According to prison, nobody was "responsible" for the 08 crash.
Nobody can answer that question because nobody took responsibility for that crash and the same BS is still happening today. So until you answer your own question, everyone that is not doing their jobs are responsible. You can say it was the credit rating agencies that got paid off. You can say it was the FED for not regulating bank holding companies. You can also say it was banks and bank holding companies for writing bad loans (gouging by way of excessive fees and unrealistic loan terms). You can also say it was irresponsible borrowers taking on bigger loans they couldn't afford (and maxing out the loans by taking every dollar of equity they could manage). You can also say it was RE appraisers that were jacking up appraisals so banks could qualify loans. You can also blame the govt for allowing "everyone should be able to afford a home if you want one". Everyone was greedy during those times. Everyone.
@wallstreetcappers
According to prison, nobody was "responsible" for the 08 crash.
Nobody can answer that question because nobody took responsibility for that crash and the same BS is still happening today. So until you answer your own question, everyone that is not doing their jobs are responsible. You can say it was the credit rating agencies that got paid off. You can say it was the FED for not regulating bank holding companies. You can also say it was banks and bank holding companies for writing bad loans (gouging by way of excessive fees and unrealistic loan terms). You can also say it was irresponsible borrowers taking on bigger loans they couldn't afford (and maxing out the loans by taking every dollar of equity they could manage). You can also say it was RE appraisers that were jacking up appraisals so banks could qualify loans. You can also blame the govt for allowing "everyone should be able to afford a home if you want one". Everyone was greedy during those times. Everyone.
Did you not get that what you explained in PART was my point?
Rush decided that the FED was to blame and I suggested and do suggest that they were for sure not the blame and no government agency is in front of capitalist corps. The FED isnt an agency but they are lagging way behind with their "regulation" as they rely on the banks and institutions performing within certain boundaries as a standard business practice, the FED is not an internal auditor and internal auditors even if they are independent rely on the company to do things a certain way in order to do their independent analysis. The FED does stress tests which evaluate how banks and hedgies will perform given different economic scenarios but that is not a measure of regulation that is a poor attempt to create what-if scenarios and try to safeguard against worst cast situations..and as we saw in 2008 the worst case happened far more severely than anyone projected, the credit derivative markets froze, world wide credit froze, the financial system failed as there was no market in several areas which served a critical purpose and due to leverage combined with illiquid markets it placed several firms (like Bear) into a position of forced liquidation. There were multiple causes of the actual events, the breakdown events but what led up to the breakdown events were other flaws and mistakes which had they not be in place the system would not have failed to function.
For sure credit rating agencies, independent auditors, regulators, insurance agencies who wrote policies, internal auditors and executives...many players were at fault but definitely not the FED or any one source of blame for what happened.
@BigGame90
Did you not get that what you explained in PART was my point?
Rush decided that the FED was to blame and I suggested and do suggest that they were for sure not the blame and no government agency is in front of capitalist corps. The FED isnt an agency but they are lagging way behind with their "regulation" as they rely on the banks and institutions performing within certain boundaries as a standard business practice, the FED is not an internal auditor and internal auditors even if they are independent rely on the company to do things a certain way in order to do their independent analysis. The FED does stress tests which evaluate how banks and hedgies will perform given different economic scenarios but that is not a measure of regulation that is a poor attempt to create what-if scenarios and try to safeguard against worst cast situations..and as we saw in 2008 the worst case happened far more severely than anyone projected, the credit derivative markets froze, world wide credit froze, the financial system failed as there was no market in several areas which served a critical purpose and due to leverage combined with illiquid markets it placed several firms (like Bear) into a position of forced liquidation. There were multiple causes of the actual events, the breakdown events but what led up to the breakdown events were other flaws and mistakes which had they not be in place the system would not have failed to function.
For sure credit rating agencies, independent auditors, regulators, insurance agencies who wrote policies, internal auditors and executives...many players were at fault but definitely not the FED or any one source of blame for what happened.
If the FED would have regulated the banks properly, do you think they could have caught the issues before shit hit the fan? Was the FED reactive, or proactive in the case leading up to the markets of 08?
Should the FED be reactive or proactive? The stress tests (that are complete BS) should have caught the major issues with the lending which could have been a chance for the FED to be proactive. Afterall, the FEDs job is to regulate the banks (part of the financial markets) to ensure stability, correct?
@wallstreetcappers
If the FED would have regulated the banks properly, do you think they could have caught the issues before shit hit the fan? Was the FED reactive, or proactive in the case leading up to the markets of 08?
Should the FED be reactive or proactive? The stress tests (that are complete BS) should have caught the major issues with the lending which could have been a chance for the FED to be proactive. Afterall, the FEDs job is to regulate the banks (part of the financial markets) to ensure stability, correct?
