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There is no doubt that the entire housing market was exploited to float the US economy and covered up a recession dating from 2000-2001 until the housing market

There is no doubt that the entire housing market was exploited to float the US economy and covered up a recession dating from 2000-2001 until the housing market could no longer be sustained resulting in a complete collapse of the financial markets and banking. The housing market didn’t “snap back” rather two unprecedented tax payer stimulus packages totaling just shy of $2T were given to the banks to finance millions of foreclosure cases and allow the entire industry to consolidate. That $2T resulted in the longest bull market in history, as well as the biggest transfer/consolidation of wealth in history. It was unprecedented until the “stimulus packages” during Covid which is probably closer to a total of $7-8T, so far, once the federal reserve leveraging is included. Once again the policy response during this crisis was designed to benefit corporations and the wealthy. One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended. The very same way people look back and excuse the banks for their culpability for the financial meltdown resulting in “the Great Recession”, and even more bizarrely argue to some extent that taxpayers should thank the banks for allowing the taxpayers to bail them out (ie finance their foreclosure cases and major bank acquisitions)…its clear the people have once again been conned by politicians and are stupid enough that we will be reading future articles about how 2020-20?? wasn’t a stock market bubble and wasn’t inflation and that the people will once again be thanking politicians and the federal reserve for robbing them.

