Author Topic: August is when it all implodes  (Read 4492 times)

thedigitalone

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August is when it all implodes
« on: June 16, 2020, 04:56:58 PM »
According to this Buzzfeed article: https://www.buzzfeednews.com/article/tomgara/economy-recession-coronavirus

They're predicting that the combination of stimulus money running out, eviction bans being lifted and deferred payments (Mortgage, student debt, rent) coming due may cause a real economic collapse.

I post these because I really enjoy the *rational* discussion that follows, you folks keep me sane some days!

Buffaloski Boris

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Re: August is when it all implodes
« Reply #1 on: June 16, 2020, 05:15:40 PM »
Really? So the financial apocalypse will happen in August? How about a specific date and time. Like August 4th at 1046 AM EDT.

While reading cassandras is entertaining, I’d take it with about 3 grains of salt. We’re going into an election season and the politicians will be trampling each other to show that they’re the “friends of the working class.”  So I’d put the chances of no further helicopter money at about zero. I do think that there will be a work incentive payment, say paying you an extra few hundred bucks a week because you’re working and still have a pulse. Debt moratoriums can be extended.

Upshot: the day of reckoning looms but probably not in August.

nereo

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Re: August is when it all implodes
« Reply #2 on: June 16, 2020, 05:44:22 PM »
Really?  Buzzfeed is where we are turning for astute financial predictions?

Look... no one has a clue what the F is going to happen next week or next month or in August.  There was a cantankerous thread here several weeks ago that got locked, but the basic premise was that, after an absurdly good April the markets were absolutely going to crash very soon, as in within the next few days or maybe a week...  and it hasn’t happened.  Yet. 

Almost impossibly we’re at about the same point we were in December 2019... before anyone had heard of the Corona Virus and most everyone was predicting a financially Steller 2020. Oops.

There are absolutely reasons why stuff could go deeply south.  A second, bigger wave of the virus. States re-locking down. Another breakdown of the supply chains.  War(s).  But things could possibly change, too.  For one many businesses have figured out this whole work-from-home thing, so a second lockdown wouldn’t be nearly as disruptive as the first.  Supply chains have already been re-arranged.  The Fed hasn’t turned off the fire-hose of stimulus and will now buy corporate bonds “as it sees fit” and anonymously.  And perhaps the biggest wildcard of all: Congress.  It’s an election year, so if things look really bad (for their election prospects) expect a whole bunch of elected officials to suddenly get behind another massive bailout.  No one wants their voters to be destitute right before they go to the polls, REpublican or Democrat.

So August might go way down.  Or way up.  Or sideways.  EVentually all this stimulus might be a drag on the economy... but probably not for a year or two, or maybe a decade.  Or maybe never.  Most likely NOT while the money is still flowing.

Predicting “the end of times” in a financial sense is a no-lose proposition.  When you are wrong no one remembers.  When you are right people read just that article and suddenly you are upheld as “the guy/gal that correctly predicted the exact month it would all come crashing down!”

Bottom line:  No point in worrying about something you can’t predict, can’t avoid (or at least shouldn’t try to) and can’t stop.

Evgenia

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Re: August is when it all implodes
« Reply #3 on: June 16, 2020, 06:00:02 PM »
I limit my news intake pretty strictly, but this piece on Here and Now (featuring Laurie Garrett, who won the Pulitzer for her work chronicling the Ebola outbreak in Zaire) did a nice job explaining what various models and researchers predict about virus progression and the economy, depending on the choices we make.
https://www.wbur.org/hereandnow/2020/06/16/coronavirus-pandemic-us

Timing isn't mentioned, but "According to the Organisation for Economic Co-operation and Development, U.S. GDP could decline to -8.5% if there is a second wave" (which is not what we're having now; we're still in the first wave). That GDP number, insofar as it's used as a recession measure, would be a pretty extraordinary; in late 2008 it was -6.2%.

American GenX

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Re: August is when it all implodes
« Reply #4 on: June 16, 2020, 06:01:51 PM »
Everyone likes to speculate.  lol

waltworks

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Re: August is when it all implodes
« Reply #5 on: June 16, 2020, 06:47:57 PM »
Someone let Thorstache write an article for Buzzfeed?

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nereo

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Re: August is when it all implodes
« Reply #6 on: June 16, 2020, 07:15:44 PM »
Someone let Thorstache write an article for Buzzfeed?