The FED does not regulate banks in any fashion to make an impact, they are not auditors and are not equipped to be in front of dishonest deceptive practices in real time. They give guidelines and are puppet regulators who are either from industry or are connected to industry and that makes them ineffective.
Some of the issues which caused the freeze in the markets were not due to regulation rather intentional business decisions made to avert risk..for example in the case of the fluid markets for debt instruments there are buyers and sellers in the markets, that means broker/dealers and banks and hedgies both from the US and the world make markets, buying and selling derivatives, debt instruments etc so in the case of 2008 those markets became illiquid because participants backed away from the market and were not making a market.
What would happen if AMZN leveraged their stock to fund their operations and relied on a fluid functioning market in order to transact their capital and exist? Say that they had covenants which stated if their stock price dropped below a certain level that it would trigger an insolvency and a forced liquidation of more shares? What if the market was not functioning due to broker dealers refusing to step into the market to avoid risk and thus the bid/ask spread for AMZN was enormous? That would trigger a liquidation and that is what happened in this case. There was no functioning market to transact derivatives and debt instruments so the insolvency of several firms happened due to leverage ratios and a lack of a functioning market and since securities and derivatives are marked to market, if the equity percentage of the assets drops to a certain level then it triggers clauses in agreements and forces the company to raise the equity ratio and with the markets being frozen that was impossible.
The reason why the UST stepped in and the FED manufactured emergency lines was because the capital markets were frozen and not functioning, that is the downside of free markets...if free markets do not function and businesses leverage then events like this happen, and had it continued much longer the risk of LARGER firms being sucked in would have grown and that is why Fannie/Freddie/AIG etc had to be rescued, the free markets failed and the stinky government had to step in to stop the ripple effect and the impact on the greater economy of failures to the banking industry. Our economy relies heavily on a functioning banking sector and the liquidity of capital markets...so the TRUE answer to what caused the 2008 crisis was free markets and greed, too much leverage and a lack of accountability from the capitalist firms...not just banks either it was also credit agencies, insurance companies, pension funds etc...but it all falls to the flaws of capitalism and the lack of real time strong regulation to stop a credit event before it can happen.
@BigGame90
The FED does not regulate banks in any fashion to make an impact, they are not auditors and are not equipped to be in front of dishonest deceptive practices in real time. They give guidelines and are puppet regulators who are either from industry or are connected to industry and that makes them ineffective.
Some of the issues which caused the freeze in the markets were not due to regulation rather intentional business decisions made to avert risk..for example in the case of the fluid markets for debt instruments there are buyers and sellers in the markets, that means broker/dealers and banks and hedgies both from the US and the world make markets, buying and selling derivatives, debt instruments etc so in the case of 2008 those markets became illiquid because participants backed away from the market and were not making a market.
What would happen if AMZN leveraged their stock to fund their operations and relied on a fluid functioning market in order to transact their capital and exist? Say that they had covenants which stated if their stock price dropped below a certain level that it would trigger an insolvency and a forced liquidation of more shares? What if the market was not functioning due to broker dealers refusing to step into the market to avoid risk and thus the bid/ask spread for AMZN was enormous? That would trigger a liquidation and that is what happened in this case. There was no functioning market to transact derivatives and debt instruments so the insolvency of several firms happened due to leverage ratios and a lack of a functioning market and since securities and derivatives are marked to market, if the equity percentage of the assets drops to a certain level then it triggers clauses in agreements and forces the company to raise the equity ratio and with the markets being frozen that was impossible.
The reason why the UST stepped in and the FED manufactured emergency lines was because the capital markets were frozen and not functioning, that is the downside of free markets...if free markets do not function and businesses leverage then events like this happen, and had it continued much longer the risk of LARGER firms being sucked in would have grown and that is why Fannie/Freddie/AIG etc had to be rescued, the free markets failed and the stinky government had to step in to stop the ripple effect and the impact on the greater economy of failures to the banking industry. Our economy relies heavily on a functioning banking sector and the liquidity of capital markets...so the TRUE answer to what caused the 2008 crisis was free markets and greed, too much leverage and a lack of accountability from the capitalist firms...not just banks either it was also credit agencies, insurance companies, pension funds etc...but it all falls to the flaws of capitalism and the lack of real time strong regulation to stop a credit event before it can happen.
So the derivatives markets continually get pumped (leverage) which keeps the markers moving, when markets become risky (low volume), derivatives slows down, markets then needs liquidity or market fails? At what point is derivatives like drugs and at what point does the user need to stop taking their drugs? Or can users just use forever with no consequences? If the FED has the money printer turned on (providing liquidity) and everyone thinks this is normal and this becomes the new normal, what happens when the money printer turns off? We know what happens to inflation when the printer is turned on.
FED = stuck between a rock and a hard place. Turn money printer on, keep markets going, inflation continues to rise. Turn money printer off, markets turn illiquid, volatility goes up, derivatives go boom? Derivatives go boom, everything goes boom?
