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I mean it isn't that people actually think "stocks only go up", it's that the donor class own stocks and that then means political landscape is designed to alwa

I mean it isn't that people actually think "stocks only go up", it's that the donor class own stocks and that then means political landscape is designed to always bail them out. I'm closer to your age and experienced those recessions but my take away isn't that stocks go down, it's that the government will pull every tool it has to keep the wealthy wealthy.

nostrademons 6y ago
This. I don't doubt that there's going to be a crisis and a reckoning, but I changed my mind in 2020 on what that crisis will look like. The Fed & government's actions (both during the pandemic and, in retrospect, in 2018) show that they're not going to let a financial crisis happen. Instead, we're going to get a currency crisis, since whenever asset values go down the Fed prints to restore them. The fact that a currency crisis and hyperinflation seems unthinkable to many people pours fuel on this. A number of people are pushing the idea that we can and should print as much money as we can to get back to full employment (and even beyond that - "living wage" is the bar now), and they're being taken seriously in government. This has somewhat predictable results - other governments have believed it throughout history, and (like with many things market-related) the point at which people believe it is the point at which it's no longer true.
- omegaworks 6y ago
  >"living wage" is the bar now Heaven forbid we demand an economic system built upon the notion that everyone who works should have the ability to live a decent life with secure food and housing. It's telling that many see spending and regulating toward this goal as "printing money" unscrupulously, yet when similar orders of magnitude spends are casually allocated toward the Department of Defense on an annual basis not a word is uttered about their utility.
  - nostrademons 6y ago
    You can "demand" it all you want. If supply doesn't meet that demand, you get inflation. Ultimately living conditions are set by real goods & services, not by the amount of money flowing into a sector. If more money flows in and the supply of real goods remains fixed, it just makes everything cost more. I'd agree that most military spending is a waste of money - why does an F-22 cost $334M? But directing that spending into housing, education, and health care without addressing the supply bottlenecks in those industries will just make housing, health care, and college cost more. We should be building more housing (and particularly, streamlining zoning/permitting requirements so that more developers can enter the market), breaking up big health insurers so that there's more competition in the market and you don't need to put up with Anthem's bullshit, and developing lower-cost alternatives to a 4-year college degree. On a societal level "more money" is never the answer - "more goods and services" is. You fix shortages by fixing shortages, not by letting everybody pay more for the same musical chairs.
    - omegaworks 6y ago
      It is the answer when the shortage is an abrupt, acute disruption in the money supply. A massive number of people were made unemployed by the pandemic. We had lines at food pantries stretching miles long. If you recall, at the beginning of the pandemic we we had farms ploughing under crops for lack of demand. Potatoes stacking up to high heavens, farmers offering them free to anyone who'd arrive with a bag to transport them. The author actually mentions the traditional knobs of monetary policy don't impact the distribution of money at the bottom of the economy where it is needed. That's why the direct stimulus and now family UBI is so different, and should be looked at as imperfect but necessary for addressing the need at hand.
      - nostrademons 6y ago
        We didn't have an abrupt, acute disruption in the money supply, though - at least not a negative one. The quantity of money available went up by 40% in March 2020, and velocity went down correspondingly. We had an abrupt, acute disruption in the labor supply: people were unable to work. We also had large disruptions in trade and in demand. This is not 2009, when there were plenty of people available to work, there was plenty of consumer demand, but there was no money to pay them because the banks gambled it all away. The primary feature of the COVID recession was a massive supply shock and demand shift. We had potatoes piling up not because there were too many potatoes, but because there were no truck drivers and warehouse workers needed to move them from farm to table. We also had record hunger and record food assistance during that time period.
        omegaworks 6y ago
        The money supply at the bottom of the economy was disrupted. Mass unemployment disrupts the velocity of money at the bottom of the economy. The labor supply is there, the jobs that allow laborers to be paid for doing work are not. As these laborers are no longer able to buy goods from retailers that serve them, the demand evaporates. So you agree, there's not a disruption in the "supply of real goods" so we shouldn't see inflation as stimulus checks and family UBI relieve money supply issues exactly where that supply issue exists. The quantity of money might have gone up for large companies, banks and those positioned correctly, but that's inaccessible to the majority of the American population. The majority of 2020 stimulus was delivered to private banks that prioritized their largest strictly for-profit customers. 2021 stimulus, in contrast, shifts the balance toward direct aid and city/state aid.
- imtringued 6y ago
  My prediction is that thanks to the stimulus checks the USA will start growing much faster and leave the EU in the dust. Meanwhile the Euro zone is unable to engage even in the tiniest bit of fiscal stimulus.

