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Market Meltdown

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Bombadil
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Market Meltdown

Postby Bombadil » Mon Mar 09, 2020 6:56 pm

Well we've all seen the news by now..

Global stock markets posted their steepest falls since the 2008 financial crisis on Monday after a crash in the oil price amplified concerns about the escalating economic cost of the coronavirus outbreak.

Almost £125bn was wiped off the value of the FTSE 100 in the fifth-worst day in history for the index of leading UK company shares, as it plummeted by 7.7% to finish the day below 6,000 points, its lowest level since straight after the Brexit vote in 2016.

Trading on Wall Street was frozen within minutes of the market opening as the system to buy and sell shares failed to keep pace with events. The Dow Jones closed down by more than 2,000 points for the first time ever, a decline of 7.8%.

Stock markets fell across Europe with losses in France, Germany and Spain of about 8%, outstripping the depths of the eurozone sovereign debt crisis. The biggest sell-off came in Italy, with stocks in Milan collapsing by more than 11%.

The global stock market correction – of a scale last seen in the weeks after Lehman Brothers’ collapse in 2008, which triggered the worst global recession since the Great Depression of the 1930s – comes amid an increasingly bitter standoff between Saudi Arabia and Russia over oil production cuts as the coronavirus outbreak drags down international demand for crude.


Frankly it's been a long time in the post, I was really wondering how the stock market seemed so calm given China essentially shut down for a month.

So, how will this play out, how should governments respond, is the world going to collapse into anarchy..

Anything related to travel and tourism, regardless of this crash, is going to suck and suck hard for a while. Airlines, hotels, destinations, conventions, restaurants.. the list goes on. Property should also see a correction given people are going out less. You'd think e-commerce would see a huge boost but that hasn't really been the case in China for example. Automotive will be hit hard, in China sales dropped 90% y-o-y for example.

In addition, how will you be affected. Personally I should be fine, my business is relatively recession-proof but that's not going to be the case for everyone.

May the wolves of NSG economists be let loose!
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Hiram Land
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Inoffensive Centrist Democracy

Postby Hiram Land » Mon Mar 09, 2020 6:58 pm

If the markets crash, oh boy, am I moving to Mars! XD

-sell-
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Waldoven
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Postby Waldoven » Mon Mar 09, 2020 7:00 pm

Well, hopefully, this won't affect SpaceX and tesla or no Mars for you!
May facts and knowledge guide us all

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Hiram Land
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Postby Hiram Land » Mon Mar 09, 2020 7:01 pm

Waldoven wrote:Well, hopefully, this won't affect SpaceX and tesla or no Mars for you!

If they do... I'm going on a coronavirus spree...

oh wait, I have my own rocket!
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Drongonia
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Postby Drongonia » Mon Mar 09, 2020 7:02 pm

I'll be investing in local companies that are currently experiencing dips such as Air New Zealand. Their shares in particular are at a 5 year low due to COVID-19 wreaking havoc with the airline industry, dropping by about 35% in 3 days. A tidy profit will be made when they eventually recover, which I'm guessing will happen in around a year or so.

I personally only support companies I believe in myself, and being a repeat customer I think they're the best in the business (at least in this part of the world).
Last edited by Drongonia on Mon Mar 09, 2020 7:06 pm, edited 1 time in total.
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Fartsniffage
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Postby Fartsniffage » Mon Mar 09, 2020 7:03 pm

Just shut down the markets. You can't stop people trading in country clubs and the like but it would stabilise things until we know the outcome of the virus.

Nothing has really changed here except confidence. Microsoft still has all its infrastructure and people. Why should it be worth less today than two weeks ago? Stop the slide and wait until people calm down a bit.
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Hiram Land
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Postby Hiram Land » Mon Mar 09, 2020 7:04 pm

Fartsniffage wrote:Just shut down the markets. You can't stop people trading in country clubs and the like but it would stabilise things until we know the outcome of the virus.

Nothing has really changed here except confidence. Microsoft still has all its infrastructure and people. Why should it be worth less today than two weeks ago? Stop the slide and wait until people calm down a bit.

awh, just let us worry a tiny bit pls? :)
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Bombadil
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Postby Bombadil » Mon Mar 09, 2020 7:05 pm

Drongonia wrote:I'll be investing in local companies that are currently experiencing dips such as Air New Zealand. Their shares in particular are at a 5 year low due to COVID-19 wreaking havoc with the airline industry, dropping by about 35% in 3 days. A tidy profit will be made when they eventually recover.

I personally only support companies I believe in myself, and being a repeat customer I think they're the best in the business (at least in this part of the world).


