TheHaitian
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Post by TheHaitian on Aug 28, 2020 22:47:16 GMT -5
With so many people out of work, the GDP drop in the second quarter being the worst in modern history... how is the market still standing and did not crash? How come we are not seeing a repeat of 2008 with stocks in free fall?
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tskeeter
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Post by tskeeter on Aug 28, 2020 23:40:21 GMT -5
The stimulus.
As long as the government keeps replacing workers pay checks with stimulus checks and unemployment supplement checks, they succeed in propping up the markets. As long as the government props up businesses with stimulus payments and money to keep people on the payroll, fewer people end up on unemployment, get evicted, or have their houses repossessed.
When the government payments end, the economic realities will start to be reflected in the markets. Airlines are already warning of laying off tens of thousands of employees in a couple of months, if they don’t get more stimulus money.
While discussing the markets with my brother, he expressed the opinion that the current administration will do everything they can to keep the markets pumped until after the election. Then, regardless of who wins the election, taxes will likely increase and the economy will suffer. I think my brother’s assessment is on track. According to some reports, if the Biden/Harris ticket wins, implementing the ticket’s agenda will reduce business earnings by about 15%. If the Trump/Pence ticket wins, I suspect a market correction of some magnitude is also likely. So, six of one, a half dozen of the other after the election.
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Deleted
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Post by Deleted on Aug 29, 2020 9:05:16 GMT -5
Because the Feds are buying up corporate bonds and other BS to keep the market inflated for their rich friends. This happens with fascism.
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busymom
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Post by busymom on Aug 29, 2020 9:08:23 GMT -5
I'm literally waiting for some chaos in the markets around the time of the election. JMHO.
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jerseygirl
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Post by jerseygirl on Aug 29, 2020 9:27:36 GMT -5
Market is forward thinking and recovery is starting Also Fed is keeping rates at almost zero, so CDs, savings actts earning close to zero. Interest rates have been very low fir years through Obama and continuing through Trump years. To get any kind of increase on money stocks are just about the only route for most. Real estate, art etc are not considered by majority of individuals. There are some companies buying up large numbers of houses for restaurant but small compared to amounts of money going to stocks by individuals and large investors. Plus savings rate has gone up during pandemic/shut down so people not spending. Tech companies and online such as Amazon doing great. Of course the stimulus, PPP, extra unemployment , Fed buying huge amount of bonds- government absolutely shoveling money out. Only difference between the parties is how much money to shovel out. This helped get through the worst and Covid deaths and numbers seem to be decreasing. Also forward looking is hopefully vaccine/s approval
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Deleted
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Post by Deleted on Aug 29, 2020 9:30:04 GMT -5
All I know is I'm enjoying it.
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Deleted
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Post by Deleted on Aug 29, 2020 9:31:27 GMT -5
The punch bowl has been spiked so much by the Fed that there isn’t any punch left, it’s all everclear.
This hangover is gonna make 08 seem like nothing.
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pulmonarymd
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Post by pulmonarymd on Aug 29, 2020 9:42:24 GMT -5
Recovery isn’t starting. Just spent time with my brother. He just lost his job. Knows plenty others in same boat. Extra unemployment benefits ended. Weather will get cool soon, so restaurants will be hurting again. Was in DC, saw significant number of empty storefronts on M street in Georgetown. If you have a job, things are good. But just look at the number of layoffs the airlines are contemplating. Not sure where the spending will come from if not the feds. The states can’t do it, and unemployment remains north of 10%
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Tiny
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Post by Tiny on Aug 29, 2020 10:48:53 GMT -5
Is it a good thing all those Big Companies were sitting on so much "cash" and adding to the pile since before trump was elected? And the trump gave them even more money - they didn't have to spend.
Is that helping the market? The big names all have plenty of cash reserves?
Too, bad our government wasn't also being fiscally responsible during the first few years of trump's presidency.
