What’s hilarious to me is that the 2008 crash was caused by housing prices getting too high, that’s it. Which is absolutely nothing compared to what we are facing now.
Getting the feeling that the market bouncing back from 2008 has everyone and their mother (and myself) looking to buy the dips. Are stocks really going to stay this high when companies eventually start releasing earnings reports saying yeah, we are not making any money and expect earnings to be depressed for the next year or two because of knock on effects X, Y and Z?
Seems obvious to me that is a big part of it. That plus nonstop Trump and Co. sunshine pumping and throwing 5T at it so far. The problem is 5T probably isn’t going to come close to what you would really need to magically make appear to offset the total harm that will be caused.
I do think a lot of people are very overly optimistic. My dad who is basically all in on equities for his entire roll gave me a spiel about how because stocks are forward looking none of this matters as we will be back to normal in a couple months. I asked him if he thought the stock market would be setting all time highs by the end of the year and he emphatically said yes citing the Trump line of “pent up demand”. I asked him where he thought this pent up demand would come from with everyone being broke and getting broker. He didn’t have an answer for that. I imagine that sentiment is very prevalent out there. Unfortunately there is almost no hope that it is true.
It isn’t nothing but do you really think the entire economic impact of this is going to be only 5T?
Also if it is so easy to just print and replace the missing money why aren’t we doing this every recession. I realize we try but it doesn’t seem to work very quickly even in relatively mild economic downturns. The market here is expecting little more than a bump in the road in the face of the greatest economic shock in at least 90 years maybe ever.
I think at least another $5 trillion is coming if the timeline continues as Unstuck thinks. We didn’t do it in past recessions because we didn’t think it would work, but in 2008 it did work so now we are trying it again. Results are to be determined.
I’m getting really tempted to try to time the market. Or another way of putting it is that in the middle of a black swan event the market believes Donald Trump and thus it’s time to pull out.
I think I’m going to wait til Monday, though, and decide then. We’ve seen a reporting lag in deaths and cases a few weekends in a row now. That’s going to look like Mission Accomplished in the current context, and Trump will likely be more adamant about a re-opening of the economy.
Do people have any suggestions for good courses about personal finance? I am self employed, but am not originally from the US and generally not great at proactively managing my finances anyway. So things like effectively managing my tax situation and savings are something I need to work on.
I know there are a lot of free resources out there (including forums with knowledgeable people like this one, bogleheads etc) but my memory isn’t great and I feel like a course format is a better way for me to learn and properly ingest the information.
I guess (?) it’s another $2T that did it but these wildly efficient markets seem to be grabbing on for dear life to any positive news and ignoring inconvenient truths around the corner.
Because this thing has the memory of a goldfish, when another two trillion dollars isnt rocket launched at big business next week and more people die its gonna fall. Unless it’s all rigged, in which case like me you never have to think of this again.
House hunting update: we came to an agreement on price, and added a virus clause that basically says we dont have to close if there is a stay at home order in place. Sellers refused and now the deal is dead. Laid it on thick as they are buying another house with a sale of home contingency and that person is in turn buying another house with a sale of home contingency. Don’t care buddy, not my problem. I’m not carrying two mortgages indefinitely if this thing goes on through summer and fall.
So banks are starting to set a max of a 10-20% on mark down of assets for the next 2 quarters, presumably w/ the consent (or at the behest?) of regulators.
That plus money machine go brrrr is the plan for the financial system to fake till we make it through the shutdown.