I have no idea how while Trump is a) ripping out the underpinnings of constitutional law which, in turn, is all that holds up all other laws (including transactional) in the US AND b) ripping apart the post war Western defense alliance leaving Europe and Australia completely exposed and vulnerable AND c) going to impose global reciprocal tariffs, which are going to kill trade and plunge the country and the world into the greatest economic depression (coincidentally) since the 1930’s, how the market isn’t down 75% - 90% by this point. Hopes & Dreams? Hallucinogens? Heroin?
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 with no real hope of being functional shortly. How is this happening. It’s like I’m taking crazy pills every day. The market should look at what Trump’s already done (much less what he still promises to do) and say, whoop that’s us, we’re audi, this is insane, we can’t trade our value as a corporation any longer, we don’t know where supplies, labor, administration, distribution, sales, or any law governing any of it stands, we have to pull all our monies out, and put them someplace safe like our pockets.
What is happening to keep the market propped up, when literally everything, everywhere that it needs for stability in projected earnings is being hollowed out beneath it?
edit 2/20 : lol edit 2/21: lol edit 3/3: lol
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.
Yes, human history is a very long time.
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all came from, isn’t a major value add, it’s a thin mask atop the clunkiness of American payment rails that should have been replaced by something like FedNow by 2003.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.
That 176 billion people figure may be a BIT off….
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.
The “full faith and credit of the united states government” as expressed and guaranteed in American dollars, is probably pretty safe for a while at least, as most of the world’s nations economies still base their own currency on the us dollar, but that’s going to unravel at some point sooner than later i imagine
The “full faith and credit of the united states government” as expressed and guaranteed in American dollars, is probably pretty safe for a while at least,
February 10, 2025 quotes from the article:
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Trump says some Treasury payments might ‘not count’
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“We’re even looking at Treasuries,” Trump said. “There could be a problem - you’ve been reading about that, with Treasuries and that could be an interesting problem.”
If trump decides to not pay on US Treasury Bills even ONE TIME, that’s the whole ball game. The indestructible, ever-present, no-safer-investment-literally-anywhere-in-the-world is gone forever. The USA is able to be the nation it is because we are allowed to borrow money from the rest of the entire world and unbelievably low interest rates. If we’re forced to pay higher rates on our T-bills because we aren’t trustworthy anymore we will immediately drown in our $36.22 trillion national debt.
Maybe part of the plan is to own the debt owed by the US, and then just break assets off as “compensation”. It’s like a thin veneer of capitalism and deregulation being spread over what happened to the assets of the USSR when it fell in the early 90s.
And yes, that’s a pointed parallel: I do sincerely believe we’re looking at the beginning of the real fall of America as a contiguous country and meaningful world power. I say that as an American.
Pretty sure that’s the goal tbh. It’s like how these techbros crash a business and walk off with all the assets. They’re trying on countries now.
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Other countries starting to set up trade relationships not based on the dollar - now that’s a threat to the stilts propping up the American economy, for sure. Tariffs as well though I think many don’t believe they are truly going to materialize as threatened. When you say “gestures at everything,” what actually are the main things that you think should be sinking the economy as a whole? DOGE bullshit, federal agency heads resigning, DEI programs being cancelled, betraying Gaza and Ukraine… it’s all bad but most of it does not seem an immediate existential economic threat. What am I missing?
Hmm I dunno, but maybe it is time to diversify. Into euros, yens, and probably yuans. How do you think?
first off, your trading account is in some financial institution that might itself shatter. without a federal rescue boat to save the little people. second, if the us economy actually collapses 80+%, nowhere else is safe. the european union and japan couldnt fend for itself without the current power balance holding firm. china is in a terrible state itself already. no easy answers.
Yeah, trading account needs some caution, indeed. If nowhere else is safe… I guess the answer is the real gold? That’s quite difficult. Do you think 80% collapse would come? That’s gotta be quite wild, I was more thinking of general market crash.
if you knew the correct timing/scale/scope you could be crazy rich from it all. nobody knows, even those causing it. personally ive been out of the stock market for 5 years expecting a crash and it hasnt happened yet.
Gold will not hold value if the market crashes like that. Food, water, and land will be what holds value.
The stock market is speculative and is not a reflection of reality nor is it a good measure of the health of an economy.
Because it’s basd on bullshit metrics that mean nothing?
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.
There is a economic name for it called a Minsky moment. While I think most of economics is a joke this is one of the only valuable things from the field of economics.
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?
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.
that’s right people lost their homes, farms, businesses, and jumped off skycrappers in 29, before the market crashed, i must have forgotten
Dingus, they are saying it hasnt reached the tipping point yet. There will be a crash but the system has a lot of inertia that needs to grind to a slow screaching halt first before we start seeing the really big effects.
This is the correct answer.
