Would someone explain why the stock market is soaring when we are facing a devasting depression

[seeahill]

I come here to get all my serious economic questions answered.

[seeahill]

Double post.

[syaigh]

I think because the stock market has nothing to do with the economy, just the general optimism of the big corporations. And since they all just got paid, they are gonna party like its 1999. But honestly, I don't think the economy is going to crash. Small businesses will suffer for sure, but they aren't generally publicly traded stocks. And that's about all I know (don't know) about business.

[nafod]

I think they are bat-shit crazy. Herd power.

[Fat Cat]

Are they really? I had to stop looking at the reports for a while. I still got a ways to go to get back to where I was in mid-February.

[seeahill]

Yes, the markets are going up. I didn't sell anything during the big drop. I didn't buy anything. I just stood pat.

For one year, I'm up 9%. Three months (from Feb. 10) I'm down 4.22%. For one month (from April 8), I'm up just shy of 12%.

I didn't look at my portfolio for a while either. You can take a glance at it now.

[Fat Cat]

Yeah I actually did look at my Fidelity holdings after seeing this thread. I gotta check my Allianz accounts too, to figure out where I stand. Ah well, I have a house free and clear and I still am pulling a paycheck so I'm aiiight. Not sure if any of my tenants are gonna make rent come June tho.

[Bennyonesix1]

Because all the stimulus money has to go somewhere. It either buys the cheap chinese shit they import or goes into a stock fund increasing their price or goes directly to them.

Two more months and who knows.

This has never been done before because everyone with a brain and financial experience automatically figured it was cultural suicide. But who knows? Maybe Fauci and his incompetently coded models were right? Almost certainly.

[Alfred_E._Neuman]

I think it boils down to the fact that Wall Street knows for a fact that the Fed will pump unlimited dollars straight into the markets and major banks to keep this house of cars from tumbling. They learned that lesson well during '08.
The only metric left that the government (Fed) has any control over at all is how it can manipulate stocks via stimulus. Combine that with the truth that stock prices have become decoupled from the actual businesses the stocks represent and now only reflect the moods of the biggest investors, and you have a Dow that's climbing as millions lose their jobs.
I've had some thoughts about this whole thing lately as I spiral toward the deepest depression and anxiety I've ever had (which for me is saying a lot). I've been meaning to put those thoughts into words as a sort of catharsis. There was another thread about risk v. economic impact where I might lay out a long form for people to ignore.

[motherjuggs&speed]

I've been meaning to put those thoughts into words as a sort of catharsis. There was another thread about risk v. economic impact where I might lay out a long form for people to ignore.

I will read it for sure.

[nafod]

Combine that with the truth that stock prices have become decoupled from the actual businesses the stocks represent and now only reflect the moods of the biggest investors

Yup. More than any time I can recall, it seems that the market is just this mass hallucination untethered from anything of actual value.

[Gene]

I think it boils down to the fact that Wall Street knows for a fact that the Fed will pump unlimited dollars straight into the markets and major banks to keep this house of cars from tumbling. They learned that lesson well during '08.

The Fed was already pumping money into the Repo market. The Corona virus stimulus hides a lot of such 'pumping'.

Speculators probably think that the recovery will be fast. They're gambling on such a recovery.

[motherjuggs&speed]

I'm speculating it won't be.

[Bennyonesix1]

This guy is the most cutting edge and insightful analyst I've found. He saves his gold stuff for subscribers but he lays out a lot.

The real issue is the eurodollar and the shortage of same. And since hardly anyone in power understands that... they can't address the issue.

https://www.realclearmarkets.com/articl ... 3.amp.html?

[Luke]

This summed it up for me: https://www.nytimes.com/2020/04/30/opin ... virus.html

[Kirk]

I felt like something funny was about to happen with the coronavirus stuff hitting in Feb so I moved everything to bonds. Then I moved it all back to stocks a few weeks later as it seemed like things had tanked. This is completely uncharacteristic of me as I usually don't move things around. Well, it turns out that it was a good move and I'm up about 30% since Jan 1. This was purely a lucky thing but I'll take it and remember that I shouldn't go screwing around as I'm retiring in less than 6 years... ;)

[Fat Cat]

Paul Krugman is an absolute faggot who's made a career out of being wrong about anything and everything.

[Luke]

Paul Krugman is an absolute faggot who's made a career out of being wrong about anything and everything.

Hahahah! I definitely can see why you'd feel that way. I've never come across his work before - and take it that publication goes left?

[DikTracy6000]

I come here to get all my serious economic questions answered.

Hi Tim, Let me take a shot at this. Okay, "here's the deal". The stock market is a leading indicator of the economy. Stock analysts talk about lagging indicators, well the economy is a lagging indicator of the market. Let me give you a recent example:

Let's take the UBER company. Last week, they posted a horrendous quarterly report, it was $2 or $3 Billion loss in one quarter. They had projected a -$.88/share loss and oops, it was actually -$1.70/share. Massive miss, right? A month or so earlier, they laid off 20% of the their workforce. That represents the economy of the company, and for the most part, it's a bellwether for the whole damn economy.

So that's terrible news right? So the stock tanks, right? Uh No, it went up 11.2% on that news on 52 million shares traded. Investors said, I want some of that, including insiders who were buying at these levels. And after hours it went up another 8%. Why did it go up? Because the CEO said -We plan on being profitable sometime in the near future. Pretty weak I know, but people are betting optimistically that our economy will come back. How far, who knows.
Large chain restaurants, like Starbucks and Dardens, have been rebounding as well. I know a chain franchisee in Texas who says his business is down 75% or more, he's still doing take-out. Small mom and pops will suffer the most, imo. Gaming casino stocks have been rebounding for two months, and their actual real economy is pretty much zilch. They know their clientele base is itching to come back and gamble. Incidentally, some of their CEO's have also been buying up the stock at the bargain prices.
I have no clue, if our economy tanks or not, since I'm not an economist. I've read some of leading economists say first it would be a 40% reduction to our GDP, then a week later, it was 10%.
If you want another example, go back and read the VW thread, when they cheated on their emissions reports. Stock took a massive hit, and I said it was a great buying opportunity. You're looking at the same thing with the current market, only the lying was about something affecting the whole global market, this time.

[Fat Cat]

Paul Krugman is an absolute faggot who's made a career out of being wrong about anything and everything.

Hahahah! I definitely can see why you'd feel that way. I've never come across his work before - and take it that publication goes left?

[Alfred_E._Neuman]

Krugman was just on Lex Friedman's podcast. Lex was basically apologizing for the dude before they even got going.
I was vaguely aware of who Krugman was before that, but being someone who glazes over at the mention of economics I was clueless as to what a douche he is.

[Fat Cat]

He's pure ass. Dig through his articles for the New York Times if you are ever in the mood for a parade of errors.

[Luke]

Oh this is the weirdo who earlier this year tweeted he was "hacked" to make it look like he was viewing something illegal.

[Bennyonesix1]

Child porn ofc

Like Eichenwald and the tentacle porn

https://thehill.com/homenews/media/4774 ... ornography

[Fat Cat]

He's the Gary Glitter of economics.