Topic: Economy is dying but market prices are going up? - page 2. (Read 366 times)
For sure governments going to inject money again and some say it is 5 trillion but the purchasing power is going to get down? Not immediately but in long term so this is wakeup call for every human to move to decentralized to get real value for the curreny when they are holding which will be purely on demand and supply.
They are using bitcoin to buy stocks, which cause the price of stocks to go up.
Welcome to "legitimation", OP.
Welcome to "legitimation", OP.
My only answer to that question is "Quantative Easing". This means that government is probably injecting cash in big corporations to keep the economy alive.
Thougts?
Could it be that the effects are still not visible by now?
You are looking at a year graph so it look more like a drop.
How about we look for just a month?
Credits to google.
It already dropped a lot at a certain point. It looks like it is just correcting for me but not to the extent that it bounces back.
But who knows, maybe you are right.
I also saw one of Trump's statement that he is letting some workers come in. He may have thought about this too since he is a businessman.
My only answer to that question is "Quantative Easing". This means that government is probably injecting cash in big corporations to keep the economy alive.
It's absolutely due to quantitative easing, and there is no "probably" about it. The Fed have already committed to buying up "unlimited" amounts of assets. They printed $2.2 trillion for the stimulus package last week, and already Trump is tweeting about printing another $2 trillion for infrastructure projects. It took the Fed 8 years to expand their balance sheet by around $3.5 trillion after the 2008 crash. We've now outdone that in a matter of days. Not to mention that they removed the requirement for banks to hold any reserves whatsoever, meaning that they can also create unlimited amounts of money out of nothing and give out unlimited amounts of loans.There is no limit to what the markets can achieve when you can just print monopoly money endlessly to prop them up. The amusing thing is that even with all this stimulus, they still dropped more than bitcoin did.
But we all know that the situation is temporary and these companies will start operating as soon as this is gone.
Some of them, sure, but there will be a fair few companies which are bankrupted by this. 
Op, you have already given the answer - the market is rebounding partly because of the external stimulus injected by the government. Government is providing additional liquidity to the market as well as to the companies. That's why we see this kind of rebounding.
Also, there is something called "fair value" in stock market. We know a lot of companies had to stop production because of this pandemic so their stocks are trading below their "fair valuation".
But we all know that the situation is temporary and these companies will start operating as soon as this is gone. So people with money, are buying stocks of such companies while they are cheap. Such kind of buying is also another reason why the market is rebounding.
Also, there is something called "fair value" in stock market. We know a lot of companies had to stop production because of this pandemic so their stocks are trading below their "fair valuation".
But we all know that the situation is temporary and these companies will start operating as soon as this is gone. So people with money, are buying stocks of such companies while they are cheap. Such kind of buying is also another reason why the market is rebounding.
My only answer to that question is "Quantative Easing". This means that government is probably injecting cash in big corporations to keep the economy alive.
Thougts?
Thougts?
Quantitative easing is, of course, a big factor. It is somewhat a guarantee that whatever happens the large corporations will not really hit rock bottom because the governments are always there to catch them. This is more or less a bailout. This is good but also sad at the same time. This is, of course, just my opinion but I think this sends the idea that the government is more looking after the welfare of the rich capitalists rather than the common people. The companies and corporations are, of course, providing different kinds of services and goods to the people. They are also providing jobs. But in times like this, money printed out of thin air should be reaching the common folks more than the large corporations; the larger slice of the pie should put food on the table rather than keep a business conglomerate whole.
This is probably the reason why the market is already bouncing. It has already plunged. The impact of the pandemic has already been felt. The massive selling is through. Perhaps the iron is already hot for striking insofar as those who are waiting for the cheap prices are concerned.
[if you want to respond to this, @me don't quote my post]
I think it's probably because it's still a fairly prosperous market. If this all gets solved by q2 or q3 then production will start again... It lost a lot of retail investors also, a lot of banks and insurance companies will still have to be diversified into stocks somewhat even when they're plunging. But I didn't pull out of my long term positions and I imagine a lot of others didn't either... I don't know where it'll go from here down or up but it doesn't look like we'll see another massive crash unless something new comes up.
I think it's probably because it's still a fairly prosperous market. If this all gets solved by q2 or q3 then production will start again... It lost a lot of retail investors also, a lot of banks and insurance companies will still have to be diversified into stocks somewhat even when they're plunging. But I didn't pull out of my long term positions and I imagine a lot of others didn't either... I don't know where it'll go from here down or up but it doesn't look like we'll see another massive crash unless something new comes up.
What feels weird to me is one simple fact.
There is a virus pandemic, more people are dead every day, even more people losing their jobs, there is a lockdown and people dont work.
So how on earth are Market prices (Dow Jones) going up/rebounding? IF anything, they should be dropping because people need basic life needs to survive pandemic, lockdown and isolation. They cash-in whatever they have.
You can see on this image that after the initial crash, the market rebounded and going back up.
If the production has dropped due to decreased labor, the market should be plunging. However that is not the case.
My only answer to that question is "Quantative Easing". This means that government is probably injecting cash in big corporations to keep the economy alive.
Thougts?
There is a virus pandemic, more people are dead every day, even more people losing their jobs, there is a lockdown and people dont work.
So how on earth are Market prices (Dow Jones) going up/rebounding? IF anything, they should be dropping because people need basic life needs to survive pandemic, lockdown and isolation. They cash-in whatever they have.
You can see on this image that after the initial crash, the market rebounded and going back up.
If the production has dropped due to decreased labor, the market should be plunging. However that is not the case.
My only answer to that question is "Quantative Easing". This means that government is probably injecting cash in big corporations to keep the economy alive.
Thougts?
Jump to: