If not for the bailouts & stimulus package...

Onceler said:
BAC, I can't even debate you on this. You are easily one of the smartest people on this board, but your statements about the market & the economy can be jaw-dropping. The fact that you do not recognize the interconnectedness of Wall Street & Main Street is something I don't even know how to address; it is as though you are saying "I can't believe Onceler thinks the sky is blue."

All I can do is shake my head. If Wall Street fails, Main Street fails, period. There is no "oh, that's just your opinion" on this. It's the height of ignorance to suggest otherwise....
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The feeling is mutual my good brother. I have much respect for your thoughts .. which is why I keep saying "I can't believe Onceler fell for this."

I think this has less to do with our brain size and more to do with our perspectives on the bailouts and Wall Street.

I repeat, there is no imperical evidence that demonstrates that the bailouts have worked other than infusing Wall Street with a lot of taxpayer money .. that Wall Street seems to be throwing a party with. Raises for everybody .. while the rest of the country suffers.

Additionally, there is no evidence that this latest rise in Wall Street is going to lead to anything. There is no evidence that American jobs are going to come storming back because Wall Street is doing better.

We HOPE they are coming back but nobody KNOWS that for sure.

Let me give you Krugman's take on Wall Street and those rising salaries ..

"All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels.

Why is this disturbing? Let me count the ways.

First, there’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks."

Wall Street is a gambler's market my brother and it rises and lowers artificially .. AND, it is not connected to unemployment .. which it often likes.

That being said .. even though we don't completely agree, I pay particular attention to what you say .. and I do agree on some aspects of your thoughts on this.
 
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Short answer to the original post... no

Without the stimulus money and bail out, the perception would have likely transgressed into a 'depression' and investors would have panicked even more than they did. The Dow would likely have been far closer to the March lows than to 10000. That said, the bailout is not currently being viewed as successful. Regardless of the short term run in the market over the last six months, the long term problems still persist. The bad debt is still on the banks balance sheets. We still don't know the extent of what the banks hold. Unemployment is a lagging indicator, but it is expected to remain above 10% for all of 2010. This will lead to more foreclosures and a continuation of the tight credit market.

Add in the looming credit card debt bubble bursting in addition to the problems within the commercial real estate market and this may end up being more of a W shaped recovery. I will pause for a moment to give all those who just had epileptic seizures at seeing a reminder of the President they hate so much a moment to recover....

For those who think there isn't a reflection of main street on wall street... you are quite wrong. For several reasons:

1) Most workers today have investments in the market, therefore they are affected when it gets hit or when it rises. They invest directly via 401k's, 403b's etc... or indirectly through pension plans. (just ask GM employees who saw their pensions get wiped out... and then resurrected due to the takeover by the government and the pandering to the unions)

2) When companies see a recession coming, they begin pulling back earnings expectations which causes stocks to fall. When the market falls, investors tend to start saving more and spending less. (unless enticed to do otherwise by the government/corporations via low interest rates on loans or credit cards) When people start spending less, the economy retracts further which causes layoffs. Again, this ties main street to wall street.

3) As BAC stated, you can see the market going up while unemployment is doing the same (as we are seeing right now). This is due to the fact that the market is a reflection of where the collective knowledge thinks we are going (so it is more forward looking) whereas unemployment is a lagging indicator. Companies want to see the economy moving in a positive direction (typically for a quarter or two) before they begin rehiring. Because the last thing they want to do is hire someone as the market turns up only to have to lay them off again if it was a head fake.

My guess: (note the word guess)... we will see a retest of the March 2009 lows. The S&P is currently trading at about 20 times earnings. That means companies are going to have to start showing better growth numbers than they currently are. When year-over year numbers start showing up against the second quarter numbers this year... look out. Because thus far, the earnings have been compared to those from 2008, which were not good. It will be harder to show those growth rates next year. Which means we are setting up for a retraction. When it begins is anyone's guess.
 
Onceler said:
Unfortunately, the converse IS true. All of those companies that do all of the hiring? They won't budge an inch unless they see consistent gains in the market, and a healthier looking market overall.

