No Stupid Questions

Trump: "I'll run the USA like a company!"

How business people run companies: Fire all the competent people and replace with cheaper new hires. Report huge short term profits due to reduced payroll. Stock goes up. CEO ditches company and sells off stock before all the new hires completely wreak the company and tank the stock price.

Why wouldn't the stock market be up at this point?

Because the stock market isn't a measure of how well a country is operating. On the contrary, deregulation allows companies to boost profit via harmful means. Rich people got it good under Trump/Republicans and therefore the stock market thrives until disaster strikes and it all comes crashing down.

That depression that's coming is only for the working class. The rich will keep making money using us indentured workers as slaves to make more money.

Investors understand that he's going to do everything he can to transfer wealth to the top. That makes it safe to invest more because more will be coming in. That's my casual guestimate.

The stock market is speculative and is not a reflection of reality nor is it a good measure of the health of an economy.

As others have said, the stock market has little to do with reality. It's focused on money and business reports. As long as companies are showing profits, the stock market literally doesn't care.

Something only hits it when businesses hit it. Look at today's market. Walmart posted bad futures and the whole market recoiled (only a bit but still).

There's also just the denial phase. Lots of people, at lots of levels, are dependent on the stock market for their own finances. Literally everyone with a 401k has an interest in the market doing well. Saying "welp, we're fucked" is just not something that anyone wants to put towards wall street. It's why we have market "crashes", because people hold out until the water covers the bow of the sinking shop then they freak out and bail out at the last second.

This is the pump before the dump. Institutional investors are slowly exiting and retail investors are making up most of the volume.

We were due for a correction or crash but Biden and the Fed held it off long enough for the election. There is a lot of money sitting on the sidelines waiting to grab assets, housing etc on the cheap.

Grifters like Trump can’t wait to get it started. In every crisis there is opportunity what Trump does with this crisis will likely reshape our government.

It's almost like financial value is artificially assigned or something, and not, like, intrinsic.

Because the stock market doesn't reflect real life

The stock market will always be up and going up if people keep putting more money in it.

Stocks represent all assets that can be sold and traded publicly. Although US infrastructure is crumbling, all the shit is still there.

Times are hard but we still have obscene material wealth (for now, here is hoping climate change doesn’t reduce that too much). Ironically, stocks should have gone down in the pandemic cause of the productive capacity dropping but it didn’t cause a lot of cash was printed.

For stock prices to tumble down and crash, people need to take their money out of it. That’s only going to happen if there is another economy that people prefer to put their money in (like China).

So what is more likely to happen is we keep having stock prices go higher and higher, cause more and more money would be in circulation (so inflation). But our productive capacity could drop. So we could become much more poor, have little wealth all around, and go to the baker to buy 1 loaf of bread with $1000 price tag.

TLDR: when your economy represents basically “everything”, it won’t crash unless human civilization crashes.

Stock market is basically meme gambling these days no different from crypto. Its not a reliable indicator of anything.

If you believe all kinds of capitalist ideology and pseudo-science, then it might seem strange.

But in reality fascism is great for capital. Also the fed prints hella money to prop it all up.

You expect people to take their money from stocks and put into what exactly?

Putting it in "someplace safe like our pockets" is neither safe, nor something people can do in large numbers. They can put it in bank accounts in large numbers, how safer than stocks do you think those are?

Because it's basd on bullshit metrics that mean nothing?

Because it's now completely disconnected from the reality of the actual economy. It has been for a very long time. It has to do with how much money is funneled into the wealthiest hands.

The stock market is delaminated from the real market, and has been for a while.

How this has happened is not simple but a short version is that as the stock market has evolved it became a key place to put assets with a level of growth expectation. As time goes on the demand for a place for investment without effort (starting your own business vs investing in a businesses stock) keeps getting larger and the alternatives keep getting less desirable (bonds, GICs, etc.) causing a sort of investment feedback loop. There is X amount of money that needs to be invested each year lets say, and if every thing is crashing (waves at the general state of things) it means nothing is since pensions, people and firms still need to have that investment somewhere.

As long as there is still some expectation of return and faith in the current stock market you will have investment and as stocks (and therefor the market) are measured by the demand (the buy vs the sell) we have the current situation. If you want to see what happens when a stock market looses people's faith and therefor investment look at China's stock market crash https://en.wikipedia.org/wiki/2015%E2%80%932016_Chinese_stock_market_turbulence

The stock market has no attachment to reality any more

Our new defacto president is the avatar of bubble economics.

Even the other oligarchs, thry made something at dramatic scale to justify their wealth. Microsoft did sell a lot of software. Facebook got 176 billion people on board to blast adverts at. They're trillion dollar firms that do correspondingly large run rates.

Tesla is still a minor player in its space, and SpaceX is inherently a narrow business. Even PayPal, where the horrors all came from, isn't a major value add, it's a thin mask atop the clunkiness of American payment rails that should have been replaced by something like FedNow by 2003.

