I have no idea how while Trump is a) ripping out the underpinnings of constitutional law which, in turn, is all that holds up all other laws (including transactional) in the US AND b) ripping apart the post war Western defense alliance leaving Europe and Australia completely exposed and vulnerable AND c) going to impose global reciprocal tariffs, which are going to kill trade and plunge the country and the world into the greatest economic depression (coincidentally) since the 1930’s, how the market isn’t down 75% - 90% by this point. Hopes & Dreams? Hallucinogens? Heroin?
What power on earth is allowing Hedge Funds, Banks and Small Investors the justification to keep betting on an underlying business system which is literally being pulled apart at the seams with no real hope of being functional shortly. How is this happening. It’s like I’m taking crazy pills every day. The market should look at what Trump’s already done (much less what he still promises to do) and say, whoop that’s us, we’re audi, this is insane, we can’t trade our value as a corporation any longer, we don’t know where supplies, labor, administration, distribution, sales, or any law governing any of it stands, we have to pull all our monies out, and put them someplace safe like our pockets.
What is happening to keep the market propped up, when literally everything, everywhere that it needs for stability in projected earnings is being hollowed out beneath it?
edit 2/20 : lol edit 2/21: lol
Trump: “I’ll run the USA like a company!”
How business people run companies: Fire all the competent people and replace with cheaper new hires. Report huge short term profits due to reduced payroll. Stock goes up. CEO ditches company and sells off stock before all the new hires completely wreak the company and tank the stock price.
Why wouldn’t the stock market be up at this point?
Because the stock market isn’t a measure of how well a country is operating. On the contrary, deregulation allows companies to boost profit via harmful means. Rich people got it good under Trump/Republicans and therefore the stock market thrives until disaster strikes and it all comes crashing down.
That depression that’s coming is only for the working class. The rich will keep making money using us indentured workers as slaves to make more money.
Investors understand that he’s going to do everything he can to transfer wealth to the top. That makes it safe to invest more because more will be coming in. That’s my casual guestimate.
As others have said, the stock market has little to do with reality. It’s focused on money and business reports. As long as companies are showing profits, the stock market literally doesn’t care.
Something only hits it when businesses hit it. Look at today’s market. Walmart posted bad futures and the whole market recoiled (only a bit but still).
There’s also just the denial phase. Lots of people, at lots of levels, are dependent on the stock market for their own finances. Literally everyone with a 401k has an interest in the market doing well. Saying “welp, we’re fucked” is just not something that anyone wants to put towards wall street. It’s why we have market “crashes”, because people hold out until the water covers the bow of the sinking shop then they freak out and bail out at the last second.
There’s also just the denial phase.
As evidenced in The Big Short when it was very clear to banks and regulators that the whole mortgage shell game was falling apart and they all refused to act on it.
See, now I have had a few things pegged as being in the denial phase for a while. I’m in Australia, so the housing market I have had pegged to collapse, also I figured we would be heading into a recession coming on 3 years ago and changed businesses to “weather the upcoming recession”
Now while things have cooled off since then, and I still think both elements are overcooked, I obviously moved way to soon.
So my question is, how do you time the denial phase? The housing market issue has been going on for about 30 years from what I can tell (though it got more reasonable for half a minute a bit over a decade ago and then went stupid again).
In my lifetime, and I’m 40 now, I haven’t seen a proper major correction where bad decisions and greed was punished. I should have been “taking stupid risks” the entire time and I would have been just fine.
I don’t have an answer to any of your questions and I don’t think many others will either. It seems like one of those things that you look back at with the clarity of hindsight in order to map things out.
The stock market is speculative and is not a reflection of reality nor is it a good measure of the health of an economy.
This is the pump before the dump. Institutional investors are slowly exiting and retail investors are making up most of the volume.
We were due for a correction or crash but Biden and the Fed held it off long enough for the election. There is a lot of money sitting on the sidelines waiting to grab assets, housing etc on the cheap.
Grifters like Trump can’t wait to get it started. In every crisis there is opportunity what Trump does with this crisis will likely reshape our government.
Good thing Elon is trying to kill social security and other assistance programs ahead of the fall.
He really wants to see people suffer.
deleted by creator
Because the stock market doesn’t reflect real life
The stock market will always be up and going up if people keep putting more money in it.
Stocks represent all assets that can be sold and traded publicly. Although US infrastructure is crumbling, all the shit is still there.
Times are hard but we still have obscene material wealth (for now, here is hoping climate change doesn’t reduce that too much). Ironically, stocks should have gone down in the pandemic cause of the productive capacity dropping but it didn’t cause a lot of cash was printed.
For stock prices to tumble down and crash, people need to take their money out of it. That’s only going to happen if there is another economy that people prefer to put their money in (like China).
So what is more likely to happen is we keep having stock prices go higher and higher, cause more and more money would be in circulation (so inflation). But our productive capacity could drop. So we could become much more poor, have little wealth all around, and go to the baker to buy 1 loaf of bread with $1000 price tag.
TLDR: when your economy represents basically “everything”, it won’t crash unless human civilization crashes.
It’s almost like financial value is artificially assigned or something, and not, like, intrinsic.
To expand: the economy runs on many fuels. Progress, yes. But also blood.
The progress is also made of blood
Have we checked inside the billionaires to see what they are made of ?
I hear they’re full of candy, like a fat bloated piñata.