prox 5y ago
One my pet peeves is that better ventilation legislation has been blocked and for that 7T you could probably upgrade every ventilation system in existence. According to a NYT article the average vent system is 4 on a scale to ten. In a pandemic you want something like an 8. This would seriously hamper COVID / airborne viruses.
- logifail 5y ago
  > better ventilation legislation Why worry about ventilation and masking - particularly in schools - when one could spend that time looking at data showing who is actually at risk, and how to protect them. Spoiler: for this pandemic at least, the risk group simply isn't healthy children. Or indeed healthy young adults. Or maybe even anyone healthy under say 45[0] Our 8 year old had a PCR-confirmed Covid infection three weeks ago, as far as we know that's the first case in our immediate family. He's not vaccinated. For him, it represented a four-hour headache. No fever, no sore throat, no cough. He's finally been allowed to go back to school this week. [0] https://www.euromomo.eu/graphs-and-maps https://www.euromomo.eu/graphs-and-maps
  - sofixa 5y ago
    What about the teachers and all other staff at the school? Or everyone those children will run into, like parents, siblings, grandparents, friends, etc.? Even if the majority of them are healthy and under 45, some won't be and would require hospital treatment. And that's a severely limiting factor on how much Covid a health system can bare - in many countries that was stretched to and beyond it's limits. Now thankfully the latest variants are much more benign so that's not really a serious risk, for now.
    - logifail 5y ago
      > What about the teachers and all other staff at the school? Even if the majority of them are healthy and under 45, some won't be and would require hospital treatment. Isn't this why we developed vaccines? To reduce the risk of serious illness? "Every year around 600,000 people die in the UK. The Imperial College team estimates that if the virus went completely unchallenged, around 80% of people would be infected and there would be around 510,000 deaths. So, roughly speaking, we might say that getting COVID-19 is like packing a year’s worth of risk into a week or two. Which is why it’s important to spread out the infections to avoid the NHS being overwhelmed."[0] Once we've vaccinated a large proportion of the at-risk groups, then the risk of overwhelming the hospitals drops. Then life can, and should, get back to normal. [0] https://wintoncentre.maths.cam.ac.uk/news/how-much-normal-risk-does-covid-19-represent/ https://wintoncentre.maths.cam.ac.uk/news/how-much-normal-ri...
olivermarks 5y ago
Adding that although 'the Fed receiving taxpayer funds to prop up the stock market' happened, the USD as the world reserve currency allowed the Fed to create digital dollars ('money printer goes brrr' in wall street parlance) until eventually there are so many dollars in circulation we get inflation ...and here we are...one of the reasons the US now has a weaponized dollar and China and Russia are now openly challenging the reserve currency...
- notahacker 5y ago
  > one of the reasons the US now has a weaponized dollar and China and Russia are now openly challenging the reserve currency Ah yes, people are just flocking to buy roubles as an inflation hedge, and there's definitely no war on.
  - olivermarks 5y ago
    Russia has the biggest goal reserves on the planet, presumably in an attempt to attack the fiat dollar. Hot wars are usually ultimately about money.
    - Cipater 5y ago
      Not only does Russia not have the biggest gold reserves on the planet, they are 5th after the US, Germany, Italy and France. The US has just about 4 times more gold reserves than Russia and more than double that of Germany in 2nd.
      - olivermarks 5y ago
        https://www.statista.com/chart/26940/russian-central-bank-foreign-currency-and-gold-reserves-by-holder/ https://www.statista.com/chart/26940/russian-central-bank-fo...
        Cipater 5y ago
        Did you link the wrong article? Nowhere does it say that Russia has the largest gold reserves on the planet. Meanwhile: https://www.statista.com/statistics/267998/countries-with-the-largest-gold-reserves/ https://www.statista.com/statistics/267998/countries-with-th... https://en.wikipedia.org/wiki/Gold_reserve https://en.wikipedia.org/wiki/Gold_reserve https://tradingeconomics.com/country-list/gold-reserves https://tradingeconomics.com/country-list/gold-reserves
kortilla 5y ago
> One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended. This only sounds meaningful when you take it out of context. Leading up to that it was quite clear the government had effectively mandated for Disney to stop doing business. One day a business, one day not. It was on a trajectory to zero. It only had a good day after the government decided “maybe it will be less damaging to the economy to float all of the existing companies through this huge pause rather than let them all collapse and have everyone lose their retirement and their job simultaneously”. The same for cruises, airlines, hotels, restaurants, museums, concert halls, doctors offices, etc. All sane businesses one day worthy of investment, the next day not. There really aren’t parallels to what happened in 08 here. In 2008 it was a single sector imploding that happened to be the one with its tentacles wrapped around everything else. With Covid everything was failing because everything stopped.
- throwawaycities 5y ago
  > There really aren’t parallels to what happened in 08 here. Well leading up to 2008 the banks were making record profits and had record high stock prices. However, they were under funded, over leveraged and couldn’t absorb their losses. Similarly, in 2020 nearly all publicly traded companies were trading at all time highs, but in reality they were all significantly overvalued and the businesses themselves were all significantly over leveraged. You are focused on the difference in the cause of the losses, rather than the historic valuations completely detached from business fundamentals (i.e. the bubbles), and the governmental responses to prop up bubbles. Taxpayer funds shouldn’t have gone to financing foreclosures and acquisitions for failing banks and they shouldn’t have gone to the Fed to propping up businesses record high stock prices. > “maybe it will be less damaging to the economy to float all of the existing companies through this huge pause rather than let them all collapse and have everyone lose their retirement and their job simultaneously”. The irony is you are using the very same political justification for the government response to the banks in 2008, and it only highlights my point how people will be all to happy to say thank you for allowing us to bailout your failing business and return it to record high stock prices.
RandomLensman 5y ago
To some extent we actually have the counterfactual to the US, i.e. not bailing out the banks broadly in Europe. There recovery was slower, banks did do less funding of "real economies" in the aftermath, the bailouts did come with net costs overall and the banks are still not so competitive.
JumpCrisscross 5y ago
This is a broad diatribe against monetary base expansion. The counterfactual for which, post crisis, we have in Europe. (And Depression-era America.)
- imtringued 5y ago
