
How Sick Is the Stock Market? - gedrap
http://www.bloombergview.com/articles/2015-08-24/how-serious-is-the-stock-market-s-decline-
======
billpg
"Playing the stock market is easy. Buy something at random and if it goes up,
sell and take the credit. If it goes down, say its a long term investment and
hide in the cupboard." \-- Milton Jones.

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lesingerouge
TLDR: not very sick, just very short-sighted, panicky and greedy.

~~~
draugadrotten
_Greed is good_ as Gordon Gecko put it, and science concurs.
[http://time.com/41680/greed-is-good-science-
proves/](http://time.com/41680/greed-is-good-science-proves/)

~~~
crpatino
No, that's what the title says, but it is click bait.

What the actual article says is that in social groups with well defined
hierarchies, higher ranking members tend to contribute more than average to
the common good (though this might be biased due to their role in defense
against external threats). This old fashioned notion that the rich are
expected to hit above their weight level is called Noblesse Obligue, and it's
almost the exact opposite of Gecko's doctrine.

What reasons there might be to have come up with such a title/conclusion given
the information available? I can only think of one: Assholeness apologetics.

~~~
karambahh
Slight nitpick: "noblesse oblige" not "noblesse obligue" French locution
Noblesse oblige ~ En raison de leur caractère noble ~~ Because of their
nobility

~~~
crpatino
ok, thanks a lot. I was aware it was French, but cannot speak/write the
language myself.

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codingdave
The younger you are, the less it all matters, as the trend over a decade or
more will always be "up". (If not we have bigger problems.)

So if you don't plan on retiring off your investments in the next 10 years,
just enjoy the ride. If you do want your money in the next few years, it
shouldn't be in stocks.

~~~
VLM
"(If not we have bigger problems.)"

That would be an accurate assessment of the situation. We have big problems,
getting bigger.

~~~
maaku
But not Mad Max, Zombie Apocalypse level problems.

~~~
SolarNet
Depends who you ask. Automation improperly distributed could cause such
problems.

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limaoscarjuliet
Say GDP in US is growth 2%, inflation is 3%, and stock market is up 10% a year
- where do the extra 5% come from?

~~~
ant6n
concentration of wealth

~~~
ant6n
ok let me rephrase - markets represent the economic winners

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oldpond
That chart looks like it's leveling off. They don't say anything about that,
and I believe that is the most significant attribute of that chart. They are,
of course, trying to suggest behind their techno-babble that the market will
keep going up. No surprise they dragged this little gem out to counteract the
fear created in the recent correction.

A much more interesting analysis could be had from speculating on why it's
leveling off. What happens when there's no more debt to buy?

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swagatatay
can someone explain this article? made no sense to me.

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tim333
I'm not surprised it made no sense. It's from a school of writing that uses
poorly defined dramatic terms like blood-letting and secular bull to make it
sound like the author knows something. If you read someone like Buffett who
actually makes money trading stocks you get a completely different take and
vocabulary.

~~~
amyjess
"Secular bull market" is a real term with a well-established meaning:
[https://en.wikipedia.org/wiki/Market_trend#Secular_trends](https://en.wikipedia.org/wiki/Market_trend#Secular_trends)

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dsfsdfd
Look at the ftse 100 over a 30 year time frame and tell me you can't make a
guess as to what's coming.

Go here and click on 'all' in the zoom menu
[https://www.google.com/finance?q=INDEXFTSE%3AUKX&ei=qlLcVZHi...](https://www.google.com/finance?q=INDEXFTSE%3AUKX&ei=qlLcVZHiI4KUUKLsltgO)

~~~
gchokov
Double bottom, that's what happens. Expecting more heights. Long FTSE! edit:
Stock market theme is huge for click baits and zerohedge readers. No extremes
are healthy and there's too much drama around this.

~~~
drjesusphd
> Double bottom

This is no place for this kind of tea leaf reading nonsense.

~~~
lectrick
Something something head and shoulders pattern, _don 't you see it?_

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debacle
The stock market is fine. It's probably the healthiest aspect of the global
economy right now. All of the bad things about the stock market are because
it's the only safe place for investment right now.

~~~
dismal2
Stock market is probably least safe place for investment right now. Why do you
think real estate has gone crazy in the past 5 years? Lots of people that I
know who manage their money are almost entirely in cash and many of them
avoided the carnage last week.

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debacle
It costs too much to hold cash.

~~~
nulltype
How much does it cost to hold cash vs holding stocks?

~~~
debacle
2-4% a year.

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arca_vorago
What gets me the most is how much everyone buys into the massive ponzi scheme
that is the stock market. Look, first you have to realize that most people and
entities on the market are only a small blip on the graph compared to the big
ones. The central banks, the banks that make up the central banks, and the
various offshoot parasitical entities such as financial manipulation agencies
and suprainternational corporations, are the real players in the market.

Sure, there are ups and downs, and a decent broker here or an ok hedge fund
there may get you a reasonable return during the good years. That's not the
point though.

The real point is that it is a massive ponzi scheme that feeds off of the
misery and ineptness of the small players, not only that, but the market
itself is manipulated as a way to gain much more substantial power in areas
such as actual land ownership and commodities.

It's a cycle. Eventually, a few big players who know they have the ability to
move entire markets, on a downturn cut losses and on the upturn amplify gains,
do so, and then use their gains to grab exponentially more wealth, and power,
enabling them to do it even better next time.

It's generally the classic Rothschild-Waterloo move. Nathan Rothschild heard
back about Waterloo before even the British gov, caused a panic based off his
reputation to get the market to plummet, and then turned around and bought it
all up for pennies on the dollar. Market manipulation based on secret
knowledge the rest of the market didn't have.