-W

Best reply of the day.

hodedofome

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Re: August is when it all implodes
« Reply #7 on: June 17, 2020, 05:37:28 AM »
I limit my news intake pretty strictly, but this piece on Here and Now (featuring Laurie Garrett, who won the Pulitzer for her work chronicling the Ebola outbreak in Zaire) did a nice job explaining what various models and researchers predict about virus progression and the economy, depending on the choices we make.
https://www.wbur.org/hereandnow/2020/06/16/coronavirus-pandemic-us

Timing isn't mentioned, but "According to the Organisation for Economic Co-operation and Development, U.S. GDP could decline to -8.5% if there is a second wave" (which is not what we're having now; we're still in the first wave). That GDP number, insofar as it's used as a recession measure, would be a pretty extraordinary; in late 2008 it was -6.2%.

Does the article also mention the amount of error our ‘researchers and models’ had on their predictions of the virus in America thus far? We should all be dead by now if they were right in March.

I’m inclined to not believe them.

Paper Chaser

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Re: August is when it all implodes
« Reply #8 on: June 17, 2020, 05:42:28 AM »
Almost impossibly we’re at about the same point we were in December 2019... before anyone had heard of the Corona Virus and most everyone was predicting a financially Steller 2020. Oops.

Were "most everyone" predicting a financially stellar 2020? Genuine question. In my circles, they were predicting major slow downs in late 2019 and into 2020. My employer laid off 2000 people in anticipation of a significant drop in demand. Q4 2019 was their worst quarter since 2009 as far as sales/revenue are concerned.

The trucking industry was already in a recession. Freight movement was way down:

https://www.entrepreneur.com/article/339551

Auto sales were down slightly, continuing a trend. Fleet sales peaked mid-year and fell off sharply in the second half. Sub-Prime auto loan defaults were higher than they were in the Great Recession:

https://www.cbtnews.com/cox-automotive-chief-economist-jonathan-smoke-discusses-vehicle-affordability-evs-and-much-more/




nkt0

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Re: August is when it all implodes
« Reply #9 on: June 17, 2020, 07:20:41 AM »
While i don't believe that Buzzfeed is an authoritative source for financial predictions (no one is), i am genuinely worried about the prospects of another crash either soon due to coronavirus or after the election due to coronavirus and general sluggishness of the economy (no matter who wins).

My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?

nereo

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Re: August is when it all implodes
« Reply #10 on: June 17, 2020, 07:28:27 AM »
While i don't believe that Buzzfeed is an authoritative source for financial predictions (no one is), i am genuinely worried about the prospects of another crash either soon due to coronavirus or after the election due to coronavirus and general sluggishness of the economy (no matter who wins).

My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?

That is just another attempt to time the market

If you NEED the money in the next 24 months or so, by all means pull that money out. But if this is long term, keep it invested.

nkt0

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Re: August is when it all implodes
« Reply #11 on: June 17, 2020, 07:34:42 AM »
That is just another attempt to time the market

If you NEED the money in the next 24 months or so, by all means pull that money out. But if this is long term, keep it invested.

Thanks. Sometimes i just need a reality check. :D

MudPuppy

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Re: August is when it all implodes
« Reply #12 on: June 17, 2020, 07:48:18 AM »
My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?


I've changed my betterment emergency account (I keep half my emergency money in a savings acct and half in a betterment fund) to be 15% stocks and 85% bonds instead of 25% stocks and 75% bonds, but my general investing is still all stock because I don't anticipate needing it immediately.
« Last Edit: June 17, 2020, 09:07:10 AM by MudPuppy »

nereo

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Re: August is when it all implodes
« Reply #13 on: June 17, 2020, 08:50:15 AM »
Almost impossibly we’re at about the same point we were in December 2019... before anyone had heard of the Corona Virus and most everyone was predicting a financially Steller 2020. Oops.

Were "most everyone" predicting a financially stellar 2020? Genuine question. In my circles, they were predicting major slow downs in late 2019 and into 2020. My employer laid off 2000 people in anticipation of a significant drop in demand. Q4 2019 was their worst quarter since 2009 as far as sales/revenue are concerned.


A fair question, and maybe "most everyone" is un-proveable and "steller" is admittedly an overstatement, but the general sentiment was that the overall economy was in a good place with low overall employment, inflation just under target and continued growth forecasted, albeit at a moderate 2%-2.5% here in the US.