  I find it amusing when people automatically think that an increase in the money supply must result in inflation. There is this inherent contradiction that people are angry that the money supply grows because they save, while themselves demanding high interest rates like 5% to let their money compound over time. If you limit the money supply and demand high interest, that interest must circulate from lender back to the borrower. The money supply is $100. I lend out $100 and demand $105 back. The borrower pays me the full $100 back. Where does he get the $5 to pay interest? The easy answer is that I spend $5 of the money he paid to me. He then has $5 and pays off the entire loan. What if I lend out the $5 to him instead? The money supply rose by $5. Letting money compound over time by reinvesting/lending the interest will let the money supply grow exponentially and in principle there is nothing wrong with that, if I, the lender, eventually spend off all the interest income I earned because then the whole thing settles and all debt including interest is gone. Now, there is a problem here. Why doesn't that spending phase set in? Why does the money supply keep growing until the system collapses? Because of an artificial interest rate floor of 0% on cash. The saver has the option of refusing to lend out his money or spend it and wait until an inevitable recession sets. During deflation, the value of money goes up. This is terrible for debt contracts. If you rented a Prius 2010 knowing you have to return Prius in the same condition but instead you return a 2020 Prius you would expect the rental company to compensate you for returning the car in an even better condition. With debt it doesn't work that way, since you can just hold cash with 0% interest. Imagine if the car dealer had a <current_year> Prius that automatically upgrades to the latest year. You are expected to pay interest on top and bring a 2022 Prius because the dealership could just let the Prius sit in a garage and go up in value. This is because of the inherent contradiction of being able to own a store of value. A store of value can only ever be a contract between two parties. The mythical self upgrading Prius doesn't exist in the real world. Someone has to promise to manufacture the 2020 Prius in exchange for you giving him the 2010 Prius. Deflation on a fixed debt contract is the equivalent of demanding a 2022 Prius when a 2020 Prius was agreed upon. The borrower never promised a 2022 Prius so it is only natural that he ends up defaulting through no fault of his own.
imtringued 5y ago
All hail us rich savers, our savings must be subsidized at all costs. The fact that there is barely anything to invest in, the fact that any further investment would make us a loss, all of that must be ignored because human time can obviously be owned and if the people that this time represents dare to do something as foolish as age while they wait for us to employ them, they are clearly stealing from us the value of our money! Aging is a sin. Starvation is a sin. Homelessness is a sin. So we let the government indirectly borrow money from us, to pay for welfare, to keep these people alive so they stop stealing the value of our money from us by dying. How dare they die! The fact that this debt isn't paid by us but rather by the working class, is how we get away with this scheme. After all, those who work for a living, those who spend almost all of their money, unable to save it for the sake of subjugating society, spending it just to live their life, using it as the medium of exchange so many postulate it to be, do not have any significant savings to speak of and would not significantly benefit from any reward that is proportional to how much they own. I must remind everyone that the Greece financial crisis was actually a bank bailout program for German banks. After all, savings are the holy cow of the rich. If you take something away that didn't exist, in proportion to how much the real world lost, you are a communist. If you can't touch the savings and the savings keep growing, the economy must grow in lock step with the savings. Endless growth is just a subsidy to endless savers since you can't tell them to stop.
long_time_gone 5y ago
> One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended. Probably because of their massively successful streaming service that was perfectly placed to pick up the slack. They also have one of the deepest content libraries around so production stoppage hurts them less than competitors like Amazon, Netflix, AppleTV. To drive it home, Disney had record revenue in 4Q2021, driven by streaming and parks revenue [1]. Maybe it’s you who had it wrong? [1] https://www.marketwatch.com/story/disney-stock-soars-after-record-revenue-1-billion-plus-in-earnings-and-a-streaming-success-11644441518 https://www.marketwatch.com/story/disney-stock-soars-after-r...
- throwawaycities 5y ago
  > To drive it home, Disney had record revenue in 4Q2021, driven by streaming and parks revenue [1]. Maybe it’s you who had it wrong? You are cherry picking an article from Q42021 that references park revenue, whereas I gave a very specific example of their record single day gains in company history which occurred while the parks were closed in 2020. As to Disney+ streaming service it launched in 2020 but the Disney+ lost $2.8B in fiscal 2020, the same period of time it’s parks were closed and park losses total about $7B, and yet during this period it saw it’s record single day stock price gains in history. That record day was a direct result of the Fed and taxpayer money, not record theme park revenue (it was record losses) nor Disney+ which was a brand new division and recording its own multibillion dollar losses.
  - long_time_gone 5y ago
    The article is proof that investors were correct. Stock prices are a present value of future earnings. In 2020, after the stock price had already tanked due to COVID and the bailout was announced, investors thought future earnings would increase. They bid up the stock price to acknowledge that belief. At the time Disney+ was losing money, but the pandemic and the bailout were indicators that the steaming business would take off (it did). Their huge content backlog had them perfectly placed to manage a production shutdown. There’s also the 21st Century Fox acquisition that was Closed in 2019 and gave them more content. If investors expected future earnings to grow more than current losses (which were already priced in by the market), then it isn’t wild for the stock to bounce. A year later, their earnings pretty much prove it. We could also go into the calculations of why the value of recurring revenue (streaming subscribers) is much higher than the value of non-recurring revenue (park visits).
dragonwriter 5y ago
> There is no doubt that the entire housing market was exploited to float the US economy and covered up a recession dating from 2000-2001 This is false. There is no doubt that, while there was a short recession in early-mid 2001, there was a general economic expansion, not a recession, after that; to the extent that housing market was exploited to paper over something, it was the unusually top-loaded distribution of the benefits of that expansion, where the bottom 3 income quintiles and the fourth quintile was basically flat, with the gains concentrated in a fair small segment at the top, which it covered by (non-sustainably) paying for continued debt-fueled lifestyle improvements for groups that weren't seeing real income gains.
- throwawaycities 5y ago
  > there was a general economic expansion… with the gains concentrated in a fair small segment at the top, which it covered by (non-sustainably) paying for continued debt-fueled lifestyle improvements for groups that weren't seeing real income gains. That’s one long sentence. The thing is it’s impossible to decouple any economic expansion from 2000-2008 from the trillions of dollars that flooded into the economy during that period as a direct result of the artificial housing prices and newly available debt. I agree with you though to the extent that any actual wealth that was generated was concentrated to the top, it always is. There hasn’t been real income gains for the working class in about 50 years, but the explosion in household and consumer debt in that time is incontrovertible from about $300B in 1970 to $11.5T in 2010.

