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

PoliTalker said:
Hello Flash,

That runs counter to what I've understood.

60% of the consumer economy is the top 20%?

Can you support that claim with a link?
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It makes logical sense. If the top 20% gets an increasing share of the income, it only stands to reason that they do an increasing percentage of consumer spending.

The figures come from the Bureau of Labor Standards. It will take some time to find it. Meanwhile, see this older article explaining why the 2008 recession was slow to recover because of the decline in the purchase of luxury items by the wealthy--it includes that 60% statements.

https://www.nytimes.com/2011/08/04/business/sales-of-luxury-goods-are-recovering-strongly.html?_r=0

BLS also includes the data about Americans spending a smaller percentage of their income on most consumer items (food, clothing, etc.).
 
Flash said:
I understand. I have never disputed that, but that was not what my original post was about. It said that 60% of all consumer spending is spent by the top 20%.--not as a percent of their income but as a percent of all consumer spending.

The number of dollars is not fixed. If the top 20% have large investments in stocks and those stocks make 20% this year, it increased their income. It took nothing away from the bottom 80% because the top 20% increased their income.

But that increased income for the top 20% boosted the economy because they account for 60% of consumer spending. Yes, it would have been nice for all quintiles to increase their income by 20%, but if that doesn't happen they have more jobs because of the increased consumer spending by those at the top. If more consumer spending occurs it benefits the economy whether that money is spent by the bottom or the top. None of this relates to the percent of a person's income spent on essentials.
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No, no and no again. You cannot simply print money without it causing inflation.

The money supply can expand and contract to a small degree, but the number of dollars is indeed a fixed amount. Stock market money is not 'real'. For every stock purchase, there is a corresponding stock sale. But ultimately, the value of a stock is the value of the company. Some stocks gain value, and some lose all of their value. It is ultimately a zero sum game.
 
Concart said:
No, no and no again. You cannot simply print money without it causing inflation.

The money supply can expand and contract to a small degree, but the number of dollars is indeed a fixed amount. Stock market money is not 'real'. For every stock purchase, there is a corresponding stock sale. But ultimately, the value of a stock is the value of the company. Some stocks gain value, and some lose all of their value. It is ultimately a zero sum game.
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I'm not talking about printing money (although we just printed over $3 trillion). I'm talking about an increase in the price of stocks and bonds. That money comes from increased profits of those businesses because consumers bought their products and services. No new money was printed. Look at the current market--it has been making large gains because of the companies made money and more people invested in the market.

If I sell some of my mutual funds right now and make a 20% profit, no new money was printed for Fidelity to send me my money. If I go out and spend that 20% profit I have added to consumer spending and boosted the economy. It doesn't matter which income quintile I am in or what percentage of my income I spend. And I took nothing away from lower income individuals when I took my profit.

What do you mean the money is not "real"? I have been putting money in my IRA for 40+ years and living of off the required minimum distribution since I retired in 2013. That money is real enough to pay my bills. Where was the zero sum?
 
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Hello Flash,

Flash said:
It makes logical sense. If the top 20% gets an increasing share of the income, it only stands to reason that they do an increasing percentage of consumer spending.

The figures come from the Bureau of Labor Standards. It will take some time to find it. Meanwhile, see this older article explaining why the 2008 recession was slow to recover because of the decline in the purchase of luxury items by the wealthy--it includes that 60% statements.

https://www.nytimes.com/2011/08/04/business/sales-of-luxury-goods-are-recovering-strongly.html?_r=0

BLS also includes the data about Americans spending a smaller percentage of their income on most consumer items (food, clothing, etc.).
Click to expand...

I'd like to read that article but don't want to have my email address on their file, nor get more spam. But I'll take your word for it if it comes from BLS.

Even if 60% of the dollar amount of consumer spending is from the rich I would doubt it creates as many jobs as the 40% of consumer spending by the non-rich. It's not like jewelry and fine art creates a lot of jobs.
 
PoliTalker said:
Hello Flash,



I'd like to read that article but don't want to have my email address on their file, nor get more spam. But I'll take your word for it if it comes from BLS.

Even if 60% of the dollar amount of consumer spending is from the rich I would doubt it creates as many jobs as the 40% of consumer spending by the non-rich. It's not like jewelry and fine art creates a lot of jobs.
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The luxury spending is on top of required items such as housing, food, transportation, etc. There is no reason to believe 60% of the spending creates fewer jobs than 40% of the spending.

But it is not necessary to frame everything in terms of higher income v. lower income and blame either for any existing problems.
 
Hello Flash,

Flash said:
The luxury spending is on top of required items such as housing, food, transportation, etc. There is no reason to believe 60% of the spending creates fewer jobs than 40% of the spending.

But it is not necessary to frame everything in terms of higher income v. lower income and blame either for any existing problems.
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Sewing a dress is the same amount of work whether it's fine material or the cheap stuff. If a rich woman buys a $1500 dress it doesn't create any more jobs than a penny pincher buying one at Target.