Here's a few snippets:
From the last meeting of the Fed Reserve:
Quote
The U.S. economy begins the year 2020 in a good place. The unemployment rate is at a 50-year low, inflation is close to our 2 percent objective, gross domestic product growth is solid, and the Federal Open Market Committee's (FOMC) baseline outlook is for a continuation of this performance in 2020.... The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective

From the World Bank in January 2020:
Quote
Global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year’s significant weakness

Petere Navarro on Dec 30th, 2019:
Quote
Forecast-wise, I’m seeing closer to 3% real GDP growth than 2% [in 2020]. I’m seeing at least 32,000 on the Dow

Wall Street Journal, Dec 18th 2019:
Quote
US Expansion expected to continue through 2020 - WSJ Survey finds
  (note: this was the summary conclusion of a panel of 57 economists).

...there were of course the permabears, nad a bunch of preditions on what "Black Swan" events could heave us into recession (interestingly I've yet to come across one that predicted a global pandemic shutting down supply chains and forcing massive shelter-in-place orders).  But by and large the sentiment was: 2020 was going to see a continuation of the 11 year economic expansion, albeit at a moderate pace.

Google news-archives is a facinating place to explore!

frugalnacho

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Re: August is when it all implodes
« Reply #14 on: June 17, 2020, 09:02:14 AM »
Look... no one has a clue what the F is going to happen next week or next month or in August.  There was a cantankerous thread here several weeks ago that got locked, but the basic premise was that, after an absurdly good April the markets were absolutely going to crash very soon, as in within the next few days or maybe a week...  and it hasn’t happened.  Yet. 

This isn't unique to april.  I'm confident if you scour the forum you will find those prediction threads for every month since the forum's inception.  People are constantly predicting the market is going to crash.  The market is overvalued, fiscal cliff, Obama got re-elected, Brexit, Trump got elected, Trump got impeached, my hamster farted, a plane got shot down, tensions between multiple countries, the chinese market slumps, it's an election year and we don't know who will win - but either way it's bad!,  coronavirus, etc.  There always has been, and always will be, multiple reasons for people to predict gloom and doom and market crashes.  Occasionally they are temporarily right, but so far none have been correct long term.

waltworks

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Re: August is when it all implodes
« Reply #15 on: June 17, 2020, 09:06:55 AM »
My favorite thing about the market crash predictions is that unless you're VERY close to FIRE, a market crash is GOOD for you, for the obvious reason that it lets you accumulate shares cheaper/quicker.

I mean, a 99% drop in the stock market would wipe out 2/3 of my net worth. But with the remaining bonds/e-fund/etc, I could buy easily triple or quadruple the shares I have now and be FIRE on the dividends alone (of course assuming the economy was still functioning in some way in my outlandish scenario).

If your goal is FIRE and you're not there yet, you should be rooting for the market to drop or at most stagnate.

-W

frugalnacho

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Re: August is when it all implodes
« Reply #16 on: June 17, 2020, 09:09:28 AM »
My favorite thing about the market crash predictions is that unless you're VERY close to FIRE, a market crash is GOOD for you, for the obvious reason that it lets you accumulate shares cheaper/quicker.

I mean, a 99% drop in the stock market would wipe out 2/3 of my net worth. But with the remaining bonds/e-fund/etc, I could buy easily triple or quadruple the shares I have now and be FIRE on the dividends alone (of course assuming the economy was still functioning in some way in my outlandish scenario).

If your goal is FIRE and you're not there yet, you should be rooting for the market to drop or at most stagnate.

-W

Yes, so you can buy more while it's cheap.  But trying to time it so you can sell before the crash and buy back after the crash is a fool's errand. 

RWD

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Re: August is when it all implodes
« Reply #17 on: June 17, 2020, 09:18:31 AM »
According to this Buzzfeed article [...]
[...] may cause a real economic collapse.
I'm confident if you scour the forum you will find those prediction threads for every month since the forum's inception.  People are constantly predicting the market is going to crash.

Yup. We got a brief reprieve in March/April when the threads temporarily turned from "it's going to crash soon" to "look it's finally crashing all hope is lost!" If you predict a crash every month eventually you will be right. Eventually.

Examples of [mostly] poor estimations of market value:

