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Show HN: Is the stock market going to crash?

isthestockmarketgoingtocrash.com

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Re: Show HN: Is the stock market going to crash?

#51

Post by mxschumacher »

American companies sell products & services outside of the United States. Comparing American GDP with the aggregate value of the US stock-market is deeply misleading, especially given a historical comparison: foreign markets such as China have gained in relative importance over timeframe under consideration.

When looking at debt, one should not just observe the nominal amount, but also the interest rates, which have never been lower. Large companies can tap public debt markets and borrow billions at 1.5% over a timeframe of ten years. Risk is thus lower than the website suggests (at lower interest rates, a company can carry more debt). Additionally, returns to equity will be higher (the I in EBIT is smaller, so profits are bigger).

Re: Show HN: Is the stock market going to crash?

#52

Post by matthewmacleod »

TekMol wrote: post #25

The page strives solely on it's nice graphics, and sensationalist wording. There is little to no content of substance. For example the page calculates "Market Overvaluation" as the US stock market value divided by the yearly US GDP. Hilarious.

This comment strives solely on its mid-brow dismissal of a project with no content of substance to back it up :)

Bit glib, but what is the problem? How does one traditionally measure market overvaluation?

Re: Show HN: Is the stock market going to crash?

#53

Post by solatic »

truffle_pig wrote: post #27
avip wrote: post #20

I love the design and phrasing. This is just a well-done website. It would be really interesting to see your collapse pyramid over time. How did it look in 2000? 2008?

This is a good idea. I'm going to implement it as a timeline I think.

Since the diamond is a 2D figure, then if you add time as a third dimension, you'd get a diamond-shaped cylinder. Add a blue-red spectrum color code, whereby blue is a time slice with a small surface area and red is a time slice with a large surface area, and you'd be able to plot the dangerously large Diamonds of Economic Failure over time in a way which clearly indicates when the danger signs were worst.

Re: Show HN: Is the stock market going to crash?

#54

Post by wheaties »

runako wrote: post #35

I've never seen market valuation expressed as market cap as % of GDP. I'm not an economist, so I'll leave the detailed arguments to them. But it would be at least useful to explain why you think this is a meaningful metric as compared to those typically used to measure market valuation (e.g. P/E ratios etc.). Your graph also ties your valuation metric to the 2000 peak and the 2008 peak. However, there were crashes in…

One issue I see here is how much of the S&P500 (or general market cap) are we attributing to a US-centric view of global companies? That is, if a company is "in the US" but economically are not.

Re: Show HN: Is the stock market going to crash?

#55

Post by speeder »

knewter wrote: post #19
SmellTheGlove wrote: post #15

Earlier quoted context omitted.

I wouldn't worry about student loan debt being a problem. It's very likely that they're going to get a bailout before a bubble bursts. Where on earth did I come up with this, you ask? Easy - I just paid my student loans off last week. It's only natural that everyone else will now get bailed out! Seriously, though, this is a real problem and we need to do something. Even if it doesn't have a direct effect any time soo…

> Seriously, though, this is a real problem and we need to do something the thing we have to do is not borrow money we can't repay. capitalism is a distributed system. borrowing money you can't repay is a broken local protocol. don't try to fix that with anything but fixing it locally.

I was forced when I was 17, to pick a private college, people didn't let me do what I wanted.

At same time, I was repeateadly promised by all 'adults' that I was very intelligent, and that getting into a college would ensure I would get a job, and it is why it was so important.

After lots of struggling I ended doing what people wanted, got in a college, and I had no way to pay for it, so I got into debt too. (and I hate debts, I used to never get into any debt at all).

Around time I graduated, the last crash happened, my country never really recovered from it...

I am 29 now, and I can't get unemployment benefits, because I was NEVER employed in first place, all work I list on my LinkedIn was by freelance-style contracts, I never found the promised jobs...

I did recently finished paying almost all my debts (I still have some, and my net worth is still negative).

But 'not borrowing money' wasn't really an option.

Re: Show HN: Is the stock market going to crash?

#56

Post by wuliwong »

benmarten wrote: post #31

How is the heat matrix diagram calculated? It seems to be wrong. Public Debt has a 3.7/10, while it looks like its around 8.5 in the heat diagram. Looking at the individual ratings: - Household Debt: 5.5 / 10 - Market Overvaluation: 9.1/10 - Market Volatility: 0.3/10 - Public Debt: 3.7/10 --> SUM = 18.6/40 or 46.5% Also I noted: Drawing a linear trend line through the "Market Overvaluation" diagram, does make it look…

I'm also confused by the public debt number. It is far higher now than in 2008.

Re: Show HN: Is the stock market going to crash?

#57

Post by tjr225 »

knewter wrote: post #19
SmellTheGlove wrote: post #15

Earlier quoted context omitted.

I wouldn't worry about student loan debt being a problem. It's very likely that they're going to get a bailout before a bubble bursts. Where on earth did I come up with this, you ask? Easy - I just paid my student loans off last week. It's only natural that everyone else will now get bailed out! Seriously, though, this is a real problem and we need to do something. Even if it doesn't have a direct effect any time soo…

> Seriously, though, this is a real problem and we need to do something the thing we have to do is not borrow money we can't repay. capitalism is a distributed system. borrowing money you can't repay is a broken local protocol. don't try to fix that with anything but fixing it locally.

What if I can afford to repay it? So what? My wife and I can easily afford the 1500$ a month minimums we have to pay(We pay more than our minimums in an effort to expedite the process) but while we do pay off these loans we also choose not to have children, or buy a house, or buy cars. I can say without a doubt that our educations have been valuable, but not in the sense that we learned have anything other than that higher education is a signaling scam designed to keep people poorer than ourselves outside of the working class.

Re: Show HN: Is the stock market going to crash?

#58

Post by choxi »

pillowkusis wrote: post #18

A site like this seems dangerous at best. Nobody can predict the stock market. Nobody can predict when a stock market is more likely to crash. This site tries to indicate otherwise. Whatever causes the crash it probably won't be one of the indicators listed here.

I think the subtitle sets expectations pretty clearly:

> No one knows for sure, but there are indicators that can help us guess. We can chart these indicators to give us the illusion of foresight.

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