Wasn’t a huge contributing factor that most stock purchases in the 1920’s were bought on margin? This contributed to the panicked sell off and crash. How much stock is purchased with borrowed money these days?
What is so different today is money is being invested in the market because the economy sucks. And because no other investment is more attractive.
Unless Powell goes completely rogue and channels Volcker, the market will likely continue to be where money is invested. Of, course this is just one opinion.
The derivatives market is, in a word, gigantic—often estimated at over $1 quadrillion on the high end. How can that be? Largely because there are numerous derivatives in existence, available on virtually every possible type of investment asset, including equities, commodities, bonds, and currency.
Sure, thankfully it wasn’t before my time. Thankful I’m still here!
Volcker executed a strategy to bring inflation under control by raising Fed rates to almost 18% which brought the economy to a grinding halt. Some people believe he killed any chance of Carter winning re-election.
I was young, but I remember it was pretty miserable. The only upside was if you had cash CD rates were around 18%, but inflation was 13% at the time.
I got married during that time. If you had money in the bank, ( I didn’t) the interest was incredible. I remember basic money market accounts earning 9-10%. CDs at 15-18% Now you’re lucky to get .03%.
They have now control of two sides of the trade. JPM is on the call side. BOFA is on the put side .... The ups and downs allow them to make money and roll over their shit and perpetuate it ad infinitum, or so they think.
Wasn’t a huge contributing factor that most stock purchases in the 1920’s were bought on margin? This contributed to the panicked sell off and crash. How much stock is purchased with borrowed money these days?
What is so different today is money is being invested in the market because the economy sucks. And because no other investment is more attractive.
Unless Powell goes completely rogue and channels Volcker, the market will likely continue to be where money is invested. Of, course this is just one opinion.
The derivatives leverage game is far, far, FAR larger than margin trading was in the 20s.
I was going to say the same thing but you beat me to it. This crash is going to be far worse because of those derivatives.
automatic updoot for username
keep in mind, the powerful WANT a crash this time around. IDK how much they influenced the last one, but could be they wanted that one too.
market volatility is awesome if you control the volatility
sounds like you agree?
Volcker? The Fed guy before Greenspan?
He was before most of our time--care to fill us in why that's important?
Sure, thankfully it wasn’t before my time. Thankful I’m still here!
Volcker executed a strategy to bring inflation under control by raising Fed rates to almost 18% which brought the economy to a grinding halt. Some people believe he killed any chance of Carter winning re-election.
I was young, but I remember it was pretty miserable. The only upside was if you had cash CD rates were around 18%, but inflation was 13% at the time.
I got married during that time. If you had money in the bank, ( I didn’t) the interest was incredible. I remember basic money market accounts earning 9-10%. CDs at 15-18% Now you’re lucky to get .03%.
That sounds like right around the time they were teaching us "the magic of compound interest" in Junior High.
Thank you, sir. I was of single-digit age when he left the Fed, so I didn't know.
It gave us Reagan, at least. Flawed as he was, he was also the proto-Trump. Amnesty aside, of course.
Stagflation.
My 1st house was at 18% interest and that was with the VA discount. Think those times are returning unfortunately.
Doesn't have to go Volker, as soon as interest rates hit 3% the flight to bonds will be a sight to behold.
They’re currently sitting in the high 5’s
They have now control of two sides of the trade. JPM is on the call side. BOFA is on the put side .... The ups and downs allow them to make money and roll over their shit and perpetuate it ad infinitum, or so they think.
Looks like margin debt is considerably higher than anything before 2020, athough we are trending down over these last few months.
Oh but you can invest in international markets to get all of that juicy growth!
Ahh... wait. Ah...
Bu-bu-but you can invest in real estate!
Yeah... We fucked up that asset too.
Bonds!
Nope.
As much as the stock market is rigged and sucks for the HODL crowd right now, it's the cleanest dirty shirt. Or so I tell myself.
We need to reclaim the country from the Zogferatu Junta, and then we have a chance to bounce back from this.