Then we should string them up in a tree and beat them with sticks,
… To get the candy.
Blood from crushed orphans is up 300% this year! 📈
yes financial value isn’t intrinsic, it’s created, but it’s created by group acclimation, a thing is worth what a) someone of a group of someones says it’s worth AND by b) a second group who is willing to pay what the first group has valued that thing at, for that thing. but it’s an understanding, which is based in observable, recordable, and prooveable metrics BASED equally on the intangible of trust in the underlying business system upon which it is offered. That second bit can’t exist in the current environment, when the Constitution and all law based on it, are becoming meaningless.
You kind of get it with your own answer but are refusing to see it.
Why hasn’t the market dropped yet with all the fuckery going on in DC? Because the impact of said fuckery has not occurred yet. Let this be a chance for some awareness of your own personal information bubble and possible over doom scrolling.
This is not saying this administration isn’t going to cause some terrible shit. It just hasn’t stuck yet. Nothing the administration has done has prevented Microsoft or Google or Netflix from collecting their subscription fees. The closest thing so far has been tariffs that came and went.
The closest thing so far has been tariffs that came and went.
For the record, they were only delayed for 30 days, not cancelled.
Also, Trump just announced some more today, so that’s fun.
You’re right that the actual brunt of the effects haven’t hit yet, though.
Why hasn’t the market dropped yet with all the fuckery going on in DC? Because the impact of said fuckery has not occurred yet.
This is s completely incorrect take on the stock market.
Rule #1 of the stock market is that none understands how it responds to inputs.
Rule #2 is that it attempts to factor in future expectations, so if you wait for something to happen, the impact is already accounted for in the price if the stock.
Market frenzy, people piling on when FOMO takes over, etc all make it impossible to have any level of certainty. So it’s a valid question to ask why all of the current fuckery has not translated into market chaos.
So it’s a valid question to ask why all of the current fuckery has not translated into market chaos.
My reply addresses this with your 2nd point. What I’m trying to say is that maybe the market did factor in the fuckery and has so far believed it to be a nothing burger.
Everyone could be wrong, of course, but so far that is what the markets indicates. So naturally the follow up questions should be, are the markets wrong? Or am I (OP) consuming too much media from my bubble which is overexaggerating the doom and gloom?
The people with the money are the ones running shit. Everything works until they say it doesn’t. Or until we all do.
Much stock value is artificial, but these companies still have infrastructure, brands and products.
And these things are truly worth a fraction of their assigned value - and no value at all to those who aren’t interested in them. The plumbing inside Microsoft is worthless to me except to maybe make a bong, but it’s worth billions to the company that requires it.
these companies still have infrastructure, brands and products.
And you assume this has intrinsic value? Brands and products?
If you woke up tomorrow and had full rights to the name Coca Cola™, would that not be of extreme value to you? Of course it doesn’t have the intrinsic value of a gold brick, but it’s still valuable and stock fluctuations won’t change that fact.
And you assume this has intrinsic value?
I assume they’re making a point about hard assets versus pure speculation, like comparing real estate to crypto coins.
Stock market is basically meme gambling these days no different from crypto. Its not a reliable indicator of anything.
The stock market is delaminated from the real market, and has been for a while.
How this has happened is not simple but a short version is that as the stock market has evolved it became a key place to put assets with a level of growth expectation. As time goes on the demand for a place for investment without effort (starting your own business vs investing in a businesses stock) keeps getting larger and the alternatives keep getting less desirable (bonds, GICs, etc.) causing a sort of investment feedback loop. There is X amount of money that needs to be invested each year lets say, and if every thing is crashing (waves at the general state of things) it means nothing is since pensions, people and firms still need to have that investment somewhere.
As long as there is still some expectation of return and faith in the current stock market you will have investment and as stocks (and therefor the market) are measured by the demand (the buy vs the sell) we have the current situation. If you want to see what happens when a stock market looses people’s faith and therefor investment look at China’s stock market crash https://en.wikipedia.org/wiki/2015%E2%80%932016_Chinese_stock_market_turbulence
Maybe we should abolish stock markets.
That’s the goal of actual leftism
If you believe all kinds of capitalist ideology and pseudo-science, then it might seem strange.
But in reality fascism is great for capital. Also the fed prints hella money to prop it all up.
I think economy, in the sense of money as a concept, is an illusion. We all just agree that money is worth something. When our belief in the American Dollar fails, so would follow any stocks tied up in businesses that rely upon it. Those trillions and tax cuts that Musk has? Worthless.
shrug
That is my hypothesis, anyways. My guess is that we are into a Weimer Germany sort of scenario. I have been converting my money into Euros, with the assumption that America as we knew it is going to die horribly within years. Hopefully, my efforts are pragmatic, not paranoid. 😕
I have been converting my money into Euros, with the assumption that America as we knew it is going to die horribly within years. Hopefully, my efforts are pragmatic, not paranoid. 😕
Hopefully, your efforts are paranoid, not pragmatic.
(Not blaming you for how you’re coping/preparing, just not personally ready to give up on our country yet) The past is useful because history rhymes, but the future isn’t written in stone
More than fair. It would be nice to rub the back of my neck and feel embarrassed for overreacting. Here’s hoping your timeline is what happens.
How big are the odds that the billions (later corrected to millions) of saving (a single day of borrowing btw) they did are competent and not a fascist hyper capitalist dictatorship rising?
