Clearly I don't understand the stock market
June 9, 2020 at 3:40 AM - Views: 116 #324637elias39Participant
- Total Posts: 4,765
and we’ve been in a recession since February according to ‘officials’. Go figure.
Having fun yet?
June 9, 2020 at 3:55 AM #324649
June 9, 2020 at 4:05 AM #324652jerry611Participant
- Total Posts: 899
First off, the rich know their money isn’t in any danger. It doesn’t matter if Trump wins or Biden wins….they know their money is safe. So no worry there. The riots are not threat either because it’s either Biden or Trump through 2024. Neither want any major change to the system.
Second, lots of stimulus money still circulating around and talk that congress could pass another relief bill in the fall.
Third, unemployment numbers out last week were much better than expected which some see it as a sign as recovery.
Fourth, the oil situation has stabilized for now.
The market is now only 1,500 points down from it’s high in February. So the rich have already made their money back from the COVID downturn.
June 9, 2020 at 5:05 AM #324687
In case of de facto USD (De Jure is whole different story) it boils down to “creative” (to the extreme!) accounting in the form that mathematically equals a ponzi/pyramid scheme. The amount of negative money (ie. debt) that Fed keeps pumping to produce an accounting unit with positive sign, with which interest on debt can be payed, keeps climbing astronomically. USD cannot be considered a very safe storage of value, which rich fucks consider the primary function of money, on the contrary, general trust in USD keeps eroding due to domestic and international processes.
There’s actual “shortage of dollar” – in the sense of positive sign dollars that can be used to pay the debt nominated in negative dollar. The cost of paying debt for the astronomically debt leveraged hedge funds etc. and their mountains of derivatives has been increasing rapidly. The financial ponzi bubble is giant with very very muddy clay feet.
Situation is not in any way relieved by the fact that the foundation of the whole system, rent extraction by the owning class, is vanishing. The shortage of dollar is most acute at the bottom of pyramid, caring class people simply have no money left to pay rent or serve their debt, and that means that securities etc. financial instruments based on expectation that more rent could be extracted and debt could be paid are becoming worthless junk that nobody – except the Fed pump – will buy. But as Fed can and will buy only the junkiest junk of the top most junkies, more and more bottom layers of the pyramid are falling of into dedollarized and demonetized real economy, where genuine social capital – having friends and relatives who can help with basic necessities, networks of mutual aid, etc.
When the parasite – the financial dollar debt bubble – finally sucks out all the blood etc. bodily juices of the host – the dollar nominated real economy, what does being dollar nominated billionaire mean? Nothing, as without ability control people and extract rent etc. wealth dollar has no power and becomes just meaningless strings of numbers, not a thing.
June 9, 2020 at 6:43 AM #324709Ohio BarbarianModerator
- Total Posts: 14,654
It is better to vote for what you want and not get it than to vote for what you don't want and get it.--Eugene Debs
Show me a man that gets rich by being a politician, and I'll show you a crook.--Harry Truman
June 9, 2020 at 4:46 AM #324657
June 9, 2020 at 6:06 AM #324702Mr. Mickeys MomModerator
- Total Posts: 3,653
The U.S. Treasury can print as much money as they want, and when that happens, debt (which is the only thing that backs up our U.S. Dollar) increases.
It’s a game, and unless you play that game, swings up and down in the stock market won’t indicate a dog gone thing about whether Mr. & Mrs. America are “doing better than they were 5 years ago”. It means nothing of that order. What might be a better indicator is the amount of DEBT we have in the way Americans invest, and the Bond Market. That isn’t stable at all.
So, it’s more about debt, and how much our dollar will buy us day to day and long term. If we can’t earn enough to set aside money that’s constantly being printed. Congress just said that it would commit $2.4Trillion dollars to bail out all these businesses that continue to trade on Wall Street while laying off lots of their employees. The employed are essentially screwed.
The Federal Reserve has been one of the biggest purchasers of debt in recent weeks. It has essentially “printed” more than $1 trillion to purchase Treasuries. In turn, the extra money in the circulation has helped pay for the stimulus and prop up the U.S. economy and financial system.
But, if you look at who is in charge of putting money back INTO this system, backed by full faith in the U.S. Treasury…
Hell, no... I'm not giving up...
June 9, 2020 at 6:33 AM #324705
How do we protect our assets from run-away inflation, which looks to me to be the next step.
June 9, 2020 at 9:04 AM #324759
Depends on what you mean by inflation. Inflation of the debt bubble does not automatically turn into consumer price inflation. On the contrary, standard prediction is stagflation, as velocity of money in the real economy stagnates. As GDP is basically a measure of velocity of money, stagflation means shrinking GDP. Debt bubble is inflated to prevent the bankrupt Potemkin financial system of debt leverage going puff, not to provide consumers more purchasing power which could result in consumer price inflation.
June 9, 2020 at 6:31 AM #324704
The stock market is a measure of the happiness of the 1%.
