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No_hite_pls
Joined: 05 Mar 2007
Location: Don't hate me because I'm right
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 Posted: Tue Mar 05, 2013 10:35 pm Post subject: Dow hits a record high,in other news Obama is a socialist |
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http://www.reuters.com/article/2013/03/05/us-markets-stocks-idUSBRE9240EG20130305
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A new high for the Dow Jones Industrial Average is an important milestone on the road to recovery, no doubt. The stock index has more than doubled from its low in March 2009, making this one of the strongest bull markets in history. At the same time, regular people have hardly benefited.
The Dow Jones Industrial Average gained 125.95 points on Tuesday to close at at 14,253.77, breaking its previous high close of 14,164.53 set on October 9, 2007. The Dow has recovered all of its losses from the financial crisis and recession, gaining 119 percent from its low in March 2009, making this the third-strongest bull market for the Dow since World War II.
Though the Dow has erased its memories of the crisis, many households aren't so lucky: Neither jobs nor wages have regained their pre-crisis highs. Home prices are still nearly 26 percent below their level when the Dow last peaked, and about 14 million homeowners were underwater on their mortgages, at last check.
The job market has recovered only 5.5 million of the 8.7 million jobs lost during the recession, making this the worst labor-market recovery since World War II.
With the job market weak, worker wages have stagnated. Inflation-adjusted average income is 8 percent lower than in 2007, when the Dow was at its previous high, |
http://www.huffingtonpost.com/2013/03/05/dow-record-high_n_2783096.html
Conservatives, how have Obama policies brought socialism to America? If Obama is a Socialist or even a lefty then why are wages 8 percent lower than before he was elected? Why is the stock market at record high if Obama and the Democrats are lefties or socialists? |
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akcrono
Joined: 11 Mar 2010
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| Posted: Tue Mar 05, 2013 11:02 pm Post subject: |
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| Because the current republican party has no logical argument, and must resort to rhetoric and ridiculousness to persuade voters. |
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comm
Joined: 22 Jun 2010
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| Posted: Wed Mar 06, 2013 1:37 am Post subject: Re: Dow hits a record high,in other news Obama is a socialis |
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| No_hite_pls wrote: |
| Conservatives, how have Obama policies brought socialism to America? If Obama is a Socialist or even a lefty then why are wages 8 percent lower than before he was elected? Why is the stock market at record high if Obama and the Democrats are lefties or socialists? |
Corporatism is socialism for the rich and Barack Obama is the most corporatist President the U.S. has ever seen.
Did you notice how many people were held accountable for the crimes that resulted in the financial crisis?
And after the fallout, how many "too big to fail" institutions were broken up to reduce future risk?
Was it the American taxpayer who got "bailed out", or was it huge corporations?
But specifically, the answer to both of your questions is 'irresponsible monetary policy'. Speaking of which, the minimum wage was $1.25/hr in 1964. Now the metal from those 5 quarters per hour is worth over $25.
It seems to me that you're asking: "Why don't conservatives like Obama when he's acting like a Republican?" When you should be asking: "Why aren't liberals angry at Obama for acting like a Republican?" |
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akcrono
Joined: 11 Mar 2010
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| Posted: Wed Mar 06, 2013 1:59 am Post subject: |
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What irresponsible monetary policy?
I would hardly call Obama more corporatist than any other recent president. It's not like he actually has control over bank breakups or new regulation. Hell, Dodd-Frank is watered down and barely effective, and yet that's a struggle to keep on the books and implement. If anything, he less corporatist than Romney. |
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JustinC
Joined: 10 Mar 2012
Location: We Are The World!
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| Posted: Wed Mar 06, 2013 2:49 am Post subject: |
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Stocks are not at record highs in gold (or anything else, for that matter, except a fiat currency).
Once Uncle Ben invokes negative interest rates and QE20 Obama will have been forgotten, as people start stealing food from each other's kitchens.
The crime wave that hits New York over the coming years is going to make all those "up and coming" neighborhoods look not so "up and coming".
I like to remind all those people who think "real estate always goes up", that much of Brooklyn real estate peaked in the 1920's and collapsed until the mid 1990's.
