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The stock market hitting new highs should not surprise anyone.  Stock indexes do not report on an inflation adjusted basis.  GDP is above what it was when the market crashed in 2008.  GDP growth is slow, and has not kept the pace we would like.  This is a case of something growing less slowly than we need it to, not going down.  In 2000 the stock market was in a bubble.  In 2008 the economy crashed.  If stocks were not in a bubble in 2008 we should expect that they will reach new highs as GDP passes the point it was at in 2008.  That's the good news, now let's talk about the people who are about to lose their shirts.  

The crash of 2008 saw the velocity of money (how fast people spend money) take a nosedive.

Velocity of Money
If money moves less quickly we need more of it to keep the economy running.
The velocity of the M1 money supply fell by about half.  The fed has now increased the M1 money supply by about half.  Some parts of the economy are beginning to pick up.  These are not unrelated events.

Things softened a bit int he Spring.  The Fed was created in 1914 in response to the Panic of 1907.  The Panic of 1907 occurred when not enough physical currency became available to settle harvest related debts (paying field hands in cash and the like).  That extra money for agricultural use got taken out of the economy this spring.

Non-Seasonally Adjusted M1 Money Supply
So yes.  The Fed is printing money, but they are doing so because they want the economy to recover.  This is not some secret plan to transfer wealth to the 1%.

On the other hand, some wealthy Americans are about to see their portfolios take a tumble.  Some leaders of the Republican Party have been pushing the faithful to buy gold.  In doing so they've been claiming that hyperinflation is right around the corner.  Gold makes a nice paperweight.  Inflation is at 1.5% and dropping.  On the surface, it appears that all the fear mongering created a gold and commodities bubble.  That bubble is now popping as investors realize:

1.  Gold is a Paperweight
2.  Stocks pay Dividends
3.  The Stock Market is Going Up Faster than the Price of Gold

What does this mean for Democrats.  It means Republican Leaders have told their base to speculate in a commodity!  Like any good pyramid scheme, it only works if people keep buying in.  Eventually, and probably very soon, that is going to stop.  Those left holding the bag are going to find themselves very unhappy with the Republican Party when that happens.

Then their is the fact that the S&P 500 (looking at the statistics for VOO, an S&P 500 exchanged traded mutual fund) has a one year appreciated of 16% and a 2% dividend.  That party is probably either over or soon to be over.  Ont he other hand, stock prices are likely to continue rising, though not as fast.  At the same time a 16% return on the S&P 500 is like ringing the dinner bell in the financial markets.  If the Republican party starts playing debt and deficit games they risk screwing up the stock markets returns.  Getting between investors and a 18% return is an invitation to get squashed.

What Democrats should do is note the increase in the stock market and claim that we need to repair and improve our infrastructure to avoid bottlenecks as the economy improves.  

Originally posted to Metaclick on Tue Apr 30, 2013 at 09:31 AM PDT.

Also republished by Money and Public Purpose and Community Spotlight.

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  •  Tip Jar (150+ / 0-)
    Recommended by:
    Urizen, FG, Kane in CA, antooo, kevinpdx, aravir, matador, Deep Texan, mookins, Odysseus, polecat, mhanch, shaso, RonV, rodentrancher, some other george, xyz, Youffraita, TX Unmuzzled, shrike, Joy of Fishes, wonkydonkey, Davidsfr, Palafox, jamess, AdamR510, ruleoflaw, alphorn, Ginny in CO, cordgrass, PatriciaVa, yet another liberal, citizen dan, decisivemoment, chantedor, phillies, gramofsam1, randomfacts, maggiejean, FarWestGirl, MarciaJ720, TomP, ichibon, YucatanMan, maybeeso in michigan, Temmoku, duhban, Al Fondy, wonderful world, BusyinCA, ybruti, Satya1, ExStr8, Davui, MeToo, Railfan, HarpboyAK, 1BQ, sebastianguy99, cspivey, MikePhoenix, gbinwc, suesue, Nulwee, indie17, BrowniesAreGood, yella dawg, Judgment at Nuremberg, offgrid, gas28man, Involuntary Exile, defluxion10, Jeff Y, David PA, Brecht, etherealfire, riverlover, PriorityStrategic, kharma, most peculiar mama, caul, DRo, marleycat, rapala, Habitat Vic, sodalis, Mentatmark, BlueInARedState, wader, eagleray, Preston S, DarthMeow504, karmsy, Sun Tzu, JDWolverton, DBunn, grrr, Cronesense, Beetwasher, flatford39, Imhotepsings, gizmo59, zozie, Fury, dmhlt 66, Mistral Wind, el dorado gal, zerelda, chuco35, kefauver, elziax, ubertar, Gary Norton, Limelite, Anne Elk, ksuwildkat, Byron from Denver, camlbacker, chrississippi, Shippo1776, catly, Dr Swig Mcjigger, fou, science nerd, radarlady, MarkInSanFran, livingthedream, Alice Venturi, MKinTN, legendmn, puakev, MartyM, eeff, yoduuuh do or do not, political mutt, LookingUp, Skennet Boch, Aquarius40, FindingMyVoice, artmartin, The Knute, jck, Angie in WA State, jediwashuu, hilltopper, maxcat06, Things Come Undone, monkeybrainpolitics, radical simplicity, Larsstephens

    http://www.aeinstein.org/organizations/org/FDTD.pdf From Dictatorship to Democracy, Guide to Non Violent Protests.

    by sdelear on Tue Apr 30, 2013 at 09:31:12 AM PDT

  •  "Life has improved, comrades. (20+ / 0-)

    Life has become more joyous."

    Oh, and an oldie but a goodie from exactly four years ago "Green Shoots!"


    Actual Democrats is the surest, quickest. route to More Democrats

    by Jim P on Tue Apr 30, 2013 at 09:45:08 AM PDT

  •  a similar gold bubble. . . (21+ / 0-)

    . . .occurred in, I think, 1974 or 75. I remember the run up and the gold fever. Almost got caught up in it myself. But then, it finally broke and gold dropped to less than half what it was. many people thought it would recover quickly, but it didn't. . .it stayed at that new lever for many years.

    I have been expecting this gold bubble to burst for about five years now. I am surprised it has lasted this long but that's the way these things seem to go. . .they last longer and go higher and then, when they bust, they go lower than anyone ever expected. I think this one will plateau around the 800 level, but I am certainly no expert.

    •  Summer of '79. /nt (15+ / 0-)

      Happy little moron, Lucky little man.
      I wish I was a moron, MY GOD, Perhaps I am!
      —Spike Milligan

      by polecat on Tue Apr 30, 2013 at 01:22:53 PM PDT

      [ Parent ]

      •  Yup, I was panning for gold in So Cal. (17+ / 0-)

        I remember $825 an ounce, and if you could see a flake, it was a dollar.  Of corse, we didn't save it...we sold it immediately, probably to buy beer or something.

        "We refuse to fight in a war started by men who refused to fight in a war." -freewayblogger

        by Bisbonian on Tue Apr 30, 2013 at 06:13:35 PM PDT

        [ Parent ]

      •  There was a silver bubble around the same time (14+ / 0-)

        Probably 1979 or 80 or 81. I was just out of college and working at a place that sold photographic/graphics supplies to commercial printers and graphic designers. Film contains silver and the price went up so relentlessly that we had to change our policy of guaranteeing the current price if a customer ordered something but we had to back-order it.

        At that time there were two rich guys (the Hunt brothers from Texas) who were trying to corner the market on silver. Eventually the price crashed and things went back to relatively normal.

        "Stupid just can't keep its mouth shut." -- SweetAuntFanny's grandmother.

        by Dbug on Tue Apr 30, 2013 at 10:22:19 PM PDT

        [ Parent ]

      •  Yup- my first investment wipe-out at age 9 (3+ / 0-)
        Recommended by:
        Heart n Mind, Ruh Roh, polecat

        I was a kid in Hong Kong at the time. Back then one enterprising jewelry chain store sold 'gold coupons'. The advantage of gold coupons is that you could buy and sell as you wish, at market price. Kind of like a Kruggerand- except it's good for people who can't afford a whole krugerrand coin, like a 9 year old kid. These gold coupons became the hottest thing in town, and these jewelry stores were popping up all over Hong Kong.

        I remember emptying my piggy bank, dragging my mom to the jewelry chain store, and buying a gold coupon for myself. Every day, I would dutifully listen to the radio for the gold price, and calculating how much my investment is increasing in value. It was great fun keeping track of how much money I was making. Then gold prices began to fall. And one morning, without any warning, all of the jewelry stores that sold the gold coupons failed to open their doors. All the gold coupons that we were holding, became worthless pieces of papers.  I held onto my gold coupon for years after that- hoping that it would somehow, some day become valuable again.

        Sadly that wasn't the last time I was fleeced by the tycoons and financiers. Not by a long shot.

      •   (0+ / 0-)

        I was a kid in Hong Kong at the time. Back then one enterprising jewelry chain store sold 'gold coupons'. The advantage of gold coupons is that you could buy and sell as you wish, at market price. Kind of like a Kruggerand- except it's good for people who can't afford a whole krugerrand coin, like a 9 year old kid. These gold coupons became the hottest thing in town, and these jewelry stores were popping up all over Hong Kong.

        I remember emptying my piggy bank, dragging my mom to the jewelry chain store, and buying a gold coupon for myself. Every day, I would dutifully listen to the radio for the gold price, and calculating how much my investment is increasing in value. It was great fun keeping track of how much money I was making. Then gold prices began to fall. And one morning, without any warning, all of the jewelry stores that sold the gold coupons failed to open their doors. All the gold coupons that we were holding, became worthless pieces of papers.  I held onto my gold coupon for years after that- hoping that it would somehow, some day become valuable again.

        Sadly that wasn't the last time I was fleeced by the tycoons and financiers. Not by a long shot.

    •  The richest guy (26+ / 0-)

      I have ever known in 74-5 took his considerable, (huge) trust fund out of the market and bought gold. He was our roommate in LA.  I helped him put the gold in bowling ball bags with bike locks on the zippers and we hauled them to the train station where he carted them off to Oregon to place in the hands of his crazy ass brother, who was a rich young religious cultist with survivalist RW tendencies.

      He came from a 1% family in Cedar Rapids, Michigan where his mom owned  a string of radio stations and his grandpa was one of Reagun's financial advisors. He has had nothing to do with us (liberal heathens) since the early 90's but I often wonder what became of all that gold. Strangely he wasn't a Christian but some bizarre cult that was a combination of Mormon and Hinduism. It cherry picked the worst aspects of both these 'religions' and even creepier he was before his conversion a liberal gay man, who saved his soul by renouncing his evil ways. I hope he has let go of the divine rationalization for turning his back on humanity both his and mine.        

    •  the markets are in general corrupt. (1+ / 0-)
      Recommended by:
      The Rational Hatter

      why anyone trusts them, i don't know

      •  I don't trust them (4+ / 0-)

        . . .but I do use them. I have, over the years, put just a little money into the stock market from time to time. Overall, I have done fairly well. I did lose a bit on Hechinger's though. The place was so poorly run and I believed the stock holders would eventually throw out the big heads and get new ones that knew what they were doing. They never did. My other modest picks have done better, but it's always a little scary, knowing the game is rigged and the market manipulators can drive down the price of a stock at will.

      •  if you have any kind of (4+ / 0-)
        Recommended by:
        mmacdDE, ER Doc, patbahn, lostinamerica

        retirement account, an IRA or a 401(k), you don't have a lot of choice, you are in the markets. Those things were designed as investment vehicles, as a way to generate Wall Street commissions and to remove from corporations the financial burden of paying pensions.

        That they have been largely mediocre and sometimes worse for many workers and retirees is beside the point.

        There is no question that there is an unseen world. The problem is, how far is it from Midtown and how late is it open? -- Woody Allen

        by Mnemosyne on Wed May 01, 2013 at 08:17:07 AM PDT

        [ Parent ]

        •  Yep IRAs & 401ks failed working & middle class (2+ / 0-)

          Americans just as the critics said they would. But the average 401k generates $150,000 over its existence for investment firms whether the investments tank or provide a comfortable retirement for the sucker, er investor.

          Think or the millions SS private accounts will piss into the Wall St sewer.  

        •  you can do a Self-Directed IRA (0+ / 0-)

          i'm rolling my IRA into an SD-IRA and
          trying to buy a small apartment building.

          If i can buy a 4 unit garden apartment, it won't be
          glamorous, but, it's entirely under my control.

          just when i'm 65, it needs to work out distribution.

          •  true, (0+ / 0-)
            you can do a Self-Directed IRA
            but most people don't know about them. Most people don't know much about any of the financial "options" they're told will ensure their blissful golden years, and the dog-and-pony shows the fund-sellers put on are extremely surface and elementary.

            There is no question that there is an unseen world. The problem is, how far is it from Midtown and how late is it open? -- Woody Allen

            by Mnemosyne on Wed May 01, 2013 at 02:08:29 PM PDT

            [ Parent ]

    •  I remember that too (0+ / 0-)

      Gold went up and up, over $1000, IIRC. That was a hell of a lot 35+ yrs ago.

      And then it dropped. A lot. A WHOLE lot. I think it wound up about a third of what it had been.

      I've never been a huge fan of gold, or any collectibles/antiques/commodities stuff. If you like them, have some. Don't expect them to drastically increase in value, and you sure as hell don't build an investment strategy on them.

      •  One collectible has done very well (1+ / 0-)
        Recommended by:
        Larsstephens

        Pre-1967 vw split windshield buses. People thought I was crazy when I bought mine about fifteen years ago. I am looking into a double cab pickup now. They have sure outperformed the stock market.

        Plus, I get to enjoy it.

        •  But you enjoy it (1+ / 0-)
          Recommended by:
          matador

          and that's the main thing. The fact that it's worth more now is just gravy.

          I have a couple pieces of furniture we bought when we lived in England. I'll bet they're worth considerably more than what we paid for them 30 yrs ago.

          But that's not why I bought them. And I'll bet that's not why you bought your vehicles either.

  •  The "velocity" of money has fallen (51+ / 0-)

    because those who usually spend it don't have any of it.  Pumping more into the stock market (the 1%) doesn't change that.  This is not "some secret plan to transfer wealth to the 1%" only because it is not "secret" . . . it is just a bogus excuse for further enriching the rich, at the expense of everyone else.

    Fake Left, Drive Right . . . not my idea of a Democrat . . .

    by Deward Hastings on Tue Apr 30, 2013 at 10:24:06 AM PDT

  •  Typos (9+ / 0-)

    Nice concise piece. Before I forward to my Glenn Beck family members it would be nice if you could fix the typos.  

  •  agreed (8+ / 0-)

    -You want to change the system, run for office.

    by Deep Texan on Tue Apr 30, 2013 at 10:36:36 AM PDT

  •  the problem isn't Democrats (13+ / 0-)
    What Democrats should do is note the increase in the stock market and claim that we need to repair and improve our infrastructure to avoid bottlenecks as the economy improves.  
    The American people aren't listening. They pay more attention to TMZ than congress. It wouldn't' matter if the Democrats spoke about this every day.  Who would cover it? The media is complicit in this as well. The financial news channels are complete bullshit.

    What to do?  Change the fabric of America? The people, the corporations and the greed that binds us?  

    You are correct in many ways.  However, the prescription won't even make us feel better.

    -You want to change the system, run for office.

    by Deep Texan on Tue Apr 30, 2013 at 10:43:20 AM PDT

    •  "Change the fabric of America" ... (3+ / 0-)
      Recommended by:
      jbsoul, Nulwee, ozsea1

      Yep. That's the (electoral) job. Not easy certainly, maybe not possible. Here's wishing there was a Senator that would start grandstanding (and running for 2016). Yeah I know 2014 comes first but a national leader could help move the O window in the trenches.

      If you didn't like the news today, go out and make some of your own.

      by jgnyc on Tue Apr 30, 2013 at 11:45:04 AM PDT

      [ Parent ]

      •  if you've been alive long enough then (15+ / 0-)

        you have seen great change.

        The parties were nothing like what they are today 60 years ago.

        The last national leader that helped moved the country from one paradigm to another also had the effect of giving up the south to the Republicans.

        -You want to change the system, run for office.

        by Deep Texan on Tue Apr 30, 2013 at 12:14:26 PM PDT

        [ Parent ]

      •  That isn't an electoral job (13+ / 0-)

        And if you think we can change the fabric of the country through an election then you're sadly mistaken. You do that outside the party. The progressive wave of youth that's coming along didn't happen because people voted the right way, it happened because people organized and got out there and convinced people that progressive values were better. Voting can't do that, voting reflects that.

        If debt were a moral issue then, lacking morals, corporations could never be in debt.

        by AoT on Tue Apr 30, 2013 at 03:37:49 PM PDT

        [ Parent ]

        •  These terms are dead, imo, having been (4+ / 0-)

          subverted to our false politics: progressive, conservative, liberal, centrist...

          The non-abstract, and real, political poles have at their extremes: Human Decency and Pathological Selfishness. The youth can tell what Human Decency is. We don't need dead 19th Century factional language anymore (in fact, it's a divide-and-rule device); just the recognition of which pole a position tends toward.


          Actual Democrats is the surest, quickest. route to More Democrats

          by Jim P on Tue Apr 30, 2013 at 07:46:40 PM PDT

          [ Parent ]

          •  not sure I understand (0+ / 0-)

            There is a legitimate debate about the role of government in peoples lives. It's been going on since ...? at least TR breaking the trusts, Triangle building fire, FDR etc ...
            While there are agents of greed at all levels of society addressing what society intends to do for ourselves has to do with electoral politics. But come up with new branding, sure. Even I tune out when "Capitalist and Socialist" get thrown around.

            If you didn't like the news today, go out and make some of your own.

            by jgnyc on Wed May 01, 2013 at 11:03:21 AM PDT

            [ Parent ]

            •  Labeling people, self or others, in the 19thC (0+ / 0-)

              modes available to us... they've all been rendered meaningless. They're just tools of the ruling class, maintained in existence to keep us in intellectual and emotional ghettos and at each other's throats.

              We have a lot more in common and at stake, everyone in the entire political spectrum, including the lunatic ends, than we have against each other.

              The only meaningful divisions are what's plainly and Humanly Decent versus Pathological Selfishness.


              Actual Democrats is the surest, quickest. route to More Democrats

              by Jim P on Wed May 01, 2013 at 02:04:18 PM PDT

              [ Parent ]

        •  interesting but abstract (0+ / 0-)

          > Voting can't do that, voting reflects that.

          Sure why not.

          >The progressive wave of youth that's coming along

          has generated some media but hasn't as far as I can tell made very much difference (so far). Attempting to separate civics from society is an interesting goal but not that realistic, unless it's more about making a point than making a difference. As I have kids I'm more interesting in change for the good AND stopping change for the bad then I am in abstraction. For instance, there are people missing meals because of the sequester. If the current corporate Democratic Party had taken the House in 2012 they wouldn't be missing meals. That matters today and tomorrow. Long term, change society, yeah I'm down.

          If I go on I'm sure this could devolve into a standard dkos flame war so I'll just point out that the reason this blog exists has to do with electoral politics. If you think you can make a positive change in peoples lives without seizing control of the government you're probably right, but it won't count for much without changing the current course of government, and least not in the next say few decades.

          (note: by "seizing control" I mean winning elections)

          If you didn't like the news today, go out and make some of your own.

          by jgnyc on Wed May 01, 2013 at 11:00:19 AM PDT

          [ Parent ]

          •  You completely missed the point (0+ / 0-)

            I was pointing out that elections don't change how people think, they reflect how people think. And we haven't seen everything change in a more progressive direction yet because they're still young and younger people always have voted at lower levels. But they are clearly more progressive than the Boomer generation or Gen x. And that isn't because people focussed on winning elections, it's because people focused on changing how people think about the issues. It's a long term strategy and we're seeing the beginning of the pay off now.

            If debt were a moral issue then, lacking morals, corporations could never be in debt.

            by AoT on Wed May 01, 2013 at 12:27:34 PM PDT

            [ Parent ]

            •  okay I get it now (1+ / 0-)
              Recommended by:
              AoT

              That makes sense. I'm not saying I agree with your assessment - time will tell - but I understand. We may also differ on the change that is being brought to/by "young people". I find a pretty broad spectrum of political leanings out there in under-35 land. I think a major problem is presenting concrete ideas for moving forward tactically rather than esthetically or conceptually. We're winning the culture war but losing big, so far, at an attempt to enunciate a united front in the economic war which is tied to a species wide ecological crisis. From the old school FDRists/Krugman-ites (that would be me) to the more, shall we say, amorphous ideas of the utopians there isn't a concrete way forward. It's either "defend the New Deal" (good idea) or "Create a new society" (sure why not) or a policy wonk argument for top down Keynsianism (a good idea IMHO). A combination of all three on local levels would be concrete. Then there might be candidates but there isn't.

              If you didn't like the news today, go out and make some of your own.

              by jgnyc on Wed May 01, 2013 at 01:05:08 PM PDT

              [ Parent ]

              •  I agree about economic issues (1+ / 0-)
                Recommended by:
                jgnyc

                I think that a lot of people were too focused on social issues alone and we failed to tie them to economic issues as they rightfully should be. That should be the new focus, bringing it all together in a holistic narrative. Currently I only see that happening on the fringes, but it seems to be getting more notice.

                If debt were a moral issue then, lacking morals, corporations could never be in debt.

                by AoT on Wed May 01, 2013 at 01:27:02 PM PDT

                [ Parent ]

                •  We need to tell the Mondragon story (1+ / 0-)
                  Recommended by:
                  AoT

                  Economically those in the bottom 65% have to be shown there are alternatives besides brutal corporate monopoly capitalism and Stalin. FDRism has been systematically discredited since Reagan (sorry to some but Clinton didn't help on that). The Mondragon corporation is a model that isn't mentioned in the USA. Maybe because it's too dangerous to Wall St.

                  If you didn't like the news today, go out and make some of your own.

                  by jgnyc on Wed May 01, 2013 at 02:32:13 PM PDT

                  [ Parent ]

        •  Maybe an election can't make all the change (1+ / 0-)
          Recommended by:
          Deep Texan

          but sizable Democratic majorities in all the branches of government will create the landscape in which those values can grow.  One look back at history shows that all our major positive social change occurred during those periods.

    •  How about this? (1+ / 0-)
      Recommended by:
      MeToo

      Make sure that every piece of legislation passed in Congress and signed by the President of the United States is sent to every U.S. citizen via PDF with a summary of the legislation (along with the full scan of legislation in another PDF).  An optional print copy could be mailed.

      I know my idea may be crazy but you know, you have to inform the public somehow.

    •  What we need is for Kim Kardashian (17+ / 0-)

      to start talking about the need for more infrastructure. Plaster it all over the National Enquirer.  Then America might listen.

      The sleep of reason brings forth monsters. --Goya

      by MadScientist on Tue Apr 30, 2013 at 05:53:40 PM PDT

      [ Parent ]

    •  Why should people who own no stock give (3+ / 0-)

      a fuck about stock prices?

      They don't result in jobs.

      They don't result in higher wages.

      They don't result in affordable food.

      Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

      by JesseCW on Wed May 01, 2013 at 03:02:05 AM PDT

      [ Parent ]

      •  I'm so old I remember when every regional paper (3+ / 0-)
        Recommended by:
        Onomastic, JesseCW, lostinamerica

        had a labor columnist.

        There is no news about the real economic lives of average Americans because it ain't good for the elites profit streams to have the marks aware of where they're from, where they are, and where they are being herded.

      •  Gee...I dunno (6+ / 0-)

        Maybe because higher stock values will help people with 401(k) accounts have the confidence to retire early, opening up good-paying, stable jobs for younger people?

        Maybe because higher stock values create capital gains upon sale, so that people selling some of their stock can afford to purchase union-made automobiles and other products, helping those in manufacturing as well as retail and other related services?

        Just because you choose not to own stock, and you evidently harbor antagonism about those who make the opposite choice, doesn't mean that stock prices are irrelevant to you or other similarly situated people.

        •  "choose" to own stock? (1+ / 0-)
          Recommended by:
          JesseCW

          I "choose" to eat instead.

        •  Most Americans don't have 401(k)s (0+ / 0-)

          and those that do usually only have a few thousand in them.

          If the 10% that owns 90% of all stocks, bonds, and other financial instruments were cashing them out to buy cars, the market would be falling.

          That I choose not to participate in creating misery for workers at home or abroad, and do not share in your belief that every suckers suffering should be something to profit from rather than to oppose, does in fact mean that higher stock prices resulting from the parasitic class playing games with one another do nothing to improve my life or the lives of real people like me.

          Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

          by JesseCW on Wed May 01, 2013 at 11:07:12 AM PDT

          [ Parent ]

          •  That's because most Americans are ineligible (1+ / 0-)
            Recommended by:
            Deep Texan

            for them because they don't work (retired, too young, unemployed) or don't work for a private sector employer that offers them.

            For those who are eligible, they can be a good element of your retirement savings.

            This:

            That I choose not to participate in creating misery for workers at home or abroad, and do not share in your belief that every suckers suffering should be something to profit from rather than to oppose, does in fact mean that higher stock prices resulting from the parasitic class playing games with one another do nothing to improve my life or the lives of real people like me.
            Says a lot about you and your perspective. Pretty much any human endeavor can be twisted into "creating misery for workers at home or abroad." Practice a religion?  Guilty!  Give to charity A instead of charity B?  Bigot!!

            And any commercial activity whatsoever can be contorted into causing "suckers (sic) suffering." Any person who fails your apparent ideal of being fully self-sufficient, with zero...no...nada... dependency on another human, could be called a member of a "parasitic class."

            Yep. You've got quite the worldview there.  Hope it serves you well on your journey through life.

            •  Most people do not have excess cash to stick (0+ / 0-)

              in a scam that gives 2/3rds of all returns to a management company, while they take all the risk.

              People actually can make mutually advantageous trades of labor and goods.  It's far from impossible.  In fact, that was most of our economic activity for literally tens of thousands of years.

              What you want is for desperately poor people busting their asses working retail to be thrilled that there has been another cutback in hours with no corresponding reduction in workload, forcing them to choose between working for free through their lunch break or becoming homeless.

              You firmly believe they should be thrilled for the chance to sacrifice so that the value of your stocks can increase.

              I will never understand why some of the most fundamentally anti-worker people who have ever lived insist on trying to latch themselves on to a workers party.

              Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

              by JesseCW on Wed May 01, 2013 at 07:23:06 PM PDT

              [ Parent ]

              •  You're misinformed (1+ / 0-)
                Recommended by:
                Deep Texan

                You are sadly and wildly mistaken.

                Specifically...

                You are misinformed about 401(k) plans. Two-thirds of returns?  No.  Not even close.  It's much less. Take 2012 as an example. Average fees were about 1.5 percent. The annual return of the S&P500 was 13.4 percent. That's 11 percent. Not great, but nowhere near the 67 percent you claim.

                Well, you might be thinking, 2012 was an aberration.  No, it wasn't.  

                Taking a 1.5 percent average annual fee and comparing it to the average annual return for the S&P500 since the 401(k) law was passed in 1978 (specifically using the period July 1978 to December 2012) yields an annual S&P500 return of a little over11.2 percent. When compared to that annual fee of 1.5 percent, that would mean that fees consume about 13 percent of returns. Again, not great, but nowhere near your 67 percent confusion.

                Look: I'm aware 401(k) plans only work well for those workers who have the consistent employment, financial discipline, and reasonable enough pay to contribute a substantial amount to their plans over an extended period. If one does that, a 401(k) can be a very good vehicle for funding one's retirement. If not, they're not that helpful. However, you're simply wrong to think of them as some kind of mysterious scam preying on people. That's at odds with reality.

                As for your belief in thinking that an unfettered barter system could work as a large-scale, primary economic feature of any modern, industrialized nation, I can't really help you. You think people are victimized now? Holy moly, if that idea were implemented, just wait.

                As for your imaginings as to what I think, well, I can't really help you there.  You're free to imagine anything.  Reality be damned.

                Have a good day, JesseCW. I hope you can find a way to become a little more open-minded and, perhaps, a little happier. Things aren't as bad as you imagine them to be.

                •  jesse seems pretty biased on this (0+ / 0-)

                  the problem is people aren't educated and don't care to educate themselves about these things.

                  even a poor person, with some income of course, can save for retirement.  with our tax code and retirement accounts it can be done.  you can can find the sweet spot so that you really have the same amount of take home as usual yet are contributing to a retirement account.

                  it can be done.

                  -You want to change the system, run for office.

                  by Deep Texan on Thu May 02, 2013 at 10:34:28 AM PDT

                  [ Parent ]

  •  Thank you for publishing this (17+ / 0-)

    The other diary today made me wince.  Not because of what it said, but because of what it didn't say.  

    Not everything is a conspriracy.

    •  There's nothing inherently wrong with owning stock (11+ / 0-)

      Nor is it a privilege of the 1%.

      Sure, they own vastly more amounts of it than I do, and they reap far more benefits than I do.

      But I found the other diary to be incredibly disingenuous to suggest owning stock, or investing for that matter, is somehow amoral.

      I repeatedly claimed that Obama would never propose cuts to social security. I was wrong. Then again, I also claimed, repeatedly, that Rick Perry would win the 2012 Election, and that The Supreme Court would overturn Health Care Reform.

      by NoFortunateSon on Tue Apr 30, 2013 at 05:19:22 PM PDT

      [ Parent ]

      •  No there isn't (10+ / 0-)

        But that has nothing to do with either of these diaries.

        In fact, the main problem with stock is that people who don't own vast quantities are always the ones who get screwed. Always. That's what made the 1929 crash so brutal, that tons of regular people had invested in stocks. Ditto with the 2008 crash. No one here has every claimed that owning stocks is immoral.

        If debt were a moral issue then, lacking morals, corporations could never be in debt.

        by AoT on Tue Apr 30, 2013 at 05:33:13 PM PDT

        [ Parent ]

        •  really? (2+ / 0-)
          Recommended by:
          Aquarius40, artmartin

          when the market has crashed badly it tends to hurt the ones the most heavily invested in it and often that's those that have more money.

          The crash of 1929 hurt everyone but the rich lost entire fortunes and means of income which rebounded further down etc etc

          And I think this diary has a lot on topic, the fact is that investing in stocks can and is still a very viable means of saving and earning.

          In the time that I have been given,
          I am what I am

          by duhban on Tue Apr 30, 2013 at 07:40:35 PM PDT

          [ Parent ]

          •  Some of the rich "lose their fortune" (7+ / 0-)

            But generally speaking it is the smaller investers who lose more comparatively. The richhave people tohedge their bets and get bailed out. The poor and the middle class do not. Can you name anyone who was filthy rich before 2008 and is homeless now? Or even just can't make ends meet? That simply isn't how it works.

            I didn't realize you bought into the myth this much. I know we disagree a lot, but the idea that the rich are seriously punished during downturns is laughable.

            If debt were a moral issue then, lacking morals, corporations could never be in debt.

            by AoT on Tue Apr 30, 2013 at 08:02:08 PM PDT

            [ Parent ]

            •  you are confusing a lot of things (1+ / 0-)
              Recommended by:
              artmartin

              and buying into your preconcpetions and biases against me

              Look at the data, many of those with large stock portfilos took a serious beating in 2008, yes most of them (if not all) not only survived it but are back to where they are but to suggest as you do that simply because you have more money you are somehow immune to economic downturn is wrong.

              Look at 1929 when stockbrockers, bankers, doctors and lawyers were just as much in the bread lines as joe the brick layer.

              I'm not going that there's inequality but the stock market can and will hurt people regardless of how much money they currently have.

              And I certainly reject the other diary having had time to read it.

              In the time that I have been given,
              I am what I am

              by duhban on Tue Apr 30, 2013 at 08:21:46 PM PDT

              [ Parent ]

              •  Bought on margin (3+ / 0-)

                In 1929 you could put down 10% of a stock's price to own the whole stock.  This was fine as long as the market went up, but as soon as your stock dropped below the original purchase price, the brokerage would issue a margin call.  If you didn't have the cash to cover the call, the broker would sell the stock at a loss and you would be on the hook for the difference.

                Banks and brokerages were riding the gravy train as well.  A Wall Street cabal that included Rockefeller and J.P. Morgan tried buying stock to shore up prices and stop the panic selling.  It worked for a short while but even they didn't have enough.

                Don't look back, something may be gaining on you. - L. "Satchel" Paige

                by arlene on Wed May 01, 2013 at 05:19:41 AM PDT

                [ Parent ]

              •  It's not about you (1+ / 0-)
                Recommended by:
                Free Jazz at High Noon
                and buying into your preconcpetions and biases against me
                The narcissism; it burns.

                The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

                by ozsea1 on Wed May 01, 2013 at 06:48:15 AM PDT

                [ Parent ]

                •  Ummm...I don't know duhban (2+ / 0-)
                  Recommended by:
                  Aquarius40, duhban

                  And I'm no psychologist, so I won't comment on whether he or she is narcissistic.

                  What I can state with a fair amount of confidence is when someone writes this about a person:

                  I didn't realize you bought into the myth this much. I know we disagree a lot, but the idea that the rich are seriously punished during downturns is laughable.
                  And said person responds with:
                   you are confusing a lot of things...and buying into your preconcpetions (sic) and biases against me
                  ...then that response is not narcissistic. It was in response to a direct comment to that individual and about that individual.

                  So your comment that:

                  It's not about you
                  ...is clearly false. The statement was about her/him, and a personal response was appropriate.

                  If something's burning you, you might want to look elsewhere. It's not your mistaken allegation of narcissism regarding duhban's response.

                •  as already pointed out (0+ / 0-)

                  there is no narcissism here, AoT decided to make this personal not me

                  In the time that I have been given,
                  I am what I am

                  by duhban on Wed May 01, 2013 at 01:28:20 PM PDT

                  [ Parent ]

              •  Got a picture of any of Jay Gould's kids selling (0+ / 0-)

                apples? The safety net and market regulations put in place after 1929 have protected even the worst Wall St plungers from ruin. Andrew Mellon and other mega wealthy of his era weren't touched by crash. Was even one super rich family that made its fortune post Civil War wiped out by the depression? Is the former ceo of Lehman Bros managing a McDonalds? Any AIG poobahs living in a shelter?

                My Aunt's 401k was trashed. Retired people who were average earners cannot recover form market downturns. If 60% of Americans, or more, still had defined benefit pensions as they did when St Ronnie was elected, the 2008 crash would have spared our retirees at least. Under this individual 401k system they are just meat on the table for our financial elites.

                •  in the long term (0+ / 0-)

                  I would suspect that even your Aunt's stock portfolio  will recover. The honest question of course is when and how.

                  The actual advantage the more wealthy have in the stock market (if they are smart about it) is that they can be incredibly diverse which is why they recover so fast.

                  As I told AoT I'm not saying the system is perfect or that the market doesn't need to be regulated but to say that everyone wasn't effected in 2008 is just factually wrong.

                  What we really need to be addressing is the utter stagnation of wages since the 60s and 70s

                  In the time that I have been given,
                  I am what I am

                  by duhban on Wed May 01, 2013 at 01:32:47 PM PDT

                  [ Parent ]

                  •  Aunt's 401k isn't going to recover in time to (1+ / 0-)
                    Recommended by:
                    duhban

                    smooth out her retirement. She was already in her 80s the 2nd time her account took a hit and retired and not earning the 1st time. If our financial overlords had left her defined benefit pension alone she'd be doing a lot better. And it is pretty piss poor president'en for Obama to make her have to stress over her SS and Medicare.

                    Ceo pay is up 1,000% since 1950 so I think I know where we can find some of those stagnated pay packets. The jobs were put on boats so they could be anywhere.

              •  Doctors and Lawyers are not the rich I meant (1+ / 0-)
                Recommended by:
                duhban

                Certainly a lot of upper middle class people take a big hit. It's not just the poor and the workers, but it isn't old money that take a hit. That's all I meant. So I think we're actually pretty close on this one.

                If debt were a moral issue then, lacking morals, corporations could never be in debt.

                by AoT on Thu May 02, 2013 at 08:41:43 AM PDT

                [ Parent ]

                •  well I would say (1+ / 0-)
                  Recommended by:
                  AoT

                  the more diversified you are the less you are subject to the stock market (because if you are smart you invest in other places as well) so of course the more 'established' you are the less disruption you suffer.

                  And yes I think we are pretty close on this one just had to talk it though

                  You have a good day

                  In the time that I have been given,
                  I am what I am

                  by duhban on Thu May 02, 2013 at 03:29:56 PM PDT

                  [ Parent ]

          •  except the nuveau riche (3+ / 0-)
            Recommended by:
            blueoasis, JesseCW, ozsea1

            They get thoroughly fucked in these situations.

            If debt were a moral issue then, lacking morals, corporations could never be in debt.

            by AoT on Tue Apr 30, 2013 at 08:05:01 PM PDT

            [ Parent ]

    •  And yet some problems are systemic. (0+ / 0-)

      There is no smoke filled room with Wall St plutocrats twisting their mustaches while they push the buttons that control the world. But Fed policy and Wall St in general is absolutely the system by which the 1% screws the rest of the country and that is a systemic feature at this point.

      PS> There apparently is a room where they manipulate interest rates for the purpose of driving undue profit to megabanks... but don't look behind the curtains! Because that would mess with the narrative of this diary.  

      "If you can find money to kill people, you can find money to help people." -Tony Benn (-6.38,-6.36)

      by The Rational Hatter on Wed May 01, 2013 at 09:58:17 AM PDT

      [ Parent ]

  •  Huh? (16+ / 0-)

    What planet do you live on?

    The market is going up for only one reason - the fed is printing $4 billion a day and it has to go somewhere. Since no one wants to invest in real growth, the money ends up through the banks into the market. The pros know that the Fed is propping up the market and if you watch it carefully you can see that the whole inflation is the market is "not real", as in based upon fundamentals. The trading is now done by computer programs which follow a trend .... and the trend is up and the dollars keep coming so the market goes higher ... despite crappy economic news.

    As for gold ... really? What you are seeing below the surface is wealthy people pulling gold from GLD and banks vaults into their own possession (see Venezuela to Germany). The world economy is on the edge of another crisis and this time the smart rich want an asset that is no one else's liability .. They do not want to wake up to a Cyprus situation.

    I play/watch the market every day ... it is in some kind of twilight zone ... the new highs are real, but unsustainable and beneficial only to the 1%. The average Joe just gets poorer - every month a  new record of folks on food stamps.

    There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

    by taonow on Tue Apr 30, 2013 at 03:17:45 PM PDT

    •  Nonsense. Earnings for the S&P 500 will top (11+ / 0-)

      $110 this year - well past the $80 mark when the market last peaked in early 2008 (or 2007).

      Stock prices reflect future earnings and mood -  the Fed only indirectly influences both.

      QE is buying US Treasuries and MBS - not a single stock/equity at all.  The other diary was misleading in that regard.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Tue Apr 30, 2013 at 03:55:56 PM PDT

      [ Parent ]

      •  Where are those current numbers from? (1+ / 0-)
        Recommended by:
        ozsea1

        Link?

        My google-fu has failed me.

        If debt were a moral issue then, lacking morals, corporations could never be in debt.

        by AoT on Tue Apr 30, 2013 at 04:18:49 PM PDT

        [ Parent ]

      •  uhm (10+ / 0-)

        Look at the facts:
        1. Volume sucks. There is no support for this rally
        2. For earnings you have to remove the banks, which have easily manipulatable earnings ... and you have to adjust for all the one time charges crap.
        3. When the fed buys it pays with money that then can go elsewhere ... like into the market ... because it has already bought up a lot of the alternatives (like all the long dated debt)
        4. Stock prices don't reflect anything except the insanity of algorithms. All you have to do is spend a day or two watching how stocks trade and you will realize all the bs they teach in bus school is just bs. Just look at the volatility in apple for but one simple (but big) example in volatility. One day worth X, a few weeks later worth only 1/2 X. How the heck is that rational?
        5. The economy is now in neutral. China and Japan are rolling over and Europe is a mess too. Only massive fed intervention is keeping the US afloat. The Fed is printing $80 billion a month ... and the economy creates 150,000 new jobs ... so about  $500,000 per job. That sure looks sustainable ... or symptomatic of a broken economy.

        There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

        by taonow on Tue Apr 30, 2013 at 05:04:46 PM PDT

        [ Parent ]

        •  There is no "cost" to the Fed's programs. (7+ / 0-)

          In fact the Fed's earnings go straight to the taxpayer.

          You think Fed intervention is a bad thing like the Ron Paul crowd wrongly says.

          "The way to see by faith is to shut the eye of reason." - Thomas Paine

          by shrike on Tue Apr 30, 2013 at 06:13:04 PM PDT

          [ Parent ]

          •  it is when it cant be unwound (5+ / 0-)
            Recommended by:
            taonow, Jim P, JesseCW, banjolele, ozsea1

            how do you unwind a 4 trillion dollar position?

            •  That is the big unknown. (3+ / 0-)
              Recommended by:
              Satya1, Dr Swig Mcjigger, Aquarius40

              My personal theory is that the GSE's will be making so much money down the road they will retire their debt as fast as they can.  Fannie Mae just posted record earnings in a housing slump.

              That is complete speculation though.

              "The way to see by faith is to shut the eye of reason." - Thomas Paine

              by shrike on Tue Apr 30, 2013 at 06:31:15 PM PDT

              [ Parent ]

          •  Huge costs (6+ / 0-)

            There are massive costs to the Fed programs ... among them...
            a) artificially low rates which hurt savers and eventually pensions and pension funds. The fed is trying to force investors to take on more risk (is that really such a bright idea?)
            b) misallocations of capital. Interest rates are the key element in a capitalistic market. They help decide where capital gets allocated. If you manipulate this market signal you will get misallocation ... which eventually will come back to bite.
            c) they are and will create inflation. For the moment that inflation is p[primarily overseas but it will slowly filter stateside ... and by then it will be too late to cool easily. (Just ask anyone doing business in China about the inflation in wage rates)

            There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

            by taonow on Tue Apr 30, 2013 at 07:42:33 PM PDT

            [ Parent ]

          •  Except for Interest Rate Suppression (6+ / 0-)

            And retirees trying to live off fixed income investments.

            With respect to interest rates, imagine having a target return rate of 8.0% as a municipal pension fund manager.

            And the fed funds rate is at 0.125% and the 10-year is at 1.67%.

            Yet, you're expected to return 8.0% for the foreseeable future.

            Do you go to your mayor/governor and tell him/her that city/state workers are going to have to settle for less than they were promised.

            Or do you increase your allocation to leveraged buyout funds (not so much venture capital), hoping that some of your bets pay off, but knowing that it may blow up your face.

            So far, most, if not all, state pension managers have increased allocation to the Bains of the world.

            Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

            by PatriciaVa on Tue Apr 30, 2013 at 08:13:47 PM PDT

            [ Parent ]

            •  The honest thing to do is tell the mayor/gov the (0+ / 0-)

              target rate is not realistic and some combination of lower benefits or higher fund contributions are required.

              Also disclose how underfunded the pension is at he current time.

              The most important way to protect the environment is not to have more than one child.

              by nextstep on Tue Apr 30, 2013 at 11:44:20 PM PDT

              [ Parent ]

          •  tell those little old ladies living (1+ / 0-)
            Recommended by:
            northsylvania

            on bond income, that this is a good thing.

      •  Those earnings, of course, come from paying (3+ / 0-)

        less and less for labor.

        Which means shit is getting worse and worse for most of us.

        Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

        by JesseCW on Wed May 01, 2013 at 03:04:31 AM PDT

        [ Parent ]

    •  Keeping rates low is also (1+ / 0-)
      Recommended by:
      shrike

      keeping the taxpayer's interest on the debt lower.

      Tough situation with the players at hand.

      -6.13 -4.4 Where are you? Take the Test!!!

      by MarciaJ720 on Tue Apr 30, 2013 at 06:29:22 PM PDT

      [ Parent ]

    •  That doesn't make any sense. (2+ / 0-)
      Recommended by:
      shrike, Aquarius40
      The market is going up for only one reason - the fed is printing $4 billion a day and it has to go somewhere
      It could go into gold.  Or safe US instruments.  Or anything.  But it isn't.

      BTW, the total stock market capitalization for the US exchanges is about $15 TRILLION dollars.  I suggest that Fed action is more about confidence that it is supporting the economy than a paltry $4billion/day.

      "We're now in one of those periods when the reality of intense pressure on the middle class diverges from long-held assumptions of how the American bargain should work" --James Fallows

      by Inland on Wed May 01, 2013 at 08:17:22 AM PDT

      [ Parent ]

    •  Wait what? (0+ / 0-)

      Apple is so undervalued its not even funny.  It trades at less than 4 price to book and under 11 price to earnings.  IBM is a peer with lower growth and it trades at 12 price to book and over 13 price to earnings.  And Apple is paying a 2.78% - soon to go up - dividend.  IBM pays 1% less.

      Bank of America is up 46% over the last year and still only trades at .6 price to book.  In theory you could close shop and pay the stockholders more than the stock is worth.

      Ebay trades at less than 4 price to book despite the stock gaining 25% over the last year and posting 16% growth in earnings.

      That's just a sample.  There are LOTS of stocks with very strong fundamentals that are undervalued right now.  Of course there are some overvalued stocks too - Facebook comes to mind - but most companies are making LOTS of money.  Apple is showing a PROFIT of roughly $800 million...every week.  That's not sales.  Sales are over $500 million a DAY.  Of that, $100 million stays as profit.  EVERY DAY.

      **FULL DISCLOSURE**  I am a shareholder of Apple, Bank Of America, EBay and IBM.

      It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

      by ksuwildkat on Wed May 01, 2013 at 09:07:12 AM PDT

      [ Parent ]

  •  You're wrong (23+ / 0-)

    "So yes.  The Fed is printing money, but they are doing so because they want the economy to recover.  This is not some secret plan to transfer wealth to the 1%."

    1. "The economy" is not a black box.
    2. The economy is dominated by finance capital.
    3. The Fed is printing money to buy mortgage-backed securities.
    4. The Fed is doing this to correct the "housing market."
    5. The housing market is a creature born of finance capital for the sake of Wall St profit.

    In sum, the Fed is printing money to buy securities to reignite the housing bubble.  This is not a "secret plan" to transfer wealth to the 1%, it's a very open plan to do so.  There are plenty of people who own houses that do not belong to the 1% and will benefit from this if they take the opportunity to dump their artificially revaluated home once it goes back "above" water.  This window will be brief as the house of cards tumbles down again.  

    Roubini has a new article that speaks to these issues:
    http://www.livemint.com/...

    •  Exactly (8+ / 0-)

      If they're printing money and giving it out to the richest bankers then it's more trickle down economics bullshit. We have a consumer economy, you can't stimulate a consumer economy by giving to the richest, we know this. It's fucking absurd at this point.

      There's this idiotic belief that if we just give the banks enough money they'll finally start investing it and the economy will recover. But that doesn't work!

      I can't believe people here are seriously arguing for trickle down economics.

      If debt were a moral issue then, lacking morals, corporations could never be in debt.

      by AoT on Tue Apr 30, 2013 at 03:41:24 PM PDT

      [ Parent ]

      •  Ridiculous crap. The Fed is not "giving it out (10+ / 0-)

        to bankers".

        QE is a BOND BUYING PROGRAM and the bonds are US Treasuries and GSE MBS ( both from government entities).

        You have been reading too many swern diaries.  Inform yourself please.

        "The way to see by faith is to shut the eye of reason." - Thomas Paine

        by shrike on Tue Apr 30, 2013 at 03:59:03 PM PDT

        [ Parent ]

        •  Right, they're just "injecting money" (3+ / 0-)
          Recommended by:
          chuckvw, JesseCW, banjolele

          into the economy. But they aren't giving it out. It just gets magically put into the economy. And then it magically doesn't cause inflation. You're kidding me right?

          If debt were a moral issue then, lacking morals, corporations could never be in debt.

          by AoT on Tue Apr 30, 2013 at 04:04:08 PM PDT

          [ Parent ]

          •  By buying 100% guaranteed US debt like (8+ / 0-)

            Treasuries/MBS the Fed frees other monies to go into private investments.

            So the Fed does not "inject" QE willy-nilly.  It is safely stored in US bonds and

            1- lowers interest rates
            2- increases the money supply responsibly
            3- chases other money into projects and investment

            It does so with such little risk that the only downside (inflation) is now a mere mirage among goldbugs.

            "The way to see by faith is to shut the eye of reason." - Thomas Paine

            by shrike on Tue Apr 30, 2013 at 04:10:32 PM PDT

            [ Parent ]

            •  If interest rates are at .25 (10+ / 0-)

              then it lowers them below zero and effectively funnels money to various banks. You live in a magical world where giving money to banks somehow makes them invest it, even though we did that for years and it didn't work. We live in a consumer economy, this is more trickle down bullshit.

              If debt were a moral issue then, lacking morals, corporations could never be in debt.

              by AoT on Tue Apr 30, 2013 at 04:17:08 PM PDT

              [ Parent ]

              •  People AVOID banks when rates are low. (6+ / 0-)

                And no one is GIVING money to banks!

                How do you get everything backward?

                "The way to see by faith is to shut the eye of reason." - Thomas Paine

                by shrike on Tue Apr 30, 2013 at 04:21:43 PM PDT

                [ Parent ]

                •  Um, yeah, people don't *save* (5+ / 0-)

                  But if you think that banks don't have money then you really are living in a different world. They're investment banks. They invest their money in financial instruments and other nonsense, along with some other things. The fact that you're trying to convince me that this has nothing to do with banks is absurd. I mean, seriously?

                  If debt were a moral issue then, lacking morals, corporations could never be in debt.

                  by AoT on Tue Apr 30, 2013 at 04:24:23 PM PDT

                  [ Parent ]

              •  Your comment is on Point (9+ / 0-)

                The Fed bond/mortgage buying program forces investors to "reach for yield".  After all, CALPERS promises an 8.0% return on investments, a return they can no longer get by allocating resources to safe investments.

                So Calpers, and many others, "reach for yield", buying stocks and bonds.  The high yield index is as strong as it's ever been, even stronger then during Drexel's heyday.

                http://marketrealist.com/...

                Against all odds, the high yield bond yields ended last week setting a new record low.

                The average yield for the BAML High Yield Index was at 5.5%, after having started the year at record lows around 6%. To put it in perspective, the high yield bond market is supposed to be composed of the riskiest debt securities, and they’re yielding almost what the 10 year Treasury was yielding back in 2007. The market had never dipped below 7%, but the returns on the week ended lower.

                And frankly, I can't blame pension fund managers for reaching for yield.

                When it blows up, it's going to blow up on all their colleagues, so no one gets fired.

                If they opt for "safer" investments, and Bernanke doesn't pull the punchbowl in the short-term, their returns will trail those who did "reach for yield".  And if that happens, you get fired.

                Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

                by PatriciaVa on Tue Apr 30, 2013 at 05:03:24 PM PDT

                [ Parent ]

            •  Except it isn't (6+ / 0-)
              Recommended by:
              AoT, Palafox, chuckvw, JesseCW, banjolele, srkp23

              Currently, monies are being "freed" into stock dividends, not investment.  In fact, corporations are making use of low interest rates to buy debt in order to pay for these dividends.  Apple's mega-sale of bonds is just the most recent example of this.  By contrast, private investment is at an all-time low.

              •  Not true. Capital expenditures are at all time (4+ / 0-)

                highs too.

                "Core Cap-ex" - private only - was up 6% y/o/y in Q1.

                Apple's huge bond auction was to pay investors without repatriating its huge off shore cash.

                "The way to see by faith is to shut the eye of reason." - Thomas Paine

                by shrike on Tue Apr 30, 2013 at 04:25:45 PM PDT

                [ Parent ]

              •  Come on (0+ / 0-)
                In fact, corporations are making use of low interest rates to buy debt in order to pay for these dividends.  Apple's mega-sale of bonds is just the most recent example of this.
                You do understand, right, that what Apple is doing is borrowing $17b against its assets of $145b so as not to take a significant tax loss for sending out those dividends, right?

                I'm not quite sure how this is a bad thing, except in the generic 'no goddamn American companies pay taxes' kind of way. And honestly, it's also not terribly common. In fact, I suspect that (no google-cheating, now!) you can't name another company that has done it in the last year. And that the first three that you find via google will be doing it for the same reason: good cash flow and good profits, but for one reason or another they don't want to commit their cash right at the moment.

                •  Seriously? (5+ / 0-)

                  First, yes is obviously is a bad thing that American corporations are shuttling revenues overseas to avoid taxes.  Yes it is a bad thing that they can take advantage of ridiculously low interest rates to raise money to then funnel it to their wealthy investors.  And that amidst all this continues the austerity agenda and the suffering of the American people.  The effective tax rate paid by corporations as a whole is at the lowest level on record and it's doing no favors to our social safety net.

                  Second, that "they don't want to commit their cash" was precisely my point.  They aren't investing into the American economy, they are sitting on cash rather than make capital investments that would generate economic growth broadly felt by the American people.  Instead, they convert their cash into dividends felt by their stockholders.  QE isn't doing jack s*** for the economy despite its nominal purpose to "create jobs."

            •  not all MBS's are 'guaranteed' (0+ / 0-)

              "We can't solve problems by using the same kind of thinking we used when we created them." - Albert Einstein

              by pickandshovel on Tue Apr 30, 2013 at 06:03:19 PM PDT

              [ Parent ]

        •  Put 2+2 together (4+ / 0-)
          Recommended by:
          Palafox, chuckvw, banjolele, Kristina40

          The fact that the US government is buying mortgage-backed securities ("MBS" in your parlance) means the state has intervened to artificially prop up the mortgage securities market.  This intervention makes money in the immediate sense for the financial firms that traffic in these securities.  It has ripple effects through the economy.  The rebound in mortgage-backed securities means there is an increased demand for .. you guessed it ... mortgages.  Investment banks want them again, which means lenders have an incentive to put out more mortgages to home buyers.  As demand grows for securities, lenders will want to expand its pool of buyers accordingly.  This means restarting the sub-prime market.

          The combination of dirt-low interest rates plus a government guaranteed "MBS" market means that lenders can reignite the housing bubble.

          So, in response to your "crap" assertion, who does this benefit?  Bankers.  It isn't money "directly" put in their pocket, but in effect it's a system designed to resurrect finance capital.

          •  MBS no longer enjoys its bogus AAA cover. (1+ / 0-)
            Recommended by:
            Satya1

            Try again.

            "The way to see by faith is to shut the eye of reason." - Thomas Paine

            by shrike on Tue Apr 30, 2013 at 04:26:33 PM PDT

            [ Parent ]

          •  There is way too much new regulation (2+ / 0-)
            Recommended by:
            shrike, artmartin

            on mortgage brokers now to create anything like the subprime mess we had earlier.  I'm not saying that can't ever change some day with a Republican led push.  But it isn't going to happen anytime this business cycle.

            The regulations have done much to slow down the typical recovery in which housing sector plays a heavy role.  But the slowly improving housing sector along with better quality mortgages is building a more stable and likely longer lasting financial foundation.

            I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

            by Satya1 on Tue Apr 30, 2013 at 07:45:29 PM PDT

            [ Parent ]

            •  Really? (1+ / 0-)
              Recommended by:
              JesseCW

              Too much regulation and the gubmint is slowing down the recovery?  Why don't you find a neoliberal blog and go sing love songs to Alan Greenspan.

            •   Appraisals are going flat out nuts (1+ / 0-)
              Recommended by:
              Vespertine

              again, and I can tell you from first hand experience that multiple banks have been eager to loan my wife and I 50% more than we could reasonably pay the note on.

              We're not sub-prime borrowers, but even a short period of unemployment with what they're offering would end in foreclosure if we were dumb enough to take it.

              Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

              by JesseCW on Wed May 01, 2013 at 03:12:03 AM PDT

              [ Parent ]

              •  That is interesting (1+ / 0-)
                Recommended by:
                artmartin

                but I don't think the US has the same degree of carelessness as that which led to the massive subprime abuse.  I'm not saying all brokers are going to scrupulously follow all regs but there are some clearly defined limits.  And I also am not saying consumers should disregard the first rule, "buyer beware".  But at least there is a new place to go for guidance if consumers are willing to do a little homework for their own self interest.

                ... the new Consumer Financial Protection Bureau issued regulations spelling out how lenders must ensure that borrowers can repay their loans.  Banks that follow the criteria would be protected from most lawsuits.  To meet the standard of a qualified mortgage, a bank would have to verify the borrower's income, employment and total debt, which could not be more than 43 percent of his or her income.

                The criteria also would prohibit subprime loans, teaser low-rate mortgages with balloon payments later, interest-only mortgages, and fees of more than 3 percent.

                I just closed on Friday for a refi and while I've talked to many eager bankers, I found the process to be much tighter than the refi we did a few years ago.  And every broker was openly discussing how the process had been tightened for them.  I also found that unlike years ago, the range of offered interest rates was a much tighter number range this time.  I think perhaps fewer brokers are willing to do teaser rates.  Obviously this is a narrow experience in my area of suburban Chicago and doesn't represent the huge mortgage industry.  I don't think the process is just tighter enough that some of those marginal situations won't get mortgages quite as  easily.

                As for the other layers of the process that contributed toward the collapse: the bundling, the credit rating entities, etc - I'm not sure what is  happening there.

                I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

                by Satya1 on Wed May 01, 2013 at 07:59:58 AM PDT

                [ Parent ]

                •  That lenders are less insanely reckless than they (0+ / 0-)

                  were six or seven years ago does not mean that they are not insanely reckless.

                  They're lending at prices that likely cannot be sustained when interest rates eventually increase again.

                  This isn't about "buyer beware", it's about the contention that lending practices which hand out mortgages that will go into default if even one of the borrowers on the note losses a job for even a few months are somehow insurance against another major crash.

                  They're not.  Moving from "completely insane" to "really stupid" isn't a reason to start feeling secure.

                  Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

                  by JesseCW on Wed May 01, 2013 at 11:03:45 AM PDT

                  [ Parent ]

                •  Jesse will always (1+ / 0-)
                  Recommended by:
                  Satya1

                  take the sky is falling side to any issue and insinuate that everyone involved is corrupt.  Your breath isn't wasted though.  I've very much appreciated your input.

        •  and what are they paying for those GSE MBS's? (1+ / 0-)
          Recommended by:
          AoT

          pennies on the dollar for what they are worth? Or face value, to help the owners of them????

          "We can't solve problems by using the same kind of thinking we used when we created them." - Albert Einstein

          by pickandshovel on Tue Apr 30, 2013 at 05:47:36 PM PDT

          [ Parent ]

    •  Who can afford a mortgage (1+ / 0-)
      Recommended by:
      srkp23

      At "recovered" prices?  Wages have not recovered

  •  Hogwash! (10+ / 0-)

    It's not the gold bugs who are wrecking the economy it's the freaking disconnected run amok free market. The real economy most of us live and work in has nothing to do with this malarkey. Then again we are captured by this warped vein of what consists of an economy and some how think that we the victims globally are to blame and should just stop whining and pony up our lives to keep the market raking it in. Wealth creation and growth have nothing at all to do with what condition my or yours condition is in. such a sick conviction that says feed the beast and sacrifice for the golden bull. What for let these fuckers fall /fail they need to be pried off humanities face.  

    •  That said (4+ / 0-)
      Recommended by:
      JesseCW, Miggles, Aquarius40, shaharazade

      The people buying gold are in for trouble not too far down the line. Their reasoning behind it is just wrong and they'll take the hit for it. The myth of gold is strong, but undeserved.

      If debt were a moral issue then, lacking morals, corporations could never be in debt.

      by AoT on Tue Apr 30, 2013 at 04:22:00 PM PDT

      [ Parent ]

      •  Let them take (4+ / 0-)
        Recommended by:
        BlueDragon, AoT, NoMoreLies, JesseCW

        the hit. They deserve it. Actually might not be a bad thing if all these assholes who are screwing the world invested their 'wealth' in gold and lost it. Down the line the ordinary people are being set up to carry the load. No thanks I reject the terms of this set up. I hope the morons who believe this is reality and the way forward lose their collective shirts. Who thinks that gold or funny money is more important then an economy that allows people to work and live decently? This is a fail globally for all humans except those that have enough wealth to keep seeking for the gold at end of the made up rainbow. All for the greed. Hoarding gold is a symptom of our screwed up ass backward economy. Austerity for the people and for god sake put your ill gotten gains in a fucking useless metal or whatever gold is. Diamonds however are a girls best bloody soaked friend.  

        •  The problem is that a lot of the people (1+ / 0-)
          Recommended by:
          Aquarius40

          who are investing in gold aren't rich, they're being scammed. These are the same folks who are stocking up on arms and ammo. If they lose their shirts I hate to think what they'll do. Sure, they probably deserve it, but the rich people are not going to be the ones who take the hit, they never are unless they are forced to.

          If debt were a moral issue then, lacking morals, corporations could never be in debt.

          by AoT on Tue Apr 30, 2013 at 05:11:42 PM PDT

          [ Parent ]

          •  Well then (2+ / 0-)
            Recommended by:
            AoT, Kristina40

            lets stop worrying or focusing on the ass backward pig ignorant constant 30% and start dealing  with what we are really up against. A non partisan coup that has always sought to keep the wealth and power in charge and inevitable the latest greatest NWO.. Just give in and work for the cappies on steroids growth and wealth creation. It's inevitable it's the way forward. Nothing we can do after all society is a myth  and we all need to just let go of an economy that rewards the losers. We need to compete it's a dangerous world that cannot function for the common good or else terrorists will kill yer family and the free market will fail and we will all go over those cliffs of mass deception. Let the wild rumpas begin.  

            •  You know I'm with you on this (1+ / 0-)
              Recommended by:
              shaharazade

              And I'm doing it.

              Solidarity from the Bay Area!

              If debt were a moral issue then, lacking morals, corporations could never be in debt.

              by AoT on Tue Apr 30, 2013 at 05:50:21 PM PDT

              [ Parent ]

              •  as a former bay area (1+ / 0-)
                Recommended by:
                AoT

                resident I applaud you. We had to move to Portland as the rent was too high in SF and we were the working poor with good  corporate jobs. SF a city of clerks and the working poor cannot afford to live. The established society rich like Nancy who says get off my street/lawn/sidewalk and the constitution is just a piece of paper really own it politically.. What a con. Solidarity to the bay area that is full of ordinary people who simply want to live and prosper as all ordinary people do. All the rest is just Chinatown a California tradition wherein people just roll over and let the good times roll.  

        •  Most of the people investing in gold... (4+ / 0-)

          ...are the people who watch Glenn Beck. And let's be fair: just because they're gullible doesn't mean they deserve to lose everything.

      •  Some gold bugs have taken a bath already (2+ / 0-)
        Recommended by:
        AoT, artmartin

        If they bought in September, 2012 at $1794/oz, and sold today at $1472, they lost about 22% in seven months.

        Not a recipe for success.  They should, instead, follow J.P. Morgan's advice:

        Buy low, sell high.

        "Who the hell is Grover Norquist, anyway?" - George H.W. Bush

        by rsmpdx on Tue Apr 30, 2013 at 05:04:18 PM PDT

        [ Parent ]

      •  What riles me up (2+ / 0-)
        Recommended by:
        AoT, shaharazade

        is that Phoenix has one liberal talk radio station and runs ads for a gold investing company and two of the syndicated hosts Randi Rhodes and Thom Hartmann both use this firm as their sponsors and personally endorse them.  As smart as both of them are they have to know that gold is is a bubble right now and that the people they convince to buy might lose their shirts.  I hold both of them in great esteem but it's a good example of being a slave to advertising.  The money that company must be sending them must be great.  I can only assume that they must believe that gold in a portfolio would be sane if we have a total economic collapse.  

  •  Since Sept2008, Monetary Base has increased... (3+ / 0-)
    Recommended by:
    AoT, JesseCW, srkp23

    ..250%, while M1 has increased just 35%.

    As your Velocity graph illustrates, there is no demand for money.

    That said, I would not advise Dems to tout the stock market, as it would leave us exposed to attacks that we are far friendlier with Wall Street than the GOP.

    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

    by PatriciaVa on Tue Apr 30, 2013 at 04:46:57 PM PDT

    •  And it also leaves Dems vulnerable (2+ / 0-)
      Recommended by:
      chuckvw, JesseCW

      to more financier attacks. The banks can easily crash the stock market if they decide they want a change of party in charge. And I certainly wouldn't put it past them

      If debt were a moral issue then, lacking morals, corporations could never be in debt.

      by AoT on Tue Apr 30, 2013 at 04:55:44 PM PDT

      [ Parent ]

    •  Which Republicans are going to make that argument? (0+ / 0-)

      Eric Cantor? John Boehner? Paul Ryan? John McCain? Peter King? Chris Christie?

      Governments care only as much as their citizens force them to care. Nothing changes unless we change -- George Monbiot.

      by Nulwee on Tue Apr 30, 2013 at 11:32:14 PM PDT

      [ Parent ]

  •  I never said it was (6+ / 0-)
    The Fed is printing money, but they are doing so because they want the economy to recover.  This is not some secret plan to transfer wealth to the 1%.
     It just happens that way. I never said it was a konspiracy.

    “Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.” ― Upton Sinclair

    by gjohnsit on Tue Apr 30, 2013 at 04:58:35 PM PDT

    •  No worries (1+ / 0-)
      Recommended by:
      gjohnsit

      This diary and its supporters are clearly of the neoliberal wing of the Democratic party.  Any real data on how contradictory our current economy is will be swept under the rug in order to make some idiotic point about Republicans.  Typical partisanship that pays no attention to how the majority of Americans are doing.

      If you want further fuel to your fire, compare the Baltic Dry Goods Index versus the stock market.  Something awry there as well.  And yes, you're the person that brought that index to my attention from your diary back in '08.  Thanks again.

  •  if you want all of us to listen to you (0+ / 0-)

    you need to explain your finance jargon and get more detail into your explanation.

    i'm not sure whose diary you are sideswiping -- maybe gjohnsit, but you need to do a better job of communicating the details to us.

  •  Hooray! Celebrate! (2+ / 0-)
    Recommended by:
    Vespertine, Militarytracy

    Austerity works.

    We're all getting dividends.

    Just reach down under your seat. [No, No, that's only on Oprah.]

    50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

    by TarheelDem on Tue Apr 30, 2013 at 06:44:55 PM PDT

    •  That's an assinine simplification. (6+ / 0-)

      Nobody is alleging that austerity is boosting the stock market. It's actually the market succeeding in spite of being hobbled by austerity.

      The stock market has recovered because things have picked up a lot from where they were a few years back. It's been 4 years, these things called recoveries do tend to happen. Maybe it hasn't happened the way we would like, but the question isn't whether the recovery is fair or robust enough. It exists. And denying it's happened is square in teabircher territory.

      I don't doubt the tenuous nature of such a recovery. That's not the point.

      Governments care only as much as their citizens force them to care. Nothing changes unless we change -- George Monbiot.

      by Nulwee on Tue Apr 30, 2013 at 11:35:43 PM PDT

      [ Parent ]

      •  Which "things" have picked up a lot? (4+ / 0-)

        Certainly not wages, and not the labor force participation rate, and not median household income.

        Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

        by JesseCW on Wed May 01, 2013 at 03:14:50 AM PDT

        [ Parent ]

        •  Yeah everything sucks Jesse (0+ / 0-)

          you tell us that in every diary over and over again.

          •  You speak from privilege (0+ / 0-)

            It may not suck for you, with your 401(k) that you've let everyone know has been expertly managed through your impressive foresight, but the median family has become poorer in the last decade, people are dropping out of the economy (lowest participation rate in 30 years), and the elderly are forced back into the market to make ends meet.

      •  The stock market going up (2+ / 0-)
        Recommended by:
        Jarrayy, JesseCW

        ....is irrelevant for most people because it does not translate into higher incomes for anyone but shareholders, and of them only the privileged few with large numbers of shares.

        It no longer stimulates growth in employment; indeed it may well be the result of growth in unemployment.

        And in the absence of other assets to inflate, it looks like the paper shufflers are back to creating a stock bubble.  There is not reality underneath those paper numbers.

        50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

        by TarheelDem on Wed May 01, 2013 at 06:17:15 AM PDT

        [ Parent ]

      •  Real factor is very low interest rates (1+ / 0-)
        Recommended by:
        JesseCW

        The big gains in the stock market have been with the steady dividend paying stocks.

        Investors are desperate for income in a world with 1.67% 10 year treasury rates from aggressive action from the Fed.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Wed May 01, 2013 at 09:41:08 AM PDT

        [ Parent ]

      •  The market is succeeding because it (0+ / 0-)

        represents an entirely different economy from the one that almost all of us live in.

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Wed May 01, 2013 at 11:27:58 AM PDT

        [ Parent ]

  •  Don't count on it (1+ / 0-)
    Recommended by:
    Nulwee
    "Those left holding the bag [that is, those who bought gold] are going to find themselves very unhappy with the Republican Party when that happens."
    If there's one thing the smarter, cynical Republicans are good at, it's shifting and dodging the blame.  Anyone gullible enough to listen to Glenn Beck is a good bet to want to blame the 'liberals and dirty hippies' when his investment goes sour.

    We're all pretty strange one way or another; some of us just hide it better. "Normal" is a dryer setting.

    by david78209 on Tue Apr 30, 2013 at 06:50:43 PM PDT

  •  Its up because corporations are making money (8+ / 0-)

    Its about that we al admit a painful truth.  american corporations don't give a fuck about how well american citizens are doing.  They are global in their sales and work force.  We are becoming less and less relevant to them and to large investors.

    Where does that leave us?  Stop playing their fucking game.  Change the rules.  We need way way more employee owned business / cooperatives.  The model has to adapt to the new reality.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Tue Apr 30, 2013 at 06:54:50 PM PDT

    •  Flag of convenience (1+ / 0-)
      Recommended by:
      pgm 01

      One of the oldest ideas in international trade is the "flag of convenience".  Used traditionally in shipping, nations like Liberia and Panama are willing to accept ship registrations with almost no restrictions or regulations.  It becomes convenient for the shipowner to register the vessel in one of those countries.

      When it comes to money (the business of a corporation) the greatest flag of convenience is one that is dedicated to the sanctity of private wealth and has the muscle to respond with severity to any infringement on corporate interests.  The nation-state that far above all others offers those two characteristics is the USA, so it is as a matter of practical elf-interest that these corporations designate themselves as "American".  It is their flag of convenience.

      Ever get the feeling you've been cheated?

      by ActivistGuy on Wed May 01, 2013 at 04:05:59 AM PDT

      [ Parent ]

  •  guessing I missed a freak out diary (4+ / 0-)

    not a surprise and I even would have a couple good guesses who wrote it

    Thank you for a concise, simple to understand diary and fact filled.

    In the time that I have been given,
    I am what I am

    by duhban on Tue Apr 30, 2013 at 07:38:08 PM PDT

  •  Oh dear. Technical analysis says otherwise. (2+ / 0-)
    Recommended by:
    Nulwee, etherealfire

    Here's what I'm telling my relatives this spring: "Get out of the stock market -- as in now. As in yesterday. Stay out until at least 2014. We'll see how far stocks have fallen by the end of the year and reassess."

    Every major stock index that you care to look at within the U.S., as well as globally and for other regions, is looking toppy. Very toppy. Toppy as in "could start heading downward tomorrow" toppy.

    (The links above are to a website owned by me and two colleagues. I haven't ever posted that kind of link here before, and my intention is not to promote our site. It's just a way for me to point to the kind of analysis that we base our forecasts on. I acknowledge that the methods and jargon probably won't make sense to a lot of people, but... the stuff works.)

    This does not necessarily mean the market is destined to crash in a single week. Also, there will certainly be a few companies that manage to escape the impending bear market. But on the whole, and for most investors and mutual funds in stocks, the direction is going to be down.

    I would like to see kossacks not get burned by expectations that equity markets will go up from here. They won't, at least not by much.

    •  It may take longer than you think (0+ / 0-)

      Corporations have made incredible profits during the "recovery" and QE3 is helping reinflate the housing market.  The question is how long can this last before stagnant wages and underemployment catch up to them in the form of reduced demand.  Already the pressures for increasing credit are being applied, such as to the housing market, to compensate for lack of wages amongst the population.  

      http://dealbook.nytimes.com/...

      The big worry shouldn't be whether the market crashes tomorrow, but how big the new bubble will get before it goes pop.

  •  A house of cards (3+ / 0-)
    Recommended by:
    Kristina40, pgm 01, k9disc

    ..shaped like a casino full of computers chasing trends by the microsecond. What could possibly go wrong?

    Either inflation numbers are wildly off the mark or all the grocery stores in my medium-sized city are all in cahoots, ripping-off the locals. The packaging gets ever smaller and the prices ever higher.

    How can we sleep when our beds are burning?

    by Anthony Page aka SecondComing on Wed May 01, 2013 at 12:04:54 AM PDT

  •  The stock market is not the economy. (4+ / 0-)

    This is really basic shit.

    Wash. Judge Tells Cops To Return Man’s Marijuana Or Be Found In Contempt

    by JesseCW on Wed May 01, 2013 at 03:00:24 AM PDT

  •  National income accounting (0+ / 0-)

    As long as the proportion of social distribution can continue to flow away from wages and salaries, and towards Dividends, profits, interest and rents, there's no reason stocks and other securities shouldn't continue to rise.  The question our society will eventually face is how low are we willing to tolerate the share of wages and salaries to be pushed?  

    Ever get the feeling you've been cheated?

    by ActivistGuy on Wed May 01, 2013 at 03:53:32 AM PDT

  •  Infrastructure investment FTW (4+ / 0-)

    The diarist is absolutely correct that the most efficient mechanism for growth in this environment will be in infrastructure development that increases long term productivity (that, or population increase through migration or birth, which still requires renewed infrastructure).

    Still, I'm just a schlub who invests a little bit every month in stocks in a 403b. And I went fully into stocks in my accounts on Nov. 30.  So I'm not complaining too hard. I just made a year's salary in 4 months on my middle class nest egg, or perhaps I could say I just paid for two years of college for the kid.  

    It's not just the masters of the universe in these markets.

    “I wore black because ... it's still my symbol of rebellion -- against a stagnant status quo, against our hypocritical houses of God, against people whose minds are closed to others' ideas.” -- Johnny Cash

    by RocketJSquirrel on Wed May 01, 2013 at 06:43:04 AM PDT

    •  Well, you haven't made it YET. (0+ / 0-)

      You still have to realize the gains by selling.

      Still, all in on Nov. 30 looks pretty good at the moment.

      "We're now in one of those periods when the reality of intense pressure on the middle class diverges from long-held assumptions of how the American bargain should work" --James Fallows

      by Inland on Wed May 01, 2013 at 08:10:53 AM PDT

      [ Parent ]

  •  It's a chaotic system. (0+ / 0-)

    If it were stable, there would not be boom and bust, extravagant lending versus enforced austerity. The Treasury and the Fed have overseen both in the recent past. I'm not talking about any hidden or obvious agenda, I'm talking about best practices, something that has been sorely lacking in the recent past. Why should the Smartest Men In the Room™ be any smarter now than they were a few years ago?

    You..ought to be out raising hell. This is the fighting age. Put on your fighting clothes. -Mother Jones

    by northsylvania on Wed May 01, 2013 at 06:56:50 AM PDT

  •  Republicans have been wrong about economic (0+ / 0-)

    matters for at least 100 years. If your theory was correct, there would be no Republicans.

    I'm no philosopher, I am no poet, I'm just trying to help you out - Gomez (from the song Hamoa Beach)

    by jhecht on Wed May 01, 2013 at 07:41:51 AM PDT

  •  well, this is dubious....... (2+ / 0-)
    Recommended by:
    Vespertine, Bush Bites
    Those left holding the bag are going to find themselves very unhappy with the Republican Party when that happens.
    Republicans will just blame Democrats. It's a default position.
  •  Heard on CNBC Yesterday (1+ / 0-)
    Recommended by:
    Bush Bites

    that an unscientific poll of business heads and financial types showed a waning of concern over their own self-propagated meme: The deficit.

    Instead they're sweating over a real threat to their and the country's well being: The sequester.

    Indiscriminate cuts in Federal spending represent the actual fiscal danger to our economy.  Even in the assessment of Republicans' best friends, anti-Krugmans, and Obamaphobes.

    Readers & Book Lovers Pull up a chair! You're never too old to be a Meta Groupie

    by Limelite on Wed May 01, 2013 at 08:34:24 AM PDT

  •  It’s the boom of doom! (0+ / 0-)

    How long can we go on subsidizing capitalism?
    We all know the answer to that one = Till the Fed runs out of money …or political force.

    Love Me, I'm a Liberal!

    by simplesiemon on Wed May 01, 2013 at 04:59:35 PM PDT

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