@wallstreetcappers
Nice write up.
So the derivatives markets continually get pumped (leverage) which keeps the markers moving, when markets become risky (low volume), derivatives slows down, markets then needs liquidity or market fails? At what point is derivatives like drugs and at what point does the user need to stop taking their drugs? Or can users just use forever with no consequences? If the FED has the money printer turned on (providing liquidity) and everyone thinks this is normal and this becomes the new normal, what happens when the money printer turns off? We know what happens to inflation when the printer is turned on.
FED = stuck between a rock and a hard place. Turn money printer on, keep markets going, inflation continues to rise. Turn money printer off, markets turn illiquid, volatility goes up, derivatives go boom? Derivatives go boom, everything goes boom?
Derivatives are not bad in their purpose at origin but they go bad when there is too much leverage in them because derivatives are instruments made to serve a purpose but are used in wrong ways in excess and can implode if used incorrectly or with too much leverage, Those markets are made of participants who utilize them plus dealers who make a living off making a market with a degree of risk and then there are some players who use them as a means to profit off exclusively. Bear and Lehman had too much leverage and not enough equity to quality for the bailout lifelines so it wasnt only that they were investing in sub prime but that their leverage ratios were too high so when the derivative markets and the markets for mortgages froze, the mark to market spread dropped so much that they couldnt cover the required equity to be solvent and didnt have assets to qualify for a collateral loan by the FED. Lehman was actually in the middle of trying to lower leverage before the crisis hit but because the value of their sub prime assets were dropping they could not de-leverage without taking losses and that means they had less equity on top of the leverage. They turned to short term repo schemes to hide their leverage and dirty laundry from regulators.
Capitalist corps can deceive and creatively hide their actions for longer periods than regulators can catch them...there is no way a regulator would be able to identify the schemes firms used and use AND create an action plan, get approval, take action all before the firm either implodes or covers their tracks. We do not impower regulators to the degree required to be remotely real time so while it does not seem to matter all that much day to day, when something goes wrong it goes really wrong, really fast and there was no way the FED or the government or their auditors would have been able to stop it, the collusion and deception was faster than any regulator could ever be.
It is interesting how we reward risk taking and leverage until it goes wrong and then we have no recourse, the taxpayer footed the bill for AIG and Fannie/Freddie, bailed out banks and all to keep the financial system in place and not destroy the economy and unfortunately it will happen again, nothing has changed. I remember at the time there was the opportunity for regulators and congress to break up banks and hediges to use this bad situation to make sure it would never happen again and of course they didnt and now banks are even larger than they were then and banks are scheming and taking risks as much or more than ever...and it has not failed as of yet but it will.
Derivatives are not bad in their purpose at origin but they go bad when there is too much leverage in them because derivatives are instruments made to serve a purpose but are used in wrong ways in excess and can implode if used incorrectly or with too much leverage, Those markets are made of participants who utilize them plus dealers who make a living off making a market with a degree of risk and then there are some players who use them as a means to profit off exclusively. Bear and Lehman had too much leverage and not enough equity to quality for the bailout lifelines so it wasnt only that they were investing in sub prime but that their leverage ratios were too high so when the derivative markets and the markets for mortgages froze, the mark to market spread dropped so much that they couldnt cover the required equity to be solvent and didnt have assets to qualify for a collateral loan by the FED. Lehman was actually in the middle of trying to lower leverage before the crisis hit but because the value of their sub prime assets were dropping they could not de-leverage without taking losses and that means they had less equity on top of the leverage. They turned to short term repo schemes to hide their leverage and dirty laundry from regulators.
Capitalist corps can deceive and creatively hide their actions for longer periods than regulators can catch them...there is no way a regulator would be able to identify the schemes firms used and use AND create an action plan, get approval, take action all before the firm either implodes or covers their tracks. We do not impower regulators to the degree required to be remotely real time so while it does not seem to matter all that much day to day, when something goes wrong it goes really wrong, really fast and there was no way the FED or the government or their auditors would have been able to stop it, the collusion and deception was faster than any regulator could ever be.
It is interesting how we reward risk taking and leverage until it goes wrong and then we have no recourse, the taxpayer footed the bill for AIG and Fannie/Freddie, bailed out banks and all to keep the financial system in place and not destroy the economy and unfortunately it will happen again, nothing has changed. I remember at the time there was the opportunity for regulators and congress to break up banks and hediges to use this bad situation to make sure it would never happen again and of course they didnt and now banks are even larger than they were then and banks are scheming and taking risks as much or more than ever...and it has not failed as of yet but it will.
