I find the DOW surge to 10,000...OFFENSIVE.

[CoffeeCat]

I am willing to be enlightened if my thinking if flawed. I do understand that many
middle-class and hard-working people have their money invested in the stock market.
So, it's not like I want the DOW to crash.

However, how can Wall Street be boombing when the lower 90 percent is crashing? So many around me
are unemployed. I live in the suburbs, where the lawns are manicured. Most of my unemployed friends
have college degrees and were making decent salaries. Many of them have been unemployed for more
than a year, and send our resumes and search for work constantly.

They are suffering.

Our family took a pay cut for six months. We're still trying to recover from that loss of income.
Others are so afraid of losing jobs and corporations aren't hiring or giving our raises. Forget bonuses
or other perks.

Just this week, our state announced across-the-board 10 percent cuts. No agency, department
or institution is safe. We just had cuts two years ago, so this means that jobs
will be cut. There was a local news story about law enforcement being cut--so people
are warned--that it will take law enforcement longer to arrive on the scene at accidents or
911 emergencies. GREAT.

Everything around me is either downsizing, afraid of bracing for deteriorating times.

I find it a little offensive that Wall Street is throwing confetti and popping champagne corks--while
they handg out bonuses by the truckloads.

I don't get HOW this can happen. Doesn't the consumer drive corporate profits, which in turn--drives
up stock prices? How does Target make money if we aren't spending? How does Nabisco, Kellogg's
and General Mills make money when most people have switched to generic? How do companies make
money when consumer spending has contracted? Again, I don't get it.

Does Wall Street no longer need the petty consumer to thrive? Are we being left behind to count our
pennies while the fat cats scream, "So long suckers! We figured out how to succeed without you!"?

I really don't get this, and I really don't like it. I want us ALL to succeed. It's not like I
want the DOW to tank and stockholders to suffer. I just resent the complete chasm between
the lavish success of corporations and the struggles of 90 percent of "We The People".

Frankly, I'm offended.

Again, I'm willing to be enlightened if I'm wrong to feel this way...

[spanone]

1. there are many people 'little people' who are invested in the stock market

i'm sure they are not offended

[Hello_Kitty]

8. I used to be one of them. Until I had to sell my stock and cash in my 401k to live.

That stock market bounce isn't helping me much.

[Thickasabrick]

60. Me too - I couldn't wait. I dropped out when it was 9.5 - it really

sucks.

[janx]

83. This explains some of your other posts.

I have been through that as well, and I know how tough it can be. But good news from one segment of the economy is not bad news; just because it doesn't affect you directly now doesn't mean it's a bad thing--it may benefit you indirectly, eventually. It doesn't affect me now much either, although I have a public employee retirement account with a tiny amount of money in it.

:hug:

[PassingFair]

10. They will be when the bubble pops again.

The gains are a mirage.

Eventually the whole thing will collapse
because the bankers and investors have
sucked all the money away from REAL production.

[yourout]

36. Amen brother.....they are rebuilding the house of cards and the next gust of wind.....

may completely flatten it.

[vadawg]

14. i will be happy if the rise continues over the next 20 years or so

though if you want to retire today or in the next few months then you have to be happier than you were.

[ipaint]

22. Nearly half of Americans reported incomes of less than $30,000

and two-thirds make less than $50,000. Of those who make under 50,000 70% have less than 5,000 in retirement and most people are living paycheck to paycheck.

http://www.nytimes.com/2007/08/21/business/21tax.html?_r=1


Q8. On average, what percentage of your household’s income do you save every year for retirement
—0% or nothing, 1% to10%, 11% to 20%, or more than 20%?

UNWEIGHTED BASE 1001
WEIGHTED BASE 1001
0%- 28%
1% to 10%- 33%
11% to 20%- 16%
More than 20%- 8%
Already retired (VOLUNTEERED) 8%
Don’t know 6%

Refused 2%
http://www.nfcc.org/NewsRoom/FinancialLiteracy/files/2008SummaryReportTopline.pdf


Counting down the hours until payday? You're not alone.

As the economic downturn trudges on, many workers are struggling with household budgets. About six in 10 workers -- 61% -- report they always or usually live paycheck to paycheck just to make ends meet, compared with 49% last year and 43% in 2007, according to a new nationwide survey of more than 4,400 workers by CareerBuilder.

http://blogs.moneycentral.msn.com/smartspending/archive/2009/09/22/60-living-paycheck-to-paycheck.aspx

[rucky]

25. I gamble a bit, too.

But it's not my retirement plan.

[girl gone mad]

52. They should be.

In fact, offended isn't even the right word. Anyone who has been invested in this market should be downright angry at the money that has been stolen from them over the last decade.

Here's how the DOW has done in real dollar terms:

[TexasObserver]

2. A stock purchase is a bet, and the "bets" reflect long term optimism.

The stock purchasers who are pushing up the prices of stocks in the DOW are doing so because they think they need to invest and lock in today's number for their stock. They do so because they expect the stock to go UP over the next six months to a year, or longer.