But he's taken these tiny fundamentals and convinced Wall Street to puff more air into them than a fresh bag of Lay's.

Maybe we should abolish stock markets.

I think economy, in the sense of money as a concept, is an illusion. We all just agree that money is worth something. When our belief in the American Dollar fails, so would follow any stocks tied up in businesses that rely upon it. Those trillions and tax cuts that Musk has? Worthless.

shrug

That is my hypothesis, anyways. My guess is that we are into a Weimer Germany sort of scenario. I have been converting my money into Euros, with the assumption that America as we knew it is going to die horribly within years. Hopefully, my efforts are pragmatic, not paranoid. 😕

Because this is the Second Business Plot, and this time it worked.

how the market isn’t down 75% - 90% by this point.

I keep asking myself this same question as I stare at my retirement savings in what seems like trump's crosshairs. I only have a few possible answers, and none of them are enough to explain the continued high valuations.

The only things i know are: "the market is irrational" and "time in the market beats timing the market". How long before the crash occurs? How much gains are lost if I pull it out too early? Days? Years? Even if I were to pull everything out now, when would I know its safe to put it back in? Would I accurately be able to determine the bottom of the market and magically put it all back in to reap the spoils? If the damage trump does to our country destroys the value of the dollar, then even having pulled everything to cash would mean it would be in (at that time) worthless US Dollars.

I'm simply not that smart to execute that successfully and I don't pretend to be.

Because the stock market is pure fantasy that doesn't have anything to do with the economy?

When the Berlin Wall fell, the predictions made at the time were for several decades of low intensity conflict ('war on terror') followed by another major world war. This is the expected state of the world, not some surprise outcome from out of nowhere that the capitalists haven't planned for.

Australia is still being shielded from Chinese expansionism by NATO's anti-access and area-denial strategy emplaced along the islands off China's coast.

If the war in Europe expands and heats up, it will be European cities that get destroyed and EU citizens who will have to choose to fight for their autonomy or preemptively surrender to subjugation by the Tsar. USA pulling back from supporting Ukraine forces the EU to pick a path and walk it. Either they build an army capable of self-defense, or they'll be overrun. The fighting in Ukraine prevents Russia from building up forces, buying the EU time to arm themselves, if that's what they decide they want to do. If they move fast, there's a chance they can win the war before it really begins.

Expect to see nuclear proliferation. Modern wars have shown that non-nuclear armed states are a toothless prey species that only exist so long as their nuclear armed neighbors permit it. During the reconstruction era following WWII, USA's relative advantage in infrastructure and technology allowed them to grant credible security guarantees. Now that the rest of the world has caught up, USA's defense promises have lost credibility (for example, see Ukraine).

The ocean is full of submarines, and the coastlines bristle with long range, precision missiles. World trade is expected to be among the first casualties of the next world war. Countries that are not self-sufficient will be unable to replenish their losses. Economic protectionism is a matter of national security.

Dismantling USA's Federal government serves the interests of organized crime, ie the capitalists that own Wall Street. They're getting squeezed by de-globalization but also expect to be able to expand into new criminal enterprise enabled by deregulation and the dismantling of the Federal government's investigative capabilities. Without having someplace better to invest capital, might as well let it ride despite the chaos. With a world war, and possibly a nuclear exchange, just over the horizon, there really isn't any safe place to put one's money, except perhaps housing and real estate in those parts of the world expected to survive. Canada. Siberia. Greenland.

If we do nothing to reduce atmospheric CO2, global heating will eventually cap out at 5 degrees C and won't go higher due to diminishing returns. The far north will need to invest in agricultural infrastructure, but once that gets built out in the warmer world, there will be more arable land than there is today. Its going to be boom times for real estate developers.

The stock market is a speculative vehicle whereby predominantly rich people get richer. Generally pointing at everything should indicate a lot of rich people getting richer, so what’s the issue? It’s only if you take the valuation of the stock market as some kind of core health measurement of the economy that it stops making sense. Because it’s not that.

Why should anything be crashing at this point? Everyone is still working, right? Value is still being extracted from workers, right? People are still buying things, aren't they?

The stock market will only start crashing once the effects actually reach people's spending/working behavior, which it didn't yet.

What power on earth is allowing Hedge Funds, Banks and Small Investors the justification to keep betting on an underlying business system which is literally being pulled apart at the seams ...

When you're a hammer, everything is a nail. That's all they know how to do, and they still have enough capital to keep doing it.

There are insane mistakes being made multiple times a day now. At some point, the high stakes game of Don't Break the Ice will come to a sudden end. Putting the cubes back in the game board would require an expenditure of capital. Capitalists spend money to buy more money. The only time they spend money to avoid losing money is when they've lost money for a very specific reason multiple times, and maybe not even then.

Because of the cuts. It'll be a year or so of smooth sailing.... then, as the chickens come home to roost: nosedive.