There's something seriously wrong with the stock market

[Calculating]

The nasdaq is back near record highs on the greatest unemployment since the great depression? Really? I guess all those unemployed people don't matter because they were "the poor" anyway. Just look at jokes like Tesla and Uber, Uber lost 3 billion dollars in a quarter and the stock went up big?

I honestly hate the fed chairman Powell for this mother of all bubbles he's created. It's like the fed have just outright said that the markets will never be allowed to correct again no matter how awful the real economy is. This whole system is so corrupt that it simply all deserves to burn.

[Newest Reality]

1. I guess...

I guess you didn't hear about our bad divorce. It was terrible. Wall St. got the entire settlement and left us for the Kakistocracy. They said we were so worthless that they just can't take it anymore.

Now, we sit in a one room apartment that we are about to be evicted from with nothing but a cracked TV, a card table and chair and some can's of beans. We have no idea what they did with the kids.

[pwb]

2. Trump bankrupting us Propping up the greedy.

.

[guillaumeb]

3. A combination of quantitative easing,

and betting on which stocks will rise this year.

[procon]

4. Corporations will make more profits when they cut

labor costs. They can force existing workers to do mandatory overtime, or contract out to temp agencies,or simply go with automation or online sales.

This is a win for Big Biz. Even if they do hire new workers in the future they will pay them less and offer fewer to keep their profits up.

[NRaleighLiberal]

5. stock market has no soul or connection to politics or life

it just is

[Under The Radar]

7. That isn't true. Markets are fueled by speculation on profitability

The markets are artificially elevated because the belief that profitability will soon return because health restrictions are being dropped in favor of full employment with hopes of returned retail spending, not only in the US but world wide.

[doc03]

6. I think fundamentally the economy is in good shape and

with all the money pumped into Wall Street over the last few weeks it will recover very fast.
The Obama Stimulus reversed the economic downturn in 2009 in a few weeks. It took years
for the economy pull out of the that recession then but it was in a total shambles before Obama
took office. I fear the economy will be pretty well be on track by election time. I remember back in
2009 not one Republican voted for Obama's stimulus but this time Democrats may have given him
his edge come November. I hope I am wrong.

[DetroitLegalBeagle]

8. My friend agrees with you

He day trades in his spare time and has near doubled his income from doing it so I am assuming he knows something about market dynamics. He says the pandemic and the economic consequences are "priced in" mostly now. He says the drop we saw in the market and the economic fallout were not due to systemic issues or fundamental problems. Had COVID never happened, the market will still be performing as it was and unemployment would still be low.

[Disaffected]

21. But beware of

anyone who claims they make large amounts by day trading. Maybe for a while if lucky but the odds are high it won't last.

Otherwise, I would say his analysis of the situation is probably correct IF, an effective treatment and/or vaccine for Covid are developed - if not it's anyone's guess.

[ProfessorGAC]

25. Ask Your Friend...

...whether his analysis included leverage increases altered D/E ratios by 12% relative over 3.5 years.
Truth is the market was inflated by nearly 25%.
The current valuation of DJIA, S&P, and the Russell 2000 is about where it should be, BEFORE unemployment shot through the roof.
The upcoming impact of reduced consumption dollars & product segment inflation is not going to look like a recovery.
We've got 1 in 8 people operating on 40-60% of normal cash flow. It's literally impossible for less available money to not recess the economy, given it's 70% consumer spending. Literally impossible.
Your friend might have gotten lucky, but if he thinks the markets have rationally reacted to true macroeconomic conditions for the last 42 months, you should advise him to set aside a bunch of that "doubled" income.
He's not day trading. He's gambling.

[smirkymonkey]

26. Thanks ProfessorGAC!

I always learn a lot from you!

[still_one]

11. Sorry, not with 20% unemployment

[doc03]

22. The unemployment is 14.7% now. The unemployment is not a result of any

economic problem it is temporary from the corona virus. Once things open back up that number will
drop substantially. People have been holed up for weeks and there is lots of pent up demand. When things
open back up people are going to be out spending money. It may take a while to be back where we were but
not that long.