And the derivatives market just keeps getting bigger and bigger and bigger. Would be a shame if banks and hedgies got overleveraged, used the repo for a quick daily buck to make margin (what stress tests???) and then had to pull those funds to cover bad bets, all while taking on even more risk. I wonder what would happen when the repo market hits the bottom? Sure would be nice to make daily gains on repo that outpaced inflation while allowing margin to not call (while everyday people get stuck with inflation). I guess if marge calls, you just don't pick up, right? Or if banks/hedgies are going to fail, you just pick and choose who gets to skirt around margin calls, right? Then let the banks/hedgies that don't play along fail. Or find ways to hide your bad bets and hope everything just magically works itself out and nobody sees all the dog shit wrapped in cat shit that bad banks and hedgies have accumulated in the search for another mega mansion, or island sized yacht. I mean, if they do go bust, tax payers will just foot the bill and the bad "investors" will just get a bailout and and blame everyday investors who pay no attention to the markets while taking no responsibility for all the bad bets.
@wallstreetcappers
And the derivatives market just keeps getting bigger and bigger and bigger. Would be a shame if banks and hedgies got overleveraged, used the repo for a quick daily buck to make margin (what stress tests???) and then had to pull those funds to cover bad bets, all while taking on even more risk. I wonder what would happen when the repo market hits the bottom? Sure would be nice to make daily gains on repo that outpaced inflation while allowing margin to not call (while everyday people get stuck with inflation). I guess if marge calls, you just don't pick up, right? Or if banks/hedgies are going to fail, you just pick and choose who gets to skirt around margin calls, right? Then let the banks/hedgies that don't play along fail. Or find ways to hide your bad bets and hope everything just magically works itself out and nobody sees all the dog shit wrapped in cat shit that bad banks and hedgies have accumulated in the search for another mega mansion, or island sized yacht. I mean, if they do go bust, tax payers will just foot the bill and the bad "investors" will just get a bailout and and blame everyday investors who pay no attention to the markets while taking no responsibility for all the bad bets.
When is the next big sell-off coming on the market....do we need another "panic" event like covid for that to happen?
Trying to get a gauge of where the market is going these next 1-3 years. Seems like the top 1% don't mind the free money the fed threw into the market during covidand won't be letting go of it anytime soon...
In an extended-bubble chart wise...not much support if it comes crashing down....
@BigGame90
@wallstreetcappers
Good info on 08
When is the next big sell-off coming on the market....do we need another "panic" event like covid for that to happen?
Trying to get a gauge of where the market is going these next 1-3 years. Seems like the top 1% don't mind the free money the fed threw into the market during covidand won't be letting go of it anytime soon...
In an extended-bubble chart wise...not much support if it comes crashing down....
There has never been meaningful regulation on banks, they are too powerful and politically connected so outside an enormous event that is damaging to the economy and different politicians on those silly advisement positions I would not expect a single change even if we did have a repeat event. It seems that every ten years we have a financial wreck of some sorts and maybe if the FED keeps rates high and interest costs become too much we might see something but even at 4-5% historically rates are not that high now.
@BigGame90
There has never been meaningful regulation on banks, they are too powerful and politically connected so outside an enormous event that is damaging to the economy and different politicians on those silly advisement positions I would not expect a single change even if we did have a repeat event. It seems that every ten years we have a financial wreck of some sorts and maybe if the FED keeps rates high and interest costs become too much we might see something but even at 4-5% historically rates are not that high now.
@BigGame90 @wallstreetcappers Good info on 08 When is the next big sell-off coming on the market....do we need another "panic" event like covid for that to happen? Trying to get a gauge of where the market is going these next 1-3 years. Seems like the top 1% don't mind the free money the fed threw into the market during covidand won't be letting go of it anytime soon... In an extended-bubble chart wise...not much support if it comes crashing down....
Today — buy the dip
Quote Originally Posted by dubz4dummyz:
@BigGame90 @wallstreetcappers Good info on 08 When is the next big sell-off coming on the market....do we need another "panic" event like covid for that to happen? Trying to get a gauge of where the market is going these next 1-3 years. Seems like the top 1% don't mind the free money the fed threw into the market during covidand won't be letting go of it anytime soon... In an extended-bubble chart wise...not much support if it comes crashing down....
Just kidding. But there is no need to try to figure the market in 1-3 years. Unless, you are about to retire in that timeframe and are behind the gun for some reason. Otherwise, continue to invest in good growth and aggressive growth funds, etc.
@dubz4dummyz
Just kidding. But there is no need to try to figure the market in 1-3 years. Unless, you are about to retire in that timeframe and are behind the gun for some reason. Otherwise, continue to invest in good growth and aggressive growth funds, etc.
