Casual Economics.
The Blind Eternities forum
Posted on Aug. 24, 2015, 8:03 p.m. by Didgeridooda
Talk about current events in the world of economics. Discuss market fluctuation causes, and effects.
Note: This is not a place for hostility. This is not a place for politics. Reasonable discussion is highly encouraged, and sources make us all sleep better.
I'm asking for examples of cards that have some extreme prices changes. Figured you guys would know some good cases.
August 24, 2015 8:42 p.m.
I work as a financial advisor, so needless to say, it's been a hectic day. I'll try to get back here tonight and post my thoughts in as concise a way as my fried brain will allow.
August 24, 2015 8:46 p.m.
Didgeridooda says... #7
kmcree I would love to hear what you have to say if you are able to get to it. Also a bit on your experience today would be interesting to me. I am not sure if you have heard that before.
August 24, 2015 8:53 p.m.
Coinman1863 says... #8
Repost but relevant.
So, Today is the largest single day point swing in history though pulling in at whopping 1089.43 point swing.
And today ranks 8th overall in net loss for one day (588.64), number one was 9/29/08 with a net loss of 777.68 points on the day. The next month after that pulls #2 with a 733.08 point net loss.
Fun with random Statistics.
Also most of my info, NPR for daily stuff; for historical Wikipedia in combo with actual stock records for cross reference.
August 24, 2015 8:53 p.m.
Didgeridooda says... #9
Australia ASX All Ordinaries +10.80 +0.22% 5,025.00 8:35pm ET
Up swing in one
Nikkei 225 Japan -664.73 -3.59% 17,875.95 8:35pm ET
More of the same out of Asia
August 24, 2015 8:58 p.m.
Didgeridooda says... #10
Couple refreshes later both are down. No live updates anymore. Just wanted to give a clue on the new trading day.
August 24, 2015 8:59 p.m.
This is nothing like 2008, its all a bubble caused by the crash of the Chinese market. This was caused by spurious growth claims and artifical market forces. After China crashed the international markets restructured causing drops in both Europe and US. This is a small bubble. It is not large international debt.
August 24, 2015 9:08 p.m.
So, my thoughts on the current state of the market: There are really 3 basic things that drove the sell off over the last couple of days, culminating in this morning's ridiculousness. The first, and probably biggest, is the recent sell off in China. The Chinese stock exchange was up nearly 150% last year, and as such, was heavily over valued. Some of the growth numbers have come into question, and the market has dropped something like 40% over the last month or so. This caused a panic in China, leading the government to attempt to halt the sell off and devalue their currency. This created fears in the U.S., and was a major cause of the sell off here.
The second reason for the sell off today is the sharp decrease in the price of oil. This was primarily the result of an all time high supply. Oil companies are producing a record amount of oil, and demand hasn't kept up. This resulted in a drop in prices, a subsequent drop in oil company revenues, and thus a small panic in the market.
The third reason for the sell off is the fear surrounding a future rate hike by the Federal Reserve. Ultimately, a rate hike will probably be a good thing for the economy. But short term, a hike will result in volatility, and probably short term loses.
All in all, the sell off this morning was really just a result of unnecessary panic and emotional trading. The U.S. economy itself is in good shape. Earnings are still high, unemployment is at an all time low, and GDP is still growing. We've reached a more mature stage of growth (as opposed to the massive growth from 2012-2014) which will mean more natural volatility, but a general upward trend. Everything I mentioned above is really just ancillary, and there is no real "good" reason for the drop. It really just makes it that much more frustrating for someone in my line of work.
As far as my day: it honestly wasn't all that exciting or interesting, just a little hectic. Basically spent the morning on conference calls and in meetings regarding the market movement, and getting insights into the next few weeks. The afternoon was spent making calls to clients, assuring them that their assets are well-positioned, and recommending a rebalance when applicable. Basically, we're just trying to get money out of bonds and into stocks. Now is a fantastic time to buy into the stock market if you have extra cash. A few clients were concerned, but most were pretty relaxed. The biggest key to being a successful (and sane) advisor is to set realistic expectations with your clients.
Just a disclaimer (because reasons): Nothing above is meant as any kind of investment recommendation. Do not invest without first studying a fund's objectives, and keep in mind that any investment carries the risk of loss.
August 24, 2015 11:42 p.m.
Unemployment is at an all time low?
LOL
Can I have some of whatever drugs you're doing? They must be great.
August 25, 2015 1:59 a.m.
Well I mean, its such an easy to prove wrong statement I couldn't possibly not laugh at it. Unemployment is only historically low if you only look at the Obama years. Its pretty average by gwb or Clinton standards. And that's only looking at the two previous presidents and not taking into account 'real' unemployment or underemployment, which are higher than they were under gwb or Clinton.
Sorry though. Next time I won't go for the low hanging fruit and I'll let you get it.