Think it can't happen again? Here comes the crime, folks. First there are a few murders. Then a few more. Then a few families with kids move away, leaving older people to stick it out. Then a couple homes divide into multi-unit dwellings. Then SRO's. And then it's over for another 3 generations.
Just like last time. |
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akcrono
Joined: 11 Mar 2010
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| Posted: Wed Mar 06, 2013 3:33 am Post subject: |
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| JustinC wrote: |
Stocks are not at record highs in gold (or anything else, for that matter, except a fiat currency).
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Except that the most important markets use currency. The recent drop in gold price should be seen as a positive.
| JustinC wrote: |
| Once Uncle Ben invokes negative interest rates and QE20 Obama will have been forgotten, as people start stealing food from each other's kitchens. |
We've had negative effective interest rates for awhile now. Helps the recovery. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Mar 06, 2013 5:27 am Post subject: |
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Obama is a finance corporatist, and Bernanke's legacy will be record bank profits and record unemployment.
Corporate Profits Are Eating the Economy
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| Corporate profits starting eating the economy around 2003, around the time the housing market started delivering massive profits to finance companies. |
U.S. Banks Had Their Second-Best Year Ever in 2012
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U.S. banks celebrated their second-most-profitable year in 2012 with a whopping $141 billion in net income last year. That's scarcely smaller than the record, $145 billion, set just before the crash, in 2006, according to the FDIC.
[T]he financial industry takes home a third of all corporate profits -- up from 10 percent after World War II. When you build an economy that subsidizes debt through homeownership, gives preferential treatment to investment income, and guarantees that the biggest banks will never fail, you get what you ask for. A country where finance plays by a separate set of rules and runs away with a third of the profit. |
Obama reminds me of that George W. Bush guy. |
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actionjackson
Joined: 30 Dec 2007
Location: Any place I'm at
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| Posted: Wed Mar 06, 2013 6:10 am Post subject: |
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Another thought.
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Just a quick, cranky reminder: Despite what you may have read, the Dow Jones industrial average did not hit a new high today in any meaningful sense.
After adjusting for inflation, the Dow was higher in 2000 than it is today. It was also higher in 2007. It would need to rise another 10 percent or so to hit an all time high in real (i.e., inflation-adjusted) terms.
When reporting on other numbers that change over time, it's routine to adjust for inflation. So when people talk about wages stagnating for American households, it means that, after you adjust for inflation, the median wage is roughly the same as it was 15 years ago. If you didn't adjust for inflation, you would say the median wage has risen by more than 40 percent over the past 15 years. But that would be a meaningless statement.
It's equally meaningless for the Dow. And even if the Dow did hit a real, inflation-adjusted, all-time high, it wouldn't mean much anyway. As our colleague Adam Davidson wrote last year:
The Dow average, drawn out to two decimal places, may seem like some perfectly scientific number, but it's far from it. A small committee selects 30 big companies � I.B.M., G.E., McDonald's, Disney and so forth � and then adds up the price of their stocks. Then the analysts divide it by the Dow Divisor, a misleadingly precise-seeming number formulated to account for things like dividends and splits that right now is, well, about 0.132129493. The resulting figure is repeated throughout the country.
And those are the least of the Dow's problems. More troubling is that it ignores the overall size of companies and pays attention to only their share prices. This causes all sorts of oddities. ExxonMobil, for example, divides its value into nearly five billion lower-cost shares, while Caterpillar has around 650 million more expensive ones. Therefore ExxonMobil, one of the largest companies in history, pulls less weight on the Dow than a company less than a fifth its size.
There are other, less arbitrary indexes of the U.S. stock market, such as the S&P 500, which tracks 500 (rather than just 30) big U.S. companies. The S&P 500, for what it's worth, is below it's all-time highs in both nominal and inflation-adjusted terms. |
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Privateer
Joined: 31 Aug 2005
Location: Easy Street.
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| Posted: Wed Mar 06, 2013 6:21 am Post subject: |
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| It's very clever of conservatives to use the fact that there is welfare for the rich to further their agenda of eliminating welfare for the poor. When corporate welfare is denounced, they can simply agree that reducing 'government interference' is desirable, and cloak their next attack on programs that benefit the public under that heading. Libertarians who oppose welfare, for rich and poor alike, will find that their arguments are persuasive - but for the poor alone. |
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Privateer
Joined: 31 Aug 2005
Location: Easy Street.