Airlines are interesting, depending on how they've hedged on oil this could be pretty decent for them or they could simply be overpaying for oil given they buy futures. I don't know how Cathay Pacific is in business to be honest. One issue of an extended crash - no pun intended - is that credit dries up. A great many companies operate in debt and if credit cools and payments become an issue we could see a serious domino effect.
Last edited by Bombadil on Mon Mar 09, 2020 7:06 pm, edited 1 time in total.
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Waldoven
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Postby Waldoven » Mon Mar 09, 2020 7:08 pm

I feel like a lot of airlines will become bankrupt this year due to the lack of passengers. A lot of them were bankrupt last year so this year should be even worse thanks to the coronavirus.
May facts and knowledge guide us all

“From the stars we come, to the stars we go. Life is but a journey into the unknown.”
~ Walter Moers

My Political Compass:

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Hiram Land
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Postby Hiram Land » Mon Mar 09, 2020 7:09 pm

Waldoven wrote:I feel like a lot of airlines will become bankrupt this year due to the lack of passengers. A lot of them were bankrupt last year so this year should be even worse thanks to the coronavirus.

I mean there were a few that went bankrupt, some pretty known names like flybe (I think), Wow Air, and the lot... I think we can expect a repeat, but maybe with a smaller turnout than back in 2018/19.
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Harkback Union
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Postby Harkback Union » Mon Mar 09, 2020 7:12 pm

Here is what a lot of people dont get:

THE STOCK MARKET IS A PYRAMID SCHEME!!!

Its also a casino.

Or a game of musical chairs.

People buy/sell stocks at increasing prices even though the value of the stocks (their returns) are not increasing nearly that much. This then attracts even more people to buy stocks because "LOOK, THE MARKETS ARE BOOMING!!! YAY!!! LETS INVEST!!!" and then every wannabe stock broker buys into companies they have no clue about and prices skyrocket and once ppl run out of money to spend and there is the slightest hint of a recession they start to sell, and then you get the exact opposite effect and suddenly everyone wants to sell AND THERE ARE NO BUYERS.

Its like you buy tulips for 1000$ thinking you can sell for more, and then nobody wants to buy your 1000$ tulip, except millions of people bought into the goddamn tulip.

Who win? Where did all the money people put into the market go? Those who shuffle the money got them in bonuses.

Who lose? Anyone with savings in a bank (They gambled your money away, but also they pay no interest on it because low fed rates). Anyone who pays taxes (cause your tax money will bail out the next dozen banks to fail). Also, anyone who will lose their job in the next couple years because of a completely needless recession.

I lost count of how many youtube ads I get about investing in stocks. Never do that. Ever. Its for suckers. Might as well go to the casino, you have better odds and you won't ruin other people's lives.
Last edited by Harkback Union on Mon Mar 09, 2020 7:13 pm, edited 1 time in total.

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Lamenia
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Postby Lamenia » Mon Mar 09, 2020 7:17 pm

Always glad to see the absurdly rich crash and burn.
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Galloism
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Postby Galloism » Mon Mar 09, 2020 7:18 pm

Lamenia wrote:Always glad to see the absurdly rich crash and burn.

This does broadly hurt the middle class, because of pension funds, FYI.

So your "screw the rich" may be true, but you're screwing a lot of the middle too.
Venicilian: wow. Jesus hung around with everyone. boys, girls, rich, poor(mostly), sick, healthy, etc. in fact, i bet he even went up to gay people and tried to heal them so they would be straight.
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Farnhamia
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Postby Farnhamia » Mon Mar 09, 2020 7:18 pm

Harkback Union wrote:Here is what a lot of people dont get:

THE STOCK MARKET IS A PYRAMID SCHEME!!!

Its also a casino.

Or a game of musical chairs.

People buy/sell stocks at increasing prices even though the value of the stocks (their returns) are not increasing nearly that much. This then attracts even more people to buy stocks because "LOOK, THE MARKETS ARE BOOMING!!! YAY!!! LETS INVEST!!!" and then every wannabe stock broker buys into companies they have no clue about and prices skyrocket and once ppl run out of money to spend and there is the slightest hint of a recession they start to sell, and then you get the exact opposite effect and suddenly everyone wants to sell AND THERE ARE NO BUYERS.

Its like you buy tulips for 1000$ thinking you can sell for more, and then nobody wants to buy your 1000$ tulip, except millions of people bought into the goddamn tulip.

Who win? Where did all the money people put into the market go? Those who shuffle the money got them in bonuses.

Who lose? Anyone with savings in a bank (They gambled your money away, but also they pay no interest on it because low fed rates). Anyone who pays taxes (cause your tax money will bail out the next dozen banks to fail). Also, anyone who will lose their job in the next couple years because of a completely needless recession.

