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

ThatOwlWoman said:
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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FED policies: $2.3 trillion in lending, purchasing $500 billion in treasury securities and $200 billion in morgage backed securities, low interest loans to securities firms, expanding repo agreements, backing money market mutual funds, direct lending to state and local governments and non-profits and small businesses, relaxing regulatory requirements, etc.

Also expectation of an improving economy, a good buying opportunity, and very low interest rates making fixed income investments a poor investment.
 
T. A. Gardner said:
On the other hand, taxing the rich more, or even worse raising corporate taxes on large corporations will definitely hurt economic growth. These are the big spenders in the economy.

I was just considering an example using the commercial side work I do for a general contractor. Setting aside using a wholesaler, I often go into a Home Depot or Lowe's and spend $1000 to $5000 on materials at a shot, say $10,000 to $20,000 in a month. I'm not some rich guy I'm solidly middle class, even if positioned above the center of that group. How many individual consumers does it take to match the commercial buying I do for materials at one of those stores? If your average individual consumer spends $100 in a month in such a store, then that takes 100 to 200 customers to match what I buy for commercial work.

Who is having a greater impact on sales, me or some individual consumer? I actually get recognized by sight at the pro desk at three Home Depots now, along with two Lowe's. I get better service because I'm a serious customer and they know it. I have one job sitting on my desk right now for a re-wire of a small apartment complex priced for $15,000 in materials alone. We're waiting on the owner to okay the work. The guy's stalling because he's a cheap assed "slum lord" (only a slight exaggeration) who doesn't want to spend the money I'm quoting to get things done right--and I'm well below hiring a firm trying to actually make a business profit since I don't have to--my quack of a physician says I need more exercise and I definitely need beer money. Aside from that, it'd go in part to my buying a Lotus Elise.

None of that trickles down to the little guy working schulb who's a rent-a-cop or warehouse worker for Amazon, but that's not my problem.
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think about the billionaires, have a heart.
 
Flash said:
FED policies: $2.3 trillion in lending, purchasing $500 billion in treasury securities and $200 billion in morgage backed securities, low interest loans to securities firms, expanding repo agreements, backing money market mutual funds, direct lending to state and local governments and non-profits and small businesses, relaxing regulatory requirements, etc.

Also expectation of an improving economy, a good buying opportunity, and very low interest rates making fixed income investments a poor investment.
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this economy is completely disconnected from reality.

that's what happens with fake money.
 
Hello ThatOwlWoman,

ThatOwlWoman said:
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.
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Taxes should have been raised when the economy began to do well. That is the only time the debt can be properly serviced. With a strong economy you can work on the debt. When the economy tanks you can't. That's when you have to accept some rising debt. Because Trump foolishly used the debt to dial up the good economy instead of paying it down, we had debt rise during the good economy coupled with double debt rise during the recession to equal tripled debt rise. And it's all on him because we should have paid it down when we had the chance, and proper handling of the crisis by a real leader would have saved jobs and reduced the amount which has had to be outlayed during the crisis.

If this had all been handled properly with responsible leadership we would have worked on the debt while we had the chance and limited recession debt rise to the amount gained with responsible taxation to just about cancel out gains and losses, resulting in approximately steady debt.

We should have socked it away when we had the chance but we didn't so now we have to pay and pay.
 
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PoliTalker said:
Hello ThatOwlWoman,



Taxes should have been raised when the economy began to do well. That is the only time the debt can be properly serviced. With a strong economy you can work on the debt. When the economy tanks you can't. That's when you have to accept some rising debt. Because Trump foolishly used the debt to dial up the good economy instead of paying it down, we had debt rise during the good economy coupled with double debt rise during the recession to equal tripled debt rise. And it's all on him because we should have paid it down when we had the chance, and proper handling of the crisis by a real leader would have saved jobs and reduced the amount which has had to be outlayed curing the crisis.

If this had all been handled properly with responsible leadership we would have worked on the debt while we had the chance and limited recession debt rise to the amount gained with responsible taxation to just about cancel out gains and losses, resulting in approximately steady debt.

We should have socked it away when we had the chance but we didn't so now we have to pay and pay.
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PoliTalker:

"Dive, market, DIVE!

Take DT down with you.


