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I think the point is that a worldwide pandemic, 40 million people unemployed, China annexing Hong Kong, and mass civil unrest should logically lead to far more
by voisin 6y ago
I think the point is that a worldwide pandemic, 40 million people unemployed, China annexing Hong Kong, and mass civil unrest should logically lead to far more of a downturn than merely 10% off all-time highs (which were already several standard deviations above long term price to earnings ratios).
- dirtnugget 6y agoDoes it really though? Money doesn’t care about people. Why should that annexation be harmful for the market? Why do 40 million unemployed a dent? They’re not the ones spending money because this crisis hit bottom first.
- mullen 6y agoThis is what I am starting to suspect. From the Stock Market's perspective, the economic bottom 30% don't matter. They don't contribute much to the economy and whatever happens to them does not really matter to the Stock Market. Pre-COVID, I would never have believed that.
- voisin 6y agoGo back to the market activity during the Arab Spring. The market definitely does care about uncertainty RE trading partners and Hong Kong is a huge trading partner. 40 million unemployed domestically means lower demand for many businesses. Who will buy new cars (with debt), houses (with debt), consumer electronics, etc etc?