/biz/ - Business & Finance

Only smooth brains think single events are the cause for moves in the market, whether that's a virus or 200 billion repo.

The fact is we've been overvalued: in general over the past three decades, and more than 1929/2000/2008 over the past 2 years. Malinvestment and unproductive capital allocation has plagued the markets, starting in the 1970s, while financial instruments wielded by companies and individuals more wealthy than should exist have been used against a middle class who shouldn't have been allowed to legally compete in the first place. I dare any of you to argue against these points.

Now we're in a situation with gilded age level inequality and 1929 level valuations, with a moderate pandemic shuttering businesses globally (let's be real, it's not the bubonic plague which had a mortality rate of 80%), record levels of absolutely horrifically shitty debt that wasn't even used for productive means--only to prop up share prices.

The cherry on the top has been the fed this entire time. The most glorious bubbles in history: Tulips, South Sea, French Mississippi, 1929, were all fueled by increased monetary supply in the years immediately prior. It's the illusion that free money can last forever, and that consumption from the future can be indefinitely brought to the present--the definition of debt. Bumping up against the physical laws on Earth inevitably reverses each case.

The world isn't ending short of the nuclear risk. But this has already killed people, and from the remaining living literal decades of labor earnings having been stolen. From each and every one of us besides the top 2%. It will kill even more as all this unproductive capital unwinds. Maybe we can learn our lessons for longer than 90 years this time and keep key regulations in place, but I'm starting to doubt that it's within human nature to do so.

The virus is not the cause, but it was one of the sparks.