I don't even know how to respond to comments on this thread & other threads that jobs are still being lost even though the market is doing well. It's not like the market rises in the morning & companies decide to hire that afternoon; that's why they call jobs a "lagging indicator." Companies plan layoffs & hires this quarter for the next quarter or the quarter after, and base much of that decision-making on not just their own balance sheet, but on how the market & other indicators are doing.

Ergo, a big rise in the market this month might not show up in the jobs market for 3-6 months, at minimum. BUT, a healthy market is instrumental in setting up that long-term hiring.

Again - these are just facts. These are not my opinions.
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Uh, lots of opinions in there cochese, and not much of a rebuttal to either of the points that I made.
 
blackascoal said:
The feeling is mutual my good brother. I have much respect for your thoughts .. which is why I keep saying "I can't believe Onceler fell for this."

I think this has less to do with our brain size and more to do with our perspectives on the bailouts and Wall Street.

I repeat, there is no imperical evidence that demonstrates that the bailouts have worked other than infusing Wall Street with a lot of taxpayer money .. that Wall Street seems to be throwing a party with. Raises for everybody .. while the rest of the country suffers.

Additionally, there is no evidence that this latest rise in Wall Street is going to lead to anything. There is no evidence that American jobs are going to come storming back because Wall Street is doing better.

We HOPE they are coming back but nobody KNOWS that for sure.

Let me give you Krugman's take on Wall Street and those rising salaries ..

"All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels.

Why is this disturbing? Let me count the ways.

First, there’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks."

Wall Street is a gambler's market my brother and it rises and lowers artificially .. AND, it is not connected to unemployment .. which it often likes.

That being said .. even though we don't agree, I pay particular attention to what you say .. and I do agree on some aspects of your thoughts on this.
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I feel the same way re: your last comment. We just don't agree on this, but I don't disagree with everything you're saying about it. The abuses are real; the waste is real. I cringe when I see that the people who started this mess are the same ones seeing the 1st pay increases, or any of the crazy stories about how they're still chartering jets & planning expensive retreats.

It's just that in the scheme of things, I know that the good far outweighs the bad, which I tend to see as largely symbolic, anyway.

The bottom line is that, as an average American worker, I am heartened to see the market doing well, and not just for my own meager 401K. I know that when the market tanked, my job as well as that of most of my neighbors was in doubt; as the market is coming back, it just creates a wake that most companies can ride, and jobs will naturally follow. It also does wonders for consumer confidence, which is one of the big pillars of this economy...
 
Yurt said:
just plain politics

you're not very bright...and the nature of this thread is political, to claim it is not is stupid
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You brought the whole Obama/Bush thing in; no one else has really mentioned it. You do that a lot.

I have given Bush credit for the bailouts. As a matter of fact, I have given him credit at least 2 other times (possibly 3) when you have jumped on a thread like this clamoring like a child that Bush deserves credit...
 
Onceler said:
Would the Dow be just shy of 10,000 today?

Explain your answer...
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it's near 10k because of TARP. We shored up business' too big to fail. We basically told big business that they can make any kind of stupid decisions they want to and they won't have to worry about losing money because our government will bail them out.

what that leaves us with is another overinflated bubble waiting to burst.
 
Onceler said:
You brought the whole Obama/Bush thing in; no one else has really mentioned it. You do that a lot.

I have given Bush credit for the bailouts. As a matter of fact, I have given him credit at least 2 other times (possibly 3) when you have jumped on a thread like this clamoring like a child that Bush deserves credit...
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why are you whining about this? the nature of the bailouts and stimulus packets are political...the politics concerning the economy....to claim that there is no politics in the matter is ignorant...to continuing whining about is stupid....

grow up
 
Yurt said:
why are you whining about this? the nature of the bailouts and stimulus packets are political...the politics concerning the economy....to claim that there is no politics in the matter is ignorant...to continuing whining about is stupid....

grow up
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You're telling me to grow up?