Well I personally don't have a ton invested/nor to invest but I wouldnt want to potentially get trapped at or near the top if there is a down swing coming in a few years and I can invest when the market/stock prices are at a discount. (Which i missed out on during March 2020)
Do these gains just keep trending up to 5500-6000?? Or are we more likely to see an event of some sort and the sp500 go back to the 3300-3700 range or so
Basically is the market to good to be true right now
or
Did the fed over invest when it dumped trillions in to the market during covid the shutdown...and basically created the extended bubble we are currently in
I guess I say this in contrast to the working class who hasn't seen their wage increase as quickly as the cost of living has gone up since 2020
Therefore if the majority of the population (working class) is spending more on necessities but making the same amount of money, that leaves less money left over to be spent on other things in the economy (luxuries, renovations, vacations, etc.. ). Which means less spending = less stimulated economy
But the market is currently doing the exact opposite of this, as it churns to record highs
Which leads back to the question above
@Raiders22
Well I personally don't have a ton invested/nor to invest but I wouldnt want to potentially get trapped at or near the top if there is a down swing coming in a few years and I can invest when the market/stock prices are at a discount. (Which i missed out on during March 2020)
Do these gains just keep trending up to 5500-6000?? Or are we more likely to see an event of some sort and the sp500 go back to the 3300-3700 range or so
Basically is the market to good to be true right now
or
Did the fed over invest when it dumped trillions in to the market during covid the shutdown...and basically created the extended bubble we are currently in
I guess I say this in contrast to the working class who hasn't seen their wage increase as quickly as the cost of living has gone up since 2020
Therefore if the majority of the population (working class) is spending more on necessities but making the same amount of money, that leaves less money left over to be spent on other things in the economy (luxuries, renovations, vacations, etc.. ). Which means less spending = less stimulated economy
But the market is currently doing the exact opposite of this, as it churns to record highs
Maybe that's why the central banks are trying to create their own CBDC? When money eventually turns 100% digital, they want to control every aspect of "currency" they can. Be your own bank.
I think at 4-5% banks are still struggling. It's just a slow pain. FED should really be raising rates but that will crush banks and slow the economy. FED really is stuck between a rock and a hard place right now and they can not make everyone happy.
@dubz4dummyz
If we knew what the market would be doing, we probably wouldn't be posting in Covers. IMO, blowing past all time highs would be a stretch. We keep hearing the economy is fine, there will be a soft landing, UI is low, 200k new jobs added every month, fast food workers getting $20/HR but how long can prices keep going up before everyone is squeezed and the buying stops? As Trump once said, "buy low, sell high". I do the opposite, I buy high, and sell low so I wouldn't even listen to myself.
@wallstreetcappers
Maybe that's why the central banks are trying to create their own CBDC? When money eventually turns 100% digital, they want to control every aspect of "currency" they can. Be your own bank.
I think at 4-5% banks are still struggling. It's just a slow pain. FED should really be raising rates but that will crush banks and slow the economy. FED really is stuck between a rock and a hard place right now and they can not make everyone happy.
@dubz4dummyz
If we knew what the market would be doing, we probably wouldn't be posting in Covers. IMO, blowing past all time highs would be a stretch. We keep hearing the economy is fine, there will be a soft landing, UI is low, 200k new jobs added every month, fast food workers getting $20/HR but how long can prices keep going up before everyone is squeezed and the buying stops? As Trump once said, "buy low, sell high". I do the opposite, I buy high, and sell low so I wouldn't even listen to myself.
Funny you say blowing past all-time high would be a stretch....that is EXACTLY what is happening right now and has been since 2021...
Which leads back to does this bull-run from 2010 just keep on chugging?
At some point there has to be an opposite reaction (like the covid panic)
And I agree they keep saying the economy is fine, but reality is the working class is falling behind/not keeping up with inflation
The one thing that I think disconnects the market from reality is that the market is controlled by the ultra-rich which would explain the all-time highs vs the lagging majority (working class)
And that the FED market injection did nothing but help pad the rich while saving the smaller amount of money in the market owned by the working class
@BigGame90
Ya I hear ya
Funny you say blowing past all-time high would be a stretch....that is EXACTLY what is happening right now and has been since 2021...
Which leads back to does this bull-run from 2010 just keep on chugging?
At some point there has to be an opposite reaction (like the covid panic)
And I agree they keep saying the economy is fine, but reality is the working class is falling behind/not keeping up with inflation
The one thing that I think disconnects the market from reality is that the market is controlled by the ultra-rich which would explain the all-time highs vs the lagging majority (working class)
And that the FED market injection did nothing but help pad the rich while saving the smaller amount of money in the market owned by the working class
@Raiders22 Well I personally don't have a ton invested/nor to invest but I wouldnt want to potentially get trapped at or near the top if there is a down swing coming in a few years and I can invest when the market/stock prices are at a discount. (Which i missed out on during March 2020) Do these gains just keep trending up to 5500-6000?? Or are we more likely to see an event of some sort and the sp500 go back to the 3300-3700 range or so Basically is the market to good to be true right now or Did the fed over invest when it dumped trillions in to the market during covid the shutdown...and basically created the extended bubble we are currently in I guess I say this in contrast to the working class who hasn't seen their wage increase as quickly as the cost of living has gone up since 2020 Therefore if the majority of the population (working class) is spending more on necessities but making the same amount of money, that leaves less money left over to be spent on other things in the economy (luxuries, renovations, vacations, etc.. ). Which means less spending = less stimulated economy But the market is currently doing the exact opposite of this, as it churns to record highs Which leads back to the question above
You do NOT need a ton to invest but you DO NEED to invest.
