Mastodawn

myrmepropagandist

If there were a democrat in the white house the stock market would be tanking right now at the news of supply chain chokepoints in oil. But, under Trump the market has reacted much less. It's easy to make the mistake of thinking of the market as a force of nature but it's really just the aggregated decisions of a few thousand wealthy people and institutions.

myrmepropagandist 1d ago

The market is supposed to be objective and motivated only by profit but these decisions are informed by the biases of those people. Worse, it's deeply informed by what those few thousand wealthy people *think* their peers will do.

So you have people saying "no one believes Trump when he says the war is over, but we expect the market to react to what he says so we will react in anticipation of that... thus creating the reaction."

But, this doesn't go on forever.

myrmepropagandist 1d ago

At some point what the president says will become irrelevant to the market. His words are already irrelevant to many people, and to many nations because he simply lies far too often. It's like making investment decisions based on the output of a fortune cookie.

The previous observation that the market would be tanking with a democrat in office is based on similar circular logic. "we expect everyone else will pull out so we will move first"

myrmepropagandist 1d ago

I think there is something deeper at work as well. The thousands of wealthy people who make up the market see Trump as someone who protects their interests. If there is economic pain they expect that he will shield them. This is how many of the ordinary people who support him see it as well.

Both of them are being naive and duped. There is only one person Trump cares about. He might care a little more about rich people, but only because he's a member of that group.

Many of those large investors operate strategies that thrive on volatility and exploit access to insider knowledge (or, at least, things you and I don't know), and those strategies are often far more profitable than "buy-and-hold" Boglehead investing.

@vestige @futurebird it's like how anyone with any sense has see the impending collapse of the AI bubble that will take with it massive amounts of money (both real & imaginary), but the industry continues to get pumped, because the entire investor class are acting like slightly less-shortsighted crypto bros. the bubble will collapse, but they all expect to sell their stock before that happens and rake in tons of cash, so until then they're trying to inflate its value

@vestige because all of them somehow imagine themselves as the ones who won't be left holding worthless stock

honestly, this is the best possible explanation for any of them investing. the main reason they do is because they're all easily flattered fools who believe any hype that promises them money and the ability to fire all their workers

but it can stil be both these things

@futurebird And because they give him money.

Manc AvGeek 1d ago

@futurebird This is precisely the problem I have with "The Stock Market" (and particularly the FTSE100) and "The Economy" being used interchangeably here in the UK.
Stock prices are routinely manipulated, pretty much exclusively to the benefit of the already wealthy, I refer to this as the "imaginary" economy because many valuations are plucked out of thin air - look at the valuations for many tech firms who have never turned a profit, especially in the AI field.
The REAL economy, on the other hand, just chugging along merrily, mostly powered by the less-than-wealthy - this economy is based on the movement of money, often in the form of goods or services, from one person to another - and here is the interesting bit.
Those with the least contribute the most.
The ultra wealthy will spend a bit of their income, and stash the rest in stocks, shares, and offshore accounts.
This is money that is removed from the economy.
Those at the bottom put ~100% (often more) of their income back into the economy, paying bills and buying essentials.
Yet that is ignored in favour of inflated, imaginary valuations of companies that would often be failing if they weren't able to access financing because they are so over valued.

myrmepropagandist 1d ago

The market is just like a place where rich people get to vote based on how rich they are and the extent to which we allow it to drive policy and decisions is anti-democratic in the one person one vote view of the world.

Manc AvGeek 1d ago

@futurebird "No taxation without representation" was the cry that at least partially founded the US, yet today the wealthy pay comparatively little yet have sll the access.

Linebyline 1d ago

@mancavgeek @futurebird Right? I hear conservatives say that rich people don't just sit on their wealth like a dragon atop its pile of gold; they *invest* it. But what do they think "invest" means? It means they want a *return* on their investment. So they only put money into the economy when they think they're likely to be able to pull *more* money out. (And that's before you consider the various ways they mostly spend *other people's* money.)

myrmepropagandist 1d ago

@Linebyline @mancavgeek

"Listen, Smaug, is it OK if I just call ya 'Smaug' ? ... "

@futurebird I think you're absolutely right.

And you know, even now Trump has been intentionally making the markets freak out then try to un-freak after doing so to help his friends with money do some rather illegal investments/divestments. If they don't hurry up and catch on that he's manipulating them into losing a heck of a lot of money sooner or later he'll tank the markets just doing this even if nothing else he did affected it...

kralcttam ☕️1d ago

@futurebird This is definitely happening already. On Thursday Trump came out and did his little “everything is awesome” routine and Friday oil stayed above $110, and the U.S. stock market dropped another 1.5%

Chris Hessert 1d ago

I’ve had quite a few excellent and accurate fortunes from cookies. I’ve never heard Trump say a single thing that’s useful or true. 🤷🏻‍♂️

ChookMother 🇦🇺🦘22h ago

@futurebird I used to say this about some small children when I was a teacher: never thought I'd say it about an adult, let alone the US President:
His mind is like a lucky dip - you never what you're going to get.

Steffie 🏳️‍⚧️ :rubber_pride-heart-600: :triple-moon-transfem: 1d ago

@futurebird Kinda, the markets stopped being about profitability and soundness a while ago, and really became vehicles of speculation and short term gains. They operate far more like betting pools then financial investment arenas. At this point, the markets only exist to prop-up the markets. There’s a general understanding, by the wealthy, that if they tried to back out the entirety of their worth would collapse. So, we get manipulative 1-3 hour ‘bubbles’ as every tries to eeck out some huge return on a daily basis. The stock, bond, and futures markets are now systematically intertwined in this cycle of shifting bets and odds with the knowledge that it Must continue or capitalism, itself, becomes unstable and threatens the wealthy class, and the institutions representing mean investors (pensions, unions, 401K participants, etc). The general corruption and exploitation is merely a reflection of this. How long it can continue like this is anybody’s guess, but there is zero incentive to “correct” the markets by it’s investors or participants.

Tony 💉x10 🇦🇺1d ago

@futurebird The market is never objective. Otherwise Alan Greenspan wouldn't coin the term "Irrational Exuberance".

@futurebird the market is not that many people if you put it like this.

Inky says "What the hell?!"1d ago

@futurebird Two things from Kai Ryssdal of APMs Marketplace come to mind:

1. As he said last Thursday about this lack of market response to these disruptions and the war: "The market is an idiot".

2. More regularly, "The Stock Market is NOT the Economy." It is part of the Economy but doesn't represent most of our day to day economic interactions.

Just a pre coffee thought.