A few reasons:
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Market prices are more often determined by speculation than actual intrinsic value. People will say that the market is “efficient” in the sense that everything is valued efficiently based on the value it’s worth, but take one look at meme stocks and you’ll see that prices can easily be influenced by large volumes of purchases instead of any actual intrinsic value in the corporation being invested in. A lot of money being funneled into index funds can lead to the price of stocks continually increasing without actual value of the underlying companies being taken into account as much as you would think.
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Fascism is supported by, and continues to support capitalism. Corporations benefit from capitalism, especially under a system where safeguards are removed and businesses can make larger profit margins as a result.
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A lot of the changes Trump is making hurt working people, but don’t hurt corporations. (and often even help corporations directly) For instance, he’s making union busting easier, knows that any tariffs can simply be passed on by the companies without shrinking their margins, (just costing you more), is cracking down on legal immigration to the point that illegal migrant workers are even easier to exploit with the threat of deportation, etc. A lot of the bad things Trump is doing will only affect us, not corporations or the capital owning class.
All of that makes sense only if you fundamentally misunderstand the concept of “underpinnings”. The German stock market was valueless to anyone, and it’s stocks not worth the paper they were printed on when the Nazis took over, only German companies being offered on American stock exchanges kept and grew, and realized their value during and after the war. You sounded smart there for a minute, until I thought about what you wrote. It’s like your whistling in a hurricane, a south park cop saying nothing to see here nothing to see here.
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Crime. It was crime before, but it’s crime now too.
The people who were supposed to be in charge of preventing the crime didn’t do it before because they were part and party to it, they certainly won’t enforce the laws now.
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.
The stock market has no attachment to reality any more
“consumer confidence” = feelings = not-reality
… checks out.
Irrational exuberance anyone?
The stock market has no attachment to reality
any moreever
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.
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?
not at all, the fdic can’t be trusted any longer, and that’s only up to
100k250k when it was under trustworthy management, and people had the expectation of being made whole by the federal government if their bank failed. yeah, no, there are no safe answers here. this ghost valuation of the market propped up on yesterdays laws of american commerce though, whoof. someday soon somebody somewhere is going to say “the emporer has no clothes” and then it all comes down.FDIC coverage was updated to $250K.
Doesn’t change the current political risks to the program though, i.e. whether or not it will actually pay out to a crashed bank’s account holders.
cheers, thanks for the correction
The state will always bail out the rich (ie themselves) regardless of nominal limits.
I’m not a financial advisor, so nobody copy this, but we removed all our money from the US over the last few years in preparation. We dont have stocks any more, and our last bit of US money is due to be transferred when our tax return is paid out. I’m cautiously optimistic things will hold until then 🤞
We’ve put most of our money short term into New Zealand banks, specifically term deposits at a few locations, as the financial system here is well insulated at least compared to most countries. Long term we will vary our investment more but we don’t have many options until we are permanent residents (another couple years). It’s a moderate low risk growth, and we are okay with the downsides of it being inaccessible since we have several staggered.
Here term deposits are likely to be frozen short term in the event of a crash by the Open Banking Resolution system, but our everyday funds will be more accessible. Now for a huge market crash, most bets are off, but being in this little island nation, I feel a lot more secure in the fact that society will pull together rather than eat each other. That’s the true benefit of being here: the culture.
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.
There’s also just the denial phase.
As evidenced in The Big Short when it was very clear to banks and regulators that the whole mortgage shell game was falling apart and they all refused to act on it.
See, now I have had a few things pegged as being in the denial phase for a while. I’m in Australia, so the housing market I have had pegged to collapse, also I figured we would be heading into a recession coming on 3 years ago and changed businesses to “weather the upcoming recession”
Now while things have cooled off since then, and I still think both elements are overcooked, I obviously moved way to soon.
So my question is, how do you time the denial phase? The housing market issue has been going on for about 30 years from what I can tell (though it got more reasonable for half a minute a bit over a decade ago and then went stupid again).
In my lifetime, and I’m 40 now, I haven’t seen a proper major correction where bad decisions and greed was punished. I should have been “taking stupid risks” the entire time and I would have been just fine.
I don’t have an answer to any of your questions and I don’t think many others will either. It seems like one of those things that you look back at with the clarity of hindsight in order to map things out.
I mean that’s part of the thing right? “Who dares wins” is a great mantra until you lose. Nobody can predict the future so a lot of times the greed carries out until it’s literally irreversible. That’s why it’s so important to have people on the other end defending from the greed, from the people that will hoard and take until they die on their pile of gold.
At least for the US there is always a feeling of doom and worry and “it’s going to pop” but until it actually does, the greed will continue to take. That’s part of the system for better or worse. It can’t be stopped, but defending the people from the repercussions of that greed is what we have to do.
There’s always someone that will try to bring too much on the lifeboat. Rules are needed to stop them from sinking the whole ship.