I lost count of how many youtube ads I get about investing in stocks. Never do that. Ever. Its for suckers. Might as well go to the casino, you have better odds and you won't ruin other people's lives.

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Bombadil
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Postby Bombadil » Mon Mar 09, 2020 7:25 pm

One thing I don't understand is how markets have been so complacent, these are supposed to be geniuses sensitive to any market trends and calibrating accordingly. It's as if the effects of Coronavirus have been a complete surprise, and only when the oil issue became a problem did they wake up.

I surmised with a friend that this is because US stockbrokers remain very parochial, if it's not happening in America then they're relatively oblivious, and US markets are still the dominant force. When they move everyone else does.

I do feel stock markets need to be calibrated a little back into capital investment over market fairy gains and losses.
Last edited by Bombadil on Mon Mar 09, 2020 7:25 pm, edited 1 time in total.
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Kaystein
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Postby Kaystein » Mon Mar 09, 2020 7:43 pm

This is definitely the time to buy stocks. Anything reliable you buy now is going rebound and earn you a profit.
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Lamenia
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Postby Lamenia » Mon Mar 09, 2020 7:45 pm

Galloism wrote:
Lamenia wrote:Always glad to see the absurdly rich crash and burn.

This does broadly hurt the middle class, because of pension funds, FYI.

So your "screw the rich" may be true, but you're screwing a lot of the middle too.

IDK, this doesn't seem like such a big deal for us.
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Bombadil
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Postby Bombadil » Mon Mar 09, 2020 7:46 pm

Lamenia wrote:
Galloism wrote:This does broadly hurt the middle class, because of pension funds, FYI.

So your "screw the rich" may be true, but you're screwing a lot of the middle too.

IDK, this doesn't seem like such a big deal for us.


After '08 the rich generally remained rich while the middle and lower classes suffered immensely. I don't see why that would be any different this time. You think CEOs will lay themselves off first?
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Deacarsia
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Capitalist Paradise

Market Meltdown

Postby Deacarsia » Mon Mar 09, 2020 7:47 pm

Peter Schiff was right.
Sic enim Deus dilexit mundum, ut Filium suum unigenitum daret: ut omnis qui credit in eum, non pereat, sed habeat vitam æternam.

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Galloism
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Postby Galloism » Mon Mar 09, 2020 7:47 pm

Lamenia wrote:
Galloism wrote:This does broadly hurt the middle class, because of pension funds, FYI.

So your "screw the rich" may be true, but you're screwing a lot of the middle too.

IDK, this doesn't seem like such a big deal for us.

Depends if you're planning for retirement or not. If you intend to be a ward of the state and aren't saving any money for retirement, this isn't hurting you yet.

If you are planning for yourself in retirement, this does hurt.
Venicilian: wow. Jesus hung around with everyone. boys, girls, rich, poor(mostly), sick, healthy, etc. in fact, i bet he even went up to gay people and tried to heal them so they would be straight.
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Saiwania
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Postby Saiwania » Mon Mar 09, 2020 7:50 pm

The stock market isn't gambling, generally speaking. The share price is a real reflection of how well a company is doing (unless of course- its being artificially pumped up via speculators or if people are buying it en masse to disguise the fact that its worthless and they're waiting for a strategic time to dump it, but thats illegal).

Invest in companies whose business model you understand and that has a track record for stability, and you'll rarely go wrong in choosing to hold it. Avoid penny stocks because those are too unproven and risky. Good companies usually cost more to own a piece of.
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Kaystein
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Postby Kaystein » Mon Mar 09, 2020 7:51 pm

Here's a tip for the risk-taker: Buy bitcoin right now. It's price has dipped along with the market, and it's guaranteed to rise again in value after people can't mine for it anymore.
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The Holy Therns
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Postby The Holy Therns » Mon Mar 09, 2020 7:52 pm

Huh. My guess was only off by a year.
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Uiiop
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Postby Uiiop » Mon Mar 09, 2020 7:56 pm

Kaystein wrote:Here's a tip for the risk-taker: Buy bitcoin right now. It's price has dipped along with the market, and it's guaranteed to rise again in value after people can't mine for it anymore.

Ain't the transactions fees and errors make that not worth it?

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Nobel Hobos 2
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Postby Nobel Hobos 2 » Mon Mar 09, 2020 7:56 pm

I'm going to sell every stock I own! Wait. I don't own anything.

Business opportunity then: I can teach safe and profitable dumpster diving, how to steal electricity, and how to fix your own bicycle.
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