The Amazing Resilience of the Stock Market, Part D'Oh

Interesting how this title was first based on mystification (my interpretation) at a market that continued without regard for what it was doing for people. Now it is more sarcasm as the market is no longer resilient. It has gone up in fantasy based on false assumptions sold by capitalists to each other to the effect that they can ignore this crisis.

Both cases the market is not resilient, It is living in a false sense of security that they can continue without regard for people.

https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-buy-tesla-starbucks-mcdonalds-coronavirus-selloff-2020-3-1029041432

Sure looks like smart money is investing now, eh!

Stocks Surge to 3-Week High on Easing Virus Toll: Markets Wrap

https://www.bloomberg.com/news/articles/2020-04-05/currencies-start-mixed-as-virus-death-toll-dips-markets-wrap?srnd=premium-canada

Our pension plans depend on the stock market!

kropotkin1951 wrote:

NorthReport wrote:

Sure looks like smart money is investing now, eh!

Stocks Surge to 3-Week High on Easing Virus Toll: Markets Wrap

https://www.bloomberg.com/news/articles/2020-04-05/currencies-start-mixed-as-virus-death-toll-dips-markets-wrap?srnd=premium-canada

More reports from our American masters. Pay attention everyone to the propaganda pieces NR posts daily. He has his pulse on the best of them.

Of course for people paying attention they might notice that this bounce is in fact the oligarchy using taxpayers latest quantitative easing to buy an even greater percentage of the outstanding stocks than they already own. Right wing assholes cheeer it on thinking it proves how great the evil empire is.

I think there are two things going on here. The first is the opportunity for the rich to buy up more of the economy at a discount - that Kropotkin is speaking of here. This is not a reflection that the economy is not in trouble. It is confidence that the Trump administration will buy them out with the public's money as is always done. This is not a symptom of health -- it is one of sickness.

The second thing going on is that the stock market, like the people of the US, is increasingly disconnected from any agreed reality. In the past generally there was a single universe of truth when it came to events. Sure variations, analysis and interpretations abounded with different predictions. However, there has been a ever declining set of agreed facts. Now, you have the most right wing actually being told and believing more and more substantially different information, not only about what will happen but what has already happened and what is going on now. Many with money are convinced that this is almost over or that they can convince government soon to sacrifice people for the economy. This trend is not new but it is increasing and has grown with the popularity of self-curated reality through internet choices even since 2008. With the US having more than one very different reality, you can expect the market to drive in two different directions depending on who is buying and selling on a given day. Then you have another different version of the truth as seen by the majority who are not in this market in any major way: the non capital class. As reality comes home to people, together with new cult fantasies from the cult leader, you can expect major girations to continue.

I suspect that eventually there will be some undeniable realities that may sink through the denial class that has controled the markets for generations.

I predict another significant adjustment to the global economy. Many habits have been broken. Many of these may not return and they will threaten the market as it has been known:

1) Home working. This will escalate as those this is working for (employers and employees) will continue. Employers will find they do not need as much expensive space and will recognize how much unpaid benefits they get from this as people use their own space, own computers etc. This has some positive implications for the environment as commuting is reduced. It may have an impact on consumption. People out of the house daily are tempted to buy more and even think they need more.

2) Consumption may decrease in areas where people noticed that they saved lots of money and did not notice it much. This would not be expected to create significant benefits as this consumption may migrate to other things. Example: people who were over spending on fast food meals may have discovered how much of their money was going to this, may find that their wallet is reduced and they can continue to do without. Instead they may save this for other things, including better restaurants they may enjoy more but less frequently.

3) People may not all return to some of the risky behaviours during a pandemic as habits may develop and lingering fears may create new habits. Unfortunately this could inlcude a greater desire for automation and further job loss.

4) Savings may increase for some of the more prudent who realized that they needed more than they had. I suspect the majority will return to old habits but even a small percentage of people making a change to save more could have implications for the consumption economy.

5) Dislocation and job loss is unlikely to recover in the hopeful V recession many think is possible. This economy we have been in has been out of step socially and technologically. It is hard to imagine that the most out-of-touch elements will return without thought. For this reason even if the medical emergency goes away completely (not a sure bet) the effects are likely to include permanent, and longterm as well as temporary economy changes.

6) The private economy will be in shambles for a while. I suspect that there will be some push that in recovery the economy is built a little greener. We can expect that many capitalists will push back hard and there will be some incoherence in this depending on the responses of government as it is apporached by well-heeled lobbyists. Of course the energy sector will be very unstable as some push for greener investments and other try to revive unsustainable practices that in many cases make no sense even in the short term. This will create volatility. 

