Author Topic: August is when it all implodes  (Read 6318 times)

bigblock440

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Re: August is when it all implodes
« Reply #50 on: June 26, 2020, 06:30:06 AM »
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.)

What do they think this is, Italy?

KBecks

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Re: August is when it all implodes
« Reply #51 on: June 26, 2020, 06:59:43 AM »
This might be correct.

The fact that we have a global pandemic and a major US election may bring additional market volatility in the coming months.

talltexan

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Re: August is when it all implodes
« Reply #52 on: June 26, 2020, 07:51:21 AM »
Depending on how polls are going, Republicans may conclude that Trump is likely to lose anyway and that passing any stimulus won't save him, but will make Biden look more successful.

nereo

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Re: August is when it all implodes
« Reply #53 on: June 26, 2020, 08:49:07 AM »
Depending on how polls are going, Republicans may conclude that Trump is likely to lose anyway and that passing any stimulus won't save him, but will make Biden look more successful.

I think the calculus will be more self centered: each incumbent lawmaker on the ballot will look at how further stimulus will impact their re-election campaign.  After all, you can't fight/support Trump if you can't win.

Federal UI benefits are set to expire at the end of July.  Meanwhile we've got over 20MM drawing these benefits, and climbing.  As a politician in EITHER party I wouldn't want so many of my constituents to lose the bulk of their UI payments ten weeks before the general election.

As cases climb nationally and ~1/3 of states are hitting new high-water marks this week, it's unlikely that the virus will recede substantially before UI gets cut.

tl;dr - Republicans are all supportive of Trump until it threatens their re-election campaign.  Dems are all opposed until they need to pass something to get re-elected. 

hodedofome

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Re: August is when it all implodes
« Reply #54 on: June 26, 2020, 11:59:44 AM »
I'm not paying attention to any polls. Remember how badly they failed in the last election? Why would folks trust them again?

Also, while new Covid cases are spiking, deaths are not. I'm wondering if we're seeing an increase in testing, and the actual number of cases has not really changed all that much.

nereo

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Re: August is when it all implodes
« Reply #55 on: June 26, 2020, 12:14:47 PM »
I'm not paying attention to any polls. Remember how badly they failed in the last election? Why would folks trust them again?

Also, while new Covid cases are spiking, deaths are not. I'm wondering if we're seeing an increase in testing, and the actual number of cases has not really changed all that much.
Polls didn't "fail" during the last election. That horse has been beaten extensively. Most were within the margin of error, which is exactly what one should expect.  Trump lost the popular vote as predicted, and walked the narrowest of paths among the battleground states, all of which were predicted to be close.

As for Covid deaths - death is a lagging metric.  In the cast of Covid, most people realize they are sick a few days after infection. Most deaths occur 2-3 weeks after they first show symptoms, some much later.  We've seen a huge spike in cases in the last 7-10 days as measures relaxed and people started going out again.  Expect deaths to rise sharply starting next week, and continuing until well after new cases drop again.


dougules

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Re: August is when it all implodes
« Reply #56 on: June 26, 2020, 12:16:31 PM »
The thing about the polls both in 2016 and 2020 is that even if they're accurate, they're only accurate when they're taken.  Eleventh hour events played a big factor in 2016. The 2020 polls may be accurate for a hypothetical June election, but there's so much that could happen in 4 months, especially in a year like 2020. 

bthewalls

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Re: August is when it all implodes
« Reply #57 on: June 26, 2020, 02:43:05 PM »
Nice discussion.

My main concern is how can an economy sustain when based on Repeat stimulus, high unemployment, reduced revenue, over inflated stock price, trade war, QE, low interest rates...

I picture it like a plane in a vertical climb that’s about to run out of fuel......also ...it’s quite hard to provide more stimulus when interest rates so low To counter act a recession...I read the next phase is called a ‘period of painful deleveraging’

It’s has all the makings for a huge screw up

Buffaloski Boris

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Re: August is when it all implodes
« Reply #58 on: June 26, 2020, 04:35:18 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.)

What do they think this is, Italy?

Apparently.  They take a longer vacation than the Italians, though.  We wouldn't them to stress of course. 

stoaX

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Re: August is when it all implodes
« Reply #59 on: September 06, 2020, 11:39:59 AM »
I haven't been paying attention to the news. Did it all implode in August?

Bloop Bloop

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Re: August is when it all implodes
« Reply #60 on: September 06, 2020, 06:46:25 PM »
Bit unfortunate there's all this helicopter money propping everything and anything up to the detriment of our future taxpaying selves.