prox 5y ago

One my pet peeves is that better ventilation legislation has been blocked and for that 7T you could probably upgrade every ventilation system in existence. According to a NYT article the average vent system is 4 on a scale to ten. In a pandemic you want something like an 8. This would seriously hamper COVID / airborne viruses.

logifail 5y ago
> better ventilation legislation Why worry about ventilation and masking - particularly in schools - when one could spend that time looking at data showing who is actually at risk, and how to protect them. Spoiler: for this pandemic at least, the risk group simply isn't healthy children. Or indeed healthy young adults. Or maybe even anyone healthy under say 45[0] Our 8 year old had a PCR-confirmed Covid infection three weeks ago, as far as we know that's the first case in our immediate family. He's not vaccinated. For him, it represented a four-hour headache. No fever, no sore throat, no cough. He's finally been allowed to go back to school this week. [0] https://www.euromomo.eu/graphs-and-maps https://www.euromomo.eu/graphs-and-maps
- sofixa 5y ago
  What about the teachers and all other staff at the school? Or everyone those children will run into, like parents, siblings, grandparents, friends, etc.? Even if the majority of them are healthy and under 45, some won't be and would require hospital treatment. And that's a severely limiting factor on how much Covid a health system can bare - in many countries that was stretched to and beyond it's limits. Now thankfully the latest variants are much more benign so that's not really a serious risk, for now.
  - logifail 5y ago
    > What about the teachers and all other staff at the school? Even if the majority of them are healthy and under 45, some won't be and would require hospital treatment. Isn't this why we developed vaccines? To reduce the risk of serious illness? "Every year around 600,000 people die in the UK. The Imperial College team estimates that if the virus went completely unchallenged, around 80% of people would be infected and there would be around 510,000 deaths. So, roughly speaking, we might say that getting COVID-19 is like packing a year’s worth of risk into a week or two. Which is why it’s important to spread out the infections to avoid the NHS being overwhelmed."[0] Once we've vaccinated a large proportion of the at-risk groups, then the risk of overwhelming the hospitals drops. Then life can, and should, get back to normal. [0] https://wintoncentre.maths.cam.ac.uk/news/how-much-normal-risk-does-covid-19-represent/ https://wintoncentre.maths.cam.ac.uk/news/how-much-normal-ri...

olivermarks 5y ago

Adding that although 'the Fed receiving taxpayer funds to prop up the stock market' happened, the USD as the world reserve currency allowed the Fed to create digital dollars ('money printer goes brrr' in wall street parlance) until eventually there are so many dollars in circulation we get inflation ...and here we are...one of the reasons the US now has a weaponized dollar and China and Russia are now openly challenging the reserve currency...

notahacker 5y ago
> one of the reasons the US now has a weaponized dollar and China and Russia are now openly challenging the reserve currency Ah yes, people are just flocking to buy roubles as an inflation hedge, and there's definitely no war on.
- olivermarks 5y ago
  Russia has the biggest goal reserves on the planet, presumably in an attempt to attack the fiat dollar. Hot wars are usually ultimately about money.
  - Cipater 5y ago
    Not only does Russia not have the biggest gold reserves on the planet, they are 5th after the US, Germany, Italy and France. The US has just about 4 times more gold reserves than Russia and more than double that of Germany in 2nd.
    - olivermarks 5y ago
      https://www.statista.com/chart/26940/russian-central-bank-foreign-currency-and-gold-reserves-by-holder/ https://www.statista.com/chart/26940/russian-central-bank-fo...
      - Cipater 5y ago
        Did you link the wrong article? Nowhere does it say that Russia has the largest gold reserves on the planet. Meanwhile: https://www.statista.com/statistics/267998/countries-with-the-largest-gold-reserves/ https://www.statista.com/statistics/267998/countries-with-th... https://en.wikipedia.org/wiki/Gold_reserve https://en.wikipedia.org/wiki/Gold_reserve https://tradingeconomics.com/country-list/gold-reserves https://tradingeconomics.com/country-list/gold-reserves

