Economy

[AtW]

Nice theory of hw one can’t lose.

In practice companies can go bust or get taken over at their distressed share validation level, thus fooking smart investors over.

Invest in stock market only money you can afford to lose.

 

[BlasterBates]

Nice theory of hw one can’t lose.

In practice companies can go bust or get taken over at their distressed share validation level, thus fooking smart investors over.

Invest in stock market only money you can afford to lose.

After a stock market crash all shares are at "distressed" values. That's why it is called a crash.

Always steer clear of the sector that brought the whole thing crashing down, i.e. tech stocks in 2003 and banking stocks in 2009. In 2009 lots of good stocks at low prices for companies that had nothing to do with the crash but were at low prices because everything else was. If you have a stock portfolio inevitably companies you own will go bust; not a problem, you diversify.

 

[AtW]

After a stock market crash all shares are at "distressed" values. That's why it is called a crash.

The point is that if company gets taken over the share price gets fixed at its distressed level, or if it goes bust then ti goes down to zero - buying double isn't guaranteed winning strategy.

 

[Hobosapien]

... the banks have run out of money and are not lending any more. ...

After the last credit crunch where this happened the central banks have been shaking the magic money tree (aka QE) so what events are likely to cause this to stop?

China have pumped billions into their system to make it look like GDP isn't falling due to their handling of the virus situation. It's all fake growth at the cost of currency devaluation, as far as I can tell, though I'm no expert.

If all the big players in the world's economy are playing the same game (run up national debt with no intention of paying it back, keep interest rates low enough the house of cards doesn't collapse) then what is going to cause that to change?

 

[DealorNoDeal]

If all the big players in the world's economy are playing the same game (run up national debt with no intention of paying it back, keep interest rates low enough the house of cards doesn't collapse) then what is going to cause that to change?

Has this ever been tried before? It doesn't sound like the sort of thing that will end well.

 

[Cirrus]

Has this ever been tried before? It doesn't sound like the sort of thing that will end well.

They tried the opposite a while back

Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. By comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession.[4] Some economies started to recover by the mid-1930s. However, in many countries, the negative effects of the Great Depression lasted until the beginning of World War II - Wikipedia

.

 

[DealorNoDeal]

Oh well, I guess they know what they're doing.

 

[Hobosapien]

Oh well, I guess they know what they're doing.

Not necessarily. I think successive governments just have a short termist view, only worried about their time in office, so do little to address any fundamental problems as it's not going to keep them in office come election time.

Seems to me that what's happening with national debt is similar to hyperinflation but without the drama along the way. Likely it will end with replacement of the currency.

Maybe they will replace it with digital currency, which has other benefits to them such as no untraceable cash transactions so they can get more tax, though cryptos will still prevail on the black market unless there is a global crackdown. That won't happen while the inept UN is the nearest there is to an actionable world government. Needs a USA/UK led new empire to bring the world in line with the world police, before the commies (China) take over totally.

 

[DealorNoDeal]

I've heard it reported that Trump couldn't care less about the size of the US debt because it's unlikely to be a problem while he's still in office. Perhaps Johnson & co are thinking along the same lines.

 

[AtW]

I've heard it reported that Trump couldn't care less about the size of the US debt because it's unlikely to be a problem while he's still in office. Perhaps Johnson & co are thinking along the same lines.

Erm, they ALL Generally think along the same lines, which is why the debt is so massive!

The only exception was recently when it was politically convenient to pretend it's a huge problem and cut mildly some expenditure pretending they are trying to balance the books.