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What Drives Stock Market Returns? (2018)

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Re: What Drives Stock Market Returns? (2018)

#41
post #22

Earlier quoted context omitted.

What does "contraction of circulating currency" look like in the post-cash world?

A drastic rise in interest rate or actual destruction of bills.

What incentive do any of the few actors with the ability to effect that change have to actually pull that lever? I imagine that you have spent a lot of time thinking about this, and I would like to understand your position.

Re: What Drives Stock Market Returns? (2018)

#42
post #24

Earlier quoted context omitted.

Click the "Edit Graph" button, and change the unit to "Change from Year Ago, Billions of Dollars" to see the evidence.

I don't see anything that looks like a "slowing" in mid 2018. Q1, Q2 and Q3 2018 are all higher than anything that came before.

[deleted]

Re: What Drives Stock Market Returns? (2018)

#43
post #24

Earlier quoted context omitted.

Click the "Edit Graph" button, and change the unit to "Change from Year Ago, Billions of Dollars" to see the evidence.

I don't see anything that looks like a "slowing" in mid 2018. Q1, Q2 and Q3 2018 are all higher than anything that came before.

He said “slowing growth rate” not “shrinking economy”. Take 1900 to 2025 (or 2019 if you want to dodge covid) and EMA the (g’-g)/g and it will be visually apparent.

Quite hard to see higher derivatives or rates in the g vs. t graph. You need to plot at least dg/dt vs t to see. But definitely need dg/g vs t to see.

Haven’t looked at the true data (though it would be unsurprising) but your graph on its own hard to spot plus explanation makes no sense.

100,200,300,400,500

100%,50%,33%,25%

Increasing g, decreasing dg/g

Re: What Drives Stock Market Returns? (2018)

#44

Earlier quoted context omitted.

I don't see the contradiction?

I don't see anything that looks like a "slowing" in mid 2018. Growth in Q1, Q2 and Q3 2018 was higher than anything that came before.

Slowing refers to a change in the derivative, in this context. Slowing growth would be a decrease in change in GDP per year — a decrease in growth. But the claim is that the growth (first derivative) is what’s slowing — that is, the second derivative of GDP w.r.t. time went negative, which does seem to be the case in mid 2018 from the linked chart.

Re: What Drives Stock Market Returns? (2018)

#45

Earlier quoted context omitted.

A drastic rise in interest rate or actual destruction of bills.

What incentive do any of the few actors with the ability to effect that change have to actually pull that lever? I imagine that you have spent a lot of time thinking about this, and I would like to understand your position.

That's the core question. I would like to see the parent poster's answer as well, because I don't see it happening as long as the US can price debt in its own currency, and the only way that stops happening is after a catastrophe that isn't worth planning for because there's no way to survive financially.

Re: What Drives Stock Market Returns? (2018)

#46
post #31

Earlier quoted context omitted.

The numerous downvotes on this post containing basic statements of accepted fact is one of the more concerning things I've seen online in some time.

I find it reassuring. More people are waking up from our collective trickle-down, "free market hypothesis" fever dream and are starting to understand that there's nothing natural or rational about the stock market - it's just an elaborate wealth allocation machine that showers wealth on those who already have wealth (and showers more wealth on you, the more you already have). The stock market is about as natural or r…

This is exactly what I'm talking about. Nothing you said has anything to do with the post in question; it's just an angry, uninformed, emotional screed.

Re: What Drives Stock Market Returns? (2018)

#47
post #31

Earlier quoted context omitted.

The numerous downvotes on this post containing basic statements of accepted fact is one of the more concerning things I've seen online in some time.

Agreed. The level of financial illiteracy in many of the comments on the post is particularly concerning. Especially in response to a post that is solely trying to teach some basic economic principles.

This site has turned into a worse version of reddit, which is what I would come here to get away from (I stopped commenting there long ago, and barely visit at all at this point).

It's really unfortunate that what was a place to talk about tech and startups (and therefore capitalism and investing) with people living that experience is now yet another another online progressive cesspool.

Re: What Drives Stock Market Returns? (2018)

#48
post #31

Earlier quoted context omitted.

The numerous downvotes on this post containing basic statements of accepted fact is one of the more concerning things I've seen online in some time.

Agreed. The level of financial illiteracy in many of the comments on the post is particularly concerning. Especially in response to a post that is solely trying to teach some basic economic principles.

In the 1980s, my dad was the head of the finance department at a small college. He taught finance classes, and he taught how free markets worked. Student after student would come to him, and say this amazed them. They said they had never heard of a case for free markets.

I attribute this to the complete lack of any school teachers or professors having any business experience whatsoever.

None of my K-12 grade school classes said anything about free markets. None offered any accounting instruction, or finance instruction, or anything about managing money.

It's a sad state of affairs.

Re: What Drives Stock Market Returns? (2018)

#50

Earlier quoted context omitted.

A drastic rise in interest rate or actual destruction of bills.

What incentive do any of the few actors with the ability to effect that change have to actually pull that lever? I imagine that you have spent a lot of time thinking about this, and I would like to understand your position.

That is the problem. Reigning in debasement is what needs to happen or the dollar is dead. But, reigning in debasement means spending less. Spending less means people can't be reelected for "bringing federal money home". So, there is no incentive for Congress to cut anything. But, the piece that makes me pretty sure that debasement is the goal, is that by debasing the currency it makes it possible to pay off dollar denominated debt. I can't be the only one that sees it. Nations have been divesting of US Bonds for years now.

I'll say it another way. The government can pay off its debt by making your money worthless.

I changed my investment habits as soon as I recognized it. I am already happy I did.

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