August 25, 2015 2:18 a.m.
grumbledore says... #17
lol dude i don't touch politics. i honestly just don't care. they're annoying to watch on tv, annoying to discuss, and frankly, when i speak to people that live in other countries at work... its just kind of embarrassing. our political system is a joke. but hey, so is our medical and educational systems!
August 25, 2015 2:24 a.m.
And yet you still choose to live in the USA and raise your family here... I wonder why...
August 25, 2015 3:09 a.m.
grumbledore says... #19
I see no reason to uproot my kids just because I'm angry at the world. I make enough to put them into private schools that don't suck, and that's my biggest concern about raising them in the states. Non-nuclear familial ties have never meant shit to me, but I would like them to have access to it and formulate their own opinions. Moving out of the country would obviously hinder that.
I'm not really sure why you're trolling me, but I hope you're getting something useful out of the experience... Kind of a waste of time otherwise. In either event, it seems like you have a pretty significant chip on your shoulder about this. If this is due to your own job loss or similar situation, then I am genuinely sorry for accidentally hitting a nerve. To be fair though, the only reason I said anything in the first place was because the OP had explicitly requested that politics be left out of the discussion.
Didgeridooda - sorry for hijacking your thread man. Wasn't the intent.
August 25, 2015 3:20 a.m.
You're the only one bringing up politics... I simply pointed out a giant misconception (or outright lie maybe) a fellow poster brought up. And my only chip concerns people like you. You have an amazing life, given to you because America is the greatest country in the history of the planet... But you can't see that and just bad mouth it for whatever reason.
August 25, 2015 4:56 a.m.
Alright, I'll rephrase. Unemployment is extremely low. Not all time, but still very low. Other than a brief period in 2006, and the very end of the Clinton years (97-00), it hasn't been this low in 40 years. Honestly, shit like this is why I don't post much on T/O anymore. You took 3 words out of a 5 paragraph post, blew them completely out of proportion, and then made fun of my intelligence. If you have nothing substantive to say, don't just post to be an asshole. I have enough bullshit of my own, I don't need yours.
August 25, 2015 11:40 a.m.
grumbledore says... #22
its funny you say that kmcree - i almost never post on tappedout for the same reasons.
August 25, 2015 11:43 a.m.
He's right though. Unemployment of around 5% is pretty low. It's really not bad at all. Pretty similar to the rates of unemployment in most first world countries though.
August 25, 2015 11:44 a.m.
Didgeridooda says... #24
kmcree I really appreciate your post. I have been very curious of the market since 08. I am just trying to find other sources, opinions, and experiences.
I want to invest, and I know I should. I just find it hard to. I think it is due to a lack of knowledge on the subject. To grasp the idea, I want to understand the swings a little better. I know that is concentrating on small periods, but those are the ones that scare me.
August 25, 2015 12:34 p.m.
Really you need to understand the global nature of the market in order to more effectively understand your investments. This readjustment was something that was on the cards for a very long time.
August 25, 2015 12:36 p.m.
grumbledore says... #26
I work with a couple guys who are both investing in companies that sell bottled water. They are betting that in 10 years or so it'll be way more expensive due to rising population and lower availability of potable water. What do you think of this? Fools gold?
August 25, 2015 12:37 p.m.
Their global assessment sounds correct but their tech assessment incorrect. They are assuming the demand for bottled water will rise steadily across the globe - probably not true. Who's to say that the bottled water you invested in will be wanted as much in the US as it will in a newly developed market such as Pakistan? Furthermore in the future it is likely we'll have better methods to purify sea water which will heavily affect the way in which bottled water is sold.
Their idea is sound in principle but relies on the company they've invested in to globalise AND relies on existing tech not changing..... which isn't hugely likely. I mean, if we don't find ways to purify greater amounts of water soon, we will just perish as a race.
August 25, 2015 12:44 p.m.
I'd agree with most of what Chief said. I'd only add that investing in individual companies (of any kind) is relatively high risk. It's perfectly fine to invest small portions of your portfolio in positions like that, but for the majority of your portfolio I'd recommend mutual funds, as they provide much greater diversification and tend to be less volatile. Basically, don't throw all your eggs in one basket.
August 25, 2015 1:21 p.m.
Didgeridooda: I'd probably offer you the same advice. Find an advisor you like and trust, and invest into mutual funds. The swings honestly don't make much of a difference if you're disciplined and you prepare for them. As an example, I have a client who is invested in mutual funds, roughly 70% stocks and 30% bonds. Yesterday, we sold off about half of her bond holdings in order to purchase more stock holdings. She bought into the stock market at an extremely low point, and it has since risen. In a few weeks, once the stocks have recovered, we'll sell those extra stock positions and rebalance back into bonds, but now with more money overall after having captured those gains. That's how you go about disciplined investing, and as long as you have a long term focus, you'll be much more successful than focusing on short term timing.
