5 ms·

It is very simple. There are two things happening here. One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the ma

It is very simple. There are two things happening here. One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the markets and make it look the economy is fine. Two: interest rates are being held artificially low by the Fed and have been for a while. So people are desperate for returns and the only place to get it is equities. It is a pyramid scheme and must pop someday. Really just depends on how/what/when the Fed does.

dustingetz 6y ago
USA is all in, expect military to prevent the pop
- ComputerGuru 6y ago
  What will they do, put a gun to consumers’ heads to force them to buy exercise bikes and the latest iPhone models?
  - toby 6y ago
    Close, but you're missing a step: create new money, give it to Americans so they can afford to buy exercise bikes, put a gun to the head of anyone who dares challenge the US dollar hegemony.
    - randycupertino 6y ago
      Didn't Germany already try this exact method and fail following their post-WWI sanctions? They had to pay back something like $132 billion gold marks London Schedule of Payments required Germany to pay ~ $132 billion gold marks and issued a bunch of currency leading to hyerinflation? And resentment, populism and nationalism rose and things went pear shaped from there.
      - newen 6y ago
        They failed because they lost the war.
  - dustingetz 6y ago
    USA will negotiate ever more blatantly slanted Trade Agreements backed by sanctions (Russia), regime destabilization (Middle East) etc
    - stunt 6y ago
      You got down-voted, but it's naive to think that's not true. US and UK did orchestrate a coup to overthrow the democratically elected Prime Minister of Iran in 1953. (Operation Ajax) The Prime Minister was a lawyer and politician that took control of Iran's oil resources from British Anglo-Iranian Oil Company (What we know as BP today), and he was going to take more actions to take control over their resources. https://en.wikipedia.org/wiki/1953_Iranian_coup_d%27%C3%A9tat https://en.wikipedia.org/wiki/1953_Iranian_coup_d%27%C3%A9ta...
  - eeZah7Ux 6y ago
    Not: put a gun to people in other countries heads to force them to sign contracts that are very favorable to the US https://en.wikipedia.org/wiki/Gunboat_diplomacy https://en.wikipedia.org/wiki/Gunboat_diplomacy
    - dustingetz 6y ago
      Relevant: Map of US Navy "deployed carrier strike groups" in conspicuous locations https://news.usni.org/category/fleet-tracker https://news.usni.org/category/fleet-tracker
toby 6y ago
You're correct, but I think the "mystery" here is why a basket of unprofitable companies is outperforming broader indices.
- sharadov 6y ago
  Because of perceived future value, and if you had only certain avenues to bet on , then tech would be at the top. Added to that, gamified platforms like Robinhood, where there are a whole bunch of new, inexperienced investors. Robin hood added like 3 million customers in the months after covid.
- tachyonbeam 6y ago
  Investors are desperate for growth, and the prospect of investing in a company that could 10x in value over a very short span of time is just so tempting. It might seem outlandish, but there are many startups that have exploded right after IPO recently, so investors are asking themselves, what's the next hot stock, and how can I spot it before its valuation explodes?
- jackcosgrove 6y ago
  They're anticipating a greater fool comes along. Foolish retail investors invest in hype.
candiodari 6y ago
> One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the markets and make it look the economy is fine. And ... the predicted response (dollar collapse) has not happened so one can make 2 arguments: 1) if the result you like is the economy working then: Well Done! If the result you want is maximizing the value of dollars then: Bad Fed! Very very bad! 2) given that this hasn't collapsed the value of the dollar, why haven't they done this earlier and given the money to our government to spend on infrastructure ? Clearly we're still in the zone where more loans make the economy go smoother.

dustingetz 6y ago

USA is all in, expect military to prevent the pop

ComputerGuru 6y ago
What will they do, put a gun to consumers’ heads to force them to buy exercise bikes and the latest iPhone models?
- toby 6y ago
  Close, but you're missing a step: create new money, give it to Americans so they can afford to buy exercise bikes, put a gun to the head of anyone who dares challenge the US dollar hegemony.
  - randycupertino 6y ago
    Didn't Germany already try this exact method and fail following their post-WWI sanctions? They had to pay back something like $132 billion gold marks London Schedule of Payments required Germany to pay ~ $132 billion gold marks and issued a bunch of currency leading to hyerinflation? And resentment, populism and nationalism rose and things went pear shaped from there.
    - newen 6y ago
      They failed because they lost the war.
- dustingetz 6y ago
  USA will negotiate ever more blatantly slanted Trade Agreements backed by sanctions (Russia), regime destabilization (Middle East) etc
  - stunt 6y ago
    You got down-voted, but it's naive to think that's not true. US and UK did orchestrate a coup to overthrow the democratically elected Prime Minister of Iran in 1953. (Operation Ajax) The Prime Minister was a lawyer and politician that took control of Iran's oil resources from British Anglo-Iranian Oil Company (What we know as BP today), and he was going to take more actions to take control over their resources. https://en.wikipedia.org/wiki/1953_Iranian_coup_d%27%C3%A9tat https://en.wikipedia.org/wiki/1953_Iranian_coup_d%27%C3%A9ta...
- eeZah7Ux 6y ago
  Not: put a gun to people in other countries heads to force them to sign contracts that are very favorable to the US https://en.wikipedia.org/wiki/Gunboat_diplomacy https://en.wikipedia.org/wiki/Gunboat_diplomacy
  - dustingetz 6y ago
    Relevant: Map of US Navy "deployed carrier strike groups" in conspicuous locations https://news.usni.org/category/fleet-tracker https://news.usni.org/category/fleet-tracker

toby 6y ago

You're correct, but I think the "mystery" here is why a basket of unprofitable companies is outperforming broader indices.

sharadov 6y ago
Because of perceived future value, and if you had only certain avenues to bet on , then tech would be at the top. Added to that, gamified platforms like Robinhood, where there are a whole bunch of new, inexperienced investors. Robin hood added like 3 million customers in the months after covid.
tachyonbeam 6y ago
Investors are desperate for growth, and the prospect of investing in a company that could 10x in value over a very short span of time is just so tempting. It might seem outlandish, but there are many startups that have exploded right after IPO recently, so investors are asking themselves, what's the next hot stock, and how can I spot it before its valuation explodes?
jackcosgrove 6y ago
They're anticipating a greater fool comes along. Foolish retail investors invest in hype.

candiodari 6y ago

> One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the markets and make it look the economy is fine. And ... the predicted response (dollar collapse) has not happened so one can make 2 arguments: 1) if the result you like is the economy working then: Well Done! If the result you want is maximizing the value of dollars then: Bad Fed! Very very bad! 2) given that this hasn't collapsed the value of the dollar, why haven't they done this earlier and given the money to our government to spend on infrastructure ? Clearly we're still in the zone where more loans make the economy go smoother.