The Stock Market and Economy Disconnected

A very interesting read here that shows why the stock market is not a good indicator of economic strength, and highlights perhaps another bubble fit to be popped.

Here are some exerts:

There is even more in the main link regarding corporate profits and revenues, etc and so on. The article overall paints a very simple picture of what is keeping the stock market a float; the fed giving money to banks essentially interest free, they have been dumping the money in the markets. Wish I could get free money to ride the market up. It helps hide the inflation propagated by all the Fed money printing, as long as they don't start loaning out the extra cash.

These guys seem inordinately inept or either criminally negligent with what they are doing in my opinion.

 

It's not ineptitude or negligence. It's stealing.

 

Great post! You bring up a very interesting point. Democrats have broken the economy with their deficit spending financing their wealth distribution and social engineering schemes in violation of the Constitution. Interest rates MUST be kept artificially low since any raise in the interest rates will immediately make the federal government insolvent as the interest payments on the debt would balloon out-of-control. The Real-estate market has been destroyed by Democrats. All "investments vehicles" are now manipulated. The printing of money can find no investment to make any return BUT the stock market, which as you point out is overinflated. Soon even that bubble will pop. The elderly traditionally make much of their income FROM interest baring investments. Democrats have destroyed that source of revenue with their Constitutional violations. Basically BECAUSE of DEMOCRATS the standard of living for everyone is on uncontrollable decline that will continue for the foreseeable future; probably for generations!

 

Fortunately, during the Bush/Cheney administration there was no increase in the national debt. The tax cuts for the one percent and the two wars of choice in the Middle East cost the country nothing. The trillions of dollars run up in the past twelve years have all been spent by Obama and the Democrats.

 

Its only stealing if you have a job and some assets, otherwise we like to give the warm and fuzzy name of redistribution.

 

Yep, they know exactly what they are doing. There is a discourse in this country, which asserts that the wealthy are the most productive members of society, and that they drive all economic growth. Since that is the case, all attempts to promote their well being must be taken at every opportunity. This will ultimately lead to the betterment of all. So when the government hands money to the wealthy people, and uses all its power to promote and protect capitalist profit, that is NOT inept or negligent. There is a clear intentionality. They mean to do exactly what they are doing. The challenge is to see that, and oppose it. Not to imagine that they don't know what they are doing, and we must replace them with people that do.

 

You are so disconnected from the reality of the situation in this country it is incredible. Conservatives have won in this country. The right now sets the terms of the debate, and the neoliberal order has dominated now for 30 years. Any failures in the last decade are directly related to the neoliberal order, which is the antithesis of anything that could be called the left. Where you are correct, is that Democrats do bear much of the responsibility for that problem, as they have promoted the neoliberal agenda just as vehemently as Republicans have. Democrats are as much in the business of promoting the interests of the wealthy and corporations as Republicans are, they just need to continue to rhetorically promote an agenda which claims otherwise(even as they do the very opposite of what they say), otherwise people would begin to see the rouse, and would choose to vote for a party which offers a legitimate alternative to the epistemological framework we currently function within.

 

The only significant redistribution which occurs in this country is from the middle class to the wealthy. There is a smaller move to redistribute from the middle class to the poor, but it is insignificant in comparison.

http://www.ft.com/cms/s/2fb17b9e-95...ferer=https://www.facebook.com/#ixzz2P9q7K2SC

 

After the markets' numbers get high enough, the big investors will sell off at tremendous profits. This will cause stock values to drop dramatically, and instead of riding out the fall and waiting for recovery, small investors will sell at a loss. This will let the big boys (and girls) buy at rock bottom prices and start the cycle again.

 

There is a circle of money in big business that does not leave to some of the middle class nor poor Americans.

The other circle of money is welfare from the government, and that takes care of the 47 percent that Romney said were dependents.

So that is what makes the disconnect, America and its economy is polarized between the workers and non-workers.

 

The pile of pennies on the left are mostly for unconstitutional Democrat spending. The pennies on left and in the middle represent the tax money collected. The pile of pennies on the right represent deficit spending. All the pennies together represent the annual budget. As you can clearly see if there were no unconstitutional Democrat spending there would be no deficits. We live in world where spending actually called for in the Constitution as described by Democrats and their puppets as "discretionary spending" while Democrat violation of the Contrition are called "mandatory spending!"

http://www.youtube.com/watch?v=cWt8hTayupE

Democrats need deficits to survive. If the American People had to pay enough taxes to balance the budget, and make principal payments on the debt they would demand spending decreases as their tax rate would be far above any tax rate Americans would be willing to pay. What do you think they demand be cut constitutional expenditures, or unconstitutional Democrat spending schemes?

It's all real simple. If the federal government does not run such a huge deficit and pay interest on such a huge debt interest rates COULD actually rise, and the economy could actually work as designed. It can't because Democrats blew tens of trillions of dollars violating the Constitution.

 

You, as a conservative who obviously has definite solutions for ways to cut and even eliminate the national debt, and at the same time greatly reduce taxes please describe just how you would do this if given the power and the opportunity.

You must be specific though, just telling us you would eliminate social programs is not a solution, because you haven't told us what you would do to take care of the tens of millions of unemployed, underemployed, disabled, and elderly Americans who depend on these programs to stay alive.

 

Yeah...this is sad. Stocks go up, up, up and the fat get fatter, and the working class become the homeless.

I guess the money printing has to end up somewhere., but the bottom will fall out by the end of this month. Wait and see. I await the event with great anticipation and will enjoy the corporate pigs falling skydiving off of buildings by the thousands. Small consolation, I know but, it warms my heart just the same.

