Why Is The Stock Market Doing So Well In A Bad Recession?

[PoliTalker]

Hello Concart,

Yep. That can be fixed, but we've let it go on so long that only a drastic measure (the one time wealth tax is the best thing I've seen proposed) will correct it. We have to do something like that, and follow it up by significantly raising taxes on the top 1%. Will it hurt the stock market? Yep. That's what happens when house stops giving you credit.

It's really kind of simple. The economy will always be strong when the government is bleeding itself to death to fuel it. Republicans want to do it by greasing the rich. Democrats want to do it by taking care of everybody who can't find a job.

Balance the federal budget and we'd find out how things really are.

[PoliTalker]

Hello cawacko,

Dude, are we looking at the same thing here? Unwinding of the Fed balance sheet? The Fed balance sheet has been exploding. What do you think the Fed’s been doing these last few months? We’re in a recession and a global pandemic yet the stock market is booming. It sure as hell isn’t economic fundamentals driving it.

And regarding the stock market the stock market isn’t the economy. You’re free to debate what economy policy you prefer but that’s not what’s moving equities.

It wasn’t economic fundamentals driving the boom the past decade. As stated, we had the weakest economic recovery since the Great Depression yet the equities boomed. QE punished savors. It forced people into more risk. Each time the thread threatened to stop QE the market dove, and ultimately the Fed would pull back because the market was addicted to the stimulus.

If a strong quick recovery is fueled by excessive government debt then it is false and doomed. It has to be build up slowly for resilience.

[Earl]

Hello Concart,



It's really kind of simple. The economy will always be strong when the government is bleeding itself to death to fuel it. Republicans want to do it by greasing the rich. Democrats want to do it by taking care of everybody who can't find a job.

Balance the federal budget and we'd find out how things really are.

Horse mierda.

When was the last time that Democrats supported reduced spending?

Dementia Joe has already said that he will raise taxes, fool.

[PoliTalker]

The economy is on life support and it's plugged into the government. Cut that off and things go downhill rapidly.

Hello cawacko,

Not following what you’re referring to here

We cut taxes for the rich too much. The deficit got run up during a good economy. Totally irresponsible.

If the economy is so good we should be able to eliminate the deficit and start paying down the debt.

Not doing that? Then is a false boom; and doomed.

[Concart]

Until recently? Ok. The thread is about why the stock market is booming in a recession. Look at the Fed balance. It ain’t unwinding.

It is not demostratobly wrong that QE punishes savors and pushed people into riskier investments (like the stock market) to find higher returns and was the driver behind the market booming.

This round of QE is simply intended to increase short term liquidity. Nothing more. The Fed buys longer term bonds, but the money is placed directly into excess reserves. It enters the money supply only when a bank chooses to lend that money or the bond matures.. Until they do, the money remains in excess reserves, and the Fed has discouraged lending from excess reserves by paying interest on them. I believe that practice is still in place. If it's on the Feds balance sheet it isn't in the money supply.

[cawacko]

Hello cawacko,



If a strong quick recovery is fueled by excessive government debt then it is false and doomed. It has to be build up slowly for resilience.

I don’t know how many times this has to be repeated, the stock market isn’t the economy. You started the thread about the stock market and why is it performing like it is.

[Micawber]

where else would you put your money right now?

I just paid a million cash for a house.

[Earl]

Hello cawacko,



If a strong quick recovery is fueled by excessive government debt then it is false and doomed. It has to be build up slowly for resilience.

“It has to be build up slowly for resilience.”

The future perfect of “build” is “built,” fool.

You’re quite an “intellectual.”

[Celticguy]

I understand them perfectly. If you have a point, why don't you make it instead of trolling?

I made my point. You dont understand them at all.

[PoliTalker]

Hello cawacko,

They can put it in real estate, they can invest in new companies, they can put it in bonds. Where do you think capital comes from to invest in new ideas and companies?

They should be paying more taxes. You can't have a country without a government. That costs money. Republicans are running the government on credit and pocketing the tax cuts. Irresponsible!

[Micawber]

I don’t know how many times this has to be repeated, the stock market isn’t the economy. You started the thread about the stock market and why is it performing like it is.

Well neither is the unemployment, or the inflation, or the debt...but it is a part of it, and the notion is that it is a reflection of the value
Americans place on businesses. Though that's not true anymore with all the derivatives, index funds, people shorting stocks ect.

The OP is righteous in noting that the stock market is an outlier economic indicator. Everything else is shit. And if everything else is shit, how can
people believe Americas publicly traded businesses are worth this much. It's a good question.

[PoliTalker]

Hello cawacko.

I don’t know how many times this has to be repeated, the stock market isn’t the economy. You started the thread about the stock market and why is it performing like it is.

I am not arguing that the stock market and the economy are the same thing. They are certainly related.

I am guessing that what we are seeing is simply a lag time effect. I think the stock market is going down and it's just a matter of time until the dam breaks. You know the market. Goes up gradually but comes down like a ton of bricks.

[jacksonsprat22]

Well neither is the unemployment, or the inflation, or the debt...but it is a part of it, and the notion is that it is a reflection of the value
Americans place on businesses. Though that's not true anymore with all the derivatives, index funds, people shorting stocks ect.

The OP is righteous in noting that the stock market is an outlier economic indicator. Everything else is shit. And if everything else is shit, how can
people believe Americas publicly traded businesses are worth this much. It's a good question.

Most Americans are not invested in the stock market. And if they have a company retirement plan they still are not managing their portfolio.

[jacksonsprat22]

Hello cawacko.



I am not arguing that the stock market and the economy are the same thing. They are certainly related.

I am guessing that what we are seeing is simply a lag time effect. I think the stock market is going down and it's just a matter of time until the dam breaks. You know the market. Goes up gradually but comes down like a ton of bricks.

Mostly because of Trump. A fluctuating market is a sigh of financial instability.

[Micawber]

Most Americans are not invested in the stock market. And if they have a company retirement plan they still are not managing their portfolio.

Half are in the market the other half are invested in smokes, lotto and booze.