC

A whole lot of aphorisms in this commentary about falling knives and dead cats, but very little actual information.

If you're trying to time the bottom you may as well take your money to the blackjack table. The quants are probably going to make a bunch of money, but if you're just a regular person, you should probably just continue making your regularly scheduled 401k contributions and diversified investments. Historically speaking, all the movement is going to average out in the long run to modest gains.

Re: Stocks Off Sharply as Market Upheaval Grows

#153

Post by gmarx » Mon, Aug 24, 2015, 3:25 PM UTC

dataker wrote: post #14

I'm assuming the Fed will not raise interest rates now.

The answer (pains me to say it) is, if anything, government spending. This was actually the answer after the financial crisis too. We have come to depend far too much on monetary stimulus relative to fiscal stimulus.

Re: Stocks Off Sharply as Market Upheaval Grows

#154

Post by Throwaway1224 » Mon, Aug 24, 2015, 3:25 PM UTC

drcode wrote: post #109

rdudek wrote: post #57

Stocks are rebounding. Someone made it off like a bandit this morning.

Disney stock was down almost 10% this morning. HOW POSSIBLY can it be rational for Disney stock to drop 10% because of a single day of rough trading in the Shanghai market, especially given how much Disney has dropped already in the last few months? I considered that the buying opportunity of the year. (knock on wood...)

"extra" personal cash dries up disney customers have a high income elasticity proportionally larger revenue drop for disney

Re: Stocks Off Sharply as Market Upheaval Grows

#155

Post by cm2187 » Mon, Aug 24, 2015, 3:27 PM UTC

forgetsusername wrote: post #136

dataker wrote: post #132

Earlier quoted context omitted.

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

> QE is not healthy QE is over (though, I wouldn't be shocked to see more). > 0% interest rate for several years is not healthy. Why not? > 100+ % debt:GDP ration is not healthy. Why not? I mean, I wouldn't call the US economy "flourishing" or anything. But it's not sick, and relative to the rest of the world it's looking pretty good (as the strong dollar and low rates imply).

QE is not over. The balance sheet of the Fed hasn't gone down. What is over is QE expending.

Re: Stocks Off Sharply as Market Upheaval Grows

#156

Post by dataker » Mon, Aug 24, 2015, 3:27 PM UTC

forgetsusername wrote: post #136

dataker wrote: post #132

Earlier quoted context omitted.

Regardless of your ideological background, you cannot possibly assert the U.S economy is healthy. 0% interest rate for several years is not healthy. QE is not healthy. 100+ % debt:GDP ration is not healthy. Inflating assets is not healthy. A vanishing middle-class is not healthy.

> QE is not healthy QE is over (though, I wouldn't be shocked to see more). > 0% interest rate for several years is not healthy. Why not? > 100+ % debt:GDP ration is not healthy. Why not? I mean, I wouldn't call the US economy "flourishing" or anything. But it's not sick, and relative to the rest of the world it's looking pretty good (as the strong dollar and low rates imply).

QE is 'over'(for now), but it has shaped today's economy. There may have QE4.

Artificially low interest rates is the main cause of most malinvestment and inflating assets. Usually ends with a pretty rough recession.

For debt, I could just say 'Greece/Argentina/Brazil/Japan/...', but(yes) these aren't the world's reserve currency. U.S could just pay its debt to China by 'printing money'

Still, it also severely hurt Americans and is probably the main problem for the middle class. Wages don't keep up with inflation and assets are inflated, so their purchasing power is smaller and citizens usually get indebted themselves.

Re: Stocks Off Sharply as Market Upheaval Grows

#157

Post by achompas » Mon, Aug 24, 2015, 3:27 PM UTC

MCRed wrote: post #75

code4tee wrote: post #29

Earlier quoted context omitted.

Debt to income ratios, capitalization of companies, worker productivity, oil prices, savings rates, more healthy housing prices (in most areas), foreclosure rates, industrial orders, housing starts, .... This isn't 2007-08.

Note: I've been slow banned for this comment. Please read it, I'm sure a hell ban is coming next. Apparently having a different opinion politely expressed is not even allowed here anymore. Debt to Income- yes everyone and their dog walker is not out there buying condos hoping to flip them in 3 years, so we are less leveraged than we were. Hard to tell how much of this is because people have more money coming in or ar…

Savings Rates-- well, compared to 2006 when everyone was leveraged to the hilt to buy just one more condo, sure they are better. But are they actually good?

Well they're higher now than they were 15 years ago:

https://research.stlouisfed.org/fred2/series/PSAVERT

and just slightly off the average over the last two contractions (highlighted in gray).

Re: Stocks Off Sharply as Market Upheaval Grows

#158

Post by Throwaway1224 » Mon, Aug 24, 2015, 3:29 PM UTC

photosinensis wrote: post #117

jebblue wrote: post #89

Earlier quoted context omitted.

Why was this down voted?

Because it's ignorant. There are cool down systems in place if the stock market swings too wildly in a short period of time.

You are a dick show.

Re: Stocks Off Sharply as Market Upheaval Grows

#159

Post by cynicalkane » Mon, Aug 24, 2015, 3:29 PM UTC

cryoshon wrote: post #76

topkai22 wrote: post #50

Earlier quoted context omitted.

Corporate profits have been good, GDP has been rising at a decent rate, consumer confidence has been looking OK. Statistically, the economy has been looking alright, although the distribution of benefits continues to be unequal.

Staggeringly unequal benefits distribution makes for an unhealthy economy. We don't describe the economy of Mexico or Brazil to be healthy even when they are at high employment and growing GDP mostly because the burgeoning economy doesn't produce a similar ripple in their societies.

There's no real reason a 'staggeringly unequal benefits distribution' should lead to an economic crisis, unless you believe in proletarian revolution or something.

Re: Stocks Off Sharply as Market Upheaval Grows

#160

Post by forgetsusername » Mon, Aug 24, 2015, 3:30 PM UTC

piratebroadcast wrote: post #126

I'm a Web Developer with a few years of experience on the East Coast. I do OK, salary wise. I missed the first bubble and am not on the East Coast. What should I expect from this? Layoffs mean more developer supply? Just trying to be cautious and prepared for worst case.

>What should I expect from this?

As of right now? Nothing. This is mostly paper being moved around. Economic tides are shifting and there are always people caught with their pants down.

In the long run? Who knows? We just finished a massive bull-market run, now there's been a commodity crash and global growth prospects look bad. It could be business-as-usual or completely uncharted territory. Don't fret over what you can't control.