[uponit7771]

27. There's no recovery when 10 to 20% of the whole economy is not working

Close venue in large venue activities are a huge part of our economy

[still_one]

30. There are so many industries that are being damaged. Food, transportation, and retail.

People cannot pay their rents and mortgages, and some of these jobs being lost are not going to be coming back

Until there is a vaccine, or it burns out, there won't be a recovery. and a vaccine in the most optimistic scenario won't be available until the first quarter of next year at the earliest

[still_one]

29. According to trump's own economic advisor, May's unemployment rate is going to 20%

https://www.businessinsider.com/may-unemployment-rate-likely-20-percent-white-house-adviser-2020-5

Retail, transportation, and travel have been impacted the most, and they are not coming back for a while, and some will not come back at all, especially the small establishments.

There will be no recovery until a vaccine has been developed, and that won't be at the earliest until the first quarter of 2021, and it won't be a "V" shaped one as some like to say.

You maintain that unemployment is not the result of any economic problem. I disagree. With the deficit that was created from the trump tax cuts, and now the necessary stimulus injections due to the healthcare crisis, this is a major economic problem. Many people can't pay their rents and mortgage, and the feds and this administration have not pushed the banks and other lending institutions to move those obligations into forbearance. It is a hodgepodge between the lenders, and the mortgage holders and renters.

Perhaps you haven't seen the food lines in parts of the country where people are lining up for food. Millions of people are in a dire situation because they don't have a paycheck coming in. Feeding America is overwhelmed.

It will take maybe two or three years to start coming back, and that is only if things fall into place just right, and we don't have a second wave.

Read about the Great Depression and the 1918 flu epidemic. This is a serious situation, and a lot of people will never recover from it

[rockfordfile]

15. No

Majority of Americans blame trump for the virus outbreak that's out of control. Trump is consider un-American and he's impeached.

[doc03]

24. America has a very short memory, many think the economy was in a shambles when

Trump took office and Obama caused the 2008 recession..

[still_one]

32. Are you kidding me? Trump's trade wars hurt the farmers tremendously. While the economy has

chugged along under trump, the average growth rate was .3% Under President Obama the growth rate achieved a peak of 5.5%

Deficits have increased considerably under trump, in contrast to under President Obama and the Democrats. Those trump tax cuts are going to come back to haunt us

The Obama administration confronted the worst economic crisis since the Great Depression when it initially took office, and passed a massive stimulus package in February 2009 to jumpstart the economy, and it was successful.

Trump benefited from Obama's economic stewardship, but under trump economic expansion was very weak.

Because of trump's mismanagement, and ignoring the warnings from within and outside his administration of the pandemic, he has brought the country to its knees, both economically, and health care wise.

Except for his "true believers", people are not going to have short memories of this situation

[doc03]

36. That's what I said many people (people that voted for Trump) think the economy

in a shambles when Trump took office and Obama started the recession in 2008. Read it I didn't say that's what I
thought but Trump people do. That is what Fox News has hammered into their heads. I totally agree with you.
Trouble over 40% are true believers no matter what. The majority doesn't count it's who gets the Electoral votes.

[still_one]

38. +++

[essme]

9. Sociopaths. nt

[still_one]

10. The stock market isn't the economy, and the economy isn't the stock market

[smirkymonkey]

16. Thank YOU!

Manipulating stock prices with buybacks and layoffs and other accounting tricks does not have any relation to the overall health of the economy. When 20% of the population is unemployed and another large chunk still planning to avoid leaving home for anything but bare necessities for the foreseeable future, there is bound to be a major hit to consumer spending and corporate revenue.

[still_one]

18. Exactly. The 20% unemployment is a reality check

[kurtcagle]

12. Perhaps, though I don't think so

This presupposes that there isn't a resurgence in cases in the summer and that people rush out to start buying once again. Additionally, when even seasoned traders are going WTF, I think most people are going to figure that the fix is in wrt the market.

I'm seeing a lot fewer Trump followers on Linked-In, though more obvious trolls; for a while his sycophants were singing his praises and there was a general attitude that criticizing him was considered "political". Now, you see a lot more people at senior levels who are openly critical.

[Wounded Bear]

13. The Stock Market has been largely decoupled from the general economy...

any more, it's a casino for the hedge fund managers. Stocks used to be tied loosely to things like how much capital, equipment, and inventory it had. Now, not so much.