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| Posted: Wed Mar 06, 2013 6:25 am Post subject: |
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| Kuros wrote: |
Obama is a finance corporatist, and Bernanke's legacy will be record bank profits and record unemployment.
Corporate Profits Are Eating the Economy
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| Corporate profits starting eating the economy around 2003, around the time the housing market started delivering massive profits to finance companies. |
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Martin Wolf, Financial Times editor, 2011:
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| An out-of-control financial sector is eating out the modern market economy from inside, just as the larva of the spider wasp eats out the host in which it has been laid. |
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JustinC
Joined: 10 Mar 2012
Location: We Are The World!
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| Posted: Wed Mar 06, 2013 7:55 pm Post subject: |
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| akcrono wrote: |
| JustinC wrote: |
Stocks are not at record highs in gold (or anything else, for that matter, except a fiat currency).
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Except that the most important markets use currency. The recent drop in gold price should be seen as a positive.
| JustinC wrote: |
| Once Uncle Ben invokes negative interest rates and QE20 Obama will have been forgotten, as people start stealing food from each other's kitchens. |
We've had negative effective interest rates for awhile now. Helps the recovery. |
That's a little condescending, isn't it? Of course, all markets use currency; the fact that it takes slightly more currency to buy the dow than before, while it takes much more currency to feed your family, heat your home and buy fuel for your car bears addressing.
And, yes, you're quite correct we've had negative real rates for years. But it's more helping the TBTF banks as they can borrow at Bank Rate and lend to the government for an easy profit, maybe also line the bankers' pockets with bonuses.
FWIW I don't blame Obama or Bush as America is now a Corporatocracy. Since the tax breaks for sending jobs overseas were brought in America's economy has been declining, it was just masked by the fake housing boom brought on by the 'Greenspan put' and record-low interest rates. |
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akcrono
Joined: 11 Mar 2010
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| Posted: Wed Mar 06, 2013 8:57 pm Post subject: |
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| JustinC wrote: |
| That's a little condescending, isn't it? Of course, all markets use currency; the fact that it takes slightly more currency to buy the dow than before, while it takes much more currency to feed your family, heat your home and buy fuel for your car bears addressing. |
Apologies if I came off as condescending. You seemed like you were headed in the direction of returning to the gold standard.
There's no question that costs need to be reflected into how much the currency is valued. But that's what the CPI is for. As actionjackson correctly pointed out, the Dow as a record is not true when indexed for inflation (nor is it a particularly good measure of the economy as a whole). However, aside from fuel and healthcare, the average expenses per family are actually down. Healthcare alone has eaten up any small wage gains the middle class had.
| JustinC wrote: |
And, yes, you're quite correct we've had negative real rates for years. But it's more helping the TBTF banks as they can borrow at Bank Rate and lend to the government for an easy profit, maybe also line the bankers' pockets with bonuses.
FWIW I don't blame Obama or Bush as America is now a Corporatocracy. Since the tax breaks for sending jobs overseas were brought in America's economy has been declining, it was just masked by the fake housing boom brought on by the 'Greenspan put' and record-low interest rates. |
Can't comment too much on that (aside from I agree with you), although it's my understanding that most of the research points to deregulation of the financial sector as the primary driver of the financial crisis. Republicans are STILL fighting tooth and nail against any reform. |
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bigverne
Joined: 12 May 2004
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| Posted: Wed Mar 06, 2013 9:16 pm Post subject: |
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| Can't comment too much on that (aside from I agree with you), although it's my understanding that most of the research points to deregulation of the financial sector as the primary driver of the financial crisis |
Why didn't Obama take any meaningful steps when he first came into office to address these problems? He could have brought back Glass-Steagall or instituted similar measures to break up the banks. I suspect he didn't do anything close to this because either he's in Wall Street's pocket (his appointments would seem to suggest this), or because he has no understanding of the financial system or how it works. Either way, he's useless. |
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JustinC
Joined: 10 Mar 2012
Location: We Are The World!
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| Posted: Wed Mar 06, 2013 9:29 pm Post subject: |
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Ha ha! ^^ That old chestnut? No, it's been proved that coming off of the gold standard was the best thing for every economy to do after the Great Depression.