kortilla 5y ago

> One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended. This only sounds meaningful when you take it out of context. Leading up to that it was quite clear the government had effectively mandated for Disney to stop doing business. One day a business, one day not. It was on a trajectory to zero. It only had a good day after the government decided “maybe it will be less damaging to the economy to float all of the existing companies through this huge pause rather than let them all collapse and have everyone lose their retirement and their job simultaneously”. The same for cruises, airlines, hotels, restaurants, museums, concert halls, doctors offices, etc. All sane businesses one day worthy of investment, the next day not. There really aren’t parallels to what happened in 08 here. In 2008 it was a single sector imploding that happened to be the one with its tentacles wrapped around everything else. With Covid everything was failing because everything stopped.

throwawaycities 5y ago
> There really aren’t parallels to what happened in 08 here. Well leading up to 2008 the banks were making record profits and had record high stock prices. However, they were under funded, over leveraged and couldn’t absorb their losses. Similarly, in 2020 nearly all publicly traded companies were trading at all time highs, but in reality they were all significantly overvalued and the businesses themselves were all significantly over leveraged. You are focused on the difference in the cause of the losses, rather than the historic valuations completely detached from business fundamentals (i.e. the bubbles), and the governmental responses to prop up bubbles. Taxpayer funds shouldn’t have gone to financing foreclosures and acquisitions for failing banks and they shouldn’t have gone to the Fed to propping up businesses record high stock prices. > “maybe it will be less damaging to the economy to float all of the existing companies through this huge pause rather than let them all collapse and have everyone lose their retirement and their job simultaneously”. The irony is you are using the very same political justification for the government response to the banks in 2008, and it only highlights my point how people will be all to happy to say thank you for allowing us to bailout your failing business and return it to record high stock prices.

RandomLensman 5y ago

To some extent we actually have the counterfactual to the US, i.e. not bailing out the banks broadly in Europe. There recovery was slower, banks did do less funding of "real economies" in the aftermath, the bailouts did come with net costs overall and the banks are still not so competitive.

JumpCrisscross 5y ago

This is a broad diatribe against monetary base expansion. The counterfactual for which, post crisis, we have in Europe. (And Depression-era America.)

imtringued 5y ago
I find it amusing when people automatically think that an increase in the money supply must result in inflation. There is this inherent contradiction that people are angry that the money supply grows because they save, while themselves demanding high interest rates like 5% to let their money compound over time. If you limit the money supply and demand high interest, that interest must circulate from lender back to the borrower. The money supply is $100. I lend out $100 and demand $105 back. The borrower pays me the full $100 back. Where does he get the $5 to pay interest? The easy answer is that I spend $5 of the money he paid to me. He then has $5 and pays off the entire loan. What if I lend out the $5 to him instead? The money supply rose by $5. Letting money compound over time by reinvesting/lending the interest will let the money supply grow exponentially and in principle there is nothing wrong with that, if I, the lender, eventually spend off all the interest income I earned because then the whole thing settles and all debt including interest is gone. Now, there is a problem here. Why doesn't that spending phase set in? Why does the money supply keep growing until the system collapses? Because of an artificial interest rate floor of 0% on cash. The saver has the option of refusing to lend out his money or spend it and wait until an inevitable recession sets. During deflation, the value of money goes up. This is terrible for debt contracts. If you rented a Prius 2010 knowing you have to return Prius in the same condition but instead you return a 2020 Prius you would expect the rental company to compensate you for returning the car in an even better condition. With debt it doesn't work that way, since you can just hold cash with 0% interest. Imagine if the car dealer had a <current_year> Prius that automatically upgrades to the latest year. You are expected to pay interest on top and bring a 2022 Prius because the dealership could just let the Prius sit in a garage and go up in value. This is because of the inherent contradiction of being able to own a store of value. A store of value can only ever be a contract between two parties. The mythical self upgrading Prius doesn't exist in the real world. Someone has to promise to manufacture the 2020 Prius in exchange for you giving him the 2010 Prius. Deflation on a fixed debt contract is the equivalent of demanding a 2022 Prius when a 2020 Prius was agreed upon. The borrower never promised a 2022 Prius so it is only natural that he ends up defaulting through no fault of his own.

