This recession is simply unlike any other in history in its cause. This wasn't some market bubble that finally popped like in 2008 - this is a near total shutdown of very import parts of the...
This recession is simply unlike any other in history in its cause. This wasn't some market bubble that finally popped like in 2008 - this is a near total shutdown of very import parts of the economy. It happened suddenly and has an indefinite endpoint. This stimulus bill should be nothing more than a lifeline until we get the virus under control - that is the only way to get the economy working again and climb out of this. That fact that only like 10% (not sure on the exact numbers) of this bill goes directly to hospitals and healthcare meant to combat the virus seems incredibly short sighted to me.
Its crazy to me how much the stock market is climbing these past few days. I anticipate it to crash further once reality sets in that this isn't a couple weeks ordeal we are going through.
Its crazy to me how much the stock market is climbing these past few days. I anticipate it to crash further once reality sets in that this isn't a couple weeks ordeal we are going through.
I'd wait/ am waiting for the pandemic to hit the US full force. Four arguments: It's hard to overestimate the psychological impact of local people or loved ones dying on TV because of missing...
I'd wait/ am waiting for the pandemic to hit the US full force. Four arguments:
It's hard to overestimate the psychological impact of local people or loved ones dying on TV because of missing health care (see Italy).
I think the US-specific phenomenon of increasing medical bankruptcies and reduction in discretionary spending due to health care costs has been hugely understated in media and consequently in the markets once we close in on peak-corona.
Trump will have to walk back or go through with re-opening the country way too early. Either way that's going to hurt markets.
Liquidity issues of small businesses will hit when bills come due. That's when bankruptcies will start happening and the cycle of more bankruptcies continue. This is when the fact that joblessness will last for a long time manifests itself.
The market is waiting for at least these four shocks. I'm willing to bet significant amounts of money on the market still having a lot further to go. I'm not looking to invest at the bottom, but further down the decline before things start going up again.
If the economy tanks because a bunch of storefronts go under, it is absolutely the landlords and creditors who should lose their shirts and not the store owners. A store that continues to operate...
Liquidity issues of small businesses will hit when bills come due. That's when bankruptcies will start happening and the cycle of more bankruptcies continue. This is when the fact that joblessness will last for a long time manifests itself.
If the economy tanks because a bunch of storefronts go under, it is absolutely the landlords and creditors who should lose their shirts and not the store owners. A store that continues to operate can simply. . .continue to operate and generate economic activity. If you let the store go under, then you've got a vacancy that needs to be filled but can't because because all the people who would have started a business have no money to restart. The lag time to catch up on production gets waaaaay extended if you try to save the landlords, shareholders, or creditors. They are the least value-additive parts of the production chain yet our entire economic system is predicated on protecting their fortunes.
Well, some is probably priced in, but confirming widely suspected predictions does move markets, as the uncertain future becomes fixed history. And things are plenty uncertain lately. It seems...
Well, some is probably priced in, but confirming widely suspected predictions does move markets, as the uncertain future becomes fixed history. And things are plenty uncertain lately.
It seems likely that there will be plenty of market-moving bad news.
As the infection and death rates go up in different parts of the world, this will be in some ways confirming what is already widely expected. But exactly how well or badly different regions handle...
As the infection and death rates go up in different parts of the world, this will be in some ways confirming what is already widely expected. But exactly how well or badly different regions handle it isn't known yet. It is almost inevitable that there will be important news, one way or the other.
For example, it wasn't clear until recently that New York City would be hit before other parts of the United States. It's not known where it will get really bad next. And the timing matters.
Economists say Congress’s response was too slow, too stingy and too focused on big Wall Street firms during the Great Recession, and that prevented a faster turnaround. Many analysts say Congress deserves some credit for doing better this time. This relief package is more than double the $830 billion measure that Congress passed in 2009. It came together in a few days, and it’s far more targeted at Main Street.
