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When will the market climb?

James Lemon

Well-known member
This last image corresponds to the last 6 months of the chart I posted earlier (message #82), just presented with a different scale. It shows the same growth, but with a flatter scale. Here the same period from the website I used in message #82:

Whichever chart we use, we still have a growth of about 50% from the low in mid March. From the time the question was asked, market did climb.

These are just 6 months. Earlier I used a chart over a period of 5 years, as I think it gives more context. It shows that the market started to climb at the end of 2016 and it shows the crash at the end of 2018. That latter period is particularly interesting at it is the most recent crash prior to covid-19.
Look at he high of 9817.18 Feb 19 2020 before the drop to where it is July 15 2020 at 10,430 a gain of 6.25 %. The index experienced a loss of about 30.12% and yet required a gain of 43.09% to make up for a 30.12% loss. So I don't understand how you conclude a gain of 50%.
 
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James Lemon

Well-known member
Jérôme,

if one has linked a loan to that market, then one is not now back to normal. For me personally, the stress is not relieved enough to be at 2019 level.

But in the longer term view of things then, yes it has recovered substantially!
The Dow recently suffered a loss of 36.37% and will require a gain of 57.16% from its recent low to make up for that loss. So far it has gained 44.37% from its recent low but still substantially down from its recent high before the pandemics.

"Global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s."

"As with the April 2020 WEO projections, there is a higher-than-usual degree of uncertainty around this forecast. The baseline projection rests on key assumptions about the fallout from the pandemic. In economies with declining infection rates, the slower recovery path in the updated forecast reflects persistent social distancing into the second half of 2020; greater scarring (damage to supply potential) from the larger-than-anticipated hit to activity during the lockdown in the first and second quarters of 2020; and a hit to productivity as surviving businesses ramp up necessary workplace safety and hygiene practices. For economies struggling to control infection rates, a lengthier lockdown will inflict an additional toll on activity. Moreover, the forecast assumes that financial conditions—which have eased following the release of theApril 2020 WEO—will remain broadly at current levels. Alternative outcomes to those in the baseline are clearly possible, and not just because of how the pandemic is evolving. The extent of the recent rebound in financial market sentiment appears disconnected from shifts in underlying economic prospects—as the June 2020 Global Financial Stability Report (GFSR) Update discusses—raising the possibility that financial conditions may tighten more than assumed in the baseline". https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020


Dow jones industrial average.JPG
 
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Jerome Marot

Well-known member
Look at he high of 9817.18 Feb 19 2020 before the drop to where it is July 15 2020 at 10,430 a gain of 6.25 %. The index experienced a loss of about 30.12% and yet required a gain of 43.09% to make up for a 30.12% loss. So I don't understand how you conclude a gain of 50%.
I wrote: "a growth of about 50% from the low in mid March". In mid March, the Nasdaq was at 6900 and now is at 10500. 6900+50% is smaller than 10500.
 

Tom dinning

Registrant*
I’m always a bit sluggish to wade to not waters I don’t fully understand but I’d like to offer some thoughts as I watch the world rattle on.

What I read here and in other places of less importance is somewhat of a game play where we are the observers waiting for a match to finish so we know who is the winner, and especially, who is the loser, although that seems to be less of a concern.

What results for this analogy of mine is that we seem to be giving away our control of a situation to some unknown players who are playing with rules we are not quite sure about.
Like the players in such a match, we also have no real idea of their condition for play are their competency other than past performances.
Unfortunately, the data we rely on is old news. Not that old that it might have been useful last year but, under the new conditions of play, we have little but faith to expect things to pan out as they always have.
Some might say we have had this before and this is what happens. An extrapolation, so to speak.
Regardless of who says what, this isn’t the same game. THe field is muddied with unfamiliar ground, people in the crowd are confused, the referee is losing control of the game, the players are ignoring some of the rules, the reporting is, in part, biased and flawed.
It might seem a bit extreme to suggest this is unknown territory. But that’s exactly what it is.
This seems to be the point where the spectators need to decide, to be in control, to consider what sort of outcome they want for this game.

