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Thought it was really bizarre not seeing a single post about this weeks correction in the NYC subforum. Media is blaming coronavirus but I think we've been due for a correction virus or not. Markets just been way too hot since the last recession. Besides, I think it's been artificially inflated. Add in the fact that China lies about everything and it'll get way worse before it gets any better.
I've made this post as I'm curious to know what's the response in your life/industry. Politically, a continuation of a market slide could be the end of Trump. This, along with coronavirus scare has got to be a liberals wet dream. Financially, I don't panic. I play the long game of buy and hold. Everything's on sale as far as I'm concerned. Thoughts?
Thought it was really bizarre not seeing a single post about this weeks correction in the NYC subforum. Media is blaming coronavirus but I think we've been due for a correction virus or not. Markets just been way too hot since the last recession. Besides, I think it's been artificially inflated. Add in the fact that China lies about everything and it'll get way worse before it gets any better.
I've made this post as I'm curious to know what's the response in your life/industry. Politically, a continuation of a market slide could be the end of Trump. This, along with coronavirus scare has got to be a liberals wet dream. Financially, I don't panic. I play the long game of buy and hold. Everything's on sale as far as I'm concerned. Thoughts?
this is discussed ad naseaum in the financial forums .. it really is a not a nyc issue.
no one knows what constitutes a sale price ...we all thought the sale price in 2008 was when we fell 2000 points . who knew we had 4000 more to go and that was a terrible deal
so we have a price and a market valuation , but that does not make it a sale or even a good deal .
on an inflation adjusted basis 2000 took 13 years to get even . 1964 took until 1984 to get back . so only hind sight tells us how we did .
if i want to buy in a drop i buy , but i have no idea what my deal is as far as "sale" as markets have no memory of what they once were or what investors valued things at .
by any criteria stocks were over valued so the fact they fell does not mean it is a sale .. in fact it does not even mean they represent a good value at these levels .
Last edited by mathjak107; 02-29-2020 at 07:42 AM..
Thought it was really bizarre not seeing a single post about this weeks correction in the NYC subforum. Media is blaming coronavirus but I think we've been due for a correction virus or not. Markets just been way too hot since the last recession. Besides, I think it's been artificially inflated. Add in the fact that China lies about everything and it'll get way worse before it gets any better.
I've made this post as I'm curious to know what's the response in your life/industry. Politically, a continuation of a market slide could be the end of Trump. This, along with coronavirus scare has got to be a liberals wet dream. Financially, I don't panic. I play the long game of buy and hold. Everything's on sale as far as I'm concerned. Thoughts?
Re personal and retirement investments, you can check the financial and retirement forum. Re impact of the correction on NYC and NY State, they will collect much less tax in a time of down market. NY will be impacted much more than some other states by a down market because in NY relatively few major taxpayers (who are also investors) support a large general population.
Doubt the stock market downturn is going to affect Trump - his tax reform supported the Dow climb from 18,500 to 29,500 in three years, and he can always blame the virus (not quite incorrectly) for the market downturn :-). The Dow is still 7,000 points up from pre-Trump, even after it cratered by 4,000 points last week. This is not something that would faze Trump supporters.
I also think that overvalued stocks are one of the reasons for the downturn, and that reason may hold longer than the virus. The downturn does not affect me personally (except that it is somewhat positive for my Roth IRA conversion), since my sources of income for the next 25-30 years are not investments, but residual work in my semi-retirement (for few more years), annuities paid monthly by insurance companies (until I die), and the amount I earned in Social Security credits (after I start taking SS at 70, ie, starting in 10 years).
big market declines dont happen in a vacuum ... they generally lead to recession , job loss , plunging home values and loss of peoples savings ... not good when the drops are not just what we call the daily noise .
Re personal and retirement investments, you can check the financial and retirement forum. Re impact of the correction on NYC and NY State, they will collect much less tax in a time of down market. NY will be impacted much more than some other states by a down market because in NY relatively few major taxpayers (who are also investors) support a large general population.
Doubt the stock market downturn is going to affect Trump - his tax reform supported the Dow climb from 18,500 to 29,500 in three years, and he can always blame the virus (not quite incorrectly) for the market downturn :-). The Dow is still 7,000 points up from pre-Trump, even after it cratered by 4,000 points last week. This is not something that would faze Trump supporters.
I also think that overvalued stocks are one of the reasons for the downturn, and that reason may hold longer than the virus. The downturn does not affect me personally (except that it is somewhat positive for my Roth IRA conversion), since my sources of income for the next 25-30 years are not investments, but residual work in my semi-retirement (for few more years), annuities paid monthly by insurance companies (until I die), and the amount I earned in Social Security credits (after I start taking SS at 70, ie, starting in 10 years).
at zero or negative rates and a losing or dead stock market for an extended period of time , insurers and pension funds are not going to live up to their obligations eventually so we all have concerns and are at risk.
as the ny times said , those in insurance products may be whistling past the grave yard at negative or near zero rates .
negative interest rates impact insurance companies in three ways. First, these companies invest in bonds to create a spread between the money they earn on the bonds and the guaranteed rates on insurance policies. With negative or low rates, this spread has disappeared. While longer term the company can lower its guarantee rates, those policies in force cannot be changed so stress on the insurer magnifies ..