I don't post much on the board anymore. When I started this thread - and I'm telling the truth here - even though the thread itself has more to do with economics, I KNEW, for a fact, that you would come on here with your "a ha! You're really giving Bush credit!" routine, once again. You, who are always lecturing others about "debating." Your first comment on this thread had nothing to do with "debating."

It's a very, very tired schtick, and very predictable (as in, I predicted it, and it was easy to do so).....
 
Onceler said:
I feel the same way re: your last comment. We just don't agree on this, but I don't disagree with everything you're saying about it. The abuses are real; the waste is real. I cringe when I see that the people who started this mess are the same ones seeing the 1st pay increases, or any of the crazy stories about how they're still chartering jets & planning expensive retreats.

It's just that in the scheme of things, I know that the good far outweighs the bad, which I tend to see as largely symbolic, anyway.

The bottom line is that, as an average American worker, I am heartened to see the market doing well, and not just for my own meager 401K. I know that when the market tanked, my job as well as that of most of my neighbors was in doubt; as the market is coming back, it just creates a wake that most companies can ride, and jobs will naturally follow. It also does wonders for consumer confidence, which is one of the big pillars of this economy...
Click to expand...

You're a fucking moron if you see good in this, or think the good outweighs the bad.

The amount thrown into the system just enough to keep rich and powerful on board with the very system that will be used to abuse us even further.

We needed to learn about lesson about wallstreet and who runs it, the bailouts were just enough to keep us from learning that lesson. They were a big mistake. The truth is better than fake money on any given day.
 
Superfreak said:
Short answer to the original post... no

Without the stimulus money and bail out, the perception would have likely transgressed into a 'depression' and investors would have panicked even more than they did. The Dow would likely have been far closer to the March lows than to 10000. That said, the bailout is not currently being viewed as successful. Regardless of the short term run in the market over the last six months, the long term problems still persist. The bad debt is still on the banks balance sheets. We still don't know the extent of what the banks hold. Unemployment is a lagging indicator, but it is expected to remain above 10% for all of 2010. This will lead to more foreclosures and a continuation of the tight credit market.

Add in the looming credit card debt bubble bursting in addition to the problems within the commercial real estate market and this may end up being more of a W shaped recovery. I will pause for a moment to give all those who just had epileptic seizures at seeing a reminder of the President they hate so much a moment to recover....

For those who think there isn't a reflection of main street on wall street... you are quite wrong. For several reasons:

1) Most workers today have investments in the market, therefore they are affected when it gets hit or when it rises. They invest directly via 401k's, 403b's etc... or indirectly through pension plans. (just ask GM employees who saw their pensions get wiped out... and then resurrected due to the takeover by the government and the pandering to the unions)

2) When companies see a recession coming, they begin pulling back earnings expectations which causes stocks to fall. When the market falls, investors tend to start saving more and spending less. (unless enticed to do otherwise by the government/corporations via low interest rates on loans or credit cards) When people start spending less, the economy retracts further which causes layoffs. Again, this ties main street to wall street.

3) As BAC stated, you can see the market going up while unemployment is doing the same (as we are seeing right now). This is due to the fact that the market is a reflection of where the collective knowledge thinks we are going (so it is more forward looking) whereas unemployment is a lagging indicator. Companies want to see the economy moving in a positive direction (typically for a quarter or two) before they begin rehiring. Because the last thing they want to do is hire someone as the market turns up only to have to lay them off again if it was a head fake.

My guess: (note the word guess)... we will see a retest of the March 2009 lows. The S&P is currently trading at about 20 times earnings. That means companies are going to have to start showing better growth numbers than they currently are. When year-over year numbers start showing up against the second quarter numbers this year... look out. Because thus far, the earnings have been compared to those from 2008, which were not good. It will be harder to show those growth rates next year. Which means we are setting up for a retraction. When it begins is anyone's guess.
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Great post. I completely agree with your assessment on where the market would be now w/out the bailouts & stimulus (probably to a lesser extent w/ the stimulus, though I still feel that was important to stem the bleeding). It would have been a long, long road back if the market had dipped to some of those lows, and was still languishing as a result.