Or leave it behind and start something entirely different. Something that works for them, something that benefits them all, not just the players, managers and media.

The very essence of capitalism is facing a crisis. People are no longer safe under its rule. A small percentage have the most. A large percentage see no future. In the middle, people are concerned at how it’s got to this. They’re not looking for an ideal world, just a bit they can life on with rules they can live with that consider the individual above all.
It’s almost as if people have become disposable. Even under the current threat, the elderly and weak are considered by some as a necessary consequence of a plague or epidemic. And as this issue continues, people starve by the millions, have no home, are a consequence of hostility, and are punished when they want for a better life. Do any of them even know about the stock market? Do they care if they do?
If we are in a situation where we could change the rules, what would we consider as important?

I might seem like an idealist, which I am, but it could be such a time.

I live in a country where I believe this sort of change is not only possible but very likely. There is resistance to go back to the old ways of industry setting the rules, of politicians being detached from their constituent, of individuals in constant demand for more and more when others dhave less and less, of primary producers hanging my a financial thread while the investors reap the benefits, of resources being depleted, habitats destroyed.

I’ll,be dead in a few years. I don’t need to predict the stock market. What’s left for me is to,see some changes to a broken system. Something small will do. I’d start with education since that’s my thing. Increase proportional tax on everyone and fund totally free education for everyone. Making people smarter is always a good thing. Seems simple.
 

James Lemon

Well-known member
I’m always a bit sluggish to wade to not waters I don’t fully understand but I’d like to offer some thoughts as I watch the world rattle on.

What I read here and in other places of less importance is somewhat of a game play where we are the observers waiting for a match to finish so we know who is the winner, and especially, who is the loser, although that seems to be less of a concern.

What results for this analogy of mine is that we seem to be giving away our control of a situation to some unknown players who are playing with rules we are not quite sure about.
Like the players in such a match, we also have no real idea of their condition for play are their competency other than past performances.
Unfortunately, the data we rely on is old news. Not that old that it might have been useful last year but, under the new conditions of play, we have little but faith to expect things to pan out as they always have.
Some might say we have had this before and this is what happens. An extrapolation, so to speak.
Regardless of who says what, this isn’t the same game. THe field is muddied with unfamiliar ground, people in the crowd are confused, the referee is losing control of the game, the players are ignoring some of the rules, the reporting is, in part, biased and flawed.
It might seem a bit extreme to suggest this is unknown territory. But that’s exactly what it is.
This seems to be the point where the spectators need to decide, to be in control, to consider what sort of outcome they want for this game.

Or leave it behind and start something entirely different. Something that works for them, something that benefits them all, not just the players, managers and media.

The very essence of capitalism is facing a crisis. People are no longer safe under its rule. A small percentage have the most. A large percentage see no future. In the middle, people are concerned at how it’s got to this. They’re not looking for an ideal world, just a bit they can life on with rules they can live with that consider the individual above all.
It’s almost as if people have become disposable. Even under the current threat, the elderly and weak are considered by some as a necessary consequence of a plague or epidemic. And as this issue continues, people starve by the millions, have no home, are a consequence of hostility, and are punished when they want for a better life. Do any of them even know about the stock market? Do they care if they do?
If we are in a situation where we could change the rules, what would we consider as important?

I might seem like an idealist, which I am, but it could be such a time.

I live in a country where I believe this sort of change is not only possible but very likely. There is resistance to go back to the old ways of industry setting the rules, of politicians being detached from their constituent, of individuals in constant demand for more and more when others dhave less and less, of primary producers hanging my a financial thread while the investors reap the benefits, of resources being depleted, habitats destroyed.

I’ll,be dead in a few years. I don’t need to predict the stock market. What’s left for me is to,see some changes to a broken system. Something small will do. I’d start with education since that’s my thing. Increase proportional tax on everyone and fund totally free education for everyone. Making people smarter is always a good thing. Seems simple.
The elimination of private banks and interest would be important. Have a look at the short video on our current system, about 30 minutes and you will know all you need to know Tom . The second link is a paper that addresses the current pitfalls of the current system and does offer solutions as well. The following is one example of the benefits verses liabilities.

Interest prevents qualitative growth

The understanding that unlimited growth cannot be brought in harmony with ecology is at the point of being accepted more and more. One of the main arguments which are used now is that a change from quantitative to qualitative growth is necessary. But exactly this change can not happen due o interest.



This can be shown with a simple example:

Suppose product A costs US$ 1,000 and has a lifetime of 10 years. Another product B costs US$ 1,500 and can be used for 20 years. If the interest rate were zero, it would be advantageous to buy product B, as its annual costs come up to US$ 70. In comparison, product A would cost US$ 100 each year. An investment calculation which assumes an interest rate of 8% p.a. shows that the capital value of the investment for product A over an investment period of 20 years is US$ 1,434 and is therefore smaller than the capital value of product B which is US$ 1,500. The result of this investment calculation is that, due to interest, product A with the shorter lifetime has to be bought.



This example shows that interest devalues the future and works against more expensive quality products, favouring instead cheap goods with short lifetimes. This is, besides low energy prices, another reason why investment in solar energy and other alternative energy resources is not considered economical today.


http://userpage.fu-berlin.de/~roehrigw/gloetzl/howand.htm#:~:text=A new money system must,the inflation rate at zero.
 

Asher Kelman

OPF Owner/Editor-in-Chief
James,

You cite Helmut Creutz as your authority on money and also it seems that the text you have is copied from his writings. However, I myself am not able to find anything but his own self-supporting references that he is at all qualified or has credibility to speak as an authority on money.

What is presented in the video is nothing but a “Explainer Video”, a product of a new skilled marketing tool where “explainers“ illustrate ideas, as in a prosecutors case presentation in a major trial, but with a voice that is charming and disarming.

I receive offers for making for me such “Explainer Videos” every day and they are of this family of work product!

This presentation is indeed excellent and the ideas offered seem plausible to me, outside my own fields of expertise, as thus Like anyone other than learned economists. Still it all might be actually “true“ and experts have ignored his ideas or found them not even worthy of critique!

I admit, James, he could, indeed, be the one rare exceptional guy, an Einstein no less, who is self-taught, outside of academia who has discovered fundamental truths. But after searching, however, I find not the slightest evidence to support such a possibility.

I am trained as a scholar but not in economics. If you know any major university that uses his books to train their graduate student in economics or business then I would count that in his favor. Otherwise, so far, this man can’t be taken seriously by someone trained in scholarship as I am.

Asher
 

James Lemon

Well-known member
James,

You cite Helmut Creutz as your authority on money and also it seems that the text you have is copied from his writings. However, I myself am not able to find anything but his own self-supporting references that he is at all qualified or has credibility to speak as an authority on money.

He could indeed by the one guy who is self-taught, outside of academia who has discovered fundamental truths and he ideas are original.

I am trained as a scholar but not in economics. If you know any major university that uses his books to train their graduate student in economics or business then I would count that in his favor. Otherwise, so far, this man can’t be taken seriously by someone trained in scholarship as I am..

Asher
Yes well many of these institutions might have to change the way they do business.
 

Asher Kelman

OPF Owner/Editor-in-Chief
Anyway, James,

Interest is only a short term lever to stimulate activity. In the long run, it devalues money, so it essentially doesn’t grow as much as it seems as purchasing power falls for most products, unless new efficiencies arise. Just consider a $3,000 new car in 1975 would sell today for $20,000.

A child’s spending money of $1 then would have to be perhaps $10 today.