June 9, 2020 at 6:46 AM #324710
June 9, 2020 at 10:16 AM #324795RufusTFireflyParticipant
- Total Posts: 2,328
… although she admitted it wasn’t original with her:
“The stock market isn’t a snapshot of the economy; it’s a graph outlining the emotional state of rich people”
June 9, 2020 at 10:29 AM #324797
I got it from Krystal Ball
June 9, 2020 at 7:16 AM #324719Red CloudParticipant
- Total Posts: 1,404
So you can see the fuckers still made money by and large. The question is: If you had retirement funds that LOST money, why is that so? We need to see how the super rich made huge fortunes recently, so much so they jacked up the average of the common investors to make it appear they too had made money.
June 9, 2020 at 2:52 PM #324825doh1304Participant
- Total Posts: 1,206
@redcloud.The biggest investors (I got this from J.P.Morgan, see below) pump up a stock. (this takes a lot of money, only the biggest banksters can play) Pension funds are then required by their fiduciary responsibility to buy that stock (buying a rising stock usually means to buy a stock after it stops rising) Then the major investor sells the stock (profit taking) if the bankster is big enough this crashes the stock. The pension fund is required to dump the stock (losing money in the process) The big investors then buy back the stock (at the after crash price) They can (and do) then repeat the process.
Note what happens to the pension fund: it is tricked into buying (mostly from the bankster) at an inflated price, then forced to sell (mostly to the bankster) at a loss. The bankster makes a profit on both ends of the process.
June 9, 2020 at 7:29 AM #324723Hobbit709Participant
- Total Posts: 1,799
at the expense of everyone else.
I don't waste my time teaching pigs to sing.
June 9, 2020 at 10:29 AM #324798
June 9, 2020 at 7:36 AM #324727
June 9, 2020 at 8:02 AM #324741doh1304Participant
- Total Posts: 1,206
is that there’s a sucker willing to pay that much for it. That sucker’s name is most likely “The Fed”.
The American government doesn’t want Boeing to go bankrupt, so they print money and give it to Boeing. But they can’t admit that’s what they’re doing so they buy up Boeing stock at an inflated price and just don’t tell anyone. In 1927 (and 1905 btw) it was the House of Morgan – but Morgan had to use real money, so it ran out and the collapse happened. The Fed can print up all the money they want, so the collapse never happens yet. The Fed – the government – has been trying to generate inflation for a generation, but it just doesn’t happen for an obvious reason: inflation follows the money supply. Give money to the 1% and only things the 1% buys will inflate – stocks, not groceries or cars or snarky t-shirts. You want inflation? Give money to working people, but no one is willing to do that, because that would allow working people to pay off their mortgages (and their taxes) with inflated (devalued) money.
June 9, 2020 at 6:29 PM #324849ArtfromArkParticipant
- Total Posts: 927
Apparently you haven’t had to deal with increasing education costs, housing costs, medical costs, nursing home costs, car maintenance costs, insurance costs, property and sales taxes, etc., etc.
June 9, 2020 at 8:08 PM #324877
This is the problem when word “inflation” is used with widely different meanings. “Fed trying to generate inflation” is a very doubtful claim, but I think the historical context here is interest rates vs. real income. Before 70s when purchasing power of middle class kept rising, it was profitable to take debt e.g. for education as investment in better wages, knowing that inflation of paper money would eat away much of the debt in relation to real purchasing power income. That changed with neoliberalism, stagnation and fall of purchasing power of wages. Most important factors were letting go of gold standard, increasingly fraudulent regulation regime and digital printing of new debt out of thin air by private banks of fractional reserve system, inflation of the debt bubble with more and more shady degrees of “money”.
As you say, at the same time the cost of essential goods and services has risen wildly compared to real income. The way official statistics define and estimate consumer inflation and purchasing power is fraudulent distortion of data for various political purposes.
June 9, 2020 at 8:20 AM #324747EvilLurkerParticipant
- Total Posts: 12
21 million unemployed. Small businesses closed forever. No revenue from sports. Airlines, hotels, bars, restaurants, gyms, salons decimated. Most of the economy shutdown for 3 months but stocks experiencing record gains.
June 9, 2020 at 8:00 PM #324874retired liberalParticipant
- Total Posts: 2,709
“Just more evidence that the stock market has nothing to do with the real economy”
But nobody listens. The stock market need to be divorced from the GNP. It just doesn’t apply.
If it did, why is the stock marked doing so well, when the rest of us are not?
We are an arrogant species, believing our fantasy based "facts" are better than the other person's fake facts.
If you are wrong, it will be because you are not cynical enough.
Both major political parties are special interest groups enabling each other for power and money, at the expense of the people they no longer properly serve…
Always wear a proper mask when out and about. The life you save could be both yours and mine.
June 9, 2020 at 8:21 PM #324879
GNP and GDP basically measure velocity of money in real economy. Investments in Stock Market etc. financial instruments and their market valuations are not included in GNP calculation, so in that sense they have always been divorced.
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