When people buy stock, they are hoping it holds its value better than cash would.

[slackmaster]

7. If you buy stocks as a gamble, you're not doing it right

There is a big difference between gambling and investing.

When people buy stock, they are hoping it holds its value better than cash would.

Wealth preservation is only one of several reasons people buy stocks and other investments. Other reasons include capital appreciation and income. I suggest you learn about it before you buy anything.

[TexasObserver]

21. I stated the proposition correctly.

Every stock purchase is a bet that the stock will go UP, not down, that it will hold value better than inflation or cash, and that it may produce either cash flow in the form of dividends, or it will appreciate in value.

It's a bet, a gamble.

[slackmaster]

27. I'm going to suggest a book for you to read, and please don't take this as an insult

I have a copy and have read it myself. The fifth edition is available now.

[TexasObserver]

93. Thanks, but I've done very well at it.

[slackmaster]

99. The only things I've figured out well are precious metals and collectable firearms

I seem to know when to buy them and when to sell them.

[TexasObserver]

100. the key is finding a niche you understand reasonably well

Sounds as if you've found yours.

Doesn't matter if it is metals, or currency, or bonds, or growth stocks, or real estate.

[trackfan]

40. It is a bet.

The odds may be greatly in favor of making something on that bet. But it is not a 100% lock, and therefore is a bet. If it were not a bet, there would be NO way to lose. A bet with odds of 1-500 is much safer than a bet with odds of 1-1, but it is still a bet.

[imdjh]

17. But what are they buying on? The promise of the credit card collapse? Next round of foreclosures?s

How about the fact that car sales will be flat as pancake?
Even gun sales should be in the toilet soon because of the panic buying of the last year.

Why is this stock market climbing? Why is APPLE selling for 191 when it doesn't even pay a dividend? Why is Citi at five times its low when it is in the toilet?

[girl gone mad]

57. Because the $$Trillions the Fed injected into the banking system..

had to go somewhere.

As I told people during the TARP debate, the banks weren't about to increase lending. They were always going to do whatever would make them the largest short term profits, and it turns out that was speculating in the stock market.

[lpbk2713]

18. Precisely. It's not much more than a crapshoot.

Some like to think of it as "educated guesswork" but it's not even that.

[slackmaster]

24. My mom has been successful at investing in stocks for a long, long time

It's not educated guesswork for her. She does a lot of research into individual companies and the market sectors that they serve.

If your stock picks are guesses, you're really not doing it right.

[TexasObserver]

28. Each investor has to pick a strategy that works for them.

It sounds like your mother is very studious, and that definitely matters.

[TexasObserver]

26. Like any gambling, it's mainly knowing when to take your winnings and leave the table.

That's the part most cannot do.

I know people who hung in there and watched their retirement funds collapse as the DOW dropped from 14,000 to 7,000. They could have sold and gotten into cash any time, but refused to do so. That's just like people who can't walk away when they're winning at gambling.

[mnhtnbb]

32. And it's also knowing when to hold 'em rather than fold.

On that long ride down, if you're taking dividends in stock, or on a program of average cost buying,
then you're at least adding to your holdings at lower cost.

The whole idea is to buy low, sell high--not buy high and sell out in a panic when things drop.
It's a roller coaster ride not for the faint of heart and if you can't handle the stomach churning drops,
then you shouldn't be on the roller coaster in the first place.

[rucky]

69. There may have been a time when you could read a prospectus

or quarterly/annual report and get a pretty good idea of the VALUE of that company/stock. The peaks and valleys we've been seeing since at least the dot-com boom has no reflection on the true value of a company - it's all speculation.

[louis-t]

3. I also suspect this will be all the oil speculators

need to drive the price up to $100 plus range.

[slackmaster]

4. Something like half of US citizens own stocks either directly or through mutual funds

Millions of people in the middle class benefit from rising stock prices.

[quiller4]

104. The figure is higher than 50% now when you consider indirect

investment through pensons as well as individual retirement plans. A rise in stock value is a good thing for all because publicly held companies rely on rising stock prices to finance re-hiring. Thus market increases benefit more than just those invested.

[NRaleighLiberal]

5. Anyone with a 401K, IRA, or mutual funds benefit from the market rise.

And I certainly understand that this doesn't include everyone- but it is certainly more than an extreme minority.

[WeDidIt]

6. Employment figures are a lagging indicator.

The fact that the Dow broke the psychological barrier of 10,000 is really good news. Much of the decision making at management levels of corporations are driven by such psychological factors.

Because this psychological barrier has finally been broken, it's quite possible that upper management will begin to loosen the purse strings and start hiring where they formerly had freezes in order to meet the goals of expected growth.

