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Comment by paulpauper | Hacker News Reader

for 2 months and then new highs not long after as if nothing happened

Daily reminder that stock market is not the economy.

During the pandemic, stock market has sky rocketed while production, productivity, life expectancy and quality of life all fell off a cliff. Every measurable metric.

Why would life expectancy or quality of life have an impact on the stock market? Literally the only thing that matters is future cash flows of public companies.

GDP made a V-shaped recovery. So did corporate profits, earnings, and unemployment rate. It is correlated. People are not just buying up stocks for no reason at all.

This is one of those things that is true, kind of, but inaccurate.

Generally, we don't have government moratoriums on eviction when the economy hits new highs, nor do we need massive government spending for things like unemployment benefits.

That is a good point, but I believe that those programs did not add much to the recovery. They helped but not as much as commonly assumed. Rather, look how much profits multinationals generated. I think it had more to do with increased productivity and efficiency. Much of the stimulus was spent on administrative stuff, paying down debts, or saved, as opposed to consumer spending.

I think I see the point you're making, but the stuff that you say that the stimulus money was spent on are the things that result from the US economic inequality: folks tend to save when they _need_ a safety net; folks tend to pay down debts _when they have debts_ (especially those that they didn't feel they could pay down without the stimulus, which are generally larger, such as medical or legal debts); etc.

I own a box of band-aids, way more than enough to patch the cuts and scrapes I'm likely to experience in the near future. If Biden gave me a band-aid, I'd be very likely to hand it to someone else if they needed it, because I know I have my box. On the other hand, if I have no band-aids, and Biden was so generous, I'd probably either save it for my next (inevitable) cut or stick it straight onto one of my open wounds.

Yes, but it was still a crash. But for some reason the usual doomsayers who love to predict market crashes are not satisfied with it. They are still waiting for a repeat of 2008.

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