1/2013  [SP500 = 1462]
https://forum.mrmoneymustache.com/investor-alley/is-now-a-bad-time-to-invest-in-stock-index-funds/
5/2013  [1583]
https://forum.mrmoneymustache.com/investor-alley/starting-today!/
https://forum.mrmoneymustache.com/investor-alley/$80k-sitting-in-cash-bc-scared-of-high-flying-stock-mkt-punch-me/
10/2013  [1695]
https://forum.mrmoneymustache.com/investor-alley/stock-market-expensive-now-alternatives/
5/2014  [1884]
https://forum.mrmoneymustache.com/investor-alley/stock-market-is-high-am-i-too-late/
https://forum.mrmoneymustache.com/investor-alley/is-the-stock-market-too-expensive-to-get-back-in/
7/2014  [1973]
https://forum.mrmoneymustache.com/investor-alley/current-market-has-me-scared-to-invest/
9/2014  [2002]
https://forum.mrmoneymustache.com/investor-alley/is-it-a-good-time-to-invest-new-money/
10/2014  [1946]
https://forum.mrmoneymustache.com/ask-a-mustachian/stock-market-would-you-buy-now-or-wait/
1/2015  [2058]
https://forum.mrmoneymustache.com/investor-alley/stock-market-should-i-be-concerned/
3/2015  [2117]
https://forum.mrmoneymustache.com/investor-alley/talk-me-out-of-timing-the-australian-market/
12/2015  [2103]
https://forum.mrmoneymustache.com/ask-a-mustachian/where-to-put-a-large-windfall-with-stock-market-near-all-time-highs/
1/2016  [2013]
https://forum.mrmoneymustache.com/investor-alley/about-to-sell-everything-talk-me-off-the-ledge-(or-push-me-off)-please!/
4/2016 [2073]
https://forum.mrmoneymustache.com/investor-alley/here-it-comes-red-dow/
2/2017  [2280]
https://forum.mrmoneymustache.com/investor-alley/does-anyone-think-we-are-in-a-bubble/
4/2017  [2359]
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
6/2017  [2430]
https://forum.mrmoneymustache.com/continue-the-blog-conversation/recession-coming/
8/2017  [2476]
https://forum.mrmoneymustache.com/investor-alley/getting-scared-of-stock-market/
1/2018  [2696]
https://forum.mrmoneymustache.com/investor-alley/nervous-about-the-market/
3/2018  [2678]
https://forum.mrmoneymustache.com/investor-alley/when-would-you-get-back-in/
5/2018  [2655]
https://forum.mrmoneymustache.com/investor-alley/investing-in-a-bull-market/
6/2018  [2735]
https://forum.mrmoneymustache.com/investor-alley/moving-to-cash-market-timing-can%27t-believe-it/
10/2018  [2925]
https://forum.mrmoneymustache.com/welcome-to-the-forum/sell-index-funds-now-for-down-payment-during-recession/
2/2019  [2707]
https://forum.mrmoneymustache.com/investor-alley/welp-i'm-going-to-take-a-stab-at-timing-the-market/
4/2019  [2867]
https://forum.mrmoneymustache.com/investor-alley/buy-vtsax-now-while-its-this-high-or-wait-till-a-drop/
https://forum.mrmoneymustache.com/investor-alley/how-concerned-are-you-about-the-everything-bubble/
5/2019  [2924]
https://forum.mrmoneymustache.com/ask-a-mustachian/scared-of-investing-in-the-stock-market-now/
6/2019  [2890]
https://forum.mrmoneymustache.com/uk-tax-discussion/global-index-tracker-is-so-high!-do-i-just-keep-putting-my-money-into-it-anyway/
7/2019 [3026]
https://forum.mrmoneymustache.com/investor-alley/would-you-106836/
8/2019 [2889]
https://forum.mrmoneymustache.com/investor-alley/vtsax-and-a-looming-recession/
9/2019 [2978]
https://forum.mrmoneymustache.com/investor-alley/recession-in-2-ish-years-scale-and-nature/
10/2019 [2986]
https://forum.mrmoneymustache.com/investor-alley/advice-needed-108726/
11/2019 [3110]
https://forum.mrmoneymustache.com/investor-alley/questions-from-37yr-old-that-very-recently-became-serious-about-fi/
https://forum.mrmoneymustache.com/investor-alley/where-to-invest-my-cash-now/
12/2019 [3169]
https://forum.mrmoneymustache.com/ask-a-mustachian/help!-i-dont-know-where-to-start/
https://forum.mrmoneymustache.com/investor-alley/the-old-excuses-for-down-swings-and-a-reality-yet-we-are-at-all-time-highs!/
1/2020 [3296]
https://forum.mrmoneymustache.com/investor-alley/what-to-do-with-a-large-sum-of-money-bad-time-to-buy-index-funds/
2/2020 [3345]
https://forum.mrmoneymustache.com/real-estate-and-landlording/in-a-pickle/
6/2020 [3125]
https://forum.mrmoneymustache.com/investor-alley/august-is-when-it-all-implodes/

