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Thread: Stock Market plunge.

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    Caught in the Matrix
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    Stock Market plunge.

    Stock market drops by over 1500 points today. 6% drop so far in just one day. Is Trumps bubble bursting?

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    Troll Magnet Sparko's Avatar
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    Quote Originally Posted by JimL View Post
    Stock market drops by over 1500 points today. 6% drop so far in just one day. Is Trumps bubble bursting?
    Could be. We will see. Might be a good time to buy too.

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    tWebber alaskazimm's Avatar
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    Well, the Patriots lost the Super Bowl last night so I'd expect many more signs of the impending apocalypse to come in the next few days.

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    Quote Originally Posted by alaskazimm View Post
    Well, the Patriots lost the Super Bowl last night so I'd expect many more signs of the impending apocalypse to come in the next few days.
    Nah, the Pats have been in 8 of the last 16 Super Bowls and they lost 3 of those 8, so not much of an omen there, but we did possibly elect the anti-christ as our president last november.

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    See, the Thing is... Cow Poke's Avatar
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    I figure it's an expected correction. Fortunately, I got out two weeks ago!

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

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    tWebber Mountain Man's Avatar
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    Even with the drop, Dow is still higher than it was before Trump won the election.

    Not sure what spooked investors. Is this fallout from the memo?

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    Quote Originally Posted by Mountain Man View Post
    Even with the drop, Dow is still higher than it was before Trump won the election.

    Not sure what spooked investors. Is this fallout from the memo?
    I think it's mainly fear of inflation. That was the sense I was getting a couple weeks ago, so I switched everything to cash.

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

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    tWebber Leonhard's Avatar
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    Too soon to tell.

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    tWebber Starlight's Avatar
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    Quote Originally Posted by JimL View Post
    Stock market drops by over 1500 points today. 6% drop so far in just one day. Is Trumps bubble bursting?
    I suspect it was probably some malfunctioning computer trading programs.

    But I wouldn't be surprised to see a crash like 2008 or bigger soon. The US congress has gradually repealed the weak Dodd-Frank regulations that were put in place after 2008. The weak regulations combined with deep, deep, structural issues in the US economy, combined with record levels of wealth inequality make for a dangerous economic environment. The only thing holding it together currently has been immense amounts of quantitative easing which is a bit like wrapping a pile of radioactive waste in many layers of duct tape and declaring that it's now 'all good'. That was actually somewhat better than Europe's austerity approach of doing nothing and hoping it goes away, and it's been an interesting lesson to observe just how long quantitative easing can hold the pile of garbage together for. However, quantitative easing seems to be reaching the limits of its ability to tape over the underlying problems, so it will be interesting to see how quickly those problems re-manifest as QE's ability to hold it together runs out.

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    tWebber carpedm9587's Avatar
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    Quote Originally Posted by Starlight View Post
    I suspect it was probably some malfunctioning computer trading programs.

    But I wouldn't be surprised to see a crash like 2008 or bigger soon. The US congress has gradually repealed the weak Dodd-Frank regulations that were put in place after 2008. The weak regulations combined with deep, deep, structural issues in the US economy, combined with record levels of wealth inequality make for a dangerous economic environment. The only thing holding it together currently has been immense amounts of quantitative easing which is a bit like wrapping a pile of radioactive waste in many layers of duct tape and declaring that it's now 'all good'. That was actually somewhat better than Europe's austerity approach of doing nothing and hoping it goes away, and it's been an interesting lesson to observe just how long quantitative easing can hold the pile of garbage together for. However, quantitative easing seems to be reaching the limits of its ability to tape over the underlying problems, so it will be interesting to see how quickly those problems re-manifest as QE's ability to hold it together runs out.
    I was under the impression that QE policy reversed late 3Q17 and the fed has been moving to realign its balance sheet. I'm also not sure I agree with your assessment about a huge fall. Unlike 2008 and 2001 before it, we don't appear to have a bubble in any particular segment. Instead, the overall market has been somewhat over-hot (i.e., PE ratios hit an average of 34 over the past few months, which is well beyond the 16 that is considered "normal."). We're overdue for a 10-20 point correction, and it appears to be happening (about 8% since last Monday already). It would not surprise me to see it correct another 5-15% before leveling out and resuming its growth cycle. Overall, economic trends have been fairly good: job growth is not as strong as 2012-2016, but it's still in the healthy range. Unemployment is now at levels that creating wage pressure, which is the next thing we expected to see. Although I do not think the tax cuts are going to produce their intended results (the GOP seems to forget that if the economy overheats, the fed stepps in to adjust rates and apply the breaks to prevent exorbitant inflation), there is no questions that businesses are liking them and using the projected savings to reduce debt, drive M&As, perform stock buy-backs, and issue dividends to shareholders.

    Because there do not seem to be any overt negative economic indicators, I suspect that, once prices drop a bit more, people will starting looking for bargains and we'll see it turn back around.
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.

    -Martin Luther King

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