Middle-class and low-income Americans are slated to receive $1,200 checks (more for people with children). Small-business owners will soon have access to $10,000 emergency grants and millions in loans. And additional money is set aside for the unemployed. Only about a quarter of the money will go to large companies this time, including billions earmarked for Boeing and airlines.
But economists say two key problems remain: fixing the health crisis and getting money to people in time.
Constance Hunter, chief economist at KPMG, predicts that it will take at least six to 10 weeks for the government to disburse a significant amount of the money. That’s a long time for laid-off workers and small-business owners with no money coming in to wait. It makes it less likely that they will bounce back quickly.
“There isn’t some magic restart button for the economy,” Hunter said. “Before the money arrives, there will be a lot of collateral damage to the economy. That’s going to make restarting it difficult."
Majority Leader Mitch McConnell (R-Ky.) declared on the Senate floor Wednesday that “this is not even a stimulus package; it is emergency relief.” Economists agree. This $2 trillion isn’t about boosting the economy; it’s about trying to compensate people for what could be $2.5 trillion in lost business and wages in the coming weeks. And that’s a best-case scenario. Losses will be deeper if the pandemic lasts into the summer.
This recession is simply unlike any other in history in its cause. This wasn't some market bubble that finally popped like in 2008 - this is a near total shutdown of very import parts of the economy. It happened suddenly and has an indefinite endpoint. This stimulus bill should be nothing more than a lifeline until we get the virus under control - that is the only way to get the economy working again and climb out of this. That fact that only like 10% (not sure on the exact numbers) of this bill goes directly to hospitals and healthcare meant to combat the virus seems incredibly short sighted to me.
But there's also the tech bubble valuations and the pump-and-dump Trump economic policy to build short-term gains for reelection at long-term costs.
Its crazy to me how much the stock market is climbing these past few days. I anticipate it to crash further once reality sets in that this isn't a couple weeks ordeal we are going through.
I'd wait/ am waiting for the pandemic to hit the US full force. Four arguments:
It's hard to overestimate the psychological impact of local people or loved ones dying on TV because of missing health care (see Italy).
I think the US-specific phenomenon of increasing medical bankruptcies and reduction in discretionary spending due to health care costs has been hugely understated in media and consequently in the markets once we close in on peak-corona.
Trump will have to walk back or go through with re-opening the country way too early. Either way that's going to hurt markets.
Liquidity issues of small businesses will hit when bills come due. That's when bankruptcies will start happening and the cycle of more bankruptcies continue. This is when the fact that joblessness will last for a long time manifests itself.
The market is waiting for at least these four shocks. I'm willing to bet significant amounts of money on the market still having a lot further to go. I'm not looking to invest at the bottom, but further down the decline before things start going up again.
If the economy tanks because a bunch of storefronts go under, it is absolutely the landlords and creditors who should lose their shirts and not the store owners. A store that continues to operate can simply. . .continue to operate and generate economic activity. If you let the store go under, then you've got a vacancy that needs to be filled but can't because because all the people who would have started a business have no money to restart. The lag time to catch up on production gets waaaaay extended if you try to save the landlords, shareholders, or creditors. They are the least value-additive parts of the production chain yet our entire economic system is predicated on protecting their fortunes.
I believe it may be a dead cat bounce.
It's not based on nothing. Congress passing a major bill is very straightforwardly good news. But there will be bad news after that.
Well, some is probably priced in, but confirming widely suspected predictions does move markets, as the uncertain future becomes fixed history. And things are plenty uncertain lately.
It seems likely that there will be plenty of market-moving bad news.
As the infection and death rates go up in different parts of the world, this will be in some ways confirming what is already widely expected. But exactly how well or badly different regions handle it isn't known yet. It is almost inevitable that there will be important news, one way or the other.
For example, it wasn't clear until recently that New York City would be hit before other parts of the United States. It's not known where it will get really bad next. And the timing matters.
Okay, yeah, reading it over I'm not sure we're disagreeing on anything. I'm just emphasizing the uncertainty of it all.