Everyone takes this inflation of money into account and no seems to know of your self-advertising expert!

Stock’s, by contrast allows the person with money to kind of “lend money”, but also buy in to the risk and profit of the business enterprise. Both work, except the stock expansion is at least partly covered by tangible worth!

Asher
 

Tom dinning

Registrant*
All well and good for someone who has money or wants more than they need.
But I fear that since such a system does require some form of economy for those who have the cash or credit or means of increasing productivity or working or even eating on a regular basis, doesn’t account for those who, according to the World Bank (I have no idea if they are an authority but I’ll take it they know more than I do) about 25% of the world population live in poverty and they define poverty as living on less than $2.50 a day.
I can’t even imagine that would be possible. For many I’m sure it’s not possible.
So when the shit hits the fan they will be the first casualties.
Even in a relatively prosperous country such as Australia there are people within a few hundred km of where I live who are in that poverty bracket. In addition there are people in my suburb who I would consider to be living in poverty. They don’t have the luxury of even thinking about buying something worth $1000 and lasting ten years. They are more likely to go to the tip, find a broken one, get someone to take it home for them, fix it nd hope it lasts a week or two.
What thought would they give the stock market?
Who asks them what they need?

if it is outside the realm of possibility for these people to act for themselves surely it is up to those who can act to do so.
Yet the only things that seems to change is the poverty line and the number of people under it: both increasing.

there’s also the issue of increased productivity. Surely that has an impact on resources, most of which are limited.

somewhere along the line we lost sight of humanity. We have mistaken our wants and growth and greed, that which we recognise as economics for humanity. Humanity is now a commodity that those with can purchase and those without can simply wish for.

your video finished with the comment that “ it’s munch more complex than this”. It’s the ‘complexities’ which are the human element. The machine called economics runs humanity. It should be the other way around.
 

Asher Kelman

OPF Owner/Editor-in-Chief
Emerging hominids Growing, gathering excess food and being able to store it creates the source of original wealth. Agriculture multiplied that capability and allows permanent settlements. It’s the core of economics and civilizations! The intent was merely to survive winters and droughts.

So, Tom, that was the force of “humanity“, the imperative to sustain the community.

But it also freed others to learn new skills, create new products and have an elite running a pyramidal society. That development exaggerated the gap between those in command and everyone in successive levels below them. Humanity had to trickle down and “Charity” was created making the elites feel noble!

With that, in all recorded human history, “humanity” pretty well seems to have left the picture except occasionally, for great warrior kings like Cyrus the Great who used humanity to win over the vanquished instead of mass slaughter rape and torture!

Our world still favors dominant alpha males and the more thoughtful humanistic thinkers are often relegated to having limited influence, but that’s it! Popular bombast beats brains any time! Trump is the power here. Fauci, the health expert, is the humanist and is simply tolerated, bypassed or ignored!

Asher
 

Tom dinning

Registrant*
Emerging hominids Growing, gathering excess food and being able to store it creates the source of original wealth. Agriculture multiplied that capability and allows permanent settlements. It’s the core of economics and civilizations! The intent was merely to survive winters and droughts.

So, Tom, that was the force of “humanity“, the imperative to sustain the community.

But it also freed others to learn new skills, create new products and have an elite running a pyramidal society. That development exaggerated the gap between those in command and everyone in successive levels below them. Humanity had to trickle down and “Charity” was created making the elites feel noble!

With that, in all recorded human history, “humanity” pretty well seems to have left the picture except occasionally, for great warrior kings like Cyrus the Great who used humanity to win over the vanquished instead of mass slaughter rape and torture!

Our world still favors dominant alpha males and the more thoughtful humanistic thinkers are often relegated to having limited influence, but that’s it! Popular bombast beats brains any time! Trump is the power here. Fauci, the health expert, is the humanist and is simply tolerated, bypassed or ignored!

