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There are already enough people unemployed just over the past week that would fill those jobs in a heartbeat... I'm not sure it's understood yet what kind of d

by Reedx 7y ago

There are already enough people unemployed just over the past week that would fill those jobs in a heartbeat... I'm not sure it's understood yet what kind of devastation is unfolding with small businesses, which make up ~50% of the workforce.

Frost1x 7y ago
This is going to have long term lasting effects that further suppress labor rates and further concentrate wealth/capital in the US. It's accelerating a problem we already had.
- kortilla 7y ago
  40% of the wealth in the stock market was wiped out over the last few weeks which drastically impacts the upper middle class and rich the most. Negative returns on capital do not promote wealth inequality.
  - chiefalchemist 7y ago
    Yes. But that's simply in the short term. A good number of these people have reserves that allow them to buy back in. In the short term, the middle to the bottom lose as well. But since they can't buy back in their piece of the pie falls into the hands of those that can. Like 2007/2008 this will ultimately result in a massive transfer from the Have-less to the Have-more. For example, small businesses will close and Amazon will pick up that slack. Easily.
    - cobookman 7y ago
      they can trade on margin. Making use of low interest rates. So when the market recovers, which it will. They can see greater gains. with fed interest rate at 0%. I’m sure the 0.01% can get incredibly favorable loans against their assets to double down.
      - chiefalchemist 7y ago
        "I can trade on margin" said no one with the rent / mortgage due. That aside, you're missing the point. The public stock market best enriches those with the most reserves. Everyone else gets trickled on.
        afjl 7y ago
        Not to mention margin calls if the stock goes down past a given price.
  - asdff 7y ago
    Any good financial manager would have went cash or established a short position. Even if you held, as long as you don't realize your losses you will be right back to pre crash levels in 2-3 years, just like in 2008 or any other recession. The wealthy have the capital to take advantage of the stock market, but are also insulated from the effects of downturns due to diversified financial investments and cash on hand. Recessions are also when the wealthy expand their property holdings.
    - whatshisface 7y ago
      >Any good financial manager would have went cash or established a short position. Yeah, they did, while losing money during the crash, which is why there was a crash.
    - simonh 7y ago
      Real people lost a lot of real money. Bear in mind most of the wealth of most well off people is held in shares. It's just not possible that all shareholders all sold before the crash. A lot of people lost a lot of money. The problem is not so much that some rich people are now somewhat less rich. Boo hoo. Let's rephrase that another way though. A lot of people that previously had the wealth and assets to invest in new businesses, grow existing businesses, create jobs and fund the development of new technology now don't. These are the primary ways wealth is actually used, and now there is less of it around to do those things. So a lot less of those things are going to happen now. If you either work for a company that pays you, or have customers that buy your stuff, this is a bad thing to happen. Companies will have less to pay you with, and customers will have less money to buy stuff with because the same applies to them too.
      - chiefalchemist 7y ago
        Or employee ownership is allowed to expand as a means to grow a biz. True, that won't fill all the gaps. But it's certainly an option worthy of more attention.
        simonh 7y ago
  - listenallyall 7y ago
    Much of what was "lost" was paper profits, artificially inflated in the first place, due to extremely cheap credit and massive demand spikes due to companies buying back enormous amounts of their own stock. Limited wage growth over the past decade, and reduction of benefits helped too. From a time horizon, US stock markets have only regressed 3 years, and both the S&P and DJIA are about double where they were 10 years ago, while NASDAQ is still higher than triple its early 2010 value. Market leaders like FB, MSFT, GOOGL, NFLX, AAPL have only fallen to levels they were at in 2019. You simply can't just focus on the decline without taking a hard look at how markets reached those heights in the first place and evaluating whether they were sustainable. Well you can, as you did, but it would be disingenuous.

by Reedx 7y ago

Frost1x 7y ago

This is going to have long term lasting effects that further suppress labor rates and further concentrate wealth/capital in the US. It's accelerating a problem we already had.

kortilla 7y ago
40% of the wealth in the stock market was wiped out over the last few weeks which drastically impacts the upper middle class and rich the most. Negative returns on capital do not promote wealth inequality.
- chiefalchemist 7y ago
  Yes. But that's simply in the short term. A good number of these people have reserves that allow them to buy back in. In the short term, the middle to the bottom lose as well. But since they can't buy back in their piece of the pie falls into the hands of those that can. Like 2007/2008 this will ultimately result in a massive transfer from the Have-less to the Have-more. For example, small businesses will close and Amazon will pick up that slack. Easily.
  - cobookman 7y ago
    they can trade on margin. Making use of low interest rates. So when the market recovers, which it will. They can see greater gains. with fed interest rate at 0%. I’m sure the 0.01% can get incredibly favorable loans against their assets to double down.
    - chiefalchemist 7y ago
      "I can trade on margin" said no one with the rent / mortgage due. That aside, you're missing the point. The public stock market best enriches those with the most reserves. Everyone else gets trickled on.
      - afjl 7y ago
        Not to mention margin calls if the stock goes down past a given price.
- asdff 7y ago
  Any good financial manager would have went cash or established a short position. Even if you held, as long as you don't realize your losses you will be right back to pre crash levels in 2-3 years, just like in 2008 or any other recession. The wealthy have the capital to take advantage of the stock market, but are also insulated from the effects of downturns due to diversified financial investments and cash on hand. Recessions are also when the wealthy expand their property holdings.
  - whatshisface 7y ago
    >Any good financial manager would have went cash or established a short position. Yeah, they did, while losing money during the crash, which is why there was a crash.
  - simonh 7y ago
    Real people lost a lot of real money. Bear in mind most of the wealth of most well off people is held in shares. It's just not possible that all shareholders all sold before the crash. A lot of people lost a lot of money. The problem is not so much that some rich people are now somewhat less rich. Boo hoo. Let's rephrase that another way though. A lot of people that previously had the wealth and assets to invest in new businesses, grow existing businesses, create jobs and fund the development of new technology now don't. These are the primary ways wealth is actually used, and now there is less of it around to do those things. So a lot less of those things are going to happen now. If you either work for a company that pays you, or have customers that buy your stuff, this is a bad thing to happen. Companies will have less to pay you with, and customers will have less money to buy stuff with because the same applies to them too.
    - chiefalchemist 7y ago
      Or employee ownership is allowed to expand as a means to grow a biz. True, that won't fill all the gaps. But it's certainly an option worthy of more attention.
      - simonh 7y ago
- listenallyall 7y ago
  Much of what was "lost" was paper profits, artificially inflated in the first place, due to extremely cheap credit and massive demand spikes due to companies buying back enormous amounts of their own stock. Limited wage growth over the past decade, and reduction of benefits helped too. From a time horizon, US stock markets have only regressed 3 years, and both the S&P and DJIA are about double where they were 10 years ago, while NASDAQ is still higher than triple its early 2010 value. Market leaders like FB, MSFT, GOOGL, NFLX, AAPL have only fallen to levels they were at in 2019. You simply can't just focus on the decline without taking a hard look at how markets reached those heights in the first place and evaluating whether they were sustainable. Well you can, as you did, but it would be disingenuous.