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Why is the stock market rallying when the economy is so bad?

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Re: Why is the stock market rallying when the economy is so bad?

#401

Post by WalterBright »

magicsmoke wrote: post #9

> And as has often been the case in recent years, investors find themselves faced with few attractive alternatives if they opt out of betting on stocks. The problem is so familiar it has its own acronym: TINA, or There Is No Alternative to stocks. Cash: Gets eaten away by inflation. Although the CPI doesn't indicate high inflation it only measures consumer goods. Inflation is there in the price of investments. If you…

Buying stocks has never been more democratic. Anyone with $100 can buy stocks. No brokerage fees, and fractional shares are now common.

We also just passed what in hindsight will likely be seen as a historic buying opportunity.

Re: Why is the stock market rallying when the economy is so bad?

#402

Post by nerdponx »

changchuming wrote: post #87
ramraj07 wrote: post #43

Earlier quoted context omitted.

There's still a real possibility that there might actually be a full recovery - what's closing is small businesses, not megacorporations. The rich seem to do just fine even now. Even if most individual restaurants close, some will open back up, and more chains will move back in. In every scenario I can imagine, one thing seems inevitable - most people in this world are going to get poorer and suffer more. But I'm not…

Megacaps don't just print money out of thin air. If you have a faltering middle class, who's gonna be there to spend money? Unless you institute some kind of universal basic income, I don't see people's buying power staying the same. Remember, 70% of the economy is driven by people buying shit.

Doesn't this depend on the company? Demand for agriculture, petroleum, and financial services (among many other things) are fairly inelastic. People are going to consume all of that stuff regardless of how financially well-off they are.

Re: Why is the stock market rallying when the economy is so bad?

#403

Post by WalterBright »

ComputerGuru wrote: post #400
WalterBright wrote: post #393

Earlier quoted context omitted.

The article shows 45% of American households have a pension plan that's invested in stocks.

That’s entirely orthogonal though, isn’t it?

The point is they are participating in the stock market and benefiting from its gains.

Re: Why is the stock market rallying when the economy is so bad?

#404

Post by friendlybus »

Blammar wrote: post #323
chrispeel wrote: post #125

Earlier quoted context omitted.

> I'm surprised the average Americans (the 90%) don't get that they are providing insurance to the 86% wealth of the top 10%, but get almost none of the gains. Are you so sure that they don't get this? I guess that many do understand it and either would like a much more inequality-reducing tax structure, or envision themselves as (somehow!) becoming part of the top 10%.

Possibly because they haven't read this book ( https://en.wikipedia.org/wiki/The_Wealthy_Barber ) or understood it.

The Richest Man In Babylon is going to apply for the next decade, but all the negativity about romantic investments is countered by the billions being made in romantic investments. It's the wet blanket approach, it only has ten percent to consistently soak up in the flood times. When you have to make money by creating something, it breaks down.

It can't handle Bitcoin, space rockets, jordan peterson, self driving cars, hyperloop, neuralink, starlink, ect. There's huge and reliable money to be made riding the flame. Or rather there was, it's all about to be flooded out and those of us who don't like being formless, liquid money & stock chasers will have to wait for the next desert to appear in fifteen years time.

Re: Why is the stock market rallying when the economy is so bad?

#405

Post by ComputerGuru »

WalterBright wrote: post #403
ComputerGuru wrote: post #400

Earlier quoted context omitted.

That’s entirely orthogonal though, isn’t it?

The point is they are participating in the stock market and benefiting from its gains.

That’s true. I suppose there’s not much else they/we can do and the 86% represents the status quo even after their efforts.

Re: Why is the stock market rallying when the economy is so bad?

#406

Post by Consultant32452 »

2019-nCoV wrote: post #391
Consultant32452 wrote: post #379

Earlier quoted context omitted.

Of course luck plays a role in everything. It's merely luck that I've never been run over by a bus, or any number of other problems. But can you help me understand how a lot of effort and a sense of opportunity is not available to the common person?

42% of children born to parents in the bottom fifth of the income distribution ("quintile") remain in the bottom, while 39% born to parents in the top fifth remain at the top.

Okay, more than half of the people at the bottom rise up out of it. And less than half of the people at the top stay at the top. What are you hoping for? Please be as specific as possible.

And what does this have to do with whether a lot of effort and a sense of opportunity is available to the common person?

Re: Why is the stock market rallying when the economy is so bad?

#407

Post by WalterBright »

2019-nCoV wrote: post #391
Consultant32452 wrote: post #379

Earlier quoted context omitted.

Of course luck plays a role in everything. It's merely luck that I've never been run over by a bus, or any number of other problems. But can you help me understand how a lot of effort and a sense of opportunity is not available to the common person?

42% of children born to parents in the bottom fifth of the income distribution ("quintile") remain in the bottom, while 39% born to parents in the top fifth remain at the top.

Or 58% born in the bottom fifth move up, and 61% born in the top fifth fall down.

Re: Why is the stock market rallying when the economy is so bad?

#408

Post by jandrewrogers »

mlthoughts2018 wrote: post #265
sigstoat wrote: post #225

Earlier quoted context omitted.

https://www.cnbc.com/2019/12/12/americans-spend-over-1000-do...

That’s an average per consumer. It’s likely skewed way up by extreme outliers. Need to see median, 75th percentile, 95th percentile to really understand it. The headline seems like deliberately misleading journalism.

Per the US government, the median American household has more than $12,000 per year in cash to burn after all ordinary expenses. That is a lot of money for savings and/or beer.

Re: Why is the stock market rallying when the economy is so bad?

#409

Post by bradleyjg »

vadym909 wrote: post #31
magicsmoke wrote: post #9

> And as has often been the case in recent years, investors find themselves faced with few attractive alternatives if they opt out of betting on stocks. The problem is so familiar it has its own acronym: TINA, or There Is No Alternative to stocks. Cash: Gets eaten away by inflation. Although the CPI doesn't indicate high inflation it only measures consumer goods. Inflation is there in the price of investments. If you…

I'm surprised the average Americans (the 90%) don't get that they are providing insurance to the 86% wealth of the top 10%, but get almost none of the gains.

The hypocrisy is astounding. I could understand someone that thought no one should be bailed out by the government, but the ‘only bail out the rich’ position is beyond my ability to understand.

Re: Why is the stock market rallying when the economy is so bad?

#410

Post by Barrin92 »

shuckles wrote: post #374
Barrin92 wrote: post #272

Earlier quoted context omitted.

real wages for the bottom 80% have not budged much[1], and are pretty much non-existent for the bottom 40-60% of the distribution. The US has higher wages but mostly as a function of some sort of Baumol's cost disease. Increases in healthcare and education spending drive wages but they also drive costs. It doesn't really reflect a net gain in standards of living as hard stats like life expectancy show. the US has a l…

Most of these charts ignore non-wage income such as employer paid healthcare. https://medium.com/@russroberts/do-the-rich-capture-all-the-...

It seems like Russ is trying to make a fundamentally different point in that piece than people generally try to make.

His main point seems to be that, if you track people over the last 30 years, they have made economic progress individually. That to me seems extremely obvious though. Someone who is 50 or 60 is almost certainly going to be in a better financial position than the same person at 30, as many people tend to develop more skills or advance their career, it would be straight-up crazy if that wasn't the case.

However, it does not address the actual issue of the poorest as a demographic. What people are saying that if the nation as a whole gets richer, you would expect that 40 years later the floor has risen as well, not that the poor are simply different people.

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