im worried this article will eventually get whitewashed into "corona caused the financial crisis." HN and others have repeatedly pointed out numerous factors in the market that definitely were not corona, that would have caused this crash eventually. untenable levels of credit card debt, automobile debt, and unreformed student loan structures as well as stagnant wages and rollbacks on a number of legislative efforts to police markets and protect investors.
Before coronavirus when a company missed earnings it was battered on the public markets.<p>With Coronavirus 90%+ of companies will be directly affected in reduced revenue. Either directly like companies that are focused on retail, or indirectly, companies that are affected by challenges in logistics.<p>Was the market perhaps inflated, in my opinion yes, but I don't see how people can say this crash wasn't caused by coronavirus.<p>Could we have had a crash or reset in the future without the virus? Most likely. But that unknown reality didn't happen. Instead we have a global pandemic, where the only real working solution is to institute various levels of lock down and social distancing, which will slowdown economic spending dramatically.<p>If the entire global market has to take 2-months off from generating revenue, that is a huge blow to the system. Then you have the secondary effects. Job losses, businesses closing, rent, evictions, closures, etc.<p>The economic impact of this will take 6 months to play out to see where the bottom is. Not all companies and industries will be affected the same way, but generally speaking only a small handful of companies will really get through this without some sort of impact to their business.
I am genuinely worried that the plan of shutting everything down and instituting a quarantine will turn out to be disastrous if it continues for months on end.<p>The stock market is just the beginning - what about the millions of people making ends meet as waiters, Uber drivers, AirBnb hosts, retail store clerks, and every other in-person job? HN might not feel this much, as the tech industry is making a pretty easy switch to working remotely. But do not be blind to the facts: the overwhelming majority of the workforce doesn't have an emergency fund and won't be able to ride this out easily, if at all.
Doesn't this crash highlight a fundamental problem with stock markets ?<p>NASDAQ: -25% in one month.
CAC40 (french stock market index) : -33% over the same period.<p>These stock markets collapsing is just stupid, it just shows that it's pure speculation...<p>The world economy takes a break during let's say 2 months (everything will resume as before afterwards) and hundreds of billions of euros/dollars disappear.<p>In fact, the question is: If everyone stops working because of the covid19, if the whole economy is paused (which is basically what is happening) why doesn't the stock exchange do not simply stop too? When a company presents quaterly financial results, it's over a period of _activity_. But then at the moment it's a period of total inactivity... ?!
Remember that the dates referred to in this article are literally one week ago, so it’s not reasonable to treat this like a past event. It’s very much ongoing and the market will likely remain volatile.
The markets have been looking for a reset for a while anyhow. I think the market is well capitalized right now and this looks much more like a reset than some fundamental crisis. There isn't any underlying financial event triggering this, and I think we know roughly how bad this can and will get and it is not financial crisis worthy. The world governments are already injecting cash into the markets to stabilize them. I generally agree with the Goldman Sachs memo on this event (except how it subtly downplays quarantine/self isolation efforts)<p><a href="https://www.forbes.com/sites/abrambrown/2020/03/16/the-private-goldman-sachs-coronavirus-meeting-thats-setting-the-internet-on-fire/" rel="nofollow">https://www.forbes.com/sites/abrambrown/2020/03/16/the-priva...</a>
Oh dear, Remember the ridiculous 2020 predictions made by several soothsayers? It appears my so called 'machine learning crystal ball' was to some extent correct over this. Not that it was caused by coronavirus, but eventually in 2020 a crash will come. [0]<p>The next phase of this Act will claim all those profitless companies with high costs and burn rate who will soon collapse.<p>[0] <a href="https://news.ycombinator.com/item?id=21926473" rel="nofollow">https://news.ycombinator.com/item?id=21926473</a>
Intrigued by the authors
<a href="https://en.wikipedia.org/w/index.php?title=2020_stock_market_crash&action=history" rel="nofollow">https://en.wikipedia.org/w/index.php?title=2020_stock_market...</a>
Grateful for the wikipedia contributors putting this together so fast and well.<p>As a side note. I know a significant amount of people (relatives and friends) that truly think this event is a big "liberal conspiracy" to stop Trumps reelection. We've had to take my grandfathers keys because his favorite news station is telling people this and he believes it so was continuing to go out.
I listened to Trump yesterday and I couldn't believe he was stupid enough to encourage people with no basis! There's no higher demand after crisis as people have no money and most of this hoarding is debt at high interest of credit cards. Many were expecting the crash since last year, the pandemic just gave no reason to wait more!