 

Romney's failure to appreciate that non-workers are capitalist's casualties probably cost him the election. I suspect, if he had another chance, he'd avoid that error next time.

 

Non-workers are not the casualty of capitalists. This black and white view is BS. Many people who aren't working today put themselves into the position they are in, by not making smart choices, sure some lost jobs because businesses owners needed to cut costs, but many more are not doing well today because of large government and big businesses unholy alliance. That is fascism not capitalism. Under capitalism contracts and private property rights must be protected, when government is used to violate the property rights of some void contracts of others, and to generally put impediments to competition into law its no longer capitalism.

As for the candidates Romney is no different than Obama, both openly support the fed and its actions; and Obama reappointed Bush's fed guy Bernanke. Both are big government proponents, they are enabling and growing the twisted system we see today. Obama just had a better PR campaign, because frankly his actions are a joke.

The feds manipulating interest rate and artificially expanding the money supply have distorted the whole economy, as these things are at its foundation. Changing them has rippling effects throughout the whole thing. Blaming Capitalism for central planning meddlers messing this up... doesn't seem right to me.

 

Where do you think workers pensions are invested?

 

From Australia and you come with that argument? You guys are a freer market then us, less unemployment and will be better off then the US in a few short years. Not to be a jerk, but we outpaced you guys for awhile. Capitalism is doing pretty well down under, it can work again in America too.

- - - Updated - - -

Negative Income Tax + abolish every single social welfare program, corporate subsidy, vouchers for schools, and abolish the minimum wage and all mandatory government workers unions, and price setting and seat fixing unions like the American Medical Association. Done in a day.

[video=youtube;zo9ufzIXN3U]http://www.youtube.com/watch?v=zo9ufzIXN3U[/video]

 

More blame the victim. As for black and white – you might try to develop a more nuanced view of the effects of capitalism. Unemployment is a requirement of capitalism. The required rate can't be too low or too high, but there must be unemployment. This being the case then unemployment is an outcome of capitalism and is, generally speaking, not a personal flaw.

Unemployment for the individual may mean someone leaving school or any other educational institution who is unable to get a job because there are none for which that person is prepared. Unemployment may also mean that a worker has been made redundant and can't find work. Again, it is not a personal flaw.

The unholy alliance of business and government is exactly what capitalism is all about. Capitalism co-opts government for its own use, it was ever thus. In a liberal democracy it is what you see in the US, where corporations have to manipulate public opinion to put pressure on government to bend to their will. In a fascist society business doesn't have to bother.

Capitalism doesn't care about voided contracts and intrusion on property rights, that's par for the course for business in the competitive capitalist economy.

As for central planning – that is simply laughable, sorry, but there has been no central planning, you only have to look at the chaos of the GFC to know that.

 

Yes our brand of capitalism works, but there are extrinsic reasons for that which I may have mentioned. We have a more regulated economy but the touch is fairly light. We can thank a progressive government for that though, were it up to the conservatives here our economy would have been like Argentina's a few years ago.

 

You should get a better lawyer.

 

The higher it rises on speculation and irrational exuberance, the further it falls...

 

Nonsense, Argentina's problems come from government. Your economy is not more regulated then ours, we have millions of regulators. So many regulations no one even knows them. You are talking about back when we dominated you guys in the marketplace, now the tables have turned.

 

Argentina, some years ago, made some very bad decisions about its economy. I am referring to a sheltered, protected economy. Our economy was in a similar state up until the early 1980s. The Hawke Government - in the face of some trenchant opposition from its own party - freed up what was a tired, protected and moribund economy. That effectively stopped us going the way of Argentina in the 1980s and beyond. My point was about a closed economy versus an open economy. Wisely the Hawke Government put in place regulations which avoided the excesses of the neoliberal economy, hence our ability to weather the GFC. Like it or not your neoliberal economy facilitated the GFC, no-one else is to blame for it. You may have regulations but clearly they're not effective.

 

I agree regulations dont work.

What is free market about keeping the cost of money artificially low and subsidizing a sector into a bubble? That was neo-liberals, unless you mean liberals in the socialist sense, and not free market libertarians. Terms are all backwards in the US, here a liberal wants to take your money and spend it on their pet projects. What does liberal mean there?

Closed economies and protectionism does not help anyone. It just makes goods more expensive and protects a certain industry at the expense of all citizens. The US and every country would be better off if they followed the Hong Kong model of no tarrifs at all.

 

An honest person would agree that there are always people that don't have a job because of their life choices, its not blaming the victim because there is no victim in that scenario. I also realize that there are people who are unemployed through no fault of their own.

Unemployed doesn't have to exist for capitalism to exist, thus it is untrue its a requirement of capitalism. Unemployment is more a side effect from human nature than any economic system. Unemployment will exist in any economic system short of killing anyone who doesn't work and or forcing people to do so at the end of a gun. Getting rid of unemployment that way is far worse than anything capitalism has ever given us.

This is true, but not doing anything to better ones self to get skills for a job, or trying to create one for oneself is a flaw.

Once again its not capitalism, its human nature. People always want power, always want wealth, always want more. When an institution exists that has the monopoly on force it doesn't matter what economic system is around it, it will be co-opted for the betterment of a few.

Of course Capitalism doesn't care about voided contracts and intrusions into property rights. It is an economic system, not something with feelings. But it is defined as one with private property and contracts. Any failure in that regard is not a failure of capitalism it is the failure of the people operating in the system. People are unpredictable.

Trying to peg interest rates at a certain point is most definitely central planning. It's trying to control one of the largest factors in an economy, one that helps show risk in the market. Just because they aren't delegating jobs doesn't mean they are not trying to control things and there is no central planning. There meddling is why we get into garbage like this global financial crisis.