A lot more money could be spent without creating a correlating number of jobs to the dollars spent.
 
Flash said:
I'm not talking about printing money (although we just printed over $3 trillion). I'm talking about an increase in the price of stocks and bonds. That money comes from increased profits of those businesses because consumers bought their products and services. No new money was printed. Look at the current market--it has been making large gains because of the companies made money and more people invested in the market.

If I sell some of my mutual funds right now and make a 20% profit, no new money was printed for Fidelity to send me my money. If I go out and spend that 20% profit I have added to consumer spending and boosted the economy. It doesn't matter which income quintile I am in or what percentage of my income I spend. And I took nothing away from lower income individuals when I took my profit.

What do you mean the money is not "real"? I have been putting money in my IRA for 40+ years and living of off the required minimum distribution since I retired in 2013. That money is real enough to pay my bills. Where was the zero sum?
Click to expand...

An increase in the price of a stock has nothing to do with actual money. A share of stock is a piece of the company, and the actual value of that stock is tied completely to the value of the company. Period. You cannot pay for anything with a share of stock. You have to sell it, at the price that a person is willing to pay for it. It is a speculative price, not real money.
 
Chaz said:
I just like to see progressives admit that they have a warped perspective on what taxation is.
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Well, when you do that let me know. Obviously you aren't interested in a meaningful discussion. Run along, squirt
 
If you own a bunch of stock you don't have money. You have stock. If you sell, then it becomes money. If it loses all it's value before you sell, then you have nothing.

Nobody has money in the stock market. What they have is stock value.

Those eggs are not chickens, and not all eggs become chickens. They cannot be counted as chickens until they hatch and go peep.
 
PoliTalker said:
If you own a bunch of stock you don't have money. You have stock. If you sell, then it becomes money. If it loses all it's value before you sell, then you have nothing.

Nobody has money in the stock market. What they have is stock value.

Those eggs are not chickens, and not all eggs become chickens. They cannot be counted as chickens until they hatch and go peep.
Click to expand...

What do you consider the money you buy stocks with? (Maybe you're a big baller and only buy on margin. Don't want to rule that out.)
 
After reading through this thread it is quite apparent Concart has no fucking clue what he is talking about. Just trying to bullshit his way through this thread like all others.
 
Ive done quite well throughout the Chinese Covid " Temporary crash" . Then again, I dont rely on government to make my way in life for me,....I instead rely on the good Lord and hard work. Also,....I do think that most people understand this was a manufactured crisis mostly by the left in the hopes of winning an election. Just another reason why Trump will be your POTUS at this time next year as well.
 
Damn Politarder is clueless.
They shut down all small business and you don't understand why giant corps that were allowed to stay open have their stock price go up? Youre too stupid to make posts about this
 
Hello cawacko,

cawacko said:
What do you consider the money you buy stocks with? (Maybe you're a big baller and only buy on margin. Don't want to rule that out.)
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When you buy stock you spend money to buy it. After the purchase you no longer have the money you spent. Once money is spent it is gone. You no longer have money. What you have is stock.
 
Concart said:
An increase in the price of a stock has nothing to do with actual money. A share of stock is a piece of the company, and the actual value of that stock is tied completely to the value of the company. Period. You cannot pay for anything with a share of stock. You have to sell it, at the price that a person is willing to pay for it. It is a speculative price, not real money.
Click to expand...

If I buy stock at $100 and sell for $150, I made $50. That is real money. There is nothing speculative about it if the stock is priced at $150 when I choose to sell. If it is a mutual fund it is a piece of hundreds of companies. Or, if I buy bonds they are going to pay me regular interest payments in real money. Some stocks pay me regular dividends without having to sell that stock.

Fidelity has been sending me real money for several years. That is my retirement income plus Social Security. If I had invested my SS contributions in the market instead I would have over twice the income I have now.
 
PoliTalker said:
Hello cawacko,



When you buy stock you spend money to buy it. After the purchase you no longer have the money you spent. Once money is spent it is gone. You no longer have money. What you have is stock.
Click to expand...

I haven’t followed every post ITT. Was someone questioning how the process of purchasing a stock works?
 
Flash said:
If I buy stock at $100 and sell for $150, I made $50. That is real money. There is nothing speculative about it if the stock is priced at $150 when I choose to sell. If it is a mutual fund it is a piece of hundreds of companies. Or, if I buy bonds they are going to pay me regular interest payments in real money. Some stocks pay me regular dividends without having to sell that stock.

Fidelity has been sending me real money for several years. That is my retirement income plus Social Security. If I had invested my SS contributions in the market instead I would have over twice the income I have now.
Click to expand...

Yes, you have to SELL the stock to realize the gain. Your gain is someone elses loss. Unless of course the speculative stock price grossly overstates the value of the company. But that is the only real asset behind a share of stock. The value of the company. Period, end of story. I get that you don't understand it, but that doesn't mean I'm wrong. It just means you're uneducated and don't get it.
 
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