Miscellaneous
https://forum.mrmoneymustache.com/investor-alley/%27but-right-now-the-market-is-at-an-all-time-high-%27/
https://forum.mrmoneymustache.com/investor-alley/the-great-market-crash-of-2016!/
https://forum.mrmoneymustache.com/investor-alley/how-to-deal-with-losing-$117k-in-stock-market/
https://forum.mrmoneymustache.com/investor-alley/so-we're-basically-on-track-for-a-bear-market-by-tomorrow/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-feeling-depressed-about-global-equities-10-year-outlook/
https://forum.mrmoneymustache.com/investor-alley/stocks-will-only-return-4-annually-for-next-decade-john-bogle/

nereo

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Re: August is when it all implodes
« Reply #18 on: June 17, 2020, 09:27:36 AM »
everytime I see that list it makes me smile @RWD

frugalnacho

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Re: August is when it all implodes
« Reply #19 on: June 17, 2020, 09:31:06 AM »
HAHA, glad someone has already done the work in compiling that.  Great job. 

RWD

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Re: August is when it all implodes
« Reply #20 on: June 17, 2020, 09:40:48 AM »
everytime I see that list it makes me smile @RWD
HAHA, glad someone has already done the work in compiling that.  Great job. 
Thanks! I actually got a PM today asking when I would be updating the list again. I find it helpful to look at the long term picture and see how many people have been wrong in the past when considering the predictions of the present. And even when the predictions of crashes are correct there is still the long term upward trend which holds.

nereo

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Re: August is when it all implodes
« Reply #21 on: June 17, 2020, 09:43:29 AM »
everytime I see that list it makes me smile @RWD
HAHA, glad someone has already done the work in compiling that.  Great job. 
Thanks! I actually got a PM today asking when I would be updating the list again. I find it helpful to look at the long term picture and see how many people have been wrong in the past when considering the predictions of the present. And even when the predictions of crashes are correct there is still the long term upward trend which holds.

I like to use google news archives for similar purposes.  Earlier today someone responded to a post asking what the economic predictions were for 2020 at the end of last year (
Spoiler: show
The majority of economists thought 2020 was going to continue our economic expansion and low unemployment, and be an improvement on 2019


It facinates me to review the period prior to all recessions and see how confident most analysts were that 'good times are ahead!'.  Recency-bias/irrational exuberance?

Mighty-Dollar

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Re: August is when it all implodes
« Reply #22 on: June 17, 2020, 12:28:10 PM »
According to this Buzzfeed.... They're predicting....
Buzzfeed is a radical left-wing source. By the way, so are all of the other media outlets that have so-called "financial news". Site like Yahoo Finance and Market Watch all have armies of Trump haters who are constantly peddling negative news. 
https://youtu.be/ICXR3OnUE6E?t=147

nereo

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Re: August is when it all implodes
« Reply #23 on: June 17, 2020, 12:32:30 PM »
According to this Buzzfeed.... They're predicting....
Buzzfeed is a radical left-wing source. By the way, so are all of the other media outlets that have so-called "financial news". Site like Yahoo Finance and Market Watch all have armies of Trump haters who are constantly peddling negative news. 
https://youtu.be/ICXR3OnUE6E?t=147

Radical left-wing source?  Hmmm... I'm going to say no.  Left of center for sure, but not "radical left-wing" either.
Mostly it's a collection of freelance writers with pretty lose oversight, as are many online news sources (Marketwatch is another). 

RWD

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Re: August is when it all implodes
« Reply #24 on: June 17, 2020, 12:41:12 PM »
According to this Buzzfeed.... They're predicting....
Buzzfeed is a radical left-wing source. By the way, so are all of the other media outlets that have so-called "financial news". Site like Yahoo Finance and Market Watch all have armies of Trump haters who are constantly peddling negative news. 
https://youtu.be/ICXR3OnUE6E?t=147

Radical left-wing source?  Hmmm... I'm going to say no.  Left of center for sure, but not "radical left-wing" either.
Mostly it's a collection of freelance writers with pretty lose oversight, as are many online news sources (Marketwatch is another).

Buzzfeed is Left-Center with mixed factual reporting:
https://mediabiasfactcheck.com/buzzfeed/

MustacheAndaHalf

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Re: August is when it all implodes
« Reply #25 on: June 18, 2020, 01:17:02 AM »
According to this Buzzfeed.... They're predicting....
Buzzfeed is a radical left-wing source. By the way, so are all of the other media outlets that have so-called "financial news". Site like Yahoo Finance and Market Watch all have armies of Trump haters who are constantly peddling negative news. 
https://youtu.be/ICXR3OnUE6E?t=147
What news sources does that leave you with?

