Personally I'm glad that some sanity is returning to investing, and we are still a long way from getting back to normal.
It's absurd Americans judging at normal people spending money, but same people ok with companies making record profit during pandemic, the minimum wage limit etc. It's pathetic.
https://jsri.msu.edu/publications/nexo/vol-xxv/no-1-fall-202...
Kurzarbeit was one of the main reasons my employer survived the ill-timed purchase of another German industrial giant (deal done right before the 2008-9 financial crisis kicked off, payment due during said financial crisis) without having to lay people off, and left it in the position to get right back into the game once the world economy started improving. And, of course, spared thousands of working people a lot of misery.
Worked as designed for the benefit of the minor nobility... er, "job creators".
Let the privileged folks have their fun, so the unprivileged can eat and not worry so much.
Causes asset inflation making them out of reach for the 'unprivileged'. See housing market.
No one expects housing to appreciate (except in limited, specific situations) and then no one votes or sets policy specifically to prop up prices. There’s a dynamic market with plenty of development and supply in the right types of housing and price points and everyone’s happy pretty much.
The land does appreciate in Japan though. And if they built good homes, they would too. But they choose not to.
Bunch of people lost money. Some of them got rich. Booze is good and gambling is fun and it’s ok to blow their own money on exactly the things that everyone else blows their money on.
(This hits on the idea of “accredited investor,” and I have such a hard time not calling out that it’s a mechanism for already-rich people to participate in every deal that could make not-rich people rich. And that there are very few other ways to earn a fortune when you only have $10k in the bank. I lost my dad’s $11k when mt Gox exploded, which is objectively stupid. Meanwhile my friend is now a multi millionaire simply because he didn’t lose his coins and didn’t sell them. Was he stupid? Did I blow my money on gambling, but he was just lucky?)
Didn’t mean to rant, but it is what it is. You’re not wrong though.
I agree that the rules are overly crude and that in principle there should be some more equitable way to achieve the same way. But I'm also very confident that those rules have stopped a lot of people losing all their money and killing themselves.
> Meanwhile my friend is now a multi millionaire simply because he didn’t lose his coins and didn’t sell them. Was he stupid? Did I blow my money on gambling, but he was just lucky?
Yes. You both did a stupid gamble and one of you got lucky for now. There's no broader lesson to take from that.
I agree with your overall point, but to be clear, we're talking about day trading. There's a lot of arguments you could have about banning casinos, pro and con, but "hey, some poor person might win big on the quarter slot machines" isn't a good argument.
Also, the median "accredited investor" is a dentist from Topeka who's about to get suckered by an advance fee fraud. Being an accredited investor doesn't automatically give you access to good deals. There just isn't a pool of amazing investments out there hungry for capital but being stopped by investor protection laws. (But there is a pool of scams...)
(Note that I'm not saying that the system is good or fair or just; I'm just saying mechanically, accredited investor laws aren't the part of the system stopping you from getting rich.)
Accredited investors suck at due diligence as is, and Joe Everyman can barely understand their own bank statement, so those rules exist to prevent them from getting raked by extremely questionable investment offers.
The untargeted stimulus just enabled mob madness and scams paid for by tax dollars. Wealth redistribution from the tax payer to the dishonest and lucky.
Most people just have no financial skills and will just get slaughtered on the stock markets. Others refuse to save money for their retirement at all.
What we had, in effect, was the closest thing we will ever get to a nationwide short-term UBI experiment and it was a complete disaster.
The worst fears about UBI were realized with just a few payments: people gambling with the money, creating stock bubbles with meme stocks, and contributing to a rapid rise in inflation.
People will say that wasn't really UBI -- but it's the closest we have ever been to it and probably the closest practical implementation we could ever expect from our government, and with "real" UBI people would have been given even more free money.
Everyone knows UBI can’t possibly work but enough people who are or think they are smart will find every way possible to convince themselves and others it not only can work but it’s obvious why it will. Ignoring thousands of years of humans that said “no”.
We have a paleo-phobia problem today where for whatever reason there are a lot of people that are pretty sure the entire history of humanity has been wrong about most things and we are the fortunate ones to know better, today. Without ever considering that we are possibly just cascading our problems due to our unwise choices.
Regardless, history has shown that decadence is the end of a culture.
