Stocks and Trading Thread - Channeling your inner Mono

[Admiral Yi]

Ouch.

[Admiral Yi]

Strange pattern to the sell off today.  I've never seen it before where so many stocks decline in % terms so close to what the broad market (using the S&P 500) declined.  Like somebody decided all stocks were 6% overvalued and threw a switch.

[Admiral Yi]

https://www.youtube.com/watch?v=MH2dru5y3xc

CNBC says the crazy rally has been fueled by a lot of new retail accounts.  Huge increase in new accounts.  Takeaway: dumb money going crazy, smart money saying slow down today.

[DGuller]

https://www.youtube.com/watch?v=MH2dru5y3xc

CNBC says the crazy rally has been fueled by a lot of new retail accounts.  Huge increase in new accounts.  Takeaway: dumb money going crazy, smart money saying slow down today.

Yeah, it has to be dumb money, or investors have the expectation that public companies would be extracting more profit from less economic activity.

[Tamas]

Or, OR, the whole thing is a rigged playground for big investors, now totally detached from other economical realities thanks to decade-long and continuing money printing and non-existent interest rates.

[alfred russel]

Yeah, it has to be dumb money, or investors have the expectation that public companies would be extracting more profit from less economic activity.

If that is the expectation, I don't think that it is crazy (within limits and over a longer time horizon, of course).

[Tonitrus]

Ya'll need to stop being pessimistic commies until my retirement fund is fleshed out, okay? 

[crazy canuck]

Jinxed it

I jinxed it worse. 

Your mea culpa seems to have worked.

[Admiral Yi]

Or, OR, the whole thing is a rigged playground for big investors, now totally detached from other economical realities thanks to decade-long and continuing money printing and non-existent interest rates.

This makes no sense.

[grumbler]

Or, OR, the whole thing is a rigged playground for big investors, now totally detached from other economical realities thanks to decade-long and continuing money printing and non-existent interest rates.

This makes no sense.

Sure it does.  The big investors got to be the big investors because they are totally detached from economic realities other than the stock market.  Chumps who invested money based on economic consideration got screwed.  You know... somehow.  Because reasons.

[Admiral Yi]

Asian markets getting beat up.  Could be some carnage today.

[Tamas]

So it seems like the Fed starting to buy company bonds have really calmed the markets and its going all up.

One thing I don't understand is that, is this something that's going to be viable now for ever? The Fed prints money, QEs it to banks, buys company bonds, so things stay afloat. For somebody uneducated like me that sounds like that should result in inflation, but it doesn't. So is this the economy now? Endless pretend money pouring in and all will be fine?

[Richard Hakluyt]

I think it is because of an increasingly elderly population, many of whom have lots of money; rather than spend the extra money they buy real estate, stocks and bonds.........so the inflation occurs there. Meanwhile the QE doesn't percolate down to the poor; so the stuff they buy does not increase in price.

[crazy canuck]

So it seems like the Fed starting to buy company bonds have really calmed the markets and its going all up.

One thing I don't understand is that, is this something that's going to be viable now for ever? The Fed prints money, QEs it to banks, buys company bonds, so things stay afloat. For somebody uneducated like me that sounds like that should result in inflation, but it doesn't. So is this the economy now? Endless pretend money pouring in and all will be fine?

That logic was discredited more than a decade ago but keeps getting repeated.  But even right wing think tanks are realizing it is wrong.

https://www.cato.org/blog/return-inflation-mongers

[DGuller]

I think the danger with the Krugman side of the argument is missing a conditional or two.  It may be that printing money does not increase inflation given that some other factor holds true.  As long as that factor doesn't change, you don't have to identify it, or even be aware of it.  However, if that factor changes, and suddenly printing money does in fact cause inflation, everything can explode in your face.