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Stock market doesn't seem to agree with this conclusion.
by anilshanbhag 7y ago
Stock market doesn't seem to agree with this conclusion.
- patentatt 7y agoStock market != “The Economy”
- as-j 7y agoKai is that you? :)
- baq 7y agotrillions of dollars injected into it may have that effect.
- fallingfrog 7y agoGotta reinflate the bubble at any cost
- WJW 7y agoIt pays for pensions and old people vote a lot. So you can see why it might be a priority for politicians.
- fallingfrog 7y agoOh come on guys, I know that was a flippant comment but you see my point right? Due to the short term election cycle every politician has an incredibly short time horizon; in this case trump is trying to make things go back to normal by November and it’s just an impossible task. So the only thing he can do is massive stimulus and prayer. I guess this being HN people are more used to long winded soliloquies than single sentence terse remarks, served me right I suppose.
- coldtea 7y agoShame people can't have stocks without actual jobs and salaries to buy them in the first place, and even that after they first need to feed and shelter themselves...
- quietbritishjim 7y agoI don't think parent comment means "why don't all these poor people just sell a few of their shares, they'll be fine". They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline. (I'm not saying that I think the stock market is a good indicator of future economic growth and actually even the parent comment didn't explicitly say that.)
- coldtea 7y ago>They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline. I'd say the stock market value reflects traders' short term opportunistic view of what they can make in the stock market - especially with a huge stimulus package landing. So basically a bet on companies, not on working people income. Whether millions will be added to the jobless and new poor, is not much of a concern for such a bet.
- zebrafish 7y agoCompanies are ultimately dependent on working people income because in the absence of big government, companies are ultimately dependent on consumer spending.
- twomoretime 7y agoI don't know how anyone can trust the stock market right now. We're living in unprecedented uncertainty and on top of that, [literally] everything's closed and no one is buying anything, how can the economy possibly be growing like the market right now? Hot air that will crash eventually.
- baq 7y ago'analysts' say that a 'V-shaped' recovery is 'priced in'. same 'analysts' mostly didn't notice a 11M city going into full lockdown.
- frockington1 7y agoCompared to the begging news wave that everyone was going to get infected and millions of death per state, an 11M city going into lockdown was definitely priced in
- ironSkillet 7y agoI don't disagree with you that the stock market is inflated, but remember that stocks should be valued by looking at the estimated sum of their future cash flows, not just their current cash flows. And this is relative to a riskless cash flow, like e.g. treasuries, which are controlled by interest rates.
- twomoretime 7y agoHow long are people expecting these companies to stay in business? I think people are just buying in now while things are cheap and that's leading to a "recovery". Particularly given the longer the run the more risk averse cash you attract while prices are discounted. I bet there's another "crash" coming. I'm not sure enough to short my money where my mouth is though, so to speak.
- dakna 7y ago>Hot air that will crash eventually. If the Fed stops buying junk bonds, yes. Until then it looks like the current market prices this bailout in. https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL
- BjoernKW 7y agoThe stock market is commonly considered to represent what the economy is expected to look like in 6-12 months. If we assume a sharp downturn in Q1 and Q2 of 2020 and a subsequent uptick and prolonged recovery in the second half of 2020 and continuing in 2021 that pretty much corresponds to how stock markets have been reacting over the past few weeks.
- jazzyk 7y agoNo, it is just helicopter money distributed (to some) by the Federal Reserve. "Whatever it takes" to backstop the stock market is apparently working.
- BjoernKW 7y agoWell, while I don’t disagree that the current “Whatever it takes” influx of money helps with propping up the market right now there’s nothing that inherently prevents the economy from growing again once the immediate crisis is behind us. Make no mistake, there will be huge shifts and upheavals, regarding the ways we work and buy stuff for example. Many of today’s incumbents might not exist anymore in two years’ time but there’ll be others to take their place.
- jazzyk 7y agoYou make sense, unfortunately our "market" economy does not. Many of today's incumbents WILL exist in two years' time, because they are the recipients of "helicopter money" to prop them up, even if they deserve to die. The real losers will be small and medium businesses who will get some token (not enough to survive) help, so that politicians can claim that everyone was helped.
- bigmanwalter 7y agoThe majority of Americans work for businesses which are not listed. The stock market going up means bubkis for most people.