crawfishpie wrote:
Econ 101 wrote:
"Stock market predicted NINE of the last five recessions." -- Paul Samuelson. ;)
Did they predict Gamestop?
They are as likely to cause a recession as predict it.
What are "they"? The market? Did you get the Samuelson joke?
He was referring to something like the Black Monday in 1987. ;)
clowns everywhere wrote:
The stock market has been an insane bull run for over a decade, with a brief dip for Covid in March 2020.
The housing market is at almost comical highs.
Cryptocurrency is at insane highs.
Interest rates are near 0.
Unemployment numbers are not great.
Certain industries are being decimated by Covid.
Does anyone else look at this picture and wonder how it can possibly be sustainable? Part of me says, well, the USA has always racked up insane debt and it’s always been fine. But at some point something has to give, right? Maybe not. I see the administration talking about even more stimulus and I just can’t see how this can keep going.
The stock market is not the economy.
The economy is not in a bubble. Unemployment is way up. Growth is down. GDP is down. All are heading in the right direction, but have a long way to go,
Does the stock market reflect the economy? No it does not. It reflects future earning (or cash flows) of the companies making up the market. Do they accurately reflect those future earnings now? Probably not. The market is probably overvalued. That does not mean it will crash. It can remain overvalued for a very logn time.