Simply breaking this barrier alone could be enough to spark job growth in the next couple of months, leading to an early end to the abysmal jobs report and sparking growth across all sectors. This wold feed on itself and we could be in for a couple of boom years economically.

[MineralMan]

11. Exactly. The market is a leading indicator.

Beyond business investment, individual investors may start breathing a little easier and spending more as consumers. More help.

Nothing's certain, but the uptrend has been going on long enough to indicate recovery.

[girl gone mad]

61. "The market is a leading indicator."

Prove it.

[Hello_Kitty]

13. But why?

Where is the immutable law that jobs must lag behind the stock market? The government could step in right now and put everyone to work on public works projects.

[WeDidIt]

19. Because when revenues decrease, expenses must decrease in order to maintain profitability

Thus, jobs are lost. When revenues begin to go up again, a company must prepare for extended growth, thus jobs are created.

The growth in the economy begins before the companies can ease up on the expense side in order to drive further growth, thus job creation always follows behind revenue and profitability growth. It's that growth that demonstrates the end of a recession, but the growth must happen before companies begin to create new jobs again to promote further growth.

[Hello_Kitty]

29. But as the OP points out, how are they growing if no one is buying anything

And millions are out of work? A company can have an increase in revenue from a drastic cut in expenses - i.e. outsourcing a bunch of jobs - but that doesn't tell you anything about the long-term health of that company, or of the economy. There's a reason the phrase "jobless recovery" entered the vernacular. That's what happens when people at the top recover their money but the ones at the bottom don't recover their jobs.

Edit to add: At any rate, the government could put millions of people to work right now if it wanted to, which would be good for Main Street now and Wall Street in the near future. But the greedy-ass short term thinker Friedman koolaid drinking assholes won't let that happen.

[WeDidIt]

39. Public companies must provide earnings reports quarterly

These earnings reports are calculated into productivity calculations made by the government.

By all indications, the economy is growing. The economy is growing because people are buying things. It's not at the same rate as before, but there is growth in the economy. By definition, recessions occur where there is a contraction in the economy, or the opposite of growth.

So claiming that "no one is buying anything" is false. People are buying things, else there would be no growth. Now that there is growth, companies will have no choice but to begin hiring again in order to acccommodate further growth because investors demand growth each and every quarter, else they sell your stocks.

And claiming that all of the jobs lost were outsourced is absolute nonsense. Companies outsource to relieve themselves of duties that are not within the core competencies of the company. You must also understand, outsourcing does not necessarily mean offshoring, and offshoring can still be insourced (i.e. within the same corporate structure).

To outsource a function or service is to hire a third party comapany to fulfill that function or provide that service.

To offshore a function or service is to move that function or service to another nation.

So a company can offshore a function or service without outsourcing it and it can outsource a function or service without offshoring it.

The fact of the matter is, nearly all of the jobs lost during the Great Recession evaporated. They no longer existed because the contraction of the economy decreased revenues for companies and thus jobs were eliminated outright.

The offshored outsourcing that was done by so many companies in the past decade demosntrated little success because most of it was not done intelligently and thus costs were increased or good will with customers was decreased. When done properly, it can lead to additional growth within a company and actually create new, better jobs domestically due to the growth while the old, lower skilled postiions are moved off shore to a different company.

[Hello_Kitty]

42. More MBA hogwash.

And what does that have to do with my point that the government has the capability to put millions of people to work on badly needed projects right now?

[WeDidIt]

47. Ah, the ad hominem

You cannot argue the facts, so you proclaim my assertions "MBA hogwash".

And the fact is, the government could put millions to work, but it is cost prohibitive and would devalue the dollar to the point of extinction. Plus, it is unsustainable so for an enormous cost in debt, you ahve only a temporary solution. The government's role is to drive growth by spending, thus forcing public companies to create new jobs. The new jobs create more demand for goods forcing additional growth and additional new jobs.

Real job growth can only come from the private sector.

[Hello_Kitty]

54. The nuclear power plant in my state having a meltdown would be cost prohibitive too.

So let's just go ahead and recertify it for the umpteenth time and cross our fingers because putting unemployed people to work right now to do the maintenance on it would be so expensive

I can think of other things that are costly. Like the fact that 1/3 of the kids in my state drop out of high school. It would be so expensive to spend some money now to rehire laid off teachers and equip the schools with computers and labs. Far better to save our pennies now and spend a lot more later to incarcerate those kids.

And hey, this health care reform thing is going to cost some money too so let's just scrap it and stick with the status quo, while we await the glorious recovery that the Almighty Free Market is sure to bring us.

[Statistical]

63. There you go with the false analogy.

This isn't about free market.

This is about the US maxed out the national debt credit card on stupid shit a long time ago.

Then China nicely gave us a credit line increase during this recession because we have been a good customer.

WE DON'T HAVE THE MONEY!
WE DON'T HAVE IT!