It would be a mistake to lump NBC and CNBC together.  CNBC reports news as it impacts markets, and their most common interviewee is a CEO of a major corporation or an investment manager.

facepalm

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Re: August is when it all implodes
« Reply #26 on: June 18, 2020, 04:26:50 AM »

My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?
That's the definition of market timing.

nkt0

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Re: August is when it all implodes
« Reply #27 on: June 18, 2020, 07:56:13 AM »

My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?
That's the definition of market timing.

I'm not saying this isn't a kind of market timing, but my understanding of classic market timing is trying to sell high and buy low. What i am suggesting is rebalancing to cash at a particular date (not aiming for highest value) with the objective of holding out of the market during a period of heightened uncertainty. Then reentering at a fixed date in the future, rather than monitoring the market to try to maximize the low point.

But i've learned the folly of my thinking, so i'm just going to stay in. Viva capitalism!

waltworks

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Re: August is when it all implodes
« Reply #28 on: June 18, 2020, 10:22:09 AM »
That is some awesome verbal gymnastics that means "market timing".

-W

DadJokes

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Re: August is when it all implodes
« Reply #29 on: June 18, 2020, 10:27:13 AM »
LOL at taking anything on Buzzfeed seriously.

UnleashHell

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Re: August is when it all implodes
« Reply #30 on: June 18, 2020, 11:37:40 AM »
LOL at taking anything on Buzzfeed seriously.
I'm laughing at seriously and radical left wing.

I mean maybe if you watch oann all the time.....

thedigitalone

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Re: August is when it all implodes
« Reply #31 on: June 18, 2020, 11:42:56 AM »
Another one for RWD's list, the doomsayers are coming out in droves this week.
https://www.marketwatch.com/story/stock-market-legend-who-called-3-stock-market-bubbles-says-this-one-is-the-real-mccoy-this-is-crazy-stuff-2020-06-17

For the record I'm the buy-and-hold type, though I am tempted to sell some any pay off the mortgage, even though I know that is mathematically the wrong thing to do in the long term.

ixtap

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Re: August is when it all implodes
« Reply #32 on: June 18, 2020, 11:44:00 AM »
I limit my news intake pretty strictly, but this piece on Here and Now (featuring Laurie Garrett, who won the Pulitzer for her work chronicling the Ebola outbreak in Zaire) did a nice job explaining what various models and researchers predict about virus progression and the economy, depending on the choices we make.
https://www.wbur.org/hereandnow/2020/06/16/coronavirus-pandemic-us

Timing isn't mentioned, but "According to the Organisation for Economic Co-operation and Development, U.S. GDP could decline to -8.5% if there is a second wave" (which is not what we're having now; we're still in the first wave). That GDP number, insofar as it's used as a recession measure, would be a pretty extraordinary; in late 2008 it was -6.2%.

Does the article also mention the amount of error our ‘researchers and models’ had on their predictions of the virus in America thus far? We should all be dead by now if they were right in March.

I’m inclined to not believe them.

Would love to know where you were getting your predictions from!

nereo

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Re: August is when it all implodes
« Reply #33 on: June 18, 2020, 11:48:56 AM »
"The SP500 could lose 50% of it's value" --- that sounds serious!

dougules

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Re: August is when it all implodes
« Reply #34 on: June 18, 2020, 03:50:37 PM »
I got fooled into giving that article one more click.  Don't click; don't feed the monster, everybody.

brooklynmoney

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Re: August is when it all implodes
« Reply #35 on: June 18, 2020, 08:42:45 PM »
So what I hear you saying is “top is in.” I agree 10000000%

ixtap

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Re: August is when it all implodes
« Reply #36 on: June 18, 2020, 08:54:49 PM »
The Mayans said so.

Or is this one of those mothership things?

Bloop Bloop

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Re: August is when it all implodes
« Reply #37 on: June 19, 2020, 02:22:04 AM »
I would be delighted with an implosion followed by deflation and austerity but the truth is the government will keep printing money and pushing inflation upon us in a misguided effort to kick the can down the road.

MustacheAndaHalf

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Re: August is when it all implodes
« Reply #38 on: June 19, 2020, 02:32:48 AM »
I looked into the author of the article, Tom Gara, and he actually kinda checks out.  I can't find his educational background, but he claims to have worked at Financial Times and the Wall Street Journal.  So he's at least in his element discussing stock markets, and probably above average at this for Buzzfeed.

The key claim in his article (in my view) is this:
"On July 31, the $600 federal unemployment payments going to unemployed people every week will end, and there’s no sign they’ll be replaced with anything nearly as generous. In fact, many Republicans want to replace them with nothing at all — and there’s also little sign that another round of one-time stimulus checks will get mailed out. So income for tens of millions of households is likely to nose-dive in August."

