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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?

#831

Post by socrates1998 »

I think for the most part, it's this idea that things will go back to normal soon. And there wasn't anything structurally wrong with the economy like it was in 2008. Right now, the hardest hit people are mainly people with zero stocks (bartenders rarely have a decent portfolios).

The Fed has made bonds and savings almost worthless with all the money being pumped into the economy, so why not try to get in on this opportunity?

I think this all fools gold. We are going to hit 20% unemployment and earnings are going to take a massive hit. The stock market might not tank, but it also could break even.

At the point that people think the stock market isn't worth the risk, that's when you will get another big sell off.

In a weird way, both shorting stocks and going long stocks are both very risky positions right now.

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

#832

Post by zapita »

smegma2 wrote: post #525
zapita wrote: post #358

Earlier quoted context omitted.

I think you defined perfectly the defining problem of this generation in the US: nepotism. It is the root cause of so many structural problems that we see as unrelated. In particular the failure of the press to do their job and hold the powerful accountable. Not so easy when you went to the same school as them; got an internship thanks to them; were at a NYC roof party with them last week. Positions once available to…

Of all things, nepotism seems like an odd thing to single out. Do you have any numbers for this claim? It would be useful to hear e.g. what percentage of people secure positions through referrals/family members.

Why do you find it odd?

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

#833

Post by malandrew »

celticninja wrote: post #747
malandrew wrote: post #609

Earlier quoted context omitted.

> I think you mean funded by the tax payer, rich and poor alike The rich pay disproportionately a lot more. Most technology is funded by the rich either directly or through the majority of the taxes they pay. 97% of taxes are paid by the top 50%.

>The rich pay disproportionately a lot more. And so they should. the top 50% has a lower band of $41k annual income in the US. they are not rich, in many places they would struggle to support a family on that. >The top 1 percent of American earners pay almost 40 percent of all federal income taxes. That’s more than the bottom 90 percent pay combined that fact should not be celebrated as how generous the top 1% are bu…

I'm not arguing that they should or should not. I'm just pointing out that the people that are vilified are contributing a LOT more to keeping this ship we call a country afloat.

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

#834

Post by dang »

telaelit wrote: post #239
jl2718 wrote: post #195

Earlier quoted context omitted.

This is not at all the situation. Reality is the 1% (wealth) making the 10% (income) pay for the 90% (both) to support their investments with consumption and debt.

Trickle down economics doesn’t work. If it did then wages would have increased in the past 40 years, but they’ve remained stagnant while the rich get richer and cost of living skyrockets. But if you prefer to lick the boots of our plutocratic overlords, feel free

Can you please not post like this here? We're looking for curious conversation, not denunciatory rhetoric.

https://news.ycombinator.com/newsguidelines.html

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

#835

Post by dorchadas »

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.

That's exactly why tax cuts to the rich don't make any sense to me. Give tax cuts to the middle and lower classes, they're the ones who go out and actually buy shit, which drives everything else, really.

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

#836

Post by marcusverus »

pyuser583 wrote: post #627
marcusverus wrote: post #563

Earlier quoted context omitted.

Advocates of big government love these metrics that have been put through the academic ringer, so-as to spit out whatever tortured output is expected. Why look at this kind of esoteric figure at all? Why not look at, you know, real numbers? Spending as percentage of GDP: Denmark - 52% of GDP Norway - 55% of GDP Finland - 53% of GDP Sweden - 50% of GDP Iceland - 42% of GDP Average - 50.5% USA - 22% of GDP What does al…

The US poverty rate is very misleading. It’s not the percent of people in poverty. It’s the percentage of people below a level of income at which not being impoverished is impossible.

What data have led you to that understanding?

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

#837

Post by sjg007 »

ramraj07 wrote: post #43
nkurz wrote: post #2

https://archive.is/cmMx5 It's a decent article. Here are their 5 reasons: 1. Bets on a “V-Shaped” Recovery 2. Market Leaders Keep Rising 3. Corporate-Earnings Expectations Remain High 4. Old Habits Die Hard 5. The Fed’s Backing Personally, I'm betting we're still headed to a bloodbath, but slowly. This quarter's earnings are expected to be terrible, so this is already priced in. But the market is expecting a recovery…

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…

The rich always do well. I am surprised we put up with billionaires and rich Senators saying we need to go back to work when they could easily pay us to stay home for a few months. Essential workers could operate on shifts to reduce transmission rates of the virus.

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

#838

Post by WalterBright »

kennywinker wrote: post #825
WalterBright wrote: post #753

Earlier quoted context omitted.

A career spans 45 years. $1000 at 6% ROI compounded annually yields $13,747. Now consider adding $1000 to that each year.

If you only have $1000 in the bank, it’s not because you can save $1000 / year - it’s because that’s all you can save. And I used 30 years because 61% of americans aren’t 20 years old right now. And this is still the scenario where you don’t have a >$1000 emergency any time during that 45 years. My point is not that investing doesn’t work, my point is that most people don’t have enough capital to be a part of that sy…

> most people don’t have enough capital to be a part of that system.

Most people are not in the bottom quintile of income.

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

#839

Post by WalterBright »

jbay808 wrote: post #814
WalterBright wrote: post #754

Earlier quoted context omitted.

If you had a regular plan where you invest every year, and don't sell, you would have ridden out the 2008 fiasco just fine.

Yes! But if you were still in school in 2008 and putting your money into food and paying off student loans, the market performance isn't necessarily the thing that impacts your future wealth.

The 2008 recession didn't last that long.

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

#840

Post by WalterBright »

justin66 wrote: post #798
WalterBright wrote: post #755

Earlier quoted context omitted.

May I suggest examining "if 0.1% of your savings is in the market" again? Like what happened with the other 99.9% of your savings?

Without sperging out about the specific percentage: a situation where people have a tiny amount saved for retirement, and almost all their net worth in a house and car, is actually quite common.

Spending on a car is not an investment. It's no joke that a new car loses 30% of its value when you drive it off the lot. Essentially all cars lose value constantly, and that's not even counting the finance costs.
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