It IS A Bubble!

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It IS a bubble!
 Garuda.Chanti
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By Garuda.Chanti 2014-07-29 09:27:49
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Has the Stock Market Really Lost Its Mind? - Barron's

Quote:
"War is always and everywhere awful, but that doesn't mean it has investment implications,"
Its an interesting read and one King will understand better than most of us.
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By fonewear 2014-07-29 09:29:33
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I didn't read the story because I'm allergic to reading. I'll just have to take your word for it.


I do however see a the social media section being a bubble itself. The valuation of companies like Facebook etc seem to be out of control.
 Shiva.Nikolce
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By Shiva.Nikolce 2014-07-29 09:45:33
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We keep pushing the markets up and up until the rubes in the middle class jump in. Then we have a massive sell off. Then we move the profits off shore, wait for the market to bottom out and then jump back in. Lather, rinse, repeat... every twenty years like clockwork and nobody ever catches on.

there is a sucker born every minute.
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 Bahamut.Kara
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By Bahamut.Kara 2014-07-29 10:11:51
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Eh, this article is only discussing the US markets.

While the US has been vocal in these geo-political events they haven't declared war or carried out military actions. The US has issued sanctions but received relatively little fallout and backlash from russia in return.

The US is still receiving QE and investors are quite happy.

The markets in Russia have been highly affected by events in Ukraine. On Friday interest rates were raised again from 7.5% to 8%. Inflation is rising and foreign capital is still leaving that country.

Edit: the sanctions on Russia are not yet going to affect wall st. If any of those sanctions occur (e.g. Investment and banking fields) the markets will react more.
Also, at least the first two levy of sanctions the markets dipped the days before in anticipation of how the US would react. As it hasn't been dramatic the markets aren't holding their breaths right now.
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 Garuda.Chanti
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By Garuda.Chanti 2014-07-29 10:28:50
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It is Kara, but the US stock market is the most irrational.

Also there are several reasons why capital is fleeing Russia. For one, the recent $50 billion judgment against Russia has reminded them that everything they hold inside Russia can be expropriated.
 Bahamut.Kara
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By Bahamut.Kara 2014-07-29 10:31:06
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Nevermind on my edit.

EU has just agreed to sanctions on Banks and US stocks retreated on earlier gains.
http://www.bloomberg.com/news/2014-07-29/u-s-stock-index-futures-are-little-changed-before-fomc.html
Quote:
U.S. stocks erased earlier gains as the European Union agreed to curb state-owned Russian banks’ access to capital markets and restrict export of oil-production equipment to the nation.

It is the beginning of curbing direct investment, but it is still mild (as in should not cause a freeze or panic)

Article a bit more about the sanctions, the full amount will be announced tomorrow.
http://www.bloomberg.com/news/2014-07-29/eu-aims-at-russian-banks-technology-in-widest-sanctions-yet.html
 Bahamut.Kara
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By Bahamut.Kara 2014-07-29 10:41:49
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Garuda.Chanti said: »
It is Kara, but the US stock market is the most irrational.

Also there are several reasons why capital is fleeing Russia. For one, the recent $50 billion judgment against Russia has reminded them that everything they hold inside Russia can be expropriated.
It really depends on how you are defining rational and irrational.

When economists are referring to irrational market behavior they are usually referring to random walk behavior. There is no definitive conclusion -or to phrase better, there is no consensus under a given set of conditions and assumptions- if markets exhibit random walk behavior or if they are rational (predictable in their reactions to events).

The judgement from the Hague court happened on Monday. Capital has been leaving Russia for over 6 months.

There is always more than one reason a market drops a significant amount and over a longer time period.
 Fenrir.Atheryn
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By Fenrir.Atheryn 2014-07-29 11:27:56
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Garuda.Chanti said: »
Has the Stock Market Really Lost Its Mind? - Barron's

Quote:
"War is always and everywhere awful, but that doesn't mean it has investment implications,"
Its an interesting read and one King will understand better than most of us.