imtringued 5y ago

All hail us rich savers, our savings must be subsidized at all costs. The fact that there is barely anything to invest in, the fact that any further investment would make us a loss, all of that must be ignored because human time can obviously be owned and if the people that this time represents dare to do something as foolish as age while they wait for us to employ them, they are clearly stealing from us the value of our money! Aging is a sin. Starvation is a sin. Homelessness is a sin. So we let the government indirectly borrow money from us, to pay for welfare, to keep these people alive so they stop stealing the value of our money from us by dying. How dare they die! The fact that this debt isn't paid by us but rather by the working class, is how we get away with this scheme. After all, those who work for a living, those who spend almost all of their money, unable to save it for the sake of subjugating society, spending it just to live their life, using it as the medium of exchange so many postulate it to be, do not have any significant savings to speak of and would not significantly benefit from any reward that is proportional to how much they own. I must remind everyone that the Greece financial crisis was actually a bank bailout program for German banks. After all, savings are the holy cow of the rich. If you take something away that didn't exist, in proportion to how much the real world lost, you are a communist. If you can't touch the savings and the savings keep growing, the economy must grow in lock step with the savings. Endless growth is just a subsidy to endless savers since you can't tell them to stop.

long_time_gone 5y ago

> One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended. Probably because of their massively successful streaming service that was perfectly placed to pick up the slack. They also have one of the deepest content libraries around so production stoppage hurts them less than competitors like Amazon, Netflix, AppleTV. To drive it home, Disney had record revenue in 4Q2021, driven by streaming and parks revenue [1]. Maybe it’s you who had it wrong? [1] https://www.marketwatch.com/story/disney-stock-soars-after-record-revenue-1-billion-plus-in-earnings-and-a-streaming-success-11644441518 https://www.marketwatch.com/story/disney-stock-soars-after-r...

throwawaycities 5y ago
> To drive it home, Disney had record revenue in 4Q2021, driven by streaming and parks revenue [1]. Maybe it’s you who had it wrong? You are cherry picking an article from Q42021 that references park revenue, whereas I gave a very specific example of their record single day gains in company history which occurred while the parks were closed in 2020. As to Disney+ streaming service it launched in 2020 but the Disney+ lost $2.8B in fiscal 2020, the same period of time it’s parks were closed and park losses total about $7B, and yet during this period it saw it’s record single day stock price gains in history. That record day was a direct result of the Fed and taxpayer money, not record theme park revenue (it was record losses) nor Disney+ which was a brand new division and recording its own multibillion dollar losses.
- long_time_gone 5y ago
  The article is proof that investors were correct. Stock prices are a present value of future earnings. In 2020, after the stock price had already tanked due to COVID and the bailout was announced, investors thought future earnings would increase. They bid up the stock price to acknowledge that belief. At the time Disney+ was losing money, but the pandemic and the bailout were indicators that the steaming business would take off (it did). Their huge content backlog had them perfectly placed to manage a production shutdown. There’s also the 21st Century Fox acquisition that was Closed in 2019 and gave them more content. If investors expected future earnings to grow more than current losses (which were already priced in by the market), then it isn’t wild for the stock to bounce. A year later, their earnings pretty much prove it. We could also go into the calculations of why the value of recurring revenue (streaming subscribers) is much higher than the value of non-recurring revenue (park visits).

dragonwriter 5y ago

> There is no doubt that the entire housing market was exploited to float the US economy and covered up a recession dating from 2000-2001 This is false. There is no doubt that, while there was a short recession in early-mid 2001, there was a general economic expansion, not a recession, after that; to the extent that housing market was exploited to paper over something, it was the unusually top-loaded distribution of the benefits of that expansion, where the bottom 3 income quintiles and the fourth quintile was basically flat, with the gains concentrated in a fair small segment at the top, which it covered by (non-sustainably) paying for continued debt-fueled lifestyle improvements for groups that weren't seeing real income gains.

throwawaycities 5y ago
> there was a general economic expansion… with the gains concentrated in a fair small segment at the top, which it covered by (non-sustainably) paying for continued debt-fueled lifestyle improvements for groups that weren't seeing real income gains. That’s one long sentence. The thing is it’s impossible to decouple any economic expansion from 2000-2008 from the trillions of dollars that flooded into the economy during that period as a direct result of the artificial housing prices and newly available debt. I agree with you though to the extent that any actual wealth that was generated was concentrated to the top, it always is. There hasn’t been real income gains for the working class in about 50 years, but the explosion in household and consumer debt in that time is incontrovertible from about $300B in 1970 to $11.5T in 2010.