Here's the problem: if Republicans decide to crash the economy in August, their careers will end in November (during the election).  So for the author's prediction to come true, Republicans need to place ending their careers above spending other people's money.  Congress already agreed on the need for relief previously, and currently, so I disagree with the author's view.

Setting aside how I feel about Mitch McConnell, his view is that $600/week unemployment creates a moral hazard.  People paid under $15/hour can make better money by not working.  Republicans want an incentive for returning to work.  The Democrats plan, as I roughly understand it, would be $450/week payments to everyone regardless of job status, and declining as the unemployment rate improves.  So both parties have different ideas, but both agree relief is needed, and both have plans for doing so.  I don't see Congress wanting to crash the economy 3 months before an election.

frugalnacho

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Re: August is when it all implodes
« Reply #39 on: June 19, 2020, 07:26:39 AM »

My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?
That's the definition of market timing.

I'm not saying this isn't a kind of market timing, but my understanding of classic market timing is trying to sell high and buy low. What i am suggesting is rebalancing to cash at a particular date (not aiming for highest value) with the objective of holding out of the market during a period of heightened uncertainty. Then reentering at a fixed date in the future, rather than monitoring the market to try to maximize the low point.

But i've learned the folly of my thinking, so i'm just going to stay in. Viva capitalism!

Glad you are staying the course, but facepalm was right and that is the literal definition of market timing.  Your entire argument seems to be you aren't trying to market time to get the theoretical maximum, you are just market timing to get a pretty good return that is below the theoretical maximum, but the mechanics of it are exactly the same.  Your description literally could not be more market timey. 

Retire-Canada

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Re: August is when it all implodes
« Reply #40 on: June 19, 2020, 05:29:20 PM »
I post these because I really enjoy the *rational* discussion that follows, you folks keep me sane some days!

FWIW - we could have the same discussion without promoting clickbait in the process. Just saying....

UnleashHell

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Re: August is when it all implodes
« Reply #41 on: June 20, 2020, 05:59:29 AM »
I post these because I really enjoy the *rational* discussion that follows, you folks keep me sane some days!

FWIW - we could have the same discussion without promoting clickbait in the process. Just saying....

lets start the nonsense with: Jim Cramer says.....

MustacheAndaHalf

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Re: August is when it all implodes
« Reply #42 on: June 20, 2020, 10:05:30 AM »
When Jim Cramer said he was exhausted (Mar 19?), that helped me - I knew that weekend investors would reflect and the panic might end.  Testing increased dramatically, and Congress provided relief.  My guess is Congress continues to provide relief, and COVID-19 remains much lower than the rate of testing (right now 500k tests/day in the U.S., with 5-6% new positives).

frugaldrummer

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Re: August is when it all implodes
« Reply #43 on: June 20, 2020, 12:52:36 PM »
Reality checking the pandemic, this is a good source of graphs: https://www.npr.org/sections/health-shots/2020/03/16/816707182/map-tracking-the-spread-of-the-coronavirus-in-the-u-s?fbclid=IwAR0mVScVLilynzWwxsTqcFvYh-PAvvCLzcGSWzQ3vBi5NFZr0ApW2a5PSSs

To date, only about 6% of the U.S. population has been infected (if you use the best estimate of mild and asymptomatic cases from surveillance studies, which estimate ten times as many infections as we are currently counting. 20 million divided by 328 million = 6%). That leaves the vast majority of our population still susceptible to the virus. Political resistance to simple measures like mask wearing (which reduces transmission by 85%) will keep the pandemic going, along with opening of high risk venues like bars.

It’s possible we might see a decline by end of summer as people’s Vitamin D levels reach an annual peak, but if that happens, we will undoubtedly see a second wave in the winter.

Most states currently have too many cases for contact tracing to control outbreaks - only low risk highly rural states like Montana have a good chance at control by contact tracing , although I have no idea if they are actually doing that.

The bigger problem that will come to the fore soon is ICU beds running out. See, normally the average ICU patient is in the ICU for just a very few days, then usually either expires or is bumped down to a lower intensity floor. But COVID patients tend to stay in the ICU for a much longer time. This accumulation of ICU patients is starting to strain the system even in areas that are not super hot.

For instance - I’m in San Diego . The outbreak here has had a nicely flattened curve, due to an early lockdown and mandatory masks. We have had a steady number of new cases for the past two months, averaging about 150 per day. Not great, but not increasing.

