If you pick 10 stocks at random, 8 or 9 stocks will be lower in the last 15 days than it was previously. This is the first signs of reality setting in. The news gets worse from here. It will be down hill from here and quite a while before we get some good news. Time to hunker down.
The first signs of the recession/depression have arrived, it will get worse before it gets better.
- Thread starter Ceiling Cat
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Stock market will be 30% lower in 3 months. Sp500 has already started its decline. Nasdaq starts its drop next week. Sell your APPL first thing Monday.
Stock market doesn't seem to care about bad news now. It's purely liquidity driven. With fed printing so much money and low interest rate there is no where for the money to go but stocks. Holding cash is inflation risk with so much money printing.
Then do what with the money from aapl sale? Cash is certain to decline in value to inflation. I would put money into healthcare pharma stocks, gold and bitcoins.
Or an agency, the doors are open again and that industry is pretty much recession/ depression proof, unfortunately it wasn't pandemic proof.
Not sure... Printing money does not produce anything it cannot last.
What we saw is just short term latency for big shot broker to get their shit out of the market at a profit at the expense of their clients who will hit the loss in the next few months.
You over estimate how much the government of Canada ( as well as the Government of the U.S ) can keep printing. The governments around the world are in deep trouble. The UK was in deep DooDoo up to their lips before covid-19, now it is over their heads. Tough times are head.
After the stock market drop of March 4 there was a recovery, but I am anticipating a further drop due to recession. The markets dropped to 25-33% of the market in the Great Recession of 2008, I suspect that we will experience a drop at least to that point this time. The government coffers will be depleted and there will be increase taxation around the world for the next several years.
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Printing money produces asset inflation. Assets like stocks, real estate and gold etc. Holding cash or even bonds is dumb thing to do in this environment.
Government can definitely keep printing as long as inflation doesn't go out of control. Just as Japan did. Since we are in a deflationary environment thanks to technology, automation etc. We have huge surplus of supply of stuff and not enough consumer demand, printing money and give them away to the poor and unemployment is definitely the right thing to do in a pandemic. In 08/09 crash, government didn't do nearly as much money printing as this time around. We might not drop again this time thanks to huge monetary and fiscal intervention.
Surplus of what stuff exactly? Canada and US don't produce much. No manufacturing sector. We import goods, services, and people. Trump is trying to reverse this, but going about it in the wrong way.
We stopped doing capitalism in the 70s, when we decided to keep interest rates artificially low.
Unless and until the constant interference from the central banks is stopped, we are SOL.
What's wrong with importing stuff? It's called global trade. There are countries willing to sell stuff to us for cheap in exchange for whatever goods and services we have to offer it's all fair game. Trump is trying to kill global trade, you must like him? Capitalism alone is unstable , you need central banks inject liquidity to boost demand in time of crisis like now.
Capitalism is the only system that rewards individual hard work; creates an efficient economy; and promotes and rewards innovation.
Politicians are irrelevant; I don't care about them. I only focus on policies. It doesn't matter who is in charge, all that matters is how you make your money.
Trading is good for everyone. I am all for it. Comparative advantage is key to creating an efficient global economy. But not the way we are doing it right now, and the reason that everything is cheap is because of monetary manipulation.
What is money?
It is an IOU.
What is its value?
I'm going to simplify things to get the point across, so let's say the market determines this- forex. Just like equities, money is traded. You look at the underlying economy of the country of origin. So $1 USD is valued more than $1 CAD, because the US goods in higher demand and there is a finite amount of USD available.
What's wrong with unlimited QE?
Peter Schiff used an excellent example in one of his recent podcast, do I will reuse the same. Say we have two farmers with equal amount of land. The land belonging to the first farmer is better suited to growing apples, so he does. The other farmer's land is better suited to growing oranges. After harvest, they barter their surplus (after personal consumption) so now each of them have both fruits. Swell!
The orange farmer decides to go on a vacation, so he can't produce oranges right now. So he instead creates an IOU and hands it to the apple farmer. The apple farmer "trusts" the paper for some future good and agrees to sell the orange farmer some of his surplus apples. On returning, the orange farmer realises that he can keep creating more IOUs and as long as the Apple farmer trusts his paper, he can continue to buy Apples for free! So now instead of growing oranges, he puts up a golf course on his land and earns rent.
It should become plainly obvious that in this scenario, the Apple farmer is at a loss. Those oranges are never coming. As soon as realises the deception, he can stop the trading.
In the US/Canada - China case it is something similar. Chinese banks accept USD and Treasuries for some future payment. But if the central banks keep printing IOUs without any real economy to back its value, people will see through the farce and the dollars will become useless. This could lead to a lot serious problems.
The last paragraph, we don't have real economy to back it up? Why do you say so? Because we don't have factories to make physical goods? That's very simplistic view of economy. Because of advance of technology, only small number of tech companies are needed to create big portion of wealth for large part of population, apple, Microsoft, Tesla, biotechnology, Universities etc, and all the service industries that cater to them. And countries like India and China are willing to trade cheap manufactured goods for worthless USD because these USD enables them to buy advanced technologies or companies shares.
Yes, we have technology. But what is the dollar value to that? Our GDP already takes into account that value. The money supply without any QE is enough to keep the economy going. If the demand goes up then supply-demand economics will prevail. Inversely, if the demand drops, the cost will drop as well. By printing money, we are artificially creating inflation because everyone has too much money and now the same goods cost more even though they are not valued more. If everyone becomes a millionaire, the cost of a bottle of water will be $10,000. It doesn't mean our economy grew, it just means that it is inflated.
Lastly, the advanced technology and education advantage is ephemeral. We only have the advantage temporarily because we managed to become an advanced nation when we were a creditor nation. Now we are a debtor nation. We are getting poorer day by day.
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QE didn't distribute money to the poor, mostly to the rich and banks, that's why leading to stock market inflation not your everyday items such as food or soap. Covid stimulus did distribute print money to the poor so you might see slight inflation but again it's not bad for stocks as companies will increase price thus bottom line.
As for being temporary technology leader I agree China will definitely surpass us and Canada some day, already in many areas such as drone and 5g. But people still place greater value in stable democracy that's why there still lots smart and rich people in China and India wanting to come to live here despite they can make more money in home country. If quality of life in China and India become like ours then we are in trouble, but not likely in the next 10 years.
As for being temporary technology leader I agree China will definitely surpass us and Canada some day, already in many areas such as drone and 5g. But people still place greater value in stable democracy that's why there still lots smart and rich people in China and India wanting to come to live here despite they can make more money in home country. If quality of life in China and India become like ours then we are in trouble, but not likely in the next 10 years.
In the USA 32% of households couldn't pay their July housing payments, whether rent or Mortgage.
And next month all the failsafes are gone. The evictions will start.
Get ready for more social unrest, and another crash.
And next month all the failsafes are gone. The evictions will start.
Get ready for more social unrest, and another crash.
How do you suggest we get ready for it? Holding cash or bonds will let inflation erode your wealth away with inflation mandated by central bank printing money. The safest thing is to own assets like stocks and real estate or gold.
What I'm stating is the stock market is going to get hard again. So I would suggest go safe or go home.
Because another bailout will result in more upheaval imo. The USA is teetering.
I suppose the authorities will make some kind of compromise solution on rent and mortgage payments. I rent my own home and my landlord has given good discounts now. nobody wants a complete collapse.