As it is, I'm under no real illusions on this, and don't think a 10K market necessarily means "we're back." But I do think the economy feeds on news, good and bad, and a positive trend like this is something to cheer. I hope you're wrong about the retraction, but the reasoning there is sound...
 
Onceler said:
Great post. I completely agree with your assessment on where the market would be now w/out the bailouts & stimulus (probably to a lesser extent w/ the stimulus, though I still feel that was important to stem the bleeding). It would have been a long, long road back if the market had dipped to some of those lows, and was still languishing as a result.

As it is, I'm under no real illusions on this, and don't think a 10K market necessarily means "we're back." But I do think the economy feeds on news, good and bad, and a positive trend like this is something to cheer. I hope you're wrong about the retraction, but the reasoning there is sound...
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It would have been dramatic, but society would be better for learning the hard lesson of trusting these monetary totalitarians.
 
AssHatZombie said:
It would have been dramatic, but society would be better for learning the hard lesson of trusting these monetary totalitarians.
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I understand that argument, but I wasn't up for it, even if it would have the intended results, and I doubt many were. We're not talking about a year or 2 correction there....
 
Yurt said:
appears onceler may be right about the bailouts....
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Onceler said:
You're telling me to grow up?

I don't post much on the board anymore. When I started this thread - and I'm telling the truth here - even though the thread itself has more to do with economics, I KNEW, for a fact, that you would come on here with your "a ha! You're really giving Bush credit!" routine, once again. You, who are always lecturing others about "debating." Your first comment on this thread had nothing to do with "debating."

It's a very, very tired schtick, and very predictable (as in, I predicted it, and it was easy to do so).....
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anyways....as i said earlier:

appears onceler may be right about the bailouts....


Quote:
better-than-expected quarterly profit reports from Intel and JPMorgan Chase. full story
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I don't get how anyone thinks that a policy of Corporate Facism is what is needed to HELP the economy.
 
Onceler said:
I understand that argument, but I wasn't up for it, even if it would have the intended results, and I doubt many were. We're not talking about a year or 2 correction there....
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basically you're telling us that you're not willing to serve a sentence for allowing to happen what has? you'd rather dig the hole deeper and let your children suffer the consequences?
 
SmarterThanYou said:
basically you're telling us that you're not willing to serve a sentence for allowing to happen what has? you'd rather dig the hole deeper and let your children suffer the consequences?
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That's an interesting paraphrase. All I said was that I understand the argument; I didn't say I agreed with it.

A) There is no guarantee whatsoever that, after the intense pain such "creative destruction" would cause, the necessary changes would be made to the system as a whole

B) I am of the opinion that a committed gov't and populace can make the changes necessary without tearing the whole thing down to do it.

And no, I'm not arguing that this is happening now, but one step at a time...
 
Onceler said:
That's an interesting paraphrase. All I said was that I understand the argument; I didn't say I agreed with it.

A) There is no guarantee whatsoever that, after the intense pain such "creative destruction" would cause, the necessary changes would be made to the system as a whole

B) I am of the opinion that a committed gov't and populace can make the changes necessary without tearing the whole thing down to do it.

And no, I'm not arguing that this is happening now, but one step at a time...
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that will never happen. the fat wallets have learned first hand that the government will ensure their financial survival at our expense. The upper and middle classes benefit from the bailouts by keeping most of their jobs. The lower classes have no power and will suffer the most from it. there is no incentive to change a system that provides them benefits.
 
America's employer is small business, not Wall Street.

Obama should have focused on small business and job creation rather than bailing out losers who constantly thumb their noses at regulatioin .. AND who also FUNDED Obama's path to the White House.
 
SmarterThanYou said:
that will never happen. the fat wallets have learned first hand that the government will ensure their financial survival at our expense. The upper and middle classes benefit from the bailouts by keeping most of their jobs. The lower classes have no power and will suffer the most from it. there is no incentive to change a system that provides them benefits.
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The lower class would be the first to have their jobs cut. And they pay the least taxes for it in the end.
 
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