Any more, it's almost reflexive that when tons of people lose their jobs the market rises, thinking companies are shedding dead weight. Not so true this time, but like I said, it's kind of a relflex now.

[dawg]

14. Please don't hate on Powell.

We've had an extreme shock to the economy, and extreme measures from the Fed are warranted. They will help to ease the potential pain in the real economy.

As for the stock market, I agree with you that it's being delusional right now. It's pricing in a quick v-shaped recovery that wouldn't be possible even if we all woke up vaccinated tomorrow. (Lots of families and businesses would still be significantly damaged.)

I'll probably take advantage of the delusional market to raise a little cash sometime over the next few weeks. I'll probably be able to buy back at a lower price once reality sets in. But, if not, I'll still have the cash and I'm probably going to need it.

[NoMoreRepugs]

17. When TRILLIONS are pumped into the stock and bond markets artificially

propping up prices reality is a distant memory. For those who talk about “increased profitability” u mean declining profits with an ever shrinking number of shares to produce fictitious eps/p/e’s and momentum that isn’t really there.

[safeinOhio]

19. Pretty fragile, I would think.

Some really bad news on a Friday night and they will be jumping out windows Monday morning.

[Midnight Writer]

20. 3 reasons.

1) American corporations are no longer reliant on American labor. They can get cheaper labor elsewhere.

2) American corporations are no longer reliant on American consumers. There are larger and more lucrative markets elsewhere.

3) American oligarchs are supported by the US Government. We will spend trillions to ensure the rich are not inconvenienced, but will spend very little to help working class folk.

[Karma13612]

23. Horrible isn't it?

But please remember one crucial thing about the insufferable stock market.

It isn’t just the filthy rich repukes who have money in the stock market.

I am not rich by any stretch. Right now, I am living on my monthly SS income as a retiree since I turned 65 last year.

I had two long term jobs in my life. Plus a lot of short term ones. The two long term jobs had pension plans where the employer put a bit of money in the stock market, and you could put in some on your own.
Now, for those of you who are really savvy in the market, you would say I should have simply put the money in this or that fund etc.
Well, I wasn’t savvy. I left it in mutual funds and watched it tank, and rise and fall, stomach sick most of the time. Lately I can’t even stomach looking at the account. Towards retirement, I was instructed to place my money in a fund that was geared towards keeping principal and very low risk, so I guess it means I’m in bonds now.

This was a pension where I have X amount of money and pray the market doesn’t tank. When it is gone, I am left with just my monthly SS check It is not the type of pension where the company simply says you will get $xy per month for life.

So, as much as we all want to hate on the stock market, and we hope it crashes and makes Trump look bad, that is wishing a lot of retirees a very lean existence.

I wish a LONG time ago that some governmental body would have required that employees get to choose where their money goes, instead of the stock market. It would be a lot safer to be in CD’S.

I understand the concept of pre-tax and Roth and 501K, etc.

What I am saying is that the insrument in which my money was placed was too limited. There should have been more explanation for those not savvy in finance. It was wrong and dangerous.

Hope some of this makes sense.

I did the best I could, and am now left with praying the stock market doesn’t get worse.

[JCMach1]

28. #Eugenicscapitalism loves death and unemployment

[I_UndergroundPanther]

31. We would be way better off

As a country if capitalism dies.

[struggle4progress]

33. A two trillion dollar bailout to the rich helps float a lot of junk

[tavernier]

34. No, They heard that Pelosi would soon be in charge and things would be looking up

[shanti]

35. The U.S. will be gutted

by the time they are gone

[tinrobot]

37. I can sort of understand NASDAQ

A lot of the companies on that exchange are internet/computer companies that are not nearly as affected as some. They can still do business over the web, most of their employees are able to work at home, etc.

I don't understand the S&P 500 and other segments.

[TheFarseer]

39. You have to remember two things

Our laws have rigged it so the stock market will generally go up. And 2nd, the market already crashed. Now, I believe, it’s in recovery mode and people are getting in just for fear of missing out. I speculate it will go down in a long slow slide based on fundamentals starting any time now. But I’m not an expert.