7) Trade practices are being exposed for what  they were. There will likely be many reactions to this 

These are just some of the possibilities. I think the political/economic generational battle will intensify as well. It is difficult to imagine anything but a period of radical changes and swings and political upheaval.

Stocks rise as Federal Reserve provides $2.3 trillion to support economy, capping best week since 1974

https://www.usatoday.com/story/money/2020/04/09/dow-markets-jobless-claims-surge/5120559002/

Actually some of the stock market increases are in growth companies with a future such as the Tech sector like Apple, Google, Microsoft and companies that focus on climate change like Facedrive out of Toronto, which is in direct competition with Uber, and NextEra Energy which competes with the oil and gas sector.

It is unfortunate that one state would allow themselves to be played off against other states by the likes of Musk 

https://www.bbc.com/news/world-us-canada-52601750

It is my understanding that Shopify does not run a store themselves. They are more like Microsoft, in that they provide a sales software platform that is used by thousands of online stores.

A Financial Virus Is Killing Our Favorite Brands

https://www.forbes.com/sites/larrylight/2020/05/11/a-financial-virus-is-killing-our-favorite-brands/#3fdff7263009

That would be a big mistake.

For example where do people think their pension plans assets are invested? 

However, having said that, most stock market investments should be in the indexes like the S and P 500 Index as most investors, whether private for themselves, or on behalf of others, don't have the skills to invest in the winning stocks. 

Mortgage Deliquencies Surge by 1.6M in April, the Biggest Monthly Jump Ever

https://twitter.com/profwolff/status/1264597778841440256

"Capitalism's Crash: US homeowners fail to pay April mortgages at highest rate in history. Govt's $1200 check too little too late. As stock market rises, misery and homeless do too."

Buy on mystery, sell on history!

Dow soars 700 points on big hopes for a vaccine and the economy's reopening

https://www.cnn.com/2020/05/26/investing/dow-stock-market-today/index.html

NDPP wrote:

Holding the Bailout Bag

https://michael-hudson.com/2020/06/holding-the-bailout-bag/

The Federal Reserve is directly buying stocks, bonds, junk bonds, mortgages, junk mortgages, all to prop up the value of assets owned by the top 5%. Economist Michael Hudson joins Paul Jay.

Meet the real 'looters' of America. 'Amazing resilience' my ass...

..facing reality

How the mighty have fallen

https://www.straight.com/news/listed-for-89-million-in-failed-2017-sale-...

Covid-19 is another miracle says the real estate industry who have never ever said that a housing situation was bad for investors.  

How COVID-19 has changed Canada's economy for the worse — but also for the better

Real estate, retailers and the job market have been hit hard, but there are some reasons for hope

The pandemic has certainly wreaked havoc on one of the traditional pillars of Canada's economy — the housing market.

Physical distancing requirements at the onset of the pandemic in March walloped the real estate industry because realtors couldn't host open houses, and buyers were concerned about the future. This year was the worst April for home sales in almost 40 years, and May was only slightly better.  

Realtors are quick to say the slowdown is just a blip, and that demand remains strong. But policy-makers are clearly a little bit concerned. The Bank of Canada is expecting COVID-19 will cause mortgage deliquencies to more than double the peak they hit during the financial crisis of 2009, and Canada's national housing agency is expecting prices could drop by almost 20 per cent before rebounding starting in 2022, or later.

Lower prices are bad news for sellers, but a slowdown does represent an opportunity for buyers looking to jump to a market that had gotten away from them.

https://www.cbc.ca/news/business/covid-economy-changes-1.5618734

What year was it when the real estate industry decided to start comparing apples with oranges instead of apples with apples? Real estate statistics used to compare the price of a house sold in 2010, to the price the same house sold for in 2020. Now they compare the price of the house sold in 2010, to the price of the house sold in 2020, with the cost of living or inflation added on.

And what about condo fees, which are usually quite massive. It would be interesting to see a comparison between the selling price of a 2010 house ,with the selling price of the same house 10 years later less the 10 years of deductions for the property taxes and condo fees.     

Right now a condo is a big risk in BC. The insurance rates for strata condos are increasing across the board and the strata fees and municipal taxes are substantial and rising. However if the speculators who have been riding the rising tide start to see the neap approaching they might start renting at better rates and that would be a great thing.

NorthReport wrote:

And our governments need to get back into co-op housing.

Indeed coops are part of the picture but they also need subsidy pools to make them affordable housing and not just subsidized middle class housing.