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marmar

(76,978 posts)
Mon Oct 26, 2020, 12:39 PM Oct 2020

It's been years since investors have been this fearful of a stock market crash, Nobel-winning econom


It’s been years since investors have been this fearful of a stock market crash, Nobel-winning economist warns


(MarketWatch) That’s Robert Shiller, a Nobel Prize-winning economist and Yale professor, urging a cautious approach to investing in the top-heavy stock market in an op-ed for the New York Times.

“The coronavirus crisis and the November election have driven fears of a major market crash to the highest levels in many years,” Shiller wrote. “At the same time, stocks are trading at very high levels. That volatile combination doesn’t mean that a crash will occur, but it suggests that the risk of one is relatively high. This is a time to be careful.”

He said he reached this conclusion based on what he’s seeing in several stock-market confidence indexes that he began to develop decades ago.

Specifically, his Crash Confidence Index is sounding the alarm bells. Shiller said he asks investors this question: “What do you think is the probability of a catastrophic stock market crash in the U.S., like that of Oct. 28, 1929, or Oct. 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the U. S.?” He said the bearish answers to that question registered one of the lowest readings in confidence he’s ever seen. .........(more)

https://www.marketwatch.com/story/its-been-years-since-investors-have-been-this-fearful-of-a-stock-market-crash-nobel-prize-winning-economist-warns-11603685224?mod=home-page




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It's been years since investors have been this fearful of a stock market crash, Nobel-winning econom (Original Post) marmar Oct 2020 OP
I've been encouraging my friends in the market WhiteTara Oct 2020 #1
These doom and gloom people. Seem to always be around, aren't they? What they don't say is SWBTATTReg Oct 2020 #2
Oh, GREAT. MarketWatch is paywalled now. I used another browser and got thru progree Oct 2020 #3
Social Security is the last big score they've got Warpy Oct 2020 #4

WhiteTara

(29,676 posts)
1. I've been encouraging my friends in the market
Mon Oct 26, 2020, 12:45 PM
Oct 2020

to shelter some of their money in cash, but to no avail. They have the idea that if they are diversified that they will be safe. What do you think? My thought is that when one goes, they all go. My family was fabulously wealthy until the crash of 29 and now ninety years later, I'm on SS. I'm grateful for FDR.

SWBTATTReg

(21,856 posts)
2. These doom and gloom people. Seem to always be around, aren't they? What they don't say is
Mon Oct 26, 2020, 12:50 PM
Oct 2020

conditions surrounding the marketplace is very different today vs. 5, 10, 15 years ago. First, tax rates have been cut and also, businesses have been buying their stock back by the buckets. There is literally nothing else out there to buy, everything is too high priced. That's why we don't see a lot of buyouts and such, too rich for everyone's blood.

And more than likely, businesses have more cash on hand to weather bad economic times (with the exception of some in our Covid 19 environment), unless they are in a field where customer foot traffic has been reduced significantly. Funny too, is that Main Street has been overlooked vs. Wall Street, even the PINO goes on and on about Wall Street and its numbers, which is a farce, considering Barak Obama got us there for the most part with his reconstruction efforts after speculators destroyed real estate values, thus depressing the stock market(s) and all other indicators.

progree

(10,864 posts)
3. Oh, GREAT. MarketWatch is paywalled now. I used another browser and got thru
Mon Oct 26, 2020, 02:30 PM
Oct 2020

Last edited Mon Oct 26, 2020, 03:07 PM - Edit history (1)

so I must have hit a number of articles limit based on the cookies my main browser has.

Warpy

(110,900 posts)
4. Social Security is the last big score they've got
Tue Oct 27, 2020, 01:18 AM
Oct 2020

so expect an intense push by Republicans to get it into the "can't lose" stock market.

Yes, other crashes have happened in October, it's traditionally a tough month as investors dump poorly performing stocks and set up their tax losses for the year. Not being able to siphon more money from widows and orphans because the Republicans couldn't reach a Covid relief deal might make it a little deeper than usual. However, I don't honestly see the Big Dump happening in the next week.

We'll never know what triggers a huge crash, they're still not sure what triggered the crash of 1929. Idiotic economic misrule by Republicans joined with "fiscal conservative" Democrats have ensured that there will be one. It's completely unsustainable.

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