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justme
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Post by justme on Aug 29, 2020 11:20:27 GMT -5
I'm literally waiting for some chaos in the markets around the time of the election. JMHO. The airlines can't layoff until Oct. I'm guessing maybe some other companies are in the same boat. The travel industry is starting to switch furloughs to layoffs - I saw that mgm in Vegas laid off in the five figures. The Orlando tourist industry is doing it in waves - they're keeping a lot on furlough in hopes attendance increases but some of em are paying furloughed employees health benefits so if they don't go up enough eventually the companies will cut that expense. After a short decrease, Florida's unemployment numbers are going back up.
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justme
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Post by justme on Aug 29, 2020 11:27:03 GMT -5
Is it a good thing all those Big Companies were sitting on so much "cash" and adding to the pile since before trump was elected? And the trump gave them even more money - they didn't have to spend. Is that helping the market? The big names all have plenty of cash reserves? Too, bad our government wasn't also being fiscally responsible during the first few years of trump's presidency. A good thing for who? For the company, yea. For the employees, no. Most companies will cut employees if they decide they don't need them in the current environment to make sure they keep enough cash to keep surviving. Or hit other numbers like keeping the stock price high.
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sesfw
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Today is the first day of the rest of my life
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Post by sesfw on Aug 29, 2020 12:35:54 GMT -5
regardless of who wins the election, taxes will likely increase and the economy will suffer.
I have been thinking this also. Taxes have to increase to pay for all the stimulus going out now. Can't get around this.
I have a part time job in manufacturing and it has been steady throughout this year. DGD and her BF have a bar/restaurant close to a university and they are hurting. The restaurant is doing ok in the take-out area but had to lay off the bar area people. Don't know what is going to happen now that the college is open again.
I think some areas of the economy are gone, and other areas are changed permanently. Don't know how yet but I think the 'industries' that are worth keeping will recover ....... and the others won't.
Have talked to several people that are saying if they hear one more time about the 'new normal' they are going to scream. Scream away snowflake ............ cuz that's what it is.
Yesterday is forever gone ...... tomorrow unknown.
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jerseygirl
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Post by jerseygirl on Aug 29, 2020 14:57:11 GMT -5
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countrygirl2
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Post by countrygirl2 on Aug 29, 2020 19:55:32 GMT -5
The 1% has all the money nowhere else to put it. They aren't investing in anything but the market, so nothing to do but go up.
For the last few months, canning and putting back foodstuffs and supplies, probably enough to make it through the winter. Next I may need to invest in some ammo, hope I don't need it. We do have investments through our 401K's and IRA's. They are in pretty safe investments but if it gets bad enough we will lose too. Hope our renters stay employed, but to be seen.
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Deleted
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Post by Deleted on Aug 30, 2020 7:16:06 GMT -5
regardless of who wins the election, taxes will likely increase and the economy will suffer.I have been thinking this also. Taxes have to increase to pay for all the stimulus going out now. Can't get around this. I know- it's either that or kick the can down the road somehow. I'm pleasantly surprised at the market recovery- I'm now up a little for the year and very glad I didn't panic and sell at the bottom. Little chance of that- it wasn't my first rodeo. I'm not expecting this to last.
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Lizard Queen
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103/2024
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Post by Lizard Queen on Aug 30, 2020 9:14:57 GMT -5
I expect the STHTF this calendar year still. I should take a closer look at the various stimuli end dates to get a better sense of timing. There is still a major contraction from entertainment spending (including travel and eating out), at the very least.
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Deleted
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Post by Deleted on Aug 30, 2020 9:43:01 GMT -5
The 1% has all the money nowhere else to put it. They aren't investing in anything but the market, so nothing to do but go up. For the last few months, canning and putting back foodstuffs and supplies, probably enough to make it through the winter. Next I may need to invest in some ammo, hope I don't need it. We do have investments through our 401K's and IRA's. They are in pretty safe investments but if it gets bad enough we will lose too. Hope our renters stay employed, but to be seen. You might want to look into ammo sooner rather than later. In Los Angeles, they are selling out gun stores every day. Since March, 5 million more guns have been sold in the US. Ammo was already in short supply last time I checked and you now have to jump through hoops, at least in CA and OR to purchase it.