Then of course my other favourite example is the crash of 1907, (also a
perfect example of the power elite rewriting history) The way they teach it is
that United Copper was the instigator of the crash and JP Morgan was the
generous saviour of the day, but the reality is much different. The panic
really didn't kick off until Knickerbocker crumpled... and right as it started
to, Morgan was the one who removed lines of credit to Knickerbocker in the
first place! They were competitors, and Morgan got rid of them.

Then the Treasury intervened and suspended obligatory payments in the large
Chicago and NY banks and that was that, the crash was inevitable at that
point. Despite that fact, the crash was used to claim that a lack of a central
bank was the problem (it wasn't), the National Monetary Commission was formed,
which then toured Europe for insight into "proper banking methods".

They came back, had the Jekyll island meeting, and shortly after proposed the
Aldrich plan, which got shot down because the public was up in arms against
the "money trusts". The big bankers then pushed the Aldrich plan with a new
name, aka the Federal Reserve Act, financed some groups to tout how much it
was needed while pretending to hate it, and then got it passed on December 23
and signed by Woodrow Wilson the same day!

I could go on about the reasons why I think it was one of the worst things to
ever have happened to the US, especially as it has spectacularly failed in its
charge to prevent other crashes/panics, but what are the solutions?

I think we need to nationalize the federal reserve, and put control of
monetary policy back under the congress where it constitutionally belongs.

Until then, we will continue to see Libor scandals, bailouts, hidden bailouts,
crashes and fluctuations. We must address the fundamental problems of our
economy before we can even begin to address the ponzi scheme that is the stock
market.

edit: To keep it more on topic, I would be interested in seeing papers on the
relationship between the Fed and the stock market, which I guess would be
centred around interests rates, the federal funds rate, and dollar exchange
rates on foreign markets.

~~~
sytelus
You have some good points but you are edging on to alien abduction conspiracy
mode. Yes, few handful of private firms like Blackrock, PIMCO etc have huge
control over stock market. They have trillions of dollars to play with (mostly
funded by public through 401Ks). They can make or break market by inducing
fear or happiness with a small chunk of selloff or buyoff anytime they wish.
Yes, stock of the company has little correlation with actual returns (aka
dividends) and it's all about speculating. Stock market is in essence legally
sanctioned casino and unfortunately few of the only alternatives for
investment for general public who can't start their own companies.

What's the solution? It's actually very simple. Heavily tax any short term
gains. Something like 90% if you sell in 1st year, 45% if 2nd year and so on.
Make dividend income completely tax free. This will force people to use stocks
as actual investment and companies to actually share earnings with shareholder
(who are by definition partial owner). This can put an end to lot of
speculation because your gains would simply be taken away if you do so. It
might even end boom bust cycles because there won't be massive sell offs to
cash out or algorithm day trading. It will give security to companies so they
don't have to live in constant fear of stock tanking next quarter just because
it happened to be little bad.

~~~
arca_vorago
Number one thing I can think of is to figure out a way to prevent HFT
algorithms. Put a 1 second timer on and put taxes on those trades, to prevent
the whole "my fiber line is .2 ms faster to NY than yours" trading arbitrage.
The more fundamental issue of corruption at every level though is still not
addressed by this.

"You have some good points but you are edging on to alien abduction conspiracy
mode."

I respect all the points you have made except for this one. I very clearly
stated things that are fact based, with some speculation and broad-
generalization, but to then equate that with "edging on to alien abduction
conspiracy mode" is very frustrating to see. I understand the trepidation of
even coming close to "conspiracy theory" subjects for fear of being somehow
tainted by the crazy, but the history of the world was built on conspiracy, so
to ignore the factual and everyday conspiracy that is verifiable under the
banner of lumping it in with the crazier stuff is doing your own ability to
critically think about a subject a disservice. Again, I understand the
reaction, but I think it is one we need to guard against, as it is some
strange form of logical fallacy that combines ad hominem and strawman.

To encase my point, did you know that the CIA really pushed the term
"conspiracy theory" as a discrediting technique in 67 after outcry grew that
the Warren Commission didn't do it's job? (which it didn't..).

"2\. This trend of opinion is a matter of concern to the U.S. government,
including our organization.

The aim of this dispatch is to provide material countering and discrediting
the claims of the conspiracy theorists, so as to inhibit the circulation of
such claims in other countries. Background information is supplied in a
classified section and in a number of unclassified attachments.

3\. Action. We do not recommend that discussion of the [conspiracy] question
be initiated where it is not already taking place. Where discussion is active
addresses are requested:

a. To discuss the publicity problem with and friendly elite contacts
(especially politicians and editors) , pointing out that the [official
investigation of the relevant event] made as thorough an investigation as
humanly possible, that the charges of the critics are without serious
foundation, and that further speculative discussion only plays into the hands
of the opposition. Point out also that parts of the conspiracy talk appear to
be deliberately generated by … propagandists. Urge them to use their influence
to discourage unfounded and irresponsible speculation.

b. To employ propaganda assets to and refute the attacks of the critics. Book
reviews and feature articles are particularly appropriate for this purpose.
The unclassified attachments to this guidance should provide useful background
material for passing to assets. Our ploy should point out, as applicable, that
the critics are (I) wedded to theories adopted before the evidence was in,
(II) politically interested, (III) financially interested, (IV) hasty and
inaccurate in their research, or (V) infatuated with their own theories."

[http://www.washingtonsblog.com/wp-
content/uploads/2015/02/CI...](http://www.washingtonsblog.com/wp-
content/uploads/2015/02/CIA-conspiracy.jpg)

[http://www.washingtonsblog.com/wp-
content/uploads/2015/02/CI...](http://www.washingtonsblog.com/wp-
content/uploads/2015/02/CIA-conspiracy2.jpg)