Buffaloski Boris

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Re: August is when it all implodes
« Reply #61 on: September 07, 2020, 06:55:31 AM »
Bit unfortunate there's all this helicopter money propping everything and anything up to the detriment of our future taxpaying selves.

What taxes? It’s not going to be paid back.

rocketpj

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Re: August is when it all implodes
« Reply #62 on: September 07, 2020, 05:40:05 PM »
I had friends panicking in March/April when everything was crashing.  I suspect some of them panic sold, though I'm hardly going to press them on it.

I do remember thinking at one point in early March that it might be a good time to sell, even short the market.  But it was a passing thought because the bottom line is I just don't knew exactly the right time (it would have been, if I'd been able to time jumping back in a little later, which - maybe not).

I've had the same thought recently, but will also just look away.

For all of my indirect investing (i.e. ETFs etc) I just hum the theme song for the kids show 'A Series of Unfortunate Events'.  It seems to work.

Bloop Bloop

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Re: August is when it all implodes
« Reply #63 on: September 07, 2020, 05:52:55 PM »
Bit unfortunate there's all this helicopter money propping everything and anything up to the detriment of our future taxpaying selves.

What taxes? It’s not going to be paid back.

Inflation itself is a tax. In reality, we should be benefiting from deflation as businesses tank and the relative value of money for us industrious savers increases.

nereo

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Re: August is when it all implodes
« Reply #64 on: September 08, 2020, 05:10:27 AM »
Bit unfortunate there's all this helicopter money propping everything and anything up to the detriment of our future taxpaying selves.

What taxes? It’s not going to be paid back.

Inflation itself is a tax. In reality, we should be benefiting from deflation as businesses tank and the relative value of money for us industrious savers increases.

A little inflation is a good thing in an economy, while deflation is incredibly destabilizing.  We’ve had almost two decades of low inflation (at least here in the US) and four where it’s been in or near the ‘Goldilocks zone’ .

Perhaps you mean that high (or even runaway) inflation is imminent?  Perhaps. That was widely predicted on this very board and on Bogleheads following the QE/QE2 after the ‘great recession’, but it never materialized.  Perhaps ‘this time is different’... we shall see.  I certainly hope not.

ChpBstrd

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Re: August is when it all implodes
« Reply #65 on: September 08, 2020, 10:59:09 AM »
I haven't been paying attention to the news. Did it all implode in August?

facepalm

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Re: August is when it all implodes
« Reply #66 on: September 08, 2020, 11:34:19 AM »
I haven't been paying attention to the news. Did it all implode in August?

Dammit. Now we need to start a new thread!

marty998

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Re: September is when it all implodes
« Reply #67 on: September 08, 2020, 07:19:45 PM »
I haven't been paying attention to the news. Did it all implode in August?

Dammit. Now we need to start a new thread!

There you go. My half assed attempt at fixing it.

bthewalls

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Re: August is when it all implodes
« Reply #68 on: September 15, 2020, 03:14:17 PM »
August 2021?

phildonnia

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Re: August is when it all implodes
« Reply #69 on: September 17, 2020, 11:24:37 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 is just another attempt to time the market

...


I think it's helpful to keep a record of all the times you were nearly scared into "getting out of the market temporarily" to see what happened next.  Does it not give some insight?

The original comment was written in June, and in hindsight, this is a perfect example of why timing the market is a bad idea.

I'm not saying, of course, that the markets couldn't have gone down, and I'm certainly not saying that I was smart enough to know that they wouldn't.  That's really the essence of long-term investing: none of us is smart enough to predict the short-term.

nereo

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Re: August is when it all implodes
« Reply #70 on: September 17, 2020, 12:26:58 PM »

I'm not saying, of course, that the markets couldn't have gone down, and I'm certainly not saying that I was smart enough to know that they wouldn't.  That's really the essence of long-term investing: none of us is smart enough to predict the short-term.

Here's the rub (and why so many are suckered into market timing) - being 'smart' has very little to do with it.  On long enough time scales (multiple years) the markets reflect the profitability of the companies therein.  But on shorter timescales (anywhere from seconds to a couple years) the markets can be fickle, irrational, contrarian and at times downright insane.  That's because ultimately they are driven by deals between people, and in the short term people are fickle, irrational, and at times downright insane.  Sometimes Congress or the Fed will dash out onto the field without warning and disrupt the play.  Othertimes they stay in their luxury boxes nursing their hangovers.

You can never be "smart enough" to outguess the market, because stupid sometimes gets in the driver's seat, and we go where it takes us.