The stock dropped that low when revenue dropped 90%. It will take another black swan to get that low again

Sent from my SM-S908U using Tapatalk

 

Is a currency collapse a black swan event? Or 15% inflation? Or 20% interest rates? Or the government defaulting?

 

20% inflation would support a crash up. DAL stock could rise 5%, but lose 10-15% of its value. From May 2021 til May 2022 the S&P 500 was numerically flat, but lost 8.6% of it's value through inflation.

 

But would high inflation rates cause a depression either from normal economic forces or due to Fed over-reaction? That would effect Delta's earnings and push down the stock price. It seems like we are headed into unprecedented economic times. Never has inflation been this high with this much debt in the system. I don't see how this doesn't turn out bad for the whole economy. In my opinion the Fed starts easing again later this year, 8% inflation is something we are just going to have to live with. I read somewhere this week that government would be unable to pay 4% on its debt.

 

Like an "economic hurricane?"

 

The high inflation is a result of COVID induced money printing plus government policies over the last few years that discouraged capital investment in legacy energy commodities. It'll likely be around 3 years for all this to shake itself out. Inflation growth will stabilize but we likely looking at high energy prices for a few years. Thank our lucky stars that we have a high paying job in the United States vs the lower class in many emerging markets where these high energy prices will drastically change their access to basic necessities(water/food/shelter).

As high income earners with ample disposable income, the personal impact of inflation can easily be hedged thru cashflowing Real Estate investing or Energy equities.

Sent from my SM-S908U using Tapatalk

 

I agree with you. Inflation, to an extent, will bump stock prices. But when people quit using the dollar, then what exactly is the dollar stapled to? The cost of anything imported sky rockets. Next thing you know people will reminisce they days when a trip to the super market was only $200. Demand for non essentials craters. Again, I agree. No way they will contain inflation to 2% as the world disconnects from the dollar and our economy has proven to only function with an ever increasing supply of money.

 

Keep a couple thousand around just in case they blank out the money cards. (Bank Holiday)

 

I disagree. People in third world countries living in poverty are much less tied to energy prices than we are. They walk or bike most places. They do not use air conditioning and only heat their homes to the very barest of human tolerance. The poorest peoples will continue on as they have.

 

Dude, your pessimistic view on everything future looking is hard to ingest. By your posts we should all be looking to build windmills, farming collectives and organizing hunting parties. Am I saying inflation is good, no, do I think a recession is out of the question, no. But US default, depressions, man if those things happen, Delta’s stock is the least of everyone’s worry.

The US is in no threat of either thing happening because there is still demand and growth in our own economy, let alone off shore. We won’t default because some money somewhere will bet on American business. Russia hasn’t defaulted and it is primarily trading with 2 countries. We partner with those 2 and hundreds more.

Is there some type economic pain on the horizon that we haven’t really had for 30+ years, probably. The world is a different place though since the 70/80/90s, might not be that bad, I don’t recall it being awful then to be fair, just different than now.