I don't think CPI is an accurate measure of inflation, it certainly is recorded differently than, say, in the 80s. When the major pushes to inflation are food, fuel and raw materials - none of which are recorded as part of CPI - something stinks to high heaven, in my opinion.
Another expense is education, up 1000% in the last 15 years. There's currently a bubble in student debt at the moment, unless the jobs market picks up for graduates that bubble will blow and cause a fresh crisis. It's likely the harbinger of the next crash in the stock markets.
Deregulation certainly allowed there to be an unsustainable surge in lending, but who initiated that? It was actually started during the Clinton years, but because of a boom in IT stocks it was glossed over. The deregulation continued during the Bush years, but because of a boom in housing stocks it was glossed over.
Now it isn't being rescinded. Why? Because he said she said... No, because America is now a Corporatocracy. American corporations' market has, over the last 20 years, grown with the rapid rising in middle classes in Asia, Russia and South America. But it's cheaper to produce in those countries so they've been given a steroid boost (tax breaks) to move production overseas and get a jump on foreign companies doing the same.
American politicians (and British, European, etc) are in the pockets of the industrialists, globalization has meant multinational companies have no borders and no one to answer to. If one country's politicians won't give them the regulations they want, another one will. Politicians want those companies to stay in their country as this boosts job numbers and taxes, so they get to spend more of our money. The talking heads will back up the corporations by saying 'Free Market good, protectionism bad' but will ignore economies like Korea which has indeed protected its own companies as much as it could have. |
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akcrono
Joined: 11 Mar 2010
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| Posted: Thu Mar 07, 2013 12:14 am Post subject: |
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| bigverne wrote: |
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| Can't comment too much on that (aside from I agree with you), although it's my understanding that most of the research points to deregulation of the financial sector as the primary driver of the financial crisis |
Why didn't Obama take any meaningful steps when he first came into office to address these problems? He could have brought back Glass-Steagall or instituted similar measures to break up the banks. I suspect he didn't do anything close to this because either he's in Wall Street's pocket (his appointments would seem to suggest this), or because he has no understanding of the financial system or how it works. Either way, he's useless. |
Because we live in a constitutional republic, so Obama is not a dictator and cannot do anything he wants. He's advocated for more regulation, but the republicans have been adamant about repealing Dodd-Frank (admittedly weak legislation, but better than nothing). Dodd-Frank was basically the only legislation that could get passed at the time, as republicans have been on a "all regulation is bad" rampage. Why people blame Obama for things the republicans have blocked is beyond me.
| JustinC wrote: |
| I don't think CPI is an accurate measure of inflation, it certainly is recorded differently than, say, in the 80s. When the major pushes to inflation are food, fuel and raw materials - none of which are recorded as part of CPI - something stinks to high heaven, in my opinion. |
Food is included in the CPI
http://en.wikipedia.org/wiki/Consumer_price_index
While the CPI does not directly calculate the cost of fuel or raw materials, these cost changes end up being reflected, as they directly affect the cost of consumer goods.
You might be more interested in a cost of living index, which calculates cost changes to maintain the same standard of living. I prefer these, as they allow for better substitution (such as switching heating fuel or from a gas to electric car). It's similar to a CPI but a little more subjective; CPI-U ("chained CPI") attempts to correct for substitution. I don't think there is a true index that will make everyone happy.
| JustinC wrote: |
| American politicians (and British, European, etc) are in the pockets of the industrialists, globalization has meant multinational companies have no borders and no one to answer to. If one country's politicians won't give them the regulations they want, another one will. Politicians want those companies to stay in their country as this boosts job numbers and taxes, so they get to spend more of our money. The talking heads will back up the corporations by saying 'Free Market good, protectionism bad' but will ignore economies like Korea which has indeed protected its own companies as much as it could have. |
Be careful painting with a broad brush; I can't think of a single group of people that you can paint so broadly. Yes, the majority of legislators are in the pocket of certain business sectors (which is why Obamacare is a watered down shell of what it should/could be), but there are bright spots, like Elizabeth Warren, who has so far been a great example of a good politician. What we need the most would be strict campaign finance restrictions, but there's no way that incumbent legislators would pass legislation that took away a large advantage and cause them lose contributions should it fail. |
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