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The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”


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Still early in the trading day, and a lot can happen, but so far a drop of roughly 7 percent so far is actually a bit of a relief.

 

I still expect the market over time to dip as far down as 15K, which would just about be equivalent to the Great Recession drop. But remember after the bottoming out in March 2009, stocks gained 60 percent for the rest of the year. Not close to a full recovery which wouldn't happen for a couple years, but a nice start nonetheless.

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This seems different.  Closing down commerce for a month is going to screw so many people and have 2nd and 3rd order effects.  We havent gotten to the missed payments and defaults part of this recession crisis.... right now we are in Match 2008... 

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Question for those smart on the issue: it seems prudent for some of the steps the Fed is doing with the zero interest rates and the multi hundred billion dollar repo efforts in light of this situation, but what are the longer range negative effects of these steps, if any? Slower growth?

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Something I've been thinking about and would appreciate your take on...

 

I'm currently maxing out my 401k and actually "up'd" my deduction earlier in the year to be done contributing by mid November.  Given the crappy markets, etc.. Would it be wiser at this point to take some or most of that deduction and redirect it to the mortgage instead?  I've only got about 90k left to pay on it but I'm in a 15 yr with really good interest rate.  So the question is, buy cheap stocks & bonds that may recover and pay dividends eventually (not forgetting the tax break) or power-down the low interest mortgage?

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6 minutes ago, FuriousD said:

Something I've been thinking about and would appreciate your take on...

 

Tax advantaged space is precious and you'll never get it back. If you can afford it, you should keep contributing, especially if there's a match involved.

 

I also think I read somewhere on this board that market timing is generally a bad idea.

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2 hours ago, hail2skins said:

Question for those smart on the issue: it seems prudent for some of the steps the Fed is doing with the zero interest rates and the multi hundred billion dollar repo efforts in light of this situation, but what are the longer range negative effects of these steps, if any? Slower growth?

 

Cutting rates is a step entirely intended to boost growth, and the traditional downside is inflation.  The risk we are running is that cutting rates to zero causes the inflation without the boost to growth. 

 

https://en.wikipedia.org/wiki/Stagflation

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1 hour ago, visionary said:

 

 

 

 

Note:  Donald Trump has been sacrificing the health and lives of American citizens, to prop up the stock market.  

 

Edit:  

 

I don't think it's hard to believe at all, that Donald Trump and his "side" probably doubled the death toll from this epidemic, so that we could have this stock market.  

 

No, it will never be conclusivey proven.  But I don't think anybody but a toll can argue that a month of "it's just the flu", "It only affects old folks", "It's just (umpty-ump) people", "the real threat is to the economy" didn't increase it.  

Edited by Larry
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32 minutes ago, Barry.Randolphe said:

 

That he signed his name on :ols:

 

You can't make this **** up.....god. The documentaries written on this presidency are going to be a multi-season HBO special

They may be documentaries.  I'm sure Oliver Stone will do a Trump movie;. He's still alive right?   

Plenty of tell all books.

 

I think most people will just want to forget. 

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I'm putting this here, since this is more of an economic impact of the virus.

 

Universal's movies currently in theaters will be made available on demand this week 

>> With the coronavirus disrupting the global theater marketplace, Universal Pictures is making some of its current film releases available on demand starting this week, the studio announced Monday....<<<

Edited by Rdskns2000
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10 minutes ago, Rdskns2000 said:

I'm putting this hear, since this is more of an economic impact of the virus.

 

Universal's movies currently in theaters will be made available on demand this week 

>> With the coronavirus disrupting the global theater marketplace, Universal Pictures is making some of its current film releases available on demand starting this week, the studio announced Monday....<<<

Putting this hear?

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3 hours ago, Larry said:

 

Note:  Donald Trump has been sacrificing the health and lives of American citizens, to prop up the stock market.  

 

Edit:  

 

I don't think it's hard to believe at all, that Donald Trump and his "side" probably doubled the death toll from this epidemic, so that we could have this stock market.  

 

No, it will never be conclusivey proven.  But I don't think anybody but a toll can argue that a month of "it's just the flu", "It only affects old folks", "It's just (umpty-ump) people", "the real threat is to the economy" didn't increase it.  


They couldn’t even accomplish saving the stock market with their BS. In fact, it’s in complete free fall because the admin delayed testing, made awful decisions and didn’t want to see high case #s early on. 
 

Market is crashing now because we’re going into this thing completely blind. There is a different scenario where we know where most of the outbreaks are, what their extent is and the shutdown of the economy is a lot more targeted and proportional to the threat. 
 

This should be an extinction level event for the GOP. How anyone can vote for them in the ballot box again is a real testament to the failure and rot within this country. Everything some people have been warning for years; their disdain for science, disdain for expertise, self-serving rotten corruption — everything has been in full display through this crisis. 

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Market crash??!! Futures hit their limit up tonight at +800, which implies an opening +1000.  😀

 

I'm not sure if the same circuit breakers apply to the market upside as they do for market crashes. For example, can the S&P rise by over 7 percent during the trading day without causing a 15-minute halt.

 

Its gonna be a hard slog for the market, but hopefully we are getting into a situation where we somewhat know where we are with coronavirus and at least confidence grows with the curfews and shutdowns that perhaps we are making progress in flattening the curve. In the back of my mind, also hope that the president was presenting a worst case scenario of July/August but if restrictions (through our collective efforts) can gradually be lifted by May, he would look good. I wouldn't mind that. 

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