If isn't like we are sitting on this trillion dollar money pile and are saying "not yet". We don't have the money as a country and all our creditors are very concerned about the $11 trillion we already borrowed.
Nobody is going to lend us a couple trillion more just because we ask nicely. The crashing dollar is a sign that the world markets are saying. "HEY US, STOP SPENDING MONEY YOU DON'T FUCKING HAVE!".

Would it be nice to have an emergency fund? Hell yeah. Would it be even nicer to have a sovereign wealth fund like many countries have? That is lend money and collect interest each year rather than borrow money and pay interest. Of course it would be.

But here today, Oct 14th, 2009 we don't have that. We are BROKE! So unless you got $3 trillion under your mattress you forgot to tell us about we have reached the limit of spending other peoples money.

[Hello_Kitty]

71. So do you oppose the stimulus and health care reform?

We're having to borrow money for both of them. The idea behind the stimulus is that it will pay dividends in the near future (and appears it may be already) abd the idea behind HCR is that eventually it will bring down health care costs. But both of them require us to spend money up front that, as you rightly point out, we don't have.

[Statistical]

73. We already borrowed the money for the stimulus.

Your idea (which no country has ever pulled off) for govt to replace all private spending and avoid a recession would cost a magnitude more than HCR. HCR would look like a "cheap option" compared to the federal govt propping up employment completely via spending.

There is a limit on how much we can borrow.... or more accurately how much we can borrow at rates that don't destroy us. Remember we have $11T in revolving debt. We can't pay it off in one payment so each month some of it comes due and we sell new debt to pay off the old ones. It operates much like a credit card. Piss world lenders off by devaluing the dollar to much and they demand higher rates. Imagine what interest is on $11T at 7%, 9%, 15%.

Many countries with devalued currencies pay that much in interest. $11T at 15% would result in 100% of all current tax revenue going to interest payment. We would need to double tax revenue just to keep current level of spending going.
Your line of thinking is the same that has destroyed currencies over time. When Germany devalued its currency into nothing people felt back into a corner and began WWII. Think it couldn't happen here?

[Hello_Kitty]

78. WTF??

Your idea (which no country has ever pulled off) for govt to replace all private spending

Where did I say that? I said that the government could put people to work right now. Those people would have money, that they would then be able to spend - mostly in the private sector. You act like government spending to stimulate a moribund ecomomy is so alien a concept. Isn't that what FDR did? Were he and Keynes wrong?

[Statistical]

81. Um we did do that its called the stimulus.

You seem to think govt stimulus can be unlimited.

It could likely be larger even "fat cats" like Warren Buffet wanted to see a stimulus about 2x as large however there are limits on how much a country $11T in debt (450% more than any other country in the history of the world) can borrow.

Maybe if we hadn't racked up trillions when the economy was booming we could borrow more now but the reality is we borrowed about all we can afford (likely more than we can afford).

[Hello_Kitty]

89. Too much of the stimulus went to tax cuts

Which don't give the kind of ROI as other kinds of gov't spending. But they did it in attempt to compromise with the GOP (who didn't give us a single vote anyway). Not all gov't spending is equal, as I'm sure you know.

[sabrina 1]

102. The military is still hiring! We always have money for the war

machine. How about ending the wars and spending THAT money on education, on infrastructure, healthcare etc. so that people don't have to join the military to try to survive.

The Stock Market is nothing more than giant Casino. I hope all those who lost their life savings over the past several years won't fall for it again.

They don't just bet on companies succeeding, they bet on failure also.

How about this country starts producing things people need rather than pieces of paper that provide nothing other than the thrill of possibly making money? As far too many have found out, you can't eat those bets when you're hungry.

[janx]

48. The explanation you were given took some time. It was

well thought out and made a sincere attempt to answer your question. To to react to it by calling it MBA hogwash is unfair and actually very rude.

[Statistical]

43. People ARE buying things.

The GDP likely turned positive in Q3. Consumer spending (excluding autos) was up last month.
Industrial utilization turned positive 3 months ago.
Housing prices have risen for 2 months in a row.
Number of houses sold bottomed almost 4 months ago.

The evidence that we hit bottom is there (if you are willing to look for it).

Companies OVERCUT workforce (and production capacity) demand is now higher than capacity. At intel for example in Q3 they SOLD MORE chips then they made. How is that possible? They "stockpiled" chips people wouldn't buy in Q1 & Q2. Hwoever it is only a matter of time before they RUN OUT on inventory. You can only make 1 million widgets and sell 2 million widgets before you run out right?

So how will Intel avoid running out? (light bulb moment)

By increasing employment. That increased employment leads to more spending which causes other companies inventory to shrink and they increase employment..... etc etc etc etc

However like a locomotive getting back to full speed it takes time. Usually the lag is about 12-18 months from when stock market bottomed. In the meantime some companies are slower in the cycle and they are still cutting employment. Intel hires 1000 new people but xyz corp fires 2000 so unemployment still sticks up.

