LibertyTurns
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You been out ahead of this nearly the whole way. It’s definitely bucking historical trends.
General Investing and Economics Discussion - No Politics
- Thread starter CuseJacket
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Deleted member 2897
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Well I had no idea it was going to get to this point and be this bad. But it has been interesting to watch that each step along the way, the economic reporting of where we might be based on our current stage of confinement has really been lagging and unrealistic in my opinion. For example, I think where we are right now is completely unsustainable. There’s going to be rioting in the streets if we’re like this in 30 days. What we’re doing right now will create a depression.
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BTW, the aid package is around $2T. So say hello to our first $3T deficit.
Buzzbomb
Mello Yellow-Jacket
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Instead of a new thread on how people are effected monetarily by Covid-19, thought a few previous numbers could go in the money/investment category:
-71% of all workers are employed in the service capacity sector.
-Roughly 16 million workers are self employed, that do file a tax return.
-35% or 56 million in the work force are millennials. Largest of all groups.
-157 million(in 2019)Americans work out of approx. 328 m. in the total populous.In 2016, it was 59.7 %.
-19.8% of U.S. adults ages 65 and older – nearly 10.5 million people – reported being employed full- or part-time, continuing a steady increase since at least 2000.
-13 plus million of us, have more than one job.
-During the President Obama Administration the unemployment rate fell from just over 10% to under 5% for the U.S.A.
-71% of all workers are employed in the service capacity sector.
-Roughly 16 million workers are self employed, that do file a tax return.
-35% or 56 million in the work force are millennials. Largest of all groups.
-157 million(in 2019)Americans work out of approx. 328 m. in the total populous.In 2016, it was 59.7 %.
-19.8% of U.S. adults ages 65 and older – nearly 10.5 million people – reported being employed full- or part-time, continuing a steady increase since at least 2000.
-13 plus million of us, have more than one job.
-During the President Obama Administration the unemployment rate fell from just over 10% to under 5% for the U.S.A.
Deleted member 2897
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That last statistic actually enormously understates unemployment during the last cycle. Remember that unemployment only counts if you’re trying to find a job. There’s an “under employment” statistic that includes everyone who would work if they could find a job, but they’ve given up trying. That was in the high teens back then and took several years to get back close to 10%.
I lived in the Silicon Valley during the dot com explosion. A lot of those software companies are slightly immune to these things because they can sit on big bags of cash from fundraising. Even then, unemployment went from 1.2% in Santa Clara County (San Jose) to over 10%.
At the height of the Great Recession, we lost a net of around 700,000 jobs in a month. We could see 10x that if we keep this up. Let that sink in. For how terrible and severe the economy was back then, we could see 10x that monthly job loss. Now that’s my own guess, but we’re seeing weekly estimates way over 2,000,000 jobs nationally.
Buzzbomb
Mello Yellow-Jacket
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-Forgot to add 4 out of 5 workers, reportedly are living paycheck to paycheck.
-The average credit card holder has at least four cards. On average, each household with a credit card carries $8,398 in credit card debt. Total U.S. consumer debt is at $13.86 trillion. That includes mortgages, auto loans, credit cards and student loans.
-The average credit card holder has at least four cards. On average, each household with a credit card carries $8,398 in credit card debt. Total U.S. consumer debt is at $13.86 trillion. That includes mortgages, auto loans, credit cards and student loans.
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bobongo
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What's really crazy is that the market is STILL overvalued, even after its stupendous fall. Still a long way to the bottom...
https://www.gurufocus.com/shiller-PE.php
LibertyTurns
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2 thoughts:
1) Fastest 30% sell off ever.
2) Wow the 1930s were no fun.
1) Fastest 30% sell off ever.
2) Wow the 1930s were no fun.
Deleted member 2897
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Well, I’m not Nostradamus. Part of my decision was just where we are in life with a kid going to college next year and what-not. I thought stocks could drop 50%, but I also said I wouldn’t be surprised if they went up. You just never know. I’m still shocked actually stocks are where they are. Our current economic conditions are far worse than where they were a few years ago when the stock indexes were last where they are now. But we will see. Whether someone wants to buy or sell, I encourage you to do what let’s you sleep at night. We’re in a tough time as a country and anything that reduces stress is a good thing.
