General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCan we just admit that the markets are just a reflection of Fed policy and nothing more?
Last edited Thu May 28, 2020, 02:13 PM - Edit history (1)
The macroeconomic numbers are the worst since the Great Depression, but the markets are steadily climbing higher.
And, please spare me the "markets are forward looking institutions" bullshit. No one can tell me that they know exactly where the economy will be in 3 or 6 or 9 or 12 months from now.
I know that a former Obama economic advisor spooked a bunch of people with how we're going to have a V-shaped recovery, but he's full of shit. He based his analysis on a recovery after a hurricane, and he's right if there's not another hurricane in the distance about to land on shore. We could just as easily have a 2nd outbreak which will be worse than the first.
All those billions paid in bonuses to "geniuses" on Wall Street is just a facade, just marketing to get people to believe in bullshit.
The markets are based on their access to cheap money. The Fed cuts rates. Markets go higher. The Fed raises rates. Markets go lower. The end. No need for some highly-over-educated, hyped-up, "Master of the Universe", hedge fund manager who makes billions handicapping stocks.
--On Edit--
Richard Wolff explains it better than me.
jimfields33
(15,789 posts)The markets are confident we wont have 40 million unemployed in December. The market is right about that.
Yavin4
(35,438 posts)Seriously. How do you know that we won't be on lockdown again in December? The infection rates are still climbing. If anything, there are probably more cases than we know because we aren't collectin data.
jimfields33
(15,789 posts)Maybe a few might but all 50? Very doubtful.
dawg
(10,624 posts)People aren't suicidal. States and businesses can stay open all they want. If 3000 people are dying every day, most customers are smart enough to stay home.
uponit7771
(90,335 posts)... didn't lock down like Wuhan did and nothing close to Korea.
dawg
(10,624 posts)I hope we won't have 40 million unemployed in December, but if we have a second wave, we might be grateful for it to not be even worse.
SoonerPride
(12,286 posts)If not 40,000,000 then 35,000,000?
25,000,000?
Whatever the number it will be catastrophic but the market doesn't care because it is getting free fed money and is detached from corporate earnings.
dawg
(10,624 posts)Right now, other than a few unlucky souls who were touched by the virus, the rich are feeling just swell.
They are optimistic by nature. After all, things just always seem to go their way, don't they? Why should that change now?
Hoyt
(54,770 posts)pay unemployment benefits that are close or even more than their income while working.
They'll offer grants to businesses who keep employees on, or convert them to loans if not. Government will keep markets liquid. They'll pay CV19 healthcare costs, expand Medicaid or subsidize ACA. Government has -- and will likely again -- provide stimulus to people, even those who technically weren't hurt directly by the virus.
How long government can continue doing this is questionable, but every day moves us closer to better days. We learn more about the disease, treatment, the future, etc. And, truthfully, not sure our economy is doing worse than comparable countries. Doubt we will return to a pre-virus economy anytime soon, though.
I am surprised at how well the market is holding up, but it's not just rich people responsible for that. The economy depends on the survival of workers. Apparently investors think we are going to come out of this better than earlier projections/fears, even if there is a second or third spike.
gibraltar72
(7,503 posts)The fed has floated so much money that the corps. have no where to put it to make money. They know they can't sell stuff so why make it. They are putting money in short term. I call it the theory of the bigger fool. They think someone else will pay more in a couple weeks. Eventually you run out of fools.