02-28-2020, 06:47 AM #5 | Top
PoliTalker


"Sometimes things have to get worse before they can get better.

We're going down.

BZZZZZT! BZZZZZT! BZZZZZT!

Dive! Dive! Dive!"
 
Hello cawacko,

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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Not a goal but a necessity. The super-rich driven wealth extraction system called the US economy is very efficient, thanks to our hyper-charged modern capitalism. Poor people don't usually have even all the basics. They have no savings. What little income they get, usually for working long hours at several jobs all goes to supporting what lifestyle they can eke out. They are often in debt to rip-off high interest credit vultures such as buy-here-pay-here car lots and payday loan joints. They have no net worth. What they have is negative net worth. This is how they pay rent, stay off the streets, feed and cloth themselves, and attempt to raise children. It's not a smart financial plan, there is no plan. Their life simply happened to them, the way they see it. They were not raised to be thrifty, but they have more kids and have no idea how to raise THEM to be thrifty either. The problem is cross-generational. It is not their fault if they got born into that predicament. Kudos to the few who can extricate themselves from it, but that number is eclipsed by the majority who fail to do that, which perpetuates the problem.

When their public service jobs go away, the government needs to support them because if we don't it will only end up creating bigger problems and costing us more later. Their consumer spending drives the economy.
 
Hello Flash,

Flash said:
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.
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I did say that and what I said is true. The difference is I did not say it was directly coupled.
 
PoliTalker said:
We should have socked it away when we had the chance but we didn't so now we have to pay and pay.
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You're right.

Remember how most of us non-Trumpanzees said how (R) presidents always fuck up the economy, then a (D) has to come along to fix it, in 2016 and 2017? Looks like we were right again. Personally I'm getting pretty tired of being right about this.
 
Hello ThatOwlWoman,

ThatOwlWoman said:
You're right.

Remember how most of us non-Trumpanzees said how (R) presidents always fuck up the economy, then a (D) has to come along to fix it, in 2016 and 2017? Looks like we were right again. Personally I'm getting pretty tired of being right about this.
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I don't see any change to that cycle.

If the administration flips, all the Republican debt hawks who migrated south for the duration of the Trump disaster show will be back to criticize Democrats for the debt the Republicans own. They will carry on and on about being responsible and how tax cuts fuel the economy, and spending needs to be cut cut cut. They won't be able to offer an specifics about just WHAT spending could possibly be cut enough to reduce the debt, but that doesn't matter. If you try to pin them down to specifics they will use ad hominems and red herrings, anything but straight talk about the subject.

The Republican party is the party of false ideas and self-fooling. And that's putting it nicely.
 
PoliTalker said:
Hello Flash,



I did say that and what I said is true. The difference is I did not say it was directly coupled.
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OK. I agree. My point was that if upper income earn 20% on their stocks they increase their income and consumer spending without taking away from any lower income groups.

Gains for some do not mean losses for others.
 
Here is a thought

Maybe the economy isn’t as bad as leftists want to believe?

I mean after all these JPP leftists still believe there was Russian collusion
 
ThatOwlWoman said:
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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Same reason all the lotto tickets are bought by the poorest people. It is the sole facet of the economy untethered to anything except the naked choice
of people to do whatever they want. The other indicators are more grounded. When there are no jobs, unemployment has to go up. When the money supply is
increased and distributed, prices have to go up. When supply chains make more goods, output has to increase. But the stock market is just a bunch of
people parking money like they used to do with savings accounts. Stock market is more a measure of the rational and irrational choices of those with excess
cash. What does your local savings and loan pay in interest? Nobody but the most anxious are going to plop their money in a savings account.
 
Micawber said:
Same reason all the lotto tickets are bought by the poorest people. It is the sole facet of the economy untethered to anything except the naked choice
of people to do whatever they want. The other indicators are more grounded. When there are no jobs, unemployment has to go up. When the money supply is
increased and distributed, prices have to go up. When supply chains make more goods, output has to increase. But the stock market is just a bunch of
people parking money like they used to do with savings accounts. Stock market is more a measure of the rational and irrational choices of those with excess
cash. What does your local savings and loan pay in interest? Nobody but the most anxious are going to plop their money in a savings account.
Click to expand...