You can believe all you want that magically jobs can come first but that doesn't make it true. The world has been through dozens of recessions and depressions and it always works the same way.

[WeDidIt]

51. Thank you.

That was a well though out explanation.

[janx]

58. Both you and Statistical have produced some great

explanations, and I mean that sincerely. I'm pretty ignorant of economics but have become very curious recently--so I appreciate the posts.

You have both avoided the jargon and pomposity of the cyber analysts. :hi:

[datasuspect]

55. people ARE buying things

. . . at the dollar store.

but hey, they are buying things.

[Hannah Bell]

106. wages dropped again.

[A HERETIC I AM]

30. Does a large Federal Debt bother you?

Because the Government can't just "create" jobs without being able to pay for them unless you and everyone else has no problem with a larger government debt.

Where is the immutable law that jobs must lag behind the stock market?

Let's say you own a small Dry Cleaner. Business has slowed considerably over the last two years because even though most of your patrons prefer clean clothes, many of them have been wearing their shirt/skirt/blouse/suit for longer periods before they bring them to you for cleaning.

You've had to lay off one of your shirt pressers and one of your dry clean machine operators and you and your Significant Other have picked up the slack by going from 70 hours a week to working 90 hours a week just to keep the doors open.

Business is now beginning to pick up. Customers are bringing their shirts to you after wearing them only two days (when last year they were wearing them 5 days and or ironing themselves) and overall volume has picked up. You aren't out of the woods yet, but business is getting better.

If your Dry Cleaning business were publicly traded, me and all the others who might be interested in your company are inclined to believe, based on the fact that you have told us business is picking up, that in 6 months from now, you are likely to be doing much, much better and will probably have hired back that presser and machine operator. The group of people interested in your stock are now asking more to sell your shares and are willing to pay more to buy them because of this new information.

If you bring those two people back too soon, the wages you must pay them might possibly force you to stay at a just breaking even point or even lose money. If you wait 3 months, you're likely to have been able to sock a bit away in the company account and be in a better spot to hire them, or business will have picked up considerably to the point where you can fully justify putting them back on.

Does that make any sense to you?

[Hello_Kitty]

34. Um, I didn't need an explanation of how the stock market works.

But to borrow your dry cleaner analogy for a bit, what if the dry cleaner had to go out of business because their former patrons couldn't find jobs to replace the ones they got laid off from and their unemployment benefits ran out and now they can't even bring the shirts in once in a while because they're broke and too despondent to go on interviews anyway?

Does a large Federal Debt bother you?

Not as much as knowing that one of the largest nuclear power plants in the West, which is located in my state, should have been decertified decades ago but continues to get recertified and badly needed maintenance keeps being deferred. Crumbling infrastructure bothers me more than federal debt. So does millions of people being out of work and not having health care.

Edit to add: The main difference between people like you and people like me is that I believe the economy should serve human beings. You seem to believe the opposite.

[A HERETIC I AM]

44. LOL....no, of course not.

You've got the investment world by the tail, haven't you?

But to borrow your dry cleaner analogy for a bit, what if the dry cleaner had to go out of business because their former patrons couldn't find jobs to replace the ones they got laid off from and their unemployment benefits ran out and now they can't even bring the shirts in once in a while because they're broke and too despondent to go on interviews anyway?

Then I guess the mom and pop dry cleaner would be out of business and the rest of your run-on, irrelevant sentence wouldn't fucking matter to them would it?

Not as much as knowing that one of the largest nuclear power plants in the West, which is located in my state, should have been decertified decades ago but continues to get recertified and badly needed maintenance keeps being deferred. Crumbling infrastructure bothers me more than federal debt. So does millions of people being out of work and not having health care.

Nope, no explanation needed here, either. Particularly avoided is the difference between the asset of a Utility company and "crumbling infrastructure".

Edit to add: The main difference between people like you and people like me is that I believe the economy should serve human beings. You seem to believe the opposite.

Actually, the main difference between people like you and people like me is that I don't make broad assumptions on what you believe based on a single post on a message board. I will say however that is it becoming easier with each of your posts.

[Hello_Kitty]

50. Name an insurance company that insures nuclear power plants.

I'll answer that for you: None. Uncle Sam underwrites all nuclear facilities. When there is an incident at a facility, it is the government that cleans it up, not the utility company. Moreover, nuclear energy is the most heavily taxpayer subsidized form of energy there is. That's why it's "crumbling infrastructure". For someone who acts as smart as you do, you showed yourself to be remarkably ignorant there.

[Statistical]

66. BS.

http://en.wikipedia.org/wiki/Price-Anderson_Nuclear_Industries_Indemnity_Act

Each nuclear plant has a $300 million private insurance policy. This is a requirement of the combined operating license. Without it the reactor can't operate.