ALWAYS think longterm.
NEVER try to time the market.
Go look at a stock market chart for the last 20-30 years. You will see some dips and pullbacks, for sure. Now expand that chart out for as far as you can and you will see that the dips reduce dramatically. The chart flattens out the dips and is in a long and continuous rise.
Certainly over time as your available amount to invest increases you can add more during 'dips' if you like. But you should be constantly investing whatever you are able to. If you are keeping money in cash you are losing money over the longterm. If you do not have money to invest, you need to do what you can to get to that point.
If you are unsure of stocks -- then learn about them. If you do not like or trust stocks -- get into real estate or develop your own business that one day you might be able to sell.
BUT DO NOT sit and wait to 'time the markets'.
I did a big writeup about this very thing prior/during the Pandemic and market drawback. The sentiment of the investor is very wrong. A LOT of very SMART people even pulled money out of the market as it was dipping and at the bottom to go to cash. I was explaining why you HAVE to ride out the dips and/or buy more if you can can. ALWAYS buy when it is on sale but do NOT WAIT just to do that.
@dubz4dummyz
Quote Originally Posted by dubz4dummyz:
@Raiders22 Well I personally don't have a ton invested/nor to invest but I wouldnt want to potentially get trapped at or near the top if there is a down swing coming in a few years and I can invest when the market/stock prices are at a discount. (Which i missed out on during March 2020) Do these gains just keep trending up to 5500-6000?? Or are we more likely to see an event of some sort and the sp500 go back to the 3300-3700 range or so Basically is the market to good to be true right now or Did the fed over invest when it dumped trillions in to the market during covid the shutdown...and basically created the extended bubble we are currently in I guess I say this in contrast to the working class who hasn't seen their wage increase as quickly as the cost of living has gone up since 2020 Therefore if the majority of the population (working class) is spending more on necessities but making the same amount of money, that leaves less money left over to be spent on other things in the economy (luxuries, renovations, vacations, etc.. ). Which means less spending = less stimulated economy But the market is currently doing the exact opposite of this, as it churns to record highs Which leads back to the question above
You do NOT need a ton to invest but you DO NEED to invest.
ALWAYS think longterm.
NEVER try to time the market.
Go look at a stock market chart for the last 20-30 years. You will see some dips and pullbacks, for sure. Now expand that chart out for as far as you can and you will see that the dips reduce dramatically. The chart flattens out the dips and is in a long and continuous rise.
Certainly over time as your available amount to invest increases you can add more during 'dips' if you like. But you should be constantly investing whatever you are able to. If you are keeping money in cash you are losing money over the longterm. If you do not have money to invest, you need to do what you can to get to that point.
If you are unsure of stocks -- then learn about them. If you do not like or trust stocks -- get into real estate or develop your own business that one day you might be able to sell.
BUT DO NOT sit and wait to 'time the markets'.
I did a big writeup about this very thing prior/during the Pandemic and market drawback. The sentiment of the investor is very wrong. A LOT of very SMART people even pulled money out of the market as it was dipping and at the bottom to go to cash. I was explaining why you HAVE to ride out the dips and/or buy more if you can can. ALWAYS buy when it is on sale but do NOT WAIT just to do that.
@BigGame90 Ya I hear ya Funny you say blowing past all-time high would be a stretch....that is EXACTLY what is happening right now and has been since 2021... Which leads back to does this bull-run from 2010 just keep on chugging? At some point there has to be an opposite reaction (like the covid panic) And I agree they keep saying the economy is fine, but reality is the working class is falling behind/not keeping up with inflation The one thing that I think disconnects the market from reality is that the market is controlled by the ultra-rich which would explain the all-time highs vs the lagging majority (working class) And that the FED market injection did nothing but help pad the rich while saving the smaller amount of money in the market owned by the working class
If you already have money in the market when the dip comes you do not have to worry about timing it to get in because you will already be in for the long haul.
IF YOU THINK you can time the market that is fine. BUT it ASSUMES that you know where the 'bottom' is; you will not. If you did you would know more than so many people that have done this for many years and still cannot know where the 'tops' and 'bottoms' are.
The market is not 'controlled' by the 'ultra-rich' -- they just have more to invest. But look at how many millionaires are very, very average workers like school teachers, etc. that have simply invested over many years and rode out the 'dips'.