Asher
no wonder I feel so uncomfortable. I knew I didn’t fit in but remained aggressively tolerant.
Now I’m passively intolerant. Staying at home and at least at interface distance from the rest of the population means I can be a humanist, if only to a few select.
 

Jerome Marot

Well-known member
As far as I know, we have had zero or close to zero interest rates since the 2008-2009 crisis. In some cases, the interest rates have dipped into negative territory (e.g. Germany state bonds) and this before taking inflation into account. In Germany, negative interest rates have been implemented on private checking accounts. If you keep your money on a such account, it becomes less each month. It is supposed to be an incentive for customer spending.

If we study history, interest lending was prohibited in the middle ages by both christianity and islam. It still officially is prohibited by the later. It would seem that the consequences of these prohibition were generally negative.
 

Asher Kelman

OPF Owner/Editor-in-Chief
The lack of humanity, Jérôme, simply comes from gradual social distances of an elite class holding the reins to distribution of resources by one means or another.

Accumulation of grain/food or its bartering tool, money allows holders to buy other folks services and get some leverage of interpersonal power.

We have the humanity as a built in emotion of compassion, but it’s degraded when other folk are classified as workers or worse as vermin.

Asher
 

James Lemon

Well-known member
As far as I know, we have had zero or close to zero interest rates since the 2008-2009 crisis. In some cases, the interest rates have dipped into negative territory (e.g. Germany state bonds) and this before taking inflation into account. In Germany, negative interest rates have been implemented on private checking accounts. If you keep your money on a such account, it becomes less each month. It is supposed to be an incentive for customer spending.

If we study history, interest lending was prohibited in the middle ages by both christianity and islam. It still officially is prohibited by the later. It would seem that the consequences of these prohibition were generally negative.
In this environment it may be the creation of more debt that has a much greater effect on the equilibrium of the economy than interest rates? A 1% increase in a mortgage payment would mean 14% less disposable income for the borrower enough to put them underwater. And the prices of these assets would drop as well. I am suggesting that interest is no longer the mechanism it once was for controlling the money supply since it is not backed by anything we just create more debt. Low interest rates are keeping things afloat.
 

Jerome Marot

Well-known member
In this environment it may be the creation of more debt that has a much greater effect on the equilibrium of the economy than interest rates? A 1% increase in a mortgage payment would mean 14% less disposable income for the borrower enough to put them underwater. And the prices of these assets would drop as well. I am suggesting that interest is no longer the mechanism it once was for controlling the money supply since it is not backed by anything we just create more debt. Low interest rates are keeping things afloat.
One does not go without the other. If you lower the interest rate, you create fiat money. By lowering the interest rate, the cost of money is lowered, so more people want to take credit and more fiat money is needed to satisfy the demand.
 

James Lemon

Well-known member
One does not go without the other. If you lower the interest rate, you create fiat money. By lowering the interest rate, the cost of money is lowered, so more people want to take credit and more fiat money is needed to satisfy the demand.
Money is created by creating debt they go hand in hand. Interest is near zero and no longer has the leverage it once had. Can’t raise interest for obvious reasons. The wheels are already starting to wobble. Raising interest rates would cause them to come off completely.
 

Asher Kelman

OPF Owner/Editor-in-Chief
Money created also by growing and stockpiling “grain“, ( I.e. grain or other essential and durable foodstuffs)! That’s where it starts. Coin comes next and then symbolic coin. But, if there is zero “grain”, all money is worthless! If you have excess grain, you can print money!
 

James Lemon

Well-known member
Money created also by growing and stockpiling “grain“, ( I.e. grain or other essential and durable foodstuffs)! That’s where it starts. Coin comes next and then symbolic coin. But, if there is zero “grain”, all money is worthless! If you have excess grain, you can print money!
That must have been way back when Kings loaned money to farmers for growing crops but certainly not the case in the twenty first century. Our current system in no longer based on commodity money.
 
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