In case of claims >$200 million all the power plant providers contribute to a "mutual insurance fund" which has $10 billion in it.
If AND ONLY IF both the $200 million and the $10 billion is exhausted does the federal govt step in.

To date taxpayers have not paid a single penny in claims. This backstop hasn't cost you or me or anyone a single dollar. It is only theoretical in case hypothetically there every was in the future an incident which depleted the fund.

Utilities most certainly do pay to maintain and clean facilities. Not only that utilities pay the govt to dispose of nuclear waste. Yup they pay 1/10th cent per KWH. To date the federal govt has collected nearly $40 billion in waste disposal fees. They haven't built the repository but they keep charging the utilities. Every single kwh. Doesn't matter that they haven't (and may never) provide a service for that money they still charge them.

[Hello_Kitty]

76. That coverage is a pittance

However, critics of the Price-Anderson Act question whether the coverage it provides is adequate. A 1982 Nuclear Regulatory Commission study found that a severe nuclear accident could cost as much as $560 billion in today’s dollars. The $9.3 billion provided by the industry would therefore cover less than two percent of the damages incurred in such an accident, leaving the industry largely immune while the government foots the vast majority of the bill. “The nuclear industry is the only industry in America that is absolved of any guilt or liability for any accident, even if it is their own fault,” said Representative Shelley Berkley, D-Nev.

http://www.yuccamountain.org/fall01.htm#price


IOW, we taxpayers underwrite the nuclear industry.

[Statistical]

77. At no cost. n/t

[Hello_Kitty]

80. Until something happens.

Meanwhile, let's go ahead and recertify that plant.

[Statistical]

82. I got no problem with them certifying the plant.

US nuclear industry is never closely regulated.
Of course I am sure you support building newer safer Gen III plants like the AP1000. Build enough of them and we can shut down the oldest Gen II plants early.

The industry can count on your support right? If not then it kinda makes sense why they recertify them....

[Hello_Kitty]

90. I'm ambivalent about nuclear energy but I understand it's not going anywhere.

Of course I am sure you support building newer safer Gen III plants like the AP1000. Build enough of them and we can shut down the oldest Gen II plants early.

Rather surprised you'd even suggest such a thing since it would cost money. I thought we couldn't spend money.

Given that I live in AZ, I'd like to see some investment in solar and wind. I know, crazy talk considering we have more than 300+ sunny days a year.

[Statistical]

41. No they couldn't. we can't afford it.

The US economy contracted 3%.

We have a nearly 15T economy. 3% of 15T = 525B. Likely from begining of recession to getting back to full employment is going to be about 4 years. $525B * 4 = $2.04T.

That is theoretically what it would take to replace the loss in output from private sector. However we live in real world. Tack on anoter 20% for fraud, waste, and abuse. Then tack on another 15%-20% due to dollar devaluing from spending $2T we don't have. Finally even if govt had that money it would be impossible to spend enough of it up front. "Getting up to speed" takes time and that increases cost. If theoretically we had $3T we likely could avoid a recession and put jobs BEFORE the recovery in GDP.

We don't and we can't.

A govt at best can reduce the severity and length of recession.

[Hello_Kitty]

46. Meanwhile, the nuclear power plant near me will be recertified again.

Gee, when the bills start coming due for all the crumbling infrastructure and long-deferred maintenance all over this country, it won't be expensive at all! :sarcasm:

We could be putting people to work right now to fix it but oh no, the MBAs and econ majors trot out their nifty charts and equations to show how the Almighty Free Market just needs to be given one more chance to make it all work.

[Statistical]

49. That is the problem of running of deficits durring the good years.

We have less options during the bad years.

I am not saying it is the best method but it simply is impossible. We don't have the money and foreign entities are unwilling to buy that much debt. They barely are accepting the debt we are issuing.
The massive decline in the dollar is an indication of what the world thinks of dollar back entities. Another $3T on top of what we already have is simply not possible.

This has NOTHING to do with the free market. This country is broke. When you are broke you can't spend more than what people are willing to lend you. And China (think Capital one) is raising our minimum payment and declined raising our credit line. Until we pay down the debt (at least to a "modest" $6-$7T) and strengthen the dollar via monetary (raising interest rates) & fiscal policy (not fucking spending money we don't have = balanced budget) we have very little choice in the matter.

[ginnyinWI]

9. last year we lost half our retirement savings.

We had most of it in the stock market. We retire in eight years. Just hanging on, waiting to recover what we lost. Stuff we had bought at 27 went down as low as 6 (!!) last spring. Today it is up to 16.

[A HERETIC I AM]

15. Just curious. Did you buy more at 6? n/t

[ginnyinWI]

95. no--we need to diversify--

not good to have too much of one stock. Besides it looked pretty bleak back then--who knew if it would go even lower.

[mnhtnbb]

33. Facing retirement in 8 years you are way too heavy in equities. I hope

you are rebalancing. Most pros recommend within 5-10 years of retirement you shouldn't be more
than 30-40% in equities.