Second, the amount of money that insurance companies must keep in reserve is based on the present value of the company’s projected earnings. As yields on bonds are in negative territory, the returns are projected to be lower and thus the amount of capital required to remain uninvested. This dead capital acts as a further drag on them .
Third, consumers may purchase less insurance in the future: If guaranteed rates on policies drop, insurance products become less attractive relative to alternative investments. like all insurance , it depends on new money to help pay the liabilities on old money .
what is bad for investors is bad for insurance and annuity products.
if insurers fail what you get back is capped by the states but the problem is the income stream is over and now you need a way to develop a new one in what may be tough times. the same applies to non gov't pensions .
Last edited by mathjak107; 03-01-2020 at 03:05 AM..
Thought it was really bizarre not seeing a single post about this weeks correction in the NYC subforum. Media is blaming coronavirus but I think we've been due for a correction virus or not. Markets just been way too hot since the last recession. Besides, I think it's been artificially inflated. Add in the fact that China lies about everything and it'll get way worse before it gets any better.
I've made this post as I'm curious to know what's the response in your life/industry. Politically, a continuation of a market slide could be the end of Trump. This, along with coronavirus scare has got to be a liberals wet dream. Financially, I don't panic. I play the long game of buy and hold. Everything's on sale as far as I'm concerned. Thoughts?
Opinion:
In the last 4 years a large percentage of our economy went towards
repairing damages from mother nature. Hurricanes,Blizzards,Floods, etc.....
Taxing unfinished wars not started by his administration.
Thousands of non citizens leeching off the backs of taxpayers.
Protecting aiding other countries at our expense.
Our president has long realized the implications and
works hard to stop the bleeding out of our economy.
yet the deficit soared from his tax cuts , spending on things like billions for farmers to correct problems and imbalances with tariffs he created . corporate capital spending came to the slowest levels in a long time as chaos in washington painted less then a favorable corporate growth environment. so while i favor no political party and hate politics i do have to call it as i see it .
in fact i think our markets did as well as they did in spite of him not because of anything he has done. if it wasn't for his chaos and tariffs going on we would likely have been much higher . every time we hit a new high you could bet he threw some monkey wrench in the works with a tweet that shook markets.
at zero or negative rates and a losing or dead stock market for an extended period of time , insurers and pension funds are not going to live up to their obligations eventually so we all have concerns and are at risk.
as the ny times said , those in insurance products may be whistling past the grave yard at negative or near zero rates .
negative interest rates impact insurance companies in three ways. First, these companies invest in bonds to create a spread between the money they earn on the bonds and the guaranteed rates on insurance policies. With negative or low rates, this spread has disappeared. While longer term the company can lower its guarantee rates, those policies in force cannot be changed so stress on the insurer magnifies ..
Second, the amount of money that insurance companies must keep in reserve is based on the present value of the company’s projected earnings. As yields on bonds are in negative territory, the returns are projected to be lower and thus the amount of capital required to remain uninvested. This dead capital acts as a further drag on them .
Third, consumers may purchase less insurance in the future: If guaranteed rates on policies drop, insurance products become less attractive relative to alternative investments. like all insurance , it depends on new money to help pay the liabilities on old money .
what is bad for investors is bad for insurance and annuity products.
if insurers fail what you get back is capped by the states but the problem is the income stream is over and now you need a way to develop a new one in what may be tough times. the same applies to non gov't pensions .
New York Life has been around since 1845, Pacific Life since 1868. They have been through the 1920s and everything else. If they fail, the world will fail :-). As I told you in the Retirement forum, in the depths of the last recession NYL sent around annual statements with a cheerful message "NYL - built for times like these!". Of course, there has never been an interruption in my annuity payments. These gigantic insurers sit on gigantic reserves. They are not some dinky fly-by-night brokerage, or anything comparable even to a big investment-oriented financial institution. Annuity yields are not spectacular, because annuities are SAFE - these big insurance companies have stronger resources than states that "guarantee" annuity deposits, ie, in this case, the company is more reliable than the guarantor. I am not all that worried :-).
New York Life has been around since 1845, Pacific Life since 1868. They have been through the 1920s and everything else. If they fail, the world will fail :-). As I told you in the Retirement forum, in the depths of the last recession NYL sent around annual statements with a cheerful message "NYL - built for times like these!". Of course, there has never been an interruption in my annuity payments. These gigantic insurers sit on gigantic reserves. They are not some dinky fly-by-night brokerage, or anything comparable even to a big investment-oriented financial institution. Annuity yields are not spectacular, because annuities are SAFE - these big insurance companies have stronger resources than states that "guarantee" annuity deposits, ie, in this case, the company is more reliable than the guarantor. I am not all that worried :-).
never before has rates been this low or negative , when the stock market is in a slump . even 2008 saw rates in the 3-4% range
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