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pulmonarymd
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Post by pulmonarymd on Aug 30, 2020 11:43:55 GMT -5
regardless of who wins the election, taxes will likely increase and the economy will suffer.I have been thinking this also. Taxes have to increase to pay for all the stimulus going out now. Can't get around this. I know- it's either that or kick the can down the road somehow. I'm pleasantly surprised at the market recovery- I'm now up a little for the year and very glad I didn't panic and sell at the bottom. Little chance of that- it wasn't my first rodeo. I'm not expecting this to last. . If trump loses, do you honestly expect republicans to acknowledge that taxes need to go up? They will again bludgeon the Democrats with it at the next election instead of being responsible and doing the right thing.
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buystoys
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Post by buystoys on Aug 30, 2020 14:01:28 GMT -5
Whoever wins the election will be bludgeoned about the taxes needing to go up. It's a no win situation for both candidates.
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pulmonarymd
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Post by pulmonarymd on Aug 30, 2020 14:25:09 GMT -5
You really think trump will raise taxes if he wins?
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Post by The Walk of the Penguin Mich on Aug 30, 2020 14:32:54 GMT -5
You really think trump will raise taxes if he wins? Nope, he will just add to the debt.
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irishpad
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Post by irishpad on Aug 30, 2020 14:39:20 GMT -5
You really think trump will raise taxes if he wins? Nope, he will just add to the debt. Because, you know, like his businesses, he thinks the country can declare bankruptcy.
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buystoys
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Post by buystoys on Aug 30, 2020 14:44:58 GMT -5
I think the Republicans will be forced to raise taxes if Trump wins. There's no other out. Taxes have to increase AND spending decrease to address our deficit.
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Post by The Walk of the Penguin Mich on Aug 30, 2020 14:57:38 GMT -5
I think the Republicans will be forced to raise taxes if Trump wins. There's no other out. Taxes have to increase AND spending decrease to address our deficit. You forget....we can also declare bankruptcy. Trump’s got lots of experience here, if he can do it for his businesses, why not the country?
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pulmonarymd
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Post by pulmonarymd on Aug 30, 2020 15:03:53 GMT -5
The republicans in congress have not shown one iota of responsibility under trump. Expecting them to change is a fantasy. They will call for cuts to all sorts of programs. Will be interesting to see if they will call for cuts to SS and Medicare
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buystoys
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Post by buystoys on Aug 30, 2020 15:08:47 GMT -5
I suspect the US will not declare bankruptcy. Most republicans have supported Trump, but not all do. On another thread, wasn't there some consensus that the Democrats will take back the Senate? Then all they need is a quorum to overthrow any Trump veto. I don't expect either party to behave "nicely" over this topic in any way. Lots of fingers are going to be pointing and there are a lot of people who should accept the blame. We didn't get to this point by only one party spending like a drunk on a bender.
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jerseygirl
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Post by jerseygirl on Aug 30, 2020 15:23:02 GMT -5
Both parties will keep spending as they do now. Taxes are never enough
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seriousthistime
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Post by seriousthistime on Aug 30, 2020 15:44:09 GMT -5
In the Reagan years they reduced taxes on the higher-income taxpayers, saying it would force Congress to come to terms with its rampant spending, but neither party had the will to reduce spending so the deficits increased with the lower revenue. The Trump years have brought the same thing, tax cuts for the wealthy but no reduced spending.
Maybe we try reducing spending first, and then we decide we can cut revenue?
Trickle-down economics did not work in the Reagan years, and it has not worked in the Trump years.
The federal government cannot declare bankruptcy under currently existing law. It can print money, though, and borrow from itself.
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countrygirl2
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Post by countrygirl2 on Aug 30, 2020 16:04:47 GMT -5
My apple grower guy is also a gun dealer, interesting combo, LOL! He is out in a rural area, bet he has stacks of ammo, suppose I need to check.
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pulmonarymd
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Post by pulmonarymd on Aug 30, 2020 16:17:39 GMT -5
Both parties will keep spending as they do now. Taxes are never enough Yet the budget had a surplus under Clinton. How many times have republicans cut taxes since. If both spend, and only one attempts to pay for it, who is more responsible? Decreasing the rate of increase in the deficit would be an improvement, or are you unwilling to abdicate your both sides belief. One is more responsible than the other, they are not equivalent
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