[ginnyinWI]

96. yes, definitely!

We were way to heavy into the stock market. Hard to take it out when it's going up, up, up, but then the bottom fell out and we got bit.

[Statistical]

68. Honest question? What are you "mostly" in the stock market

Risk should decrease the closer to retirement due to the simple fact that you have less time to recover from any loss.

A 20 year old has 40 more years to recover any losses. A 50 year old... not so much.

Please don't take it as an attack but anyone close to retirement should be down <30% in equities and have substantial cash (5 years worth) so that you don't have to sell anything and can live on the cash while assets recover.

[ginnyinWI]

97. no offense taken.

You're right. And we've learned a lesson.

[Swamp Rat]

12. What "middle class?"

We are exponentially disappearing from the ranks.

[Warpy]

16. Don't worry, it won't last

because no matter how much the wealthy shuffle around stocks at the top, no company is going to survive long without customers and neither will the good times on Wall Street.

Unfortunately, we've got a long way to go before this finally dawns on them and they talk themselves into giving us a break for a decade or so before they start to steal it all back.

Earnings on those inflated stocks are going to be piss poor until the economy is set back on a rational course. The supply side is flush, the goods and services pipeline stuffed, and the rich are fattened. However, until and unless money is scraped off the top to restart the economy from the bottom up, the big fish are going to find there are no more little fish for them to eat.

[DeschutesRiver]

75. I think we are seeing the last moves of the big fish trying to suck in what remains

of the little fishes money, into the stock market, so that they can scoop up what is "invested" and then walk away to other things for awhile. Probably quite a long while.

DH and I were tossing this around on the porch this am - he was glad to hear that companies were again "profitable" and attributed the stock market climb to 10K to that fact. I told him I did two things - I listened to what the news and people online were saying about how we are now in a bull market, how recovery has started, how things are now finally and firmly turning around, and that of course, the stock market should be up at 10k, or beyond.

Second thing was I looked off my porch into the distance, and thought about what is out in my area, both near and a bit farther locally. Businesses are being boarded up and abandoned daily, houses are in the tank, we have one of the nation's highest unemployment rates (in the twenties), people aren't buying much at all, neighbors have no jobs, our postmaster joked that we are the only ones in the whole valley still paying our bills, people's autos/trucks/equipment are being repo'd rapidly, and on and on.

And I really wonder how this rising stock market can be signaling a true recovery when what I see outside my own window points in the complete opposite direction? At this point, I think the market is doing a head fake so that the big players can vaccum up whatever small change is out there before things slow to such a crawl that the market drops and goes sideways for a decade. Kind of like it did while I was growing up.

The cons are preying upon people who suffered big losses in the last couple of years and just want to try to get back to where they were, and do it via the stock market. The con guys are more than willing to accommodate, and since they control the game, they will know when to fold 'em. Average Joe won't, and this will lead to some bad outcomes.

[Warpy]

87. We're seeing other things, as well

Big fish know they can ride a prolonged bad market out, they've done it before the last time they screwed up the economy by buying Congress. Also, we're seeing foreign investment money snapping up bargains while the dollar is low.

I'm not making any predictions about a coming bust. I just have no idea how low it will go before the government is permitted to act to restore a more rational economy.

[DeschutesRiver]

94. I can't predict the timing at all

but if I look at things beyond the view from my porch, I can make a reasonable guess as to whether we've reached the worst outcome possible. And bad as things are now, I don't think things are as bad as they will become, because I think there are jobs that won't be coming back in my lifetime. I think that "recovery" is relative - will recovery take us back to the final crazy days of an almost 30 year credit expansion? No. When I was reading about the Depression, I noted that the number of people failing and dropping off society's radar rose in increasing numbers every year after the main event. I don't see why that isn't a possibility today too, ie that this thing just keeps taking a chunk out of us, year after year for awhile. While there might be bumps up, we are still heading in the same downward direction.

I am an old woman, yet didn't realize the level of corruption out there. I am not sure it is any worse than in other eras, but this is my era and it stinks. I am not certain that government alone can restore a more rational economy; that said, there is a big role for government if they would step up to the plate and take command of the situation. I had hoped to see a more firm hand from the democrats we elected (I am an independent, but do not lean republican). OTOH, this is such a f'd up situation that I understand the unraveling of things and righting of wrongs is probably a fairly delicate operation. If they wanted to, the big fish who've been amassing fortunes throughout this debacle could squash much progress, and probably would do so if it appears that all their goodie bags are to be taken away from them. I don't have a single certain answer to any of this, because I don't have access to the behind the scenes tangled web that we've woven over the past years.

Well, there are good times, bad times, but these times are the only ones I get, and I am just hoping for the best.

