Biggest crash in stock market history?

When I think of back door I definitely don’t think about investing strategies...

On the topic of kids... every monetary gift they receive I sock it away (529, savings, UGMA) And it’s a coincidence this topic came up. I think I had a nightmareast night that one day they see a good sum of money in their control and they blow it within a few months of turning “responsible.” I guess the only way to prevent that is keep teaching them the right things and values but any insight from you older folks.
 
THATmanMANNY said:
When I think of back door I definitely don’t think about investing strategies...

On the topic of kids... every monetary gift they receive I sock it away (529, savings, UGMA) And it’s a coincidence this topic came up. I think I had a nightmareast night that one day they see a good sum of money in their control and they blow it within a few months of turning “responsible.” I guess the only way to prevent that is keep teaching them the right things and values but any insight from you older folks.
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There's always hope. My 20 year old opened a brokerage account to buy the dips with his money from waiting tables. When I was his age all my pay was dumped into my car and going skiing.
 
THATmanMANNY said:
.... I think I had a nightmareast night that one day they see a good sum of money in their control and they blow it within a few months of turning “responsible.”...
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P
THATmanMANNY said:
When I think of back door I definitely don’t think about investing strategies...

On the topic of kids... every monetary gift they receive I sock it away (529, savings, UGMA) And it’s a coincidence this topic came up. I think I had a nightmareast night that one day they see a good sum of money in their control and they blow it within a few months of turning “responsible.” I guess the only way to prevent that is keep teaching them the right things and values but any insight from you older folks.
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Precisely why I choose the Roth over a 529. College is the biggest waste of time and money, not for everyone, nor should being old & broke.
 
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I hope we all understand that the stock market is not reflective of the economy, right?!
No matter what the unemployment is, the same CLASS of people that are contributing before the pandemic are still contributing during the pandemic.
(very most likely) The unemployed retail or restaurant worker was not and is not contributing to the stock market/retirement.
 
Guess the 1% needs to pad their pockets for the increase in taxes that is coming their way
 
THATmanMANNY said:
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I hope we all understand that the stock market is not reflective of the economy, right?!
No matter what the unemployment is, the same CLASS of people that are contributing before the pandemic are still contributing during the pandemic.
(very most likely) The unemployed retail or restaurant worker was not and is not contributing to the stock market/retirement.
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Don’t tell that to the 2008-2009 stock market. It’s not all about contributions but earnings too.The only reason it is where it is now is because of Bernanke and Powell printing endless dollas.
 
Patrick said:
what does this mean?
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Talking about Quantitative Easing policies. The Federal Reserve balance sheet has increased by 800+% since 2008, pushing down long-term interest rates on riskless assets like government debt. That has forced people to increase exposure to stocks in their portfolios. Higher concentration in stocks -> more money in stocks -> higher valuations. One of the goals of the policies is actually referred to as the "wealth effect," in that QE increases values of portfolios, making consumers feel wealthier and incentivizing higher spending to stimulate the economy.
 
phillychris498 said:
Talking about Quantitative Easing policies. The Federal Reserve balance sheet has increased by 800+% since 2008, pushing down long-term interest rates on riskless assets like government debt. That has forced people to increase exposure to stocks in their portfolios. Higher concentration in stocks -> more money in stocks -> higher valuations. One of the goals of the policies is actually referred to as the "wealth effect," in that QE increases values of portfolios, making consumers feel wealthier and incentivizing higher spending to stimulate the economy.
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So the government takes on debt to prevent markets destabilizing or just short term drop?

These stimulus checks are just government debt?

What future tax offsets the debt? Do they care?
 
Patrick said:
So the government takes on debt to prevent markets destabilizing or just short term drop?

These stimulus checks are just government debt?

What future tax offsets the debt? Do they care?
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The fed "creates" money by buying government debt in the federal funds market. The majority of the money they create manifests itself into being held by other, smaller banks, but also increases demand for US debt, which lowers interest rates of all maturities (which is why auto loans and mortgage rates are at all-time lows right now). It is, in a way, a means of maintaining the US government's ability to continue to issue debt at what seems to be an endless rate. The goal is to prevent/minimize the freezing of lending in financial markets, which is typically how economic crises become financial crises... financial crises always exacerbate recessions (see the Great Depression and Great Recession).

Do they care? Not really. It definitely isn't a sustainable policy... but with interest rates already at 0, it's the one policy they have left. Of course, the more money they create, the less meaningful creating that same amount of money is in the future. It's an attempt at kicking the can far down the road, to minimize the extent of a downturn in the present.
 
phillychris498 said:
The fed "creates" money by buying government debt in the federal funds market. The majority of the money they create manifests itself into being held by other, smaller banks, but also increases demand for US debt, which lowers interest rates of all maturities (which is why auto loans and mortgage rates are at all-time lows right now). It is, in a way, a means of maintaining the US government's ability to continue to issue debt at what seems to be an endless rate. The goal is to prevent/minimize the freezing of lending in financial markets, which is typically how economic crises become financial crises... financial crises always exacerbate recessions (see the Great Depression and Great Recession).

Do they care? Not really. It definitely isn't a sustainable policy... but with interest rates already at 0, it's the one policy they have left. Of course, the more money they create, the less meaningful creating that same amount of money is in the future. It's an attempt at kicking the can far down the road, to minimize the extent of a downturn in the present.
Click to expand...
The implosion will come. Powell will rot in hell. The fortunate part for the middle class is they are not dying, rather distancing more from the lower class. The wealthy need the middle class to keep inflating thw market by adding to the 401ks. This makes the big money that’s already there even bigger...so the middle class isn’t dead u til the upper class is dead.
 
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