S&P 500 rallies to record close as Irma concerns decline; Dow jumps more than 250 points

TexTex Posts: 197 Bronze ✭✭✭
https://www.cnbc.com/2017/09/11/north-korea-oil-hurricanes-on-the-agenda-for-wall-street.html

This is a joke right? The insurance companies that are on the hook for the damage went up? No investor in his right mind would invest in a company at the moment that it has a huge unknown expense. Clearly central bank manipulation, or am I just completely crazy? I guess it's cheaper and easier for the CB to buy and buy stocks to pump up the market so the insurance industry can cash out to pay for the expenses instead of waiting on Congress to send the $. Plus it lessens the amount of $ the congress has to ask for.

Comments

  • GMONEY1GMONEY1 Posts: 426 Silver ✭✭✭✭
    I think the derivatives market has a lot to do with short-term price action like this. If traders go in heavy buying puts to open or bear spreads (instead of just selling or even short selling) then the writer of those puts wants the price of the underlying stock to go up short-term... not down. Or they could sell the put, buy the stock upward (like today), then the price of the put decreases, and they can hedge or close their position or collect the spread. You have to have major capital to be able to do that though; that'd be suicide for a small-retail trader imo...because the system is fixed that way.

    @Tex markets are a complex game. Literally, a game. Market makers and CBs have made a joke of fundamentals (this is often alluded to with the term "asset bubble"). e.g. >200+ P/E for large cap stocks ... insane. $50B+ market caps with no earnings...insane. 90th+ percentile historic valuations... insane.

    However... what does this all say about the paper, derivative, fiat-based system as a whole? (my opinion... that's the joke. It takes more and more dollars to keep it all afloat... and the marginal effect of a dollar is very small and getting smaller. )
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