Exactly. Fiscal conservatives decry the lack of savings by average working people. But where is their incentive? Even CDs don't pay much these days. I'm no economist, but I suspect one reason why the stock market has been so robust is the only savings vehicle left for regular ppl is their 401(k)s, and those are generally invested in the markets by their managers, depending on what options the employee selected.

Just imagine a future where the (R)s have finally managed to get rid of Medicare and Social Security. Few employers offer pensions anymore. So the *only* retirement a worker will have is whatever he/she can park in his/her 401(k). But in a severe economic downturn like this one, the laid-off worker might have to liquidate all or part of that account just to keep their bills paid up and kids fed. They won't have squat to live on when they get to retirement age. That's the GOP plan -- work hard your entire life, then drop dead. Pretty much like their health care plan -- don't get sick but if you do, die quickly.
 
ThatOwlWoman said:
Exactly. Fiscal conservatives decry the lack of savings by average working people. But where is their incentive? Even CDs don't pay much these days. I'm no economist, but I suspect one reason why the stock market has been so robust is the only savings vehicle left for regular ppl is their 401(k)s, and those are generally invested in the markets by their managers, depending on what options the employee selected.

Just imagine a future where the (R)s have finally managed to get rid of Medicare and Social Security. Few employers offer pensions anymore. So the *only* retirement a worker will have is whatever he/she can park in his/her 401(k). But in a severe economic downturn like this one, the laid-off worker might have to liquidate all or part of that account just to keep their bills paid up and kids fed. They won't have squat to live on when they get to retirement age. That's the GOP plan -- work hard your entire life, then drop dead. Pretty much like their health care plan -- don't get sick but if you do, die quickly.
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Your response is interesting because Concart gave me sh*t earlier ITT for saying QE/low interest rates punish savers and push people into riskier investments looking for yield yet that’s exactly what you are saying here.

And there is no world where Republicans eliminate S.S. or Medicare. That’s purely a liberal scare tactic. (Not that Republicans don’t employ scare tactics of their own but that’s a different conversation). Now if Libertarians ran all facets of government eliminating those program could potentially occur but that’s not likely going to happen. Liberals like to use this scare technique to avoid addressing the unfunded liabilities of the programs and any reforms to make them more viable long term.
 
 
PoliTalker said:
Hello cawacko,



Not a goal but a necessity. The super-rich driven wealth extraction system called the US economy is very efficient, thanks to our hyper-charged modern capitalism. Poor people don't usually have even all the basics. They have no savings. What little income they get, usually for working long hours at several jobs all goes to supporting what lifestyle they can eke out. They are often in debt to rip-off high interest credit vultures such as buy-here-pay-here car lots and payday loan joints. They have no net worth. What they have is negative net worth. This is how they pay rent, stay off the streets, feed and cloth themselves, and attempt to raise children. It's not a smart financial plan, there is no plan. Their life simply happened to them, the way they see it. They were not raised to be thrifty, but they have more kids and have no idea how to raise THEM to be thrifty either. The problem is cross-generational. It is not their fault if they got born into that predicament. Kudos to the few who can extricate themselves from it, but that number is eclipsed by the majority who fail to do that, which perpetuates the problem.

When their public service jobs go away, the government needs to support them because if we don't it will only end up creating bigger problems and costing us more later. Their consumer spending drives the economy.
Click to expand...

seeing others suffer makes the system feel like meritocracy.

the people who make the money and decide who gets it can never be dethroned.

fiat currency is tyranny.
 
Micawber said:
Bullshit.

https://www.azcentral.com/story/opi...ity-medicare-medicaid-believe-him/4978568002/

https://www.msn.com/en-us/news/poli...ty-and-medicare-if-he-s-reelected/ar-BB17JIZa

https://www.forbes.com/sites/teresa...ocial-security-starve-the-beast/#404d0de43794

https://www.cnbc.com/2018/03/26/privatization-is-really-a-plan-to-dismantle-social-security.html

https://www.fedsmith.com/2013/10/11/ronald-reagan-and-the-great-social-security-heist/



It's an FDR thing. Republicans have been against it forever.
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Thank you proving my point. These articles are all about “IF Republicans win the next election they will eliminate S.S.” Then Republicans win and nothing happens and you break it out again the next election cycle. Rinse, wash and repeat
 
 
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