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Stocks Off Sharply as Market Upheaval Grows

nytimes.com

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Re: Stocks Off Sharply as Market Upheaval Grows

#321

Post by bsbechtel »

forgetsusername wrote: post #182
dllthomas wrote: post #166

Earlier quoted context omitted.

"'Greece/Argentina/Brazil/Japan/...'" ... were all just barely over 100% debt / GDP when things went bad? I don't recall that being the case. It is surely true that there can be unsustainable levels of debt. You have not made the case that those are anywhere near 100% GDP. I would be surprised if there were any fixed number of GDP where it goes from good to bad - it's going to at least depend on the cost of borrowing…

> were all just barely over 100% debt / GDP when things went bad? Indeed. It's amazing to me that people don't blink an eye at borrowing 8-10x their annual income to buy a home in California, but think the US economy, which can print its own currency, is going to fold with debt levels at 1x income and rates at historic lows.

Actually, debt is held by the US Government, which has had historic average revenues of ~18% GDP. Therefore, to have 100% debt/GDP is actually the US Government borrowing 5.5x their annual income.

Re: Stocks Off Sharply as Market Upheaval Grows

#322

Post by jusben1369 »

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.

> 0% interest rate for several years is not healthy

That's not healthy or unhealthy. It's just a thing.

> QE is not healthy

Ask Europe that didn't do quantitative easing (or did too little too late) which economy they'd rather have right now. And it's no longer a thing - because it ran its course and largely worked.

>Inflating assets is not healthy

Some classes of assets are inflating. Some are deflating. Again it's a little vague.

> 100+ % debt:GDP ration is not healthy.

It was never higher than right before the boom of the 50's and 60's so...

Agree with you on the impact on the middle class.

But I think you can assert on the balance of things that the economy is healthy vs not. You've obviously ignored a lot of positive stats around employment growth and economic growth.

Re: Stocks Off Sharply as Market Upheaval Grows

#323

Post by EliRivers »

alyx wrote: post #149
forgetsusername wrote: post #107

Earlier quoted context omitted.

> people were expecting a correction in the stock market for some time "People" are expecting a correction 100% of the time, so the forecast is pretty much useless. If it was truly anticipated, it wouldn't happen. Action, like that which occurred at opening this morning, is sheer panic.

I'm interested to hear other people's experiences. I have a 100k trading portfolio and I have sold/bought nothing in the last week. Thoughts on who's doing all this downward trading?

I've placed orders to buy one of my favoured indices today (which should turn into an actual purchase on Wednesday), and I wish I had more cash to invest at the moment.

Re: Stocks Off Sharply as Market Upheaval Grows

#324

Post by wahsd »

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.

But at least home prices are back to bubble levels ... so there's that, right?

Re: Stocks Off Sharply as Market Upheaval Grows

#325

Post by smitherfield »

forgetsusername wrote: post #170
dataker wrote: post #156

Earlier quoted context omitted.

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 Am…

> "Artificially low interest rates is the main cause of most malinvestment and inflating assets." Rates aren't "artificial" (there is huge demand for treasuries) and malinvestment occurs at any time. Sure, it makes it "cheaper" to spend money stupidly, but it's also cheaper to spend money "smartly" -- to take risks and chances to do big things. You know, what places like SV are all about. I'm agnostic as to what the…

>Rates aren't "artificial" (there is huge demand for treasuries)

Of course they're "artificial." There may be huge demand for treasuries, but not enough to maintain a constant ~0% interest rate - that's the Fed's doing. The Fed certainly is not allowing treasuries to drop to their true market value, as Volcker did.

Re: Stocks Off Sharply as Market Upheaval Grows

#326

Post by svachalek »

wiz21 wrote: post #313
blakecaldwell wrote: post #308

Earlier quoted context omitted.

Yep. If you invest broadly enough, then shrug this off and consider that the market is on sale today. Your existing holdings will return to their yesterday prices at some point, and everything you buy in the meantime will have gone up.

Pardon my ignorance, but why will the : "existing holdings will return to their yesterday prices at some point" ? The way you put it seems so inevitable (although "at some point" may be 100 years from now). So, as you're not the only one to say that, I'd like to know what makes you think that the holdings will get back to their previous level ? Because, if they increase from their current position, then you certainly…

It tends to fluctuate within a range but just to play devil's advocate, note that it took about 30 years to recover from the 1929 crash.

Re: Stocks Off Sharply as Market Upheaval Grows

#327

Post by [deleted] »

wiz21 wrote: post #313
blakecaldwell wrote: post #308

Earlier quoted context omitted.

Yep. If you invest broadly enough, then shrug this off and consider that the market is on sale today. Your existing holdings will return to their yesterday prices at some point, and everything you buy in the meantime will have gone up.

Pardon my ignorance, but why will the : "existing holdings will return to their yesterday prices at some point" ? The way you put it seems so inevitable (although "at some point" may be 100 years from now). So, as you're not the only one to say that, I'd like to know what makes you think that the holdings will get back to their previous level ? Because, if they increase from their current position, then you certainly…

[deleted]

Re: Stocks Off Sharply as Market Upheaval Grows

#328

Post by IceColdCoder »

I'm just injecting some alternative thought here but I think one major question that needs to be asked about the health of the economy is:

"How much of the weighted average person's day is that person spending on survival".

I don't see how slow shift to a 60-hour instead of a 40-hour work week is indicative of a healthy economy but I could be wrong. To me it seems that survival is taking more and more time when it should be taking less and less if the economy were actually growing. This is probably just a "correction" but I think we will be seeing more and more of these here soon. I've been looking at the robotics industry and I can see them going into full public view within the next decade. The results will be interesting.

Re: Stocks Off Sharply as Market Upheaval Grows

#329

Post by wutbrodo »

jusben1369 wrote: post #322
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.

> 0% interest rate for several years is not healthy That's not healthy or unhealthy. It's just a thing. > QE is not healthy Ask Europe that didn't do quantitative easing (or did too little too late) which economy they'd rather have right now. And it's no longer a thing - because it ran its course and largely worked. >Inflating assets is not healthy Some classes of assets are inflating. Some are deflating. Again it's…

>> 0% interest rate for several years is not healthy > That's not healthy or unhealthy. It's just a thing.

I agree with you generally, but this response is a little silly. What does "it's just a thing" even mean? Given that there's no ironclad economic consensus on this question yet, it's more comfortable to not spend too much time sitting on the ZLB. Now that doesn't suggest anything specific about what costs should be incurred to get away from the ZLB[1], but all else held equal, it's not unreasonable to suggest that staying near zero for so long is a bit more uncomfortable than having a bit of a buffer to lower rates.

[1]i.e., I'm not taking the oft-heard position that we need to do what it takes to raise rates NOW before it's too late

Re: Stocks Off Sharply as Market Upheaval Grows

#330

Post by theseatoms »

IceColdCoder wrote: post #328

I'm just injecting some alternative thought here but I think one major question that needs to be asked about the health of the economy is: "How much of the weighted average person's day is that person spending on survival". I don't see how slow shift to a 60-hour instead of a 40-hour work week is indicative of a healthy economy but I could be wrong. To me it seems that survival is taking more and more time when it sh…

Weighted by what?
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