[TheWebHead]

20. well the stock market rising creates a wealth effect

which means all those who are invested are cashing in on their capital gains to spend on goods they wouldn't have been able to purchase back in March. If you are rooting against capitalism, I guess you can take solace in the face that the Dow first crossed 10k in 1999, so it hasn't been the best place to put your money in the past "lost decade".

[girl gone mad]

65. Only if you subscribe to..

the theory of trickle down economics.

[Statistical]

70. Or trickle sideways.

60% of Americans own equities either directly or indirectly (401K, IRA, mutual funds).

[janx]

88. YEP. It's not trickle down, that's for sure.

Currently I work full-time but am paid part-time wages. (Don't ask. It's too depressing, but suffice it to say I'm working for about half of the going rate for what I do and the time I put in.) It is mandatory that the state take a hefty amount (relatively speaking) of my paycheck every month for a public employee retirement program.

It's not trickling down, from my perspective--it's trickling UP--out of my paycheck every two weeks. So it had damn well better be trickling sideways.

[rucky]

23. I am SO reccomending this!

It's way past the time to get pissed!

[gratuitous]

31. Your feelings are your feelings

So your feelings aren't "right" or "wrong" any more than the fact that it's sunny or rainy today is "right" or "wrong."

Anyway, good news for Wall Street investors, banksters and speculators doesn't always translate into good news for Main Street workers, shop owners and citizens. The stock market hitting 10,000 isn't some silver bullet that kills the recession, and it isn't a panacea for all that ails the American economy. However, as a measure that investors are feeling more confident about the near term prospects of the economy, it's better to see the stock market go up than go down. It increases the value of investment funds tied to the stock market, makes more value available to collateralize loans, and encourages big investment.

What lags behind? Just about everything you mention affecting the individual consumers. Jobs, local businesses, local government, bonuses and pay will all take time to rebound. Very few of these things had much to do with the economic disaster that overtook the country, but they bear the brunt of the short-sighted greedy policies pursued by the captains of industry. Part of the blame also has to be apportioned to the government sector, which took four Ambien in 2001, and slept very quietly until quite recently, exercising no oversight over the aforementioned short-sighted and greedy machinations.

There are signs of hope, a partial list of which is in the second paragraph. There is also the good news that the regulatory agencies who are supposed to keep an eye on Wall Street appear to have shaken off their former somnambulance, and are prepared to fulfill their mandate once again.

[scheming daemons]

35. The market always turns around several months before the jobless numbers get better

But it is a good harbinger.

[Hello_Kitty]

37. Right. That's why they coined the phrase "jobless recovery".

Which is what we've seen the past few cycles.

[nadinbrzezinski]

38. Yeah you don't get it

partly because people ARE starting to buy more, why Target is getting higher profits.

Nabisco not just sells in the US, but even there they are selling more.

In other words, we are seeing signs that things ARE starting to recover. They are slow, and hard to spot for most people...

I will give you one... we went to bike on the boardwalk the other day, my hubby and I. We were shocked that the restaurants were FULL during the WEEK. (He works a weird schedule so he usually has Friday off).

Now this is the OFF season.

Then we went for lunch to the local restaurant located in a very touristy area of town. Again, the place was packed, during the WEEK.

Now as we recover, we will still see cuts... and fear and all of that. Also recovery is not equal across the board, why you are still seeing what you are seeing. Oh and some people, I fear, will not get a job that is as well paying as they used to have.

Should the feds have done other things? Yes... WPA comes to mind, and we may still see it.

Now you are also looking at the micro economic stuff, aka what you can see. But at the macro level we seem to have hit bottom and seem to be going up. Problem is that jobs are ALWAYS a leading indicator when the economy sours and a lagging one when it recovers... and yes, that sucks.

Oh and I will be highly critical of some of the things done by the Feds, by the way.

[Politics_Guy25]

72. Dow 10,000 bad news, Nobel peace prize bad news, health care progress bad

Everything that Obama does or gets is bad bad bad!

BAD I tell ya. BAD!!

[lunatica]

45. The stock market doing well does not equate to people doing well

My take is this. For example, If Bush goes to war the stocks for weapons, military equiptment, etc. go up but lots and lots of people get killed. Or when there's an earthquake that's devastating the stocks for food and rescue equipment and caskets goes up.

Stocks going up are only indicative of whether people buy and sell according to what happens in real life. That's also true of the stock market losing. Generally if it's good for people, the stock market will drop for those items that depend on human misery to exist.

[earth mom]

53. The stock market is a giant pyramid scheme. Those fuckers could give a shit about us.

The sooner we all realize it and move on to other ways of providing for our families that has nothing to do with the way they want us to behave by buying all their fucking crap, the better.

Time for bartering, growing our own food, finding other means of transportation to give up our dependence on fossil fuels.

It's not going to be easy, but we all need to be aware that the government is NOT going to step in and help us.

Remember Katrina and how the government fucked it all up so bad and to this day NOLA is still a wasteland?

Katