Why Is The Stock Market Doing So Well In A Bad Recession?

Hello Flash,

Flash said:
Nobody lost money due to my profit. If auto sales are down it is because consumers chose to buy more bicycles, not because I chose to sell at a profit. What if the bike stock went down when I chose to sell. Is somebody gaining because I lost money? Did auto company stock go up? No.

Some days the larger market increases or decreases. If most stocks go up who is losing (other than those individuals who chose to sell at a loss)?

Of course people lose and gain in the market. But one person does not lose because another gained. It is not that simple.

You are confusing overall market operations with individual sales and profits. I saw major losses in my retirement account over the years--1987, 9-11, etc. In 2008 my account dropped 40% and if I sold I would have lost big. I just stayed in and it eventually came back and surpassed my previous amount.

By the way, houses, cars and trucks, and gas prices have all been gaining despite the increase in bike sales.



The money can come from a buyer, a market maker, a buyback from the company....




Not true. If somebody at the top makes a 10% gain it does not cause someone at the body to lose. If someone at the bottom sells at a loss that is why he loses, not because someone at the top gained.

Based on your assumption if Bill in the middle quintile makes a 20% gain from stock sales that means somebody at the top lost due to Bill's profit. Not true. Somebody at the top may have lost money, but not because of Bill.

I think you generally have a negative view of the wealthy and stock market and want to attribute characteristics to them that are not true in order to fit your preconceived political views.
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You are responding to things I never said. Somebody else said if someone gains another must lose, not me. Unlike the president, I believe in win/win philosophy.

My view of the wealthy is no different than my view of anybody else. There are good people and there are bad. It is greed that I hold a low view of, not wealth. Greed exists across the wealth spectrum.
 
Flash said:
But they are spending the same amount. 100% from low income people is less than 53% of upper income people.

How do you allocate money to consumer spending? Do you want higher taxes on the wealthy? How does this money get to the lower income? Does the government give lower income more money so they can spend more?

Increasing consumer spending is not worth redistributing income from one group to another beyond the current system. I thought liberals did not like capitalism because of the emphasis on consumption. Now, you want to encourage it.
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No. No. No again. If you give a dollar to someone in the top 20%, and you give a dollar to someone in the bottom 20%, who spends more of that dollar? The person in the bottom 20%. Period. End of story.
 
Hello Flash,

Flash said:
NO. You are confusing what percent of an individual's income is spent on consumer spending versus total consumer spending. All individuals added together make up total consumer spending.

Total consumer spending was $13118.41 USD Billion in the first quarter of 2020. 60% of that was spent by the top 20%.

53.3% of the income from those in the top 20% is more money than that 100% spent by the bottom 20%. Lower income spend a greater portion of their income, but the upper 20% make a larger contribution to total consumer spending.

A person who makes $20,000 per year and spends 100% on consumer spending contributes $20,000 to the economy. The person who makes $1 million and spends 50% on consumer spending contributes $500,000 to the economy.
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A $5000 TV purchase generates no more jobs than a $500 TV purchase. The man-hours to build each is approx equal. Further, those man-hours are probably not US jobs.

The US labor to stock and sell a $5000 TV is exactly the same as the US labor to stock and sell a $200 TV. If the rich are contributing more to the economy, it is primarily only benefiting the rich. If 25 struggling people buy $200 TV's, that generates 25 times as much US worker income as one rich person buying a single $5000 TV. It is similar with most products.

The rich person buys one expensive item, that translates into a little bit of income for a US worker. That worker then spends their income for a secondary beneficial effect on the economy.

If many poor people spend all of their income that translates into multitudes more ripple-effect economic activity than one rich person spending an equal amount on one expensive item.
 
PoliTalker said:
What Trump really means to the financial stability of the nation is running the debt sky high, throwing money around in the form of reduced taxes, and claiming the results cash-drunk economy is fabulous.

It is irresponsible to talk about paying down the debt during the campaign, and then refusing to do so even with a strong economy while the opportunity existed. Now it's too late.
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Exactly. Mr. Owl was saying when the Covidiot-in-Chief was selected and the economy continued on its Obama-started rise, that was the time to NOT do tax cuts. We should have been banking the revenue for a rainy day. Well, here we are in the midst of a tsunami and the piggy bank is dry.
 
ThatOwlWoman said:
Yep. They lowered it when the markets crashed and everything shut down back in March. People who are laid off sure aren't profiting from their 401(k)s (assuming they haven't had to cash them in in order to pay their bills) when nothing is being added to them. Only the already-well-off, market investors, hedge fund managers, etc. are doing well. But Reichwingers can point at the markets and screech TRUMP! and think it means something.
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A large number of employees with 401(k)s or 403(b)s cannot in those accounts unless the quit or retire. Therefore, many teachers and others stay in those accounts and contribute to them over many years of employment. They replace the traditional pension. They may go up and down, but over they long term they grow at the average rate of 10% per year. When they retire it is not unusual to have over 1$ million.
 
PoliTalker said:
Hello Flash,



A $5000 TV purchase generates no more jobs than a $500 TV purchase. The man-hours to build each is approx equal. Further, those man-hours are probably not US jobs.

The US labor to stock and sell a $5000 TV is exactly the same as the US labor to stock and sell a $200 TV. If the rich are contributing more to the economy, it is primarily only benefiting the rich. If 25 struggling people buy $200 TV's, that generates 25 times as much US worker income as one rich person buying a single $5000 TV. It is similar with most products.

The rich person buys one expensive item, that translates into a little bit of income for a US worker. That worker then spends their income for a secondary beneficial effect on the economy.

If many poor people spend all of their income that translates into multitudes more ripple-effect economic activity than one rich person spending an equal amount on one expensive item.
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If many poor people spend all their income then they are still poor with no money. Is that the goal?
 
PoliTalker said:
Hello Flash,



You are responding to things I never said. Somebody else said if someone gains another must lose, not me. Unlike the president, I believe in win/win philosophy.

My view of the wealthy is no different than my view of anybody else. There are good people and there are bad. It is greed that I hold a low view of, not wealth. Greed exists across the wealth spectrum.
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See post #186. You told me if some were gaining others were losing and it was myopic of me to suggest otherwise. I responded that I know people lose in the market, but not because I make a gain on my stock.
 
Earl said:
This went about three (3) miles over his head. He's squirming now.
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I hope so, I like it when stupid bombs miss me, not sure about you.

His own post conceded Concart's point. Let me know when you figure it out.
Oh I can't wait that long. If the poor spend all their money and the rich spend half, arguendo, that is checkmate.
We aren't talking about what amount total is being spent now, we are talking about public finance to arrange
how new/additional/more money would be used going forward.

So if we have a trillion to plop somewhere, all of it would be spent if we plop it on the poor and 1/2 of it if we dumped it on the rich.

Fuck you people are stupid.:palm:
 
Micawber said:
I hope so, I like it when stupid bombs miss me, not sure about you.

His own post conceded Concart's point. Let me know when you figure it out.
Oh I can't wait that long. If the poor spend all their money and the rich spend half, arguendo, that is checkmate.
We aren't talking about what amount total is being spent now, we are talking about public finance to arrange
how new/additional/more money would be used going forward.

So if we have a trillion to plop somewhere, all of it would be spent if we plop it on the poor and 1/2 of it if we dumped it on the rich.

Fuck you people are stupid.:palm:
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You are a fiscal illiterate. You and Concart. Two libs talking out your ass about something you know nothing about.
 
cawacko said:
If many poor people spend all their income then they are still poor with no money. Is that the goal?
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LOL. For a guy who has prided himself on his econ acumen in this thread you sure lose sight of the ball quickly.
Our goal, I think, was enhancing consumer spending as a stimulus. We weren't determining whose spending had virtue.
It was a chuckle though, that you think when the poor spend on their needs it's futile and when a rich guy buys a third yacht
its like a bank vault. A true conservative.
 
Micawber said:
I hope so, I like it when stupid bombs miss me, not sure about you.

His own post conceded Concart's point. Let me know when you figure it out.
Oh I can't wait that long. If the poor spend all their money and the rich spend half, arguendo, that is checkmate.
We aren't talking about what amount total is being spent now, we are talking about public finance to arrange
how new/additional/more money would be used going forward.

So if we have a trillion to plop somewhere, all of it would be spent if we plop it on the poor and 1/2 of it if we dumped it on the rich.

Fuck you people are stupid.:palm:
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It's a third grade math problem and they can't solve it. It's sublime.
 
Back and forth, it is all the same, not difficult, there is a lot of money out there, we have just went thru stimulus valuing over three trillion dollars, plus the Fed, some have to spend it putting it back into circulation, the goal, others, and it is largely those with money, invest in the Market, not all that difficult
 
Concart said:
It's a third grade math problem and they can't solve it. It's sublime.
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"But rich people have 50 trillion to spend and the poor don't have any so the rich spend more so we should give them even more still...."

Hilarious Earl strapped on his spurs and rode that red herring into the sunset? LMAO
 
Micawber said:
LOL. For a guy who has prided himself on his econ acumen in this thread you sure lose sight of the ball quickly.
Our goal, I think, was enhancing consumer spending as a stimulus. We weren't determining whose spending had virtue.
It was a chuckle though, that you think when the poor spend on their needs it's futile and when a rich guy buys a third yacht
its like a bank vault. A true conservative.
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I haven't followed all the posts ITT plus it's gone in multiple directions. I mean sure, if you want ultimate stimulus everyone go out and spend everything you have. And when you've spent that, borrow and spend some more. "Saving for a rainy day" is our enemy right?

As for your projection in your last sentence I have no idea where that is coming from. Here's my belief on money. 1) you've earned do what you want with it and 2) 'saving for a rainy day' and for the future is sage advice.

And in honor of consumerism and spending what we don't have here's a great song celebrating it from the early 2000's.

 
cawacko said:
I haven't followed all the posts ITT plus it's gone in multiple directions. I mean sure, if you want ultimate stimulus everyone go out and spend everything you have. And when you've spent that, borrow and spend some more. "Saving for a rainy day" is our enemy right?

As for your projection in your last sentence I have no idea where that is coming from. Here's my belief on money. 1) you've earned do what you want with it and 2) 'saving for a rainy day' and for the future is sage advice.

And in honor of consumerism and spending what we don't have here's a great song celebrating it from the early 2000's.
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You are correct regarding "gone in multiple directions," as would be expect on this forum 237 posts in, but again, to address the question in the topic post, why is the market doing well, simple fact, there is a hell'va of money out there in circulation, three trillion plus the Fed's efforts, how that currency is circulated and the best way is debatable, but you got to admit, that is what has kept the Market humming
 
Flash said:
A large number of employees with 401(k)s or 403(b)s cannot in those accounts unless the quit or retire. Therefore, many teachers and others stay in those accounts and contribute to them over many years of employment. They replace the traditional pension. They may go up and down, but over they long term they grow at the average rate of 10% per year. When they retire it is not unusual to have over 1$ million.
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Yes, I know that. Teachers and other state public employees do not have 401(k)s; they have different plans.

Facts are that those who are currently in a laid-off status and not receiving a paycheck are not contributing to their 401(k)s and neither are their employees. I already stated that. Facts also state that those who are in dire straits CAN cash out their 401(k)s even though they will take a 10% tax bite. Isn't choice just so great?

So why do YOU think that the markets are recovering to near-preCOVID levels, while the rest of the economy circles the drain?
 
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