August 25, 2015 1:27 p.m.
kmcree You really need to learn how to look up statistics.
"Alright, I'll rephrase. Unemployment is extremely low. Not all time, but still very low. Other than a brief period in 2006, and the very end of the Clinton years (97-00), it hasn't been this low in 40 years"
I'll leave this link here;
http://portalseven.com/employment/unemployment_rate_for_president_term.jsp?president=Barack%20Hussein%20Obama
From here you can click the all the 'recent' presidents and view the stats during their terms. You are flat out wrong about this one simple thing, which brings into question EVERYTHING you have to say. Which is probably why you're so upset about me pointing it out. The current 'unemployment rate' is a complete lie, and even if it were true, 5%~ is the average unemployment rate since Jimmy Carter. (who was only like 6-7%, ish, I'm not doing the math, it's there if you want to see it, and before him it was always around 5%) The current rate really seems amazing to normal people who don't pay attention though, considering how high it's been since Obama took office. But that doesn't change the fact that it's been around 5% for the past 100 years. This is not historic lows, it's not even out of place, it's slightly higher than what it freakin should be, and they're not even counting unemployment correctly.
August 25, 2015 8:24 p.m.
That link quite literally says that the unemployment rate is around 5% and is lower than it was under Bush. This is bloody amazing considering the economic turmoil the world is under.
August 25, 2015 8:26 p.m.
I'm not sure how your link shows anything other than exactly what I said? Unemployment is currently around 5.4%, and most of the numbers for recent presidents hover between 5% and 6%, with some going as high as mid 7s (excluding Obama for whatever reasons you seem to want to).
As far as the "current unemployment rate being a complete lie", I'll leave it up to you to drink whatever cool aid you want to drink. Things like under employment have always been factors left out of unemployment rates, so unless you can point me somewhere that substantively proves there is more under employment today than in the past, you have no argument.
Finally, for your "higher than it should be" comment, it actually isn't higher than it should be. The Federal Reserve targets between 5.5% and 6% as its goal unemployment rate. Whenever you get under 5% you start running into issues like a lack of applicants for jobs, which leads to higher salaries, costs, and eventually inflation.
I'm not sure who you think you are and why you felt the need to jump on here and be a complete douche, but please feel free to show yourself out. You aren't appreciated.
I'll also just leave this here. Its the actual data from the Bureau of Labor.
August 25, 2015 8:55 p.m.
What the federal reserve thinks unemployment should be has nothing to do with averages. And frankly, anyone who thinks unemployment being over 1% is dumb or lying. If unemployment was 1% we wouldn't need to kick all the illegals out of the country because they suppress wages. We could give them working visas or citizenship and treat them fairly and be happy they're here.
I'm also glad you finally stopped trying to push the narrative of Obama being a good president and his policies being good. Being confronted with the facts tends to bring about that result.
I'd show you lots of data about underemployment and why/how its so much higher now, and about how the numbers are fudged due to not counting everyone out of work and looking for a job as 'unemployed' and how the wealth gap has greatly increased under Obama.... But it would involve links to places like the heritage foundation, and you'd just cry about conservative bias or leaving politics out of the discussion.
I'm also glad to see you have to resort to name calling, because as everyone knows, once you start name calling and attacking people instead of arguing points and data you've lost the debate.
I'm also sure lots of people appreciate me correcting you. You're welcome.
August 26, 2015 12:54 a.m.
Thinks unemployment being over 1% is bad* is dumb or lying.
Oops. Wish I knew how to edit posts!
August 26, 2015 12:55 a.m.
Dude, go take a basic economics class. Like any. They will all tell you that 0% unemployment is not desirable. And for the record, I never said anything about Obama being a good president. I'm a Republican and I can't stand the guy. So seriously, go away. You're obviously just ignorant.
August 26, 2015 12:59 a.m.
VampireArmy says... #36
I wish this thread could move further. I was thoroughly enjoying reading the insights into the world of investing and high end economics. I could never afford to do it on a mental or financial level but it surely is very fun to see other's do so and observe the information. I'm saddened that it's devolved this far.
August 26, 2015 1:06 a.m.
If you guys have any specific questions or things you'd like to discuss, I'd be happy to do it on more of a 1 to 1 basis. Frankly, I've lost all interest in any public forum conversation. It just isn't conducive to productive discussion anymore.
August 26, 2015 1:44 a.m.
I'll just leave this here. On the balance of evidence economists in first world countries have been unable to correlate high immigration with lowering wages and native unemployment.
August 26, 2015 7:18 a.m.
here's another. and another
Read more. Guess less. Don't believe the hype.
Didgeridooda says... #2
This thread was posted in response to the wild ride the markets took today.
What are some of the sites that you use for up to date info? I was unable to find one that I liked. I think that might be a good starting point.
What was the catalyst for the drops. Is this tied to 2008, or is it separate entirely?
August 24, 2015 8:14 p.m.