But at a doctors visit last week, my boyfriends doctor shared what was happening in their hospital system (one of four big systems in town who provide hospital care). Due to the accumulation of ICU patients, hospitals in south county had filled their ICUs and were overflowing to the big hospital in north county. Then that ICU filled up and they had to start admitting them to the smaller hospital nearby that they had been attempting to keep Covid free. This is without any kind of new surge.

The IHME Covid projections let you look at ICU beds. California is projected to exceed capacity in September. Arizona will exceed capacity by the beginning of July. Basically, we will go into the winter flu season (and probable second wave of Covid) with our ICUs already full.

The answer is not to simply build more ICU beds - you must have doctors, nurses and equipment suitable to treating these ICU patients.

So: likely scenario: continued cases through summer, second peak in winter, ICUs beyond capacity, risks of second shutdowns in various places.
Potential modifying factors : if we come up with a treatment which can be used to treat outpatient cases and keep them from getting bad enough to need hospitalization, or if we bring everybody’s vitamin D levels up and this reduces the percentage of severe cases.

Or, less likely, the virus could mutate to become less serious.

The virus could also mutate to become more serious, as happened with the 1918 flu pandemic.

I’m not holding my breath for the vaccine, there’s a real risk of a serious complication called immune enhancement with vaccines for viruses in this category, and I don’t believe January would be long enough to get safety data to rule that out (google the roll out of dengue vaccine in the Philippines ).

Bottom line - the virus is still here, likely to surge sooner or later in this year, and economic disruption will occur even if more lockdowns don’t occur. The market may or may not reflect that.
« Last Edit: June 20, 2020, 01:25:49 PM by frugaldrummer »

nereo

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Re: August is when it all implodes
« Reply #44 on: June 20, 2020, 06:00:11 PM »
^ —  tl;dr... there’s no telling what the markets will do.

frugledoc

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Re: August is when it all implodes
« Reply #45 on: June 21, 2020, 08:59:30 AM »

My question is: Should i pull out of the stock market temporarily with the plan of getting back in at a particular date in the future, or is that just another attempt to time the market?
That's the definition of market timing.

I'm not saying this isn't a kind of market timing, but my understanding of classic market timing is trying to sell high and buy low. What i am suggesting is rebalancing to cash at a particular date (not aiming for highest value) with the objective of holding out of the market during a period of heightened uncertainty. Then reentering at a fixed date in the future, rather than monitoring the market to try to maximize the low point.

But i've learned the folly of my thinking, so i'm just going to stay in. Viva capitalism!


Moving to cash in this example is definitely market timing and not rebalancing.

talltexan

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Re: August is when it all implodes
« Reply #46 on: June 25, 2020, 12:53:17 PM »
Many parts of the economy will continue to function under lockdown. Those parts are also owned within $VTSAX

OurTown

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Re: August is when it all implodes
« Reply #47 on: June 25, 2020, 02:14:22 PM »
August may or may not be a cliff depending on what we get in the next stimulus. 

Extended enhanced unemployment benefits?
More stimulus payments directly to individuals?
More small business payroll loans?
Aid to state & local governments?
A payroll tax holiday?

You are likely to see some combination of the above by the end of July.  That doesn't mean we are fully protected from another downturn this calendar year, but nobody knows nothin'.

Buffaloski Boris

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Re: August is when it all implodes
« Reply #48 on: June 25, 2020, 04:52:44 PM »
August may or may not be a cliff depending on what we get in the next stimulus. 

Extended enhanced unemployment benefits?
More stimulus payments directly to individuals?
More small business payroll loans?
Aid to state & local governments?
A payroll tax holiday?

You are likely to see some combination of the above by the end of July.  That doesn't mean we are fully protected from another downturn this calendar year, but nobody knows nothin'.

Congress is in session the last 2 weeks of July and then is gone until mid September.*The really crappy economic data won’t hit till August. So my bet is on nothing till late September.

*( we wouldn’t want our dear kakistocrats to have to work in August.)

bthewalls

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Re: August is when it all implodes
« Reply #49 on: June 25, 2020, 04:56:56 PM »
According to this Buzzfeed article: https://www.buzzfeednews.com/article/tomgara/economy-recession-coronavirus

They're predicting that the combination of stimulus money running out, eviction bans being lifted and deferred payments (Mortgage, student debt, rent) coming due may cause a real economic collapse.

I post these because I really enjoy the *rational* discussion that follows, you folks keep me sane some days!

Dude you’ll get destroyed posting something like that...or quoting dalio’s lost decade prediction lol...