General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCNN Business: America is in turmoil and stocks are booming. Is the market broken?
There are two major reasons for this: unprecedented stimulus from the Federal Reserve, and investors not wanting to miss out on monster returns once the economy recovers.
<snip>
Robert Shiller, the Nobel Prize-winning economist, told CNN Business that this backdrop of rising risks and surging stock prices leaves the equity market "vulnerable" to a setback.
"This is like a fire bell in the night. This moment. Suddenly seeing rioting in cities all over the country," Shiller said, quoting Thomas Jefferson's famous 1820 description of the extension of slavery in the Missouri Compromise as something that filled the founding father with "terror."
https://www.cnn.com/2020/06/03/investing/stocks-market-dow-jones-riots-coronavirus/index.html
Much more at the link.
Nice to see a piece which quotes economists, rather than traders, weigh in:
SoonerPride
(12,286 posts)It has no relation at all to the economy, corporate earnings, or future growth (or contraction).
It is all Fed capital.
Claustrum
(4,846 posts)That's why they artificially pop up the stock market with no relation to our economic statues of our country. As soon as Nov comes and go, all of the money will be gone and the stock market will go into free fall. And if Biden were to win, it's good for them as they will blame it on Biden just like they did to Obama in 2008.
SoonerPride
(12,286 posts)the free money will disappear and the market will crash.
and they will say it is res. elect-Biden's fault. when nothing is further from the truth.
ProfessorGAC
(65,248 posts)...are still far lower than Obama's last 5 years, and lower overall than BHO's entire 2 terms.
That's the message dems need to pound on.
40% over 3 & 2/3rds years (since election day '16) is under 9%.
Obama's years averaged around 11.
Claustrum
(4,846 posts)My dad told me he rather Bush's $10 dollar check over Obama's years. And till this day, they are still on the Trump train.
ProfessorGAC
(65,248 posts)Our problems haven't been facts. It's been salesmanship.
K.I.S.S. on messaging. No wonkiness. No detailed plans. No "we go high".
Pound on the simple FACT that the markets did better under OBAMA and make them prove they didn't.
Don't even explain it.
"Markets rose at a higher percent under Obama than Trump. That's a fact. You think otherwise, prove it!"
Over & over & over.
Claustrum
(4,846 posts)Trump era taught us that they don't.
ProfessorGAC
(65,248 posts)Don't give them facts.
Use the facts to be certain.
Sell ideas by making them prove otherwise.
I said nothing about convincing them with facts.
Use their tactics against them. Say something with certitude and dare them. They'll do nothing but fail.
At least in our case, we start with the truth.
Yavin4
(35,450 posts)Not Wall Street hookers and coke.
SoonerPride
(12,286 posts)Main street can be boarded up and a ghost town.
Small businesses can all close.
They don't give a fuck
Bernardo de La Paz
(49,047 posts)unblock
(52,387 posts)it only measures profitability of public companies. if there's highly profitable event that makes everyone miserable, the market would go up. if there's something that makes everyone happy but costs businesses, the market would go down.
in this case, the mostly of the market's good days lately are the market realizing that things aren't as bad as they initially feared, in terms of profitability, at least.
on the other hand, the markets are also still digesting the trillions of dollars the government pour into them when everyone panicked a couple months ago....
Mike 03
(16,616 posts)Especially considering how markets all but ignored the China/Hong Kong story. It had overreacted to the pandemic (in the opinion of the market, that is) to such a degree that its reaction to Hong Kong was masked. It probably did react, but it was hard to see because of all the momentum.
struggle4progress
(118,379 posts)OilemFirchen
(7,143 posts)Plus junk bond purchases.
MoonlitKnight
(1,584 posts)And growing.
OilemFirchen
(7,143 posts)I can't find a cite for it, so quoted the Fed's "official" injection total.
Add to that reducing the prime rate to zero. Bingo! Instant exuberance... and it's all free!
onecaliberal
(32,931 posts)Mike Nelson
(9,973 posts)... big businesses like the collapse of small businesses.
Wounded Bear
(58,743 posts)It's not much more than a casino with everybody wagering on credit accounts.
The actual value of most companies is probably a fraction of the stock values.
JDC
(10,135 posts)moondust
(20,017 posts)may have pushed some savers into the casino trying to get some return on their savings. Probably just what Dump has been wanting in order to get the markets to "look good" for him.