Deleted member 2897
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We’re now printing money and using it to buy ETFs. We are completely bastardizing trading markets now. I’m going to guess we spend about $10 Trillion from the Fed before we’re done. This is incredible.
https://www.marketwatch.com/story/t...s-it-mean-2020-03-23?siteid=yhoof2&yptr=yahoo
https://finance.yahoo.com/news/bare...t-of-its-bazooka-morning-brief-101830881.html
https://www.marketwatch.com/story/t...s-it-mean-2020-03-23?siteid=yhoof2&yptr=yahoo
https://finance.yahoo.com/news/bare...t-of-its-bazooka-morning-brief-101830881.html
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BuzzStone
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I am now at a 45% cash holdings now and thinking of increasing that. I am so uncertain as to what to do with my account right now. I don't like to make decisions when I am down 26% for the year. I tend to make worse decisions then.
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My personal advice (which is worth something very close to nothing) at this point is to not do anything rash. The market will go up 10% and then down 10% the next. At 45% cash, you should have enough money for a long time if the market stays down. But it won’t stay down forever. There’s no telling when it could change. For example, if we start seeing tremendous improvement from the use of drugs and development of vaccines in the rest of the world, the market could pop. We could also stay depressed if we have trouble clearing the virus and every time we remove restrictions we get another wave. I think the most important thing right now is to get to a place where you can sleep at night.
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Also, if I'm not mistaken, you suggested the economic impact would be felt due to supply chain issues in China. It seems we crippled demand so much that supply chain could not become an issue, so it's hard to say whether that theory would have been proven true or not. I think 99% of the market decline is due to the global coronavirus response, which perhaps could have been foreseen, but I'm not sure it's played out exactly as folks were expecting. Either way, I give you credit for getting out sooner than I. At least I recognized the freight train wasn't stopping a couple weeks ago.
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That was phase 1 correct, before the virus was here. Many companies from Flextronics to others were crushed because their supply chain was damaged and they are a key part of the supply chain themselves and were messed up too. Before the virus turned into what it was, I thought we were in a pretty mild recession. Obviously things have changed a lot since then. But one thing in my opinion is the same - the current actual state of our economy is still not accurately portrayed. In fairness, its because our key economic data is backwards looking (unemployment filings, new jobs, GDP numbers). But if you look at manufacturing activity and other things, they've been at record lows for awhile and gotten hardly any play in the news about it.
(Flextronics is a big manufacturing outsource provider. Their stock was down 30% before February was over, because of all these supply chain issues.)
Here is one that that was released about a week ago, but the data used to complete the survey is from about a month prior.
https://www.marketwatch.com/story/e...es-record-decline-to--215-in-march-2020-03-16
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I'm not saying supply chain didn't affect specific companies, rather the first grave decline in the overall market (IIRC) was when Italy started to get out of control and in the news. They began all their announcements around impact to sports. Since then, the correlation with market swings have had little to do with supply chain, other than our ability to get ventilators, masks, etc., but that would have been an issue no matter what.
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Yep. I certainly wasn't predicting a global shutdown. But just like I didn't think the earlier issues were appropriately factored into the market, I don't think where we are right now is either. Doesn't mean the stock market will go down from here. My favorite headline (in a masochistic way) so far was something like: "Trump declares global pandemic, Dow rallies 2,000 points".
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Yea, to be clear, I'm also saying your theory could have been proven right. Except we decimated the need for supply chain so fast that it became nearly irrelevant in the grand scheme of what's driven the market.
Deleted member 2897
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Adding some numbers into what I mean right now when I say I still don't think we're accurately factoring in where we are, I posted a link showing various unemployment forecasts. Many people expect 10%-20% unemployment is where we're quickly headed in the next month. GDP down 10%-25% this next quarter. If you look backwards, that's where we were several years ago when the Dow was 12-14,000. And the big difference was back then we were a few years removed from the great recession and were growing. We're shrinking like a Seinfield shrinkage episode right now. I'd expect a much more pessimistic feeling when we're on the way down, because nobody knows where the end is and how bad it may get. On the way out, we knew we were growing and things were getting better. Again "Trump declares global pandemic, Dow rallies 2,000 points" proves you just never really know. So for stupid people like me, I try not to ever attempt to time the market or outguess things.