Which makes sense, because it wasn't. A key point of UBI is its consistency: you know you are getting that money every month, indefinitely, and therefore can plan/budget accordingly.
A one-time payment? Okay, sure, I can use that to cover my rent this month, but then it's not doing me any good. So why pay my rent with it when I can go gamble with it and maybe luck out?
> and with "real" UBI people would have been given even more free money.
tldr: the point isn't the amount of money, it's the consistency.
people gambling their stimulus money because they didn't need it to make ends meet
Obviously, a lot of people did need that money to make ends meet. But it's also obvious that some % of the population was able to treat it as money they were able to play around and have some fun with.
In lieu of that, I think "sending a wave of money through the system by handing a check to every taxpayer will not temporarily change some peoples' behavior" is the hypothesis that would need some data to back it up, in my view.
Sending a wave of money into a group of historically underemployed seems like it'd result in normal expenditures, modulo some slush.
Maybe it's the contemporaneous injection of many, many trabillions into 501c3s, individual funds, small businesses, and other groups who could show they had done a small amount of due diligence to get a gazillion bazillion dollars for no reason that might draw your interest here?
Edit: alternatively, feel free to abstain from conversations where your allegiances lie contrary to complete honesty. I suspect many HNers do this regularly, and you can, too.
Sending a wave of money into a group of
historically underemployed seems like
it'd result in normal expenditures, modulo
some slush.
Far more importantly, "sending a wave of money into a group of historically underemployed" is not what happened. Pretty much every taxpayer got a series of stimulus checks. It wasn't based on need; it was based on your claimed income for the previous year. Historically underemployed groups got checks, rich boys with time and money on their hands got checks. Everybody. (edit: not everybody, more like ~80%) Maybe this is the root of your misconceptions?
Maybe it's the contemporaneous injection [...]
Edit: alternatively, feel free to abstain
from conversations where your allegiances
lie contrary to complete honesty
What is this missing honesty you're referring to? This is one of the weirder interactions I've ever had on HN. And that's really saying something.
oops! let me rectify that!
> Do you have hard data for that? (j/k)
ach, i'd answer but you're just kidding. still, it might be worth looking into?
> is not what happened? Pretty much every taxpayer got a series of stimulus checks. It wasn't based on need
I didn't get one. I didn't get a second. In fact, nobody I know except for business owners and one person whose income was skewed for very VERY specific reasons got one. Maybe this is the source of our fundamental disconnect? Only my business owning friends got money, none of my non-business-owning friends got money. The money mostly went, in my experience, to those who were already well set up. Or to business owners, who largely got loans forgiven.
> Literally the only thought I've expressed this entire time is yup, that wave of money given to consumers seems like it had an effect on consumer spending habits
I mean, that's the thing I mostly disagree about, so sure- it can be small but it's all I'm keen on talking about?
People should be able to do that.
I hope it didn't appear that I was saying otherwise - I was purely stating an observation.
I would feel that way about any kind of government payments, "aid" or otherwise. However, I think it's especially true for money marked as economic stimulus payments. That money is specifically meant to... stimulate the economy. It's meant to be spent.
Even rich people "playing" with money stimulates the economy, because they are spending the money.
Also, it may be reasonable to use the savings rate as a rough proxy. That rate was higher than it has been for decades when the stimulus was active and has since dropped. [2]
[1] https://www.nytimes.com/2021/03/21/business/stimulus-check-s...
Zero of our stimulus went into buying said stocks, however I did make a bucket load from GME and AMC prior. Our stimulus went into further "stimulating" our savings account. The money I spent with Robinhood was entertainment money. It just happened to pay off big.
A more conservative estimate places stimulus "meme stock" trading at less than 0.1% of the stimulus.
I had a bunch of excess cash due to falling behind on D.C.A.-ing, and I accelerated that (which was not a good idea in the short term, but that's what D.C.A.-ing is all about - wish I hadn't fallen behind on it over the years!) and bought a bunch of under-par bonds and utilities for the yield, sold a lot of now-expired SPY puts and stock calls too ;) More trading than I've done in my life, mostly because of inflation, not stimulus.
People stuck at home, with extra spending money, and a desire for internet points, caused your deviation from normality in investing.
sheesh...