@dubz4dummyz
Quote Originally Posted by dubz4dummyz:
@BigGame90 Ya I hear ya Funny you say blowing past all-time high would be a stretch....that is EXACTLY what is happening right now and has been since 2021... Which leads back to does this bull-run from 2010 just keep on chugging? At some point there has to be an opposite reaction (like the covid panic) And I agree they keep saying the economy is fine, but reality is the working class is falling behind/not keeping up with inflation The one thing that I think disconnects the market from reality is that the market is controlled by the ultra-rich which would explain the all-time highs vs the lagging majority (working class) And that the FED market injection did nothing but help pad the rich while saving the smaller amount of money in the market owned by the working class
If you already have money in the market when the dip comes you do not have to worry about timing it to get in because you will already be in for the long haul.
IF YOU THINK you can time the market that is fine. BUT it ASSUMES that you know where the 'bottom' is; you will not. If you did you would know more than so many people that have done this for many years and still cannot know where the 'tops' and 'bottoms' are.
The market is not 'controlled' by the 'ultra-rich' -- they just have more to invest. But look at how many millionaires are very, very average workers like school teachers, etc. that have simply invested over many years and rode out the 'dips'.
How do the ultra-rich not control the market....when they pull the plug, the plug has been pulled (when they sell-off, typically after-hours)...its not a bunch of joe-blow teachers pulling the plug and plunging markets
I agree with everything else you said.
It just seems like right this moment stocks are very over-valued compared to what else is going on outside the markets (2 wars, high inflation, etc..)
But since the ultra-rich have control/majority why would they sell off and hurt their profits
After typing that maybe markets are going to 6000-7000....ultra-rich have no reason to sell unless we see a big war or pandemic
@Raiders22
How do the ultra-rich not control the market....when they pull the plug, the plug has been pulled (when they sell-off, typically after-hours)...its not a bunch of joe-blow teachers pulling the plug and plunging markets
I agree with everything else you said.
It just seems like right this moment stocks are very over-valued compared to what else is going on outside the markets (2 wars, high inflation, etc..)
But since the ultra-rich have control/majority why would they sell off and hurt their profits
After typing that maybe markets are going to 6000-7000....ultra-rich have no reason to sell unless we see a big war or pandemic
@Raiders22 How do the ultra-rich not control the market....when they pull the plug, the plug has been pulled (when they sell-off, typically after-hours)...its not a bunch of joe-blow teachers pulling the plug and plunging markets I agree with everything else you said. It just seems like right this moment stocks are very over-valued compared to what else is going on outside the markets (2 wars, high inflation, etc..) But since the ultra-rich have control/majority why would they sell off and hurt their profits After typing that maybe markets are going to 6000-7000....ultra-rich have no reason to sell unless we see a big war or pandemic
Maybe a better word might be 'manipulate' or 'take advantage of' but not 'control'. If that were the case it might imply they are causing the market to dip so they can buy. They really do not do that. They will take advantage of dips by buying, sure. But the average Joe should be doing that as well. You should be I the market at all times and NOT trying to find a spot to get in and/or out. The rich do not get out of the market unless something more advantageous comes along or is forced on them. If the capital gains tax is raised, they might look for more advantageous vehicles. But they are not 'controlling' the market to make it go down so they can get in and them making it go up. They simply take advantage of the market movements.
If you really feel that way -- simply take advantage of their 'control' along with them.
It does not matter that someone thinks the markets are overvalued right now. Folks have been saying that for, going on, decades now. What should you do, sit on the sidelines until stocks get back to where you think there is value? You would have wasted decades of money-making opportunities.
IF you ARE an expert and picking and choosing individual stocks by value -- that is a different matter. BUT you CANNNOT wait to get in the market until you 'think' it is valued right. Unless, you have a better place for your money -- and almost 100% of people do NOT have a better place to invest their money.
@dubz4dummyz
Quote Originally Posted by dubz4dummyz:
@Raiders22 How do the ultra-rich not control the market....when they pull the plug, the plug has been pulled (when they sell-off, typically after-hours)...its not a bunch of joe-blow teachers pulling the plug and plunging markets I agree with everything else you said. It just seems like right this moment stocks are very over-valued compared to what else is going on outside the markets (2 wars, high inflation, etc..) But since the ultra-rich have control/majority why would they sell off and hurt their profits After typing that maybe markets are going to 6000-7000....ultra-rich have no reason to sell unless we see a big war or pandemic
Maybe a better word might be 'manipulate' or 'take advantage of' but not 'control'. If that were the case it might imply they are causing the market to dip so they can buy. They really do not do that. They will take advantage of dips by buying, sure. But the average Joe should be doing that as well. You should be I the market at all times and NOT trying to find a spot to get in and/or out. The rich do not get out of the market unless something more advantageous comes along or is forced on them. If the capital gains tax is raised, they might look for more advantageous vehicles. But they are not 'controlling' the market to make it go down so they can get in and them making it go up. They simply take advantage of the market movements.
If you really feel that way -- simply take advantage of their 'control' along with them.
It does not matter that someone thinks the markets are overvalued right now. Folks have been saying that for, going on, decades now. What should you do, sit on the sidelines until stocks get back to where you think there is value? You would have wasted decades of money-making opportunities.
IF you ARE an expert and picking and choosing individual stocks by value -- that is a different matter. BUT you CANNNOT wait to get in the market until you 'think' it is valued right. Unless, you have a better place for your money -- and almost 100% of people do NOT have a better place to invest their money.
You can't time the stock market when the stock market is fake. The average joe (investor) just contributes to their 401k and pays no attention to the market. The market is controlled = the market is fake. It's not a "free" market. It's designed to siphon your funds over time. You do not own your stocks, just like you do not own your crypto if your investments are not in your name. If you have a 401k, stocks with a broker, crypto in an exchange, you do not own what you think you own. Your "investments" are being used against you, most people just don't realize it, or care to realize it. They just go to work, keep pumping 5-7% of their pay checks and go on with their days. If people knew how the stock market and crypto actually functioned, the market would collapse. It's designed to not let average joes know what's actually happening with their investments. Again, the market(s) are fake.
You can't time the stock market when the stock market is fake. The average joe (investor) just contributes to their 401k and pays no attention to the market. The market is controlled = the market is fake. It's not a "free" market. It's designed to siphon your funds over time. You do not own your stocks, just like you do not own your crypto if your investments are not in your name. If you have a 401k, stocks with a broker, crypto in an exchange, you do not own what you think you own. Your "investments" are being used against you, most people just don't realize it, or care to realize it. They just go to work, keep pumping 5-7% of their pay checks and go on with their days. If people knew how the stock market and crypto actually functioned, the market would collapse. It's designed to not let average joes know what's actually happening with their investments. Again, the market(s) are fake.
@wallstreetcappers Maybe that's why the central banks are trying to create their own CBDC? When money eventually turns 100% digital, they want to control every aspect of "currency" they can. Be your own bank. I think at 4-5% banks are still struggling. It's just a slow pain. FED should really be raising rates but that will crush banks and slow the economy. FED really is stuck between a rock and a hard place right now and they can not make everyone happy. @dubz4dummyz If we knew what the market would be doing, we probably wouldn't be posting in Covers. IMO, blowing past all time highs would be a stretch. We keep hearing the economy is fine, there will be a soft landing, UI is low, 200k new jobs added every month, fast food workers getting $20/HR but how long can prices keep going up before everyone is squeezed and the buying stops? As Trump once said, "buy low, sell high". I do the opposite, I buy high, and sell low so I wouldn't even listen to myself.
Great points and the 34 trillion debt is now crushing the USA. At real 8-10% rates, it will close many small banks and start panic.
Not sure even Trump can save the Nation from the horror show this administration caused.
Quote Originally Posted by BigGame90:
@wallstreetcappers Maybe that's why the central banks are trying to create their own CBDC? When money eventually turns 100% digital, they want to control every aspect of "currency" they can. Be your own bank. I think at 4-5% banks are still struggling. It's just a slow pain. FED should really be raising rates but that will crush banks and slow the economy. FED really is stuck between a rock and a hard place right now and they can not make everyone happy. @dubz4dummyz If we knew what the market would be doing, we probably wouldn't be posting in Covers. IMO, blowing past all time highs would be a stretch. We keep hearing the economy is fine, there will be a soft landing, UI is low, 200k new jobs added every month, fast food workers getting $20/HR but how long can prices keep going up before everyone is squeezed and the buying stops? As Trump once said, "buy low, sell high". I do the opposite, I buy high, and sell low so I wouldn't even listen to myself.
Great points and the 34 trillion debt is now crushing the USA. At real 8-10% rates, it will close many small banks and start panic.
Not sure even Trump can save the Nation from the horror show this administration caused.
Both wages and prices have grown since the onset of the COVID-19 pandemic, but wages have grown more
Cumulative growth of wages for private-sector production and nonsupervisory workers and the consumer price index, Q4 2019–November 2023
Bar graph showing that since late 2019, both prices and wages have seen growth, with 20 percent and 23 percent increases, respectively, in November 2023.
510152025%
+20%
+23%
Prices
Wages
@dubz4dummyz
Both wages and prices have grown since the onset of the COVID-19 pandemic, but wages have grown more
Cumulative growth of wages for private-sector production and nonsupervisory workers and the consumer price index, Q4 2019–November 2023
Bar graph showing that since late 2019, both prices and wages have seen growth, with 20 percent and 23 percent increases, respectively, in November 2023.
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