nostrademons 6y ago

This. I don't doubt that there's going to be a crisis and a reckoning, but I changed my mind in 2020 on what that crisis will look like. The Fed & government's actions (both during the pandemic and, in retrospect, in 2018) show that they're not going to let a financial crisis happen. Instead, we're going to get a currency crisis, since whenever asset values go down the Fed prints to restore them. The fact that a currency crisis and hyperinflation seems unthinkable to many people pours fuel on this. A number of people are pushing the idea that we can and should print as much money as we can to get back to full employment (and even beyond that - "living wage" is the bar now), and they're being taken seriously in government. This has somewhat predictable results - other governments have believed it throughout history, and (like with many things market-related) the point at which people believe it is the point at which it's no longer true.

omegaworks 6y ago
>"living wage" is the bar now Heaven forbid we demand an economic system built upon the notion that everyone who works should have the ability to live a decent life with secure food and housing. It's telling that many see spending and regulating toward this goal as "printing money" unscrupulously, yet when similar orders of magnitude spends are casually allocated toward the Department of Defense on an annual basis not a word is uttered about their utility.
- nostrademons 6y ago
  You can "demand" it all you want. If supply doesn't meet that demand, you get inflation. Ultimately living conditions are set by real goods & services, not by the amount of money flowing into a sector. If more money flows in and the supply of real goods remains fixed, it just makes everything cost more. I'd agree that most military spending is a waste of money - why does an F-22 cost $334M? But directing that spending into housing, education, and health care without addressing the supply bottlenecks in those industries will just make housing, health care, and college cost more. We should be building more housing (and particularly, streamlining zoning/permitting requirements so that more developers can enter the market), breaking up big health insurers so that there's more competition in the market and you don't need to put up with Anthem's bullshit, and developing lower-cost alternatives to a 4-year college degree. On a societal level "more money" is never the answer - "more goods and services" is. You fix shortages by fixing shortages, not by letting everybody pay more for the same musical chairs.
  - omegaworks 6y ago
    It is the answer when the shortage is an abrupt, acute disruption in the money supply. A massive number of people were made unemployed by the pandemic. We had lines at food pantries stretching miles long. If you recall, at the beginning of the pandemic we we had farms ploughing under crops for lack of demand. Potatoes stacking up to high heavens, farmers offering them free to anyone who'd arrive with a bag to transport them. The author actually mentions the traditional knobs of monetary policy don't impact the distribution of money at the bottom of the economy where it is needed. That's why the direct stimulus and now family UBI is so different, and should be looked at as imperfect but necessary for addressing the need at hand.
    - nostrademons 6y ago
      We didn't have an abrupt, acute disruption in the money supply, though - at least not a negative one. The quantity of money available went up by 40% in March 2020, and velocity went down correspondingly. We had an abrupt, acute disruption in the labor supply: people were unable to work. We also had large disruptions in trade and in demand. This is not 2009, when there were plenty of people available to work, there was plenty of consumer demand, but there was no money to pay them because the banks gambled it all away. The primary feature of the COVID recession was a massive supply shock and demand shift. We had potatoes piling up not because there were too many potatoes, but because there were no truck drivers and warehouse workers needed to move them from farm to table. We also had record hunger and record food assistance during that time period.
      - omegaworks 6y ago
        The money supply at the bottom of the economy was disrupted. Mass unemployment disrupts the velocity of money at the bottom of the economy. The labor supply is there, the jobs that allow laborers to be paid for doing work are not. As these laborers are no longer able to buy goods from retailers that serve them, the demand evaporates. So you agree, there's not a disruption in the "supply of real goods" so we shouldn't see inflation as stimulus checks and family UBI relieve money supply issues exactly where that supply issue exists. The quantity of money might have gone up for large companies, banks and those positioned correctly, but that's inaccessible to the majority of the American population. The majority of 2020 stimulus was delivered to private banks that prioritized their largest strictly for-profit customers. 2021 stimulus, in contrast, shifts the balance toward direct aid and city/state aid.
imtringued 6y ago
My prediction is that thanks to the stimulus checks the USA will start growing much faster and leave the EU in the dust. Meanwhile the Euro zone is unable to engage even in the tiniest bit of fiscal stimulus.