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The Economy (2020/21)

Toshi

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,224
9,112
Pesqueeb said:
Are you retiring next year? Or even in the next 10?

If the answer is no, switch to decaf for the rest of the day and calm down son. @stoney has you covered.
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Buy low!

Of course, this happens to coincide with the portion of the year where I'm net negative out of my taxable account each month (pre-FICA, pre-yearly retirement plan limits so relative poverty). Oh well.
 
dan-o

dan-o

Turbo Monkey
Jun 30, 2004
6,499
2,805
stoney said:
Iirc, I mentioned it was slipping over 6 months ago...
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You did and I believe you.
One wouldn't know it by the amount of construction going on in Boston and NYC though.
Cranes for miles.
 
stoney

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
22,023
7,928
Colorado
:popcorn: -12% in 6 business days

Anybody remember how I said a year ago that there was no reason for the market to have bounced back after the sharp drop in 4Q18? Interesting how very quickly we are getting right back to that level after the *bubble* :think: seems to have burst. Look at the bar chart at the bottom as well - only about 25% higher than normal volume.

1582838453982.png


Where if we look at that same chart (monthly vs. daily) but going back to 2006 to see the housing bubble, the volume was substantially higher. A panic sell then grab of cheap stuff, if you will. (Yes, Brian, it's still higher since 11/16 - 35%, but it's not the 52% from 11/08-2/12, if you want to play the "better economy" game - even though the market /= the economy). It doesn't look like we have seen a panic yet, but that's not to say it's not potentially out there. Volume is slightly higher than average, but we're also only 5 days into a slide; they tend to take a few large days to develop.
1582838896251.png


In summary? Go drink a beer and go skiing or biking in your preferred order. There aren't many of us close enough to retirement to give a shit. If it keeps going down, increase the money you are saving and be happy when it bounces back.
 
dan-o

dan-o

Turbo Monkey
Jun 30, 2004
6,499
2,805
stoney said:
:popcorn: -12% in 6 business days

Anybody remember how I said a year ago that there was no reason for the market to have bounced back after the sharp drop in 4Q18? Interesting how very quickly we are getting right back to that level after the *bubble* :think: seems to have burst. Look at the bar chart at the bottom as well - only about 25% higher than normal volume.

View attachment 141401

Where if we look at that same chart (monthly vs. daily) but going back to 2006 to see the housing bubble, the volume was substantially higher. A panic sell then grab of cheap stuff, if you will. (Yes, Brian, it's still higher since 11/16 - 35%, but it's not the 52% from 11/08-2/12, if you want to play the "better economy" game - even though the market /= the economy). It doesn't look like we have seen a panic yet, but that's not to say it's not potentially out there. Volume is slightly higher than average, but we're also only 5 days into a slide; they tend to take a few large days to develop.
View attachment 141402

In summary? Go drink a beer and go skiing or biking in your preferred order. There aren't many of us close enough to retirement to give a shit. If it keeps going down, increase the money you are saving and be happy when it bounces back.
Click to expand...
What's the correlation of that drop to the coronavirus?
This seems more like supply chain/doomsday panic than something that lit off unprovoked. (superficial view not intended to discount your general market correction projections).

tl/dr: are last few days losses solely due to kung flu?
 
stoney

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
22,023
7,928
Colorado
dan-o said:
What's the correlation of that drop to the coronavirus?
This seems more like supply chain/doomsday panic than something that lit off unprovoked. (superficial view not intended to discount your general market correction projections).

tl/dr: are last few days losses solely due to kung flu?
Click to expand...
That's a larger question I can't answer. I think it's more of a trigger for the known weakness of the economy by anybody who looks beyond the value of the SPX and DJI. Once you factor a potentially broken supply chain, an already weak/peaked/already down-turning economic cycle can accelerate downwards.

If you think of how a basic economy works, disrupting the supply chain at he peak of the cycle can be catastrophic for forward growth.
ie. Growth > peak > recession > bottom > growth > peak > recession - rinse repeat

Growth
--> Company 1 has product that is selling well, has demand so hires more sales and manufacturing people
---->Those now employed people have income and can buy products from Company 2. Repeat from above and expand across all industries.

Peak
--> Company 1 has to raise their prices to account for their new manufacturing and sales staff. At a certain point, their prices are too high and people stop buying product.

Recession
--> Company 1 fires employees it no longer needs/can afford to pay without revenue. Those former employees no longer have income and stop buying product from Company 2. Repeat and expand across all industries.

Bottom
--> People have no or much lower income, so they are not buying discretionary items from Company 1. Company 1 is continually lowering prices to try and entice people to buy product. At a certain point, the prices are so low that even people with no or lower income will buy product (either because they must or want to).

Growth
--> Company 1 is starting to sell product again and needs people to manufacture more and to sell it. They hire more employees to fill that need.

Rinse, wash, repeat.

If you cut the supply chain at peak, then that product is not there to sell. Those employees are no longer needed and on comes the recession. Do we know if this if the reality right now? No. Will this eventually catch up to us? Yes.
 
jonKranked

jonKranked

Detective Dookie
Nov 10, 2005
89,395
27,614
media blackout
dan-o said:
What's the correlation of that drop to the coronavirus?
This seems more like supply chain/doomsday panic than something that lit off unprovoked. (superficial view not intended to discount your general market correction projections).

tl/dr: are last few days losses solely due to kung flu?
Click to expand...
Supply chain interruptions are already happening. And demand for medical supplies has started to outpace supply.
 
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