Is there any benefit to it? I was listening to someone say that if we want interest rates to reset we need to have a market crash.
What does that even mean?
Is there any benefit to it? I was listening to someone say that if we want interest rates to reset we need to have a market crash.
What does that even mean?
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Is there any benefit to it? I was listening to someone say that if we want interest rates to reset we need to have a market crash.
What does that even mean?
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If you have cash on hand, u can buy the dip.
There’s none really. Market crashes lead to lower investment overall, layoffs, etc. that all hurt the job market for middle and lower income people. Middle income at least will have retirement accounts also that drop in a market crash.
They can help very wealthy people in a way because a tight labor market helps them, they can buy discounted assets while the less wealthy can’t (and might even have to sell at a loss to cover a loss in income), etc.
Interest rates are set based on projections for inflation. Removing tariffs would be the quickest way to lower those. They aren’t very high right now though so I have no idea what resetting them would mean.
If you have cash, it is an opportunity to invest.
I’m not an expert and someone else could probably explain it better than me but if the stock market crashes investors are incentivized to move their money to government bonds – aka loan money to the government and get your money back with interest. The more people that buy bonds, the higher the demand, and so the lower the interest rate. So, the government can borrow money for lower interest rates.
The issue is, in my and other opinions, when the stock market crashes it’s because investors don’t have confidence that companies can be profitable – and that’s not really worth the trade of saving a few hundred billion on bond interest.
When companies can’t be profitable, they slow down spending with each other and it eventually leads to layoffs. As people are laid off and things are getting more uncertain, consumer confidence plummets, people save their money, demand drops, companies makes less profits and so on and so forth.
So a crashing stock market affects way more than just the people invested in the market. A crashing market means investors don’t think companies can be profitable in the current environment.
Turn up your 401k contribution and buy the dip.
I’m super exposed to this because I got a late start investing so I left everything in a super stock-oriented fund. But yeah that’s what I’m doing. Directing every excess dollar into my 401k
If you have no debt and no assets to collapse… you can live in the woods and take people’s shit… that’s about it.
If the market crash leads to bankruptcies and job losses….what money will middle and lower class have.
And with less money than before…what good will lower interest rates do. Housing prices might very well go up with lower interest rates, pricing out people regardless.
It is frankly amazing to see how Republicans are trying to spin just unprecedented self-inflicted economic disaster.
Yeah there is no advantage. First, most middle class folks of any age have money in stocks. But more importantly, the stock market crashing is an indication of poor future investments, which means more jobs, higher pay, more taxes collected.. etc. all things that help lower income folks.
In bad economic times, it is not the middle class and wealthy who suffer
Oh sure, lots of ways. People still talk about the middle class and working class golden era of the early 1930s.
Look no further than the Great Depression to see how it will be beneficial for lower income people. Hint: not at all.
https://courses.lumenlearning.com/wm-ushistory2/chapter/everyday-life-during-the-great-depression/
Generally unemployment goes up, and that drives incomes down, and burns up savings.
No
Well then we have the dream of equity – equal outcomes. We’ll ALL be poor!
Not really no.
It’s a bit of a quagmire because despite what mouthpieces from the left would have you believe everything was and remains insanely overvalued to begin with. TSLA was valued at more than all other car manufacturers combined according to the market, which realistically demonstrates it was a speculative bubble.
For what it’s worth (and I am a bit of a bear having correctly predicted 2 of the last 17 recessions) I was expecting a correction at some point in the next few years. Notice Buffet has been slowly but surely moving money into cash over the last few years so I’m at least in good company this time.
I preach a lot that markets aren’t the economy and vice versa and that is important to remember, especially when markets become speculative like they are now, everything is based in imaginary future earnings at the moment.
Sorry for the preamble but no, nothing good happens for John Q Public. the C suiters will try and keep the stock value high no matter what and since accountants are in charge these days the easiest way to do that is layoffs. Unfortunately the stock market value matters more than the balance sheet, or anything else really so people will be sacrifices for it regardless of if it makes good long tern business sense or not.
During the financial crisis of 2008 when the subprime mortgage market went bust, people might have said: “Well I don’t have a subprime mortgage . . .” or “I’m not invest in Lehman Brothers . . .” and yeah okay I’m sure that’s true.
But the liquidity problem was so great and our financial institutions so intertwined that we were literally hours away from McDonalds not being able to make payroll. If you’re working at McDonalds and don’t have a 401k this shit will still find you if it gets bad enough.
In virtually every crisis of every kind the poor and middle class are hit hardest and the rich the least. The stock market crashing is no different. The poor and middle class will hurt harder than anyone else.