Not really a surprise. Markets are predominantly driven by speculation - but within reason. War generally only impacts the stock market if the expected profitability of listed companies would be directly affected by the conflict.
 Asura.Kingnobody
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By Asura.Kingnobody 2014-07-29 11:31:42
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Bahamut.Kara said: »
Eh, this article is only discussing the US markets.

While the US has been vocal in these geo-political events they haven't declared war or carried out military actions. The US has issued sanctions but received relatively little fallout and backlash from russia in return.

The US is still receiving QE and investors are quite happy.

The markets in Russia have been highly affected by events in Ukraine. On Friday interest rates were raised again from 7.5% to 8%. Inflation is rising and foreign capital is still leaving that country.

Edit: the sanctions on Russia are not yet going to affect wall st. If any of those sanctions occur (e.g. Investment and banking fields) the markets will react more.
Also, at least the first two levy of sanctions the markets dipped the days before in anticipation of how the US would react. As it hasn't been dramatic the markets aren't holding their breaths right now.
Basically a great summary of current market structure.

Although, QE contributes to a larger portion of the skewed market values than most knows. Sanctions generally do not affect most markets unless the sanctions would affect the supply of either production or wholesale of said products. Meaning, if we did a bunch of sanctions on China, our cheap products and clothing markets would be hit the hardest due to Chinese manufacturing of said products.

What exactly do we import from Russia, besides Vodka?
 Valefor.Sehachan
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By Valefor.Sehachan 2014-07-29 11:33:40
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*blows bubbles*

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 Fenrir.Atheryn
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By Fenrir.Atheryn 2014-07-29 11:34:14
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Asura.Kingnobody said: »
Bahamut.Kara said: »
Eh, this article is only discussing the US markets.

While the US has been vocal in these geo-political events they haven't declared war or carried out military actions. The US has issued sanctions but received relatively little fallout and backlash from russia in return.

The US is still receiving QE and investors are quite happy.

The markets in Russia have been highly affected by events in Ukraine. On Friday interest rates were raised again from 7.5% to 8%. Inflation is rising and foreign capital is still leaving that country.

Edit: the sanctions on Russia are not yet going to affect wall st. If any of those sanctions occur (e.g. Investment and banking fields) the markets will react more.
Also, at least the first two levy of sanctions the markets dipped the days before in anticipation of how the US would react. As it hasn't been dramatic the markets aren't holding their breaths right now.
Basically a great summary of current market structure.

Although, QE contributes to a larger portion of the skewed market values than most knows. Sanctions generally do not affect most markets unless the sanctions would affect the supply of either production or wholesale of said products. Meaning, if we did a bunch of sanctions on China, our cheap products and clothing markets would be hit the hardest due to Chinese manufacturing of said products.

What exactly do we import from Russia, besides Vodka?

I'm sure the mail-order bride market would take a hit.
 Asura.Kingnobody
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By Asura.Kingnobody 2014-07-29 12:34:56
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Fenrir.Atheryn said: »
Asura.Kingnobody said: »
Bahamut.Kara said: »
Eh, this article is only discussing the US markets.

While the US has been vocal in these geo-political events they haven't declared war or carried out military actions. The US has issued sanctions but received relatively little fallout and backlash from russia in return.

The US is still receiving QE and investors are quite happy.

The markets in Russia have been highly affected by events in Ukraine. On Friday interest rates were raised again from 7.5% to 8%. Inflation is rising and foreign capital is still leaving that country.

Edit: the sanctions on Russia are not yet going to affect wall st. If any of those sanctions occur (e.g. Investment and banking fields) the markets will react more.
Also, at least the first two levy of sanctions the markets dipped the days before in anticipation of how the US would react. As it hasn't been dramatic the markets aren't holding their breaths right now.
Basically a great summary of current market structure.

Although, QE contributes to a larger portion of the skewed market values than most knows. Sanctions generally do not affect most markets unless the sanctions would affect the supply of either production or wholesale of said products. Meaning, if we did a bunch of sanctions on China, our cheap products and clothing markets would be hit the hardest due to Chinese manufacturing of said products.

What exactly do we import from Russia, besides Vodka?

I'm sure the mail-order bride market would take a hit.
Naw, that's an illegal activity (sex trafficking) anyway.