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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#151

Post by throwaway713 »

aazaa wrote: post #10

This will be blamed on COVID-19, but the problems go much deeper. Last year the Fed lost control of the repo market. the event was widely discounted at the time as an end-of-tax-year fluke. It wasn't. Six month ago, the yield curve inverted. People who should have known better said "this time is different." Speculators have been trained over the course of 10+ years to buy the dip. The Fed has your back. What we're se…

> This will be blamed on COVID-19, but the problems go much deeper

This is a strong claim. Can you prove it?

Re: Trading halted as U.S. stocks plummet

#152

Post by SilasX »

hi5eyes wrote: post #126
ailideex wrote: post #47

Earlier quoted context omitted.

> This will be blamed on COVID-19 Good. Because I don't buy for a moment that without COVID-19 the situation would be what it is now. Hindsight is 2020 and predictions of doom and stock market collapse is a dime a dozen.

markets knew about covid for a month before it started tanking

There were lay investors that reported betting on a covid related drop and profiting significantly by buying options (eg Wei Dai on LessWrong, will find direct link when I get to desktop).

[Usual caveat about reading too much into plays like this.]

Edit: Here's the thread, and sincere apologies for the flaketastic LW interface now, they don't even have a parent button and it took several seconds for the thread to render after the page loaded:

https://www.lesswrong.com/posts/jAixPHwn5bmSLXiMZ/open-and-w...

Re: Trading halted as U.S. stocks plummet

#153

Post by danans »

dd36 wrote: post #121
ailideex wrote: post #79

Earlier quoted context omitted.

Ehh... I mean ... if the whole rest of the world was somehow unaffected by this ... then ... You do get that a reasonably conservative projection is that within a year most people in the world would have gotten COVID-19? How the heck did Trump do that? The only means of slowing COVID-19 has massive effects on the economy. There is now way in hell this would not have had a massively negative impact on the world econom…

Trump running massive deficits and forcing rate cuts when times are good is Trump’s shaky ground.

People might forget, but part of his platform was supercharging the economy (really, the stock market) past the moderate, but steady and unexciting post-financial-crisis growth of the Obama era.

To continue the automotive analogy, supercharging an engine with major fragilities usually sets it up for a reckoning, just waiting for a trigger.

Covid-19 is just a particularly powerful trigger since it is globally correlated, and also has its primary effects at the local level. It would have shocked any economy, Obama's or Trump's, but there is much farther to fall in the latter's, because of the huge market rallies and the expectations that drove and emerged from it.

Re: Trading halted as U.S. stocks plummet

#154

Post by fredgrott »

ailideex wrote: post #47
aazaa wrote: post #10

This will be blamed on COVID-19, but the problems go much deeper. Last year the Fed lost control of the repo market. the event was widely discounted at the time as an end-of-tax-year fluke. It wasn't. Six month ago, the yield curve inverted. People who should have known better said "this time is different." Speculators have been trained over the course of 10+ years to buy the dip. The Fed has your back. What we're se…

> This will be blamed on COVID-19 Good. Because I don't buy for a moment that without COVID-19 the situation would be what it is now. Hindsight is 2020 and predictions of doom and stock market collapse is a dime a dozen.

no no,,, COVID-19 is not the trigger its just one of the steps leading to the trigger...you had to have the fed manipulation of money to account for the 2008 losses on mortgages combined with the firm's stock performance via profits etc.

Re: Trading halted as U.S. stocks plummet

#155

Post by csomar »

tekkk wrote: post #31
facethrowaway wrote: post #16

For reference, someone might want to post a chart of the gains the markets have made in the past 5 years. I would hardly call this a crash.

Hah not a crash? Well it kinda is, and if it keeps going further down it will definitely cause a recession. The oil price drop was a huge punch in the gut, and I wonder what happens to US oil production if it stays this low for longer. Or well any oil production that can't compete with these prices.

> I wonder what happens to US oil production if it stays this low for longer

Probably go under?

Re: Trading halted as U.S. stocks plummet

#157

Post by sebastianconcpt »

Seenso wrote: post #98
sebastianconcpt wrote: post #54

I wonder how different things would be if instead of those stepped halts, a super high granular delay is injected into the system. Like instead of halting, making it go on but in "slow-motion". And depending on the strength of the drop, the slow-motion factor to inject in the system. I say this because halting tries to "cool down" emotion but it still "feels like" panic while making it all go slow would "feel kind of…

> I say this because halting tries to "cool down" emotion but it still "feels like" panic while making it all go slow would "feel kind of crappy yet normal" hence "buying" time to cool things down while still working. I don't think so. Halting would allow the traders to get a cup of coffee and switch to another mental gear. A slowdown would probably just keep them in gear and result in a lot of anxious refreshes and…

Immediately yes, it will keep them in gear, but it will have no consequence because the output would come forcibly delayed, so the result will come not so immediately. Hence being anxious has no payout and being cool does.

Wouldn't be that with time, the next generation of traders for example, they will relax more when things feel bearish and put the "normal gear" when it feels bullish?

Re: Trading halted as U.S. stocks plummet

#158

Post by vanniv »

take_a_breath wrote: post #97
adventured wrote: post #56

Earlier quoted context omitted.

The Fed has as much ammo as there is wealth held in dollars. Which is to say, a lot. First, there is negative rates. Punishing people for holding cash. The ECB and Bank of Japan have done a lot of pioneering work there, the Fed will have already extensively studied what they did, what worked, what didn't work. Second, they have QE, monetizing debt & debasing dollar wealth, which is exactly what they'll unleash for th…

==First, there is negative rates. Punishing people for holding cash. The ECB and Bank of Japan have done a lot of pioneering work there, the Fed will have already extensively studied what they did, what worked, what didn't work. Second, they have QE, monetizing debt & debasing dollar wealth, which is exactly what they'll unleash for the next recession. Inflation isn't much of a concern right now, so they'll feel free…

I love how everyone uses Japan as an example of central bank success.

Their economy crashed in the 1980s and still hasn't recovered.

If that "success", I'll stick with failure.

Re: Trading halted as U.S. stocks plummet

#159

Post by dpau »

danans wrote: post #129
SkyBelow wrote: post #61

Earlier quoted context omitted.

>Either they are an indicator or they aren't. Third option is that it is an indicator as long as people aren't treating it as one, but once people react to it then it ceases having the power to indicate what is happening.

For the curious, this is known as Goodhart's Law.

also applies to psychohistory in asimov's foundation

Re: Trading halted as U.S. stocks plummet

#160

Post by dbancajas »

segmondy wrote: post #124
chrshawkes wrote: post #84

I don't know if it was a good bet but I moved all my 401k into money market accounts for the time being last Thursday. I feel like those who say I should ride the wave down are probably not telling me the truth. All indicators seem to suggest a 25% correction or more before the end of the year. I've been buying stocks heavily on the latest dips and so far that is all down around 20%. I diversified investments in crui…

Good move, Dec I moved 33% to Bond, 2 weeks ago I moved another 33% to Bond. I'm kicking myself for not moving the rest, but I can stand to be in the market for a very long time. Most knowledge that say rid the wave is rubbish. Get out if you know that things will be down so you can live to fight another day. If you have $100 and market goes down 50%, you have to wait for it to come back 100% to break even. Most folk…

aren't you timing the market though? if it's down 10% today, you moved to bonds, then it's up 20% due to recovery and you missed the upswing, then you are in a worse spot compared to if you haven't done anything?

"but I can stand to be in the market for a very long time" -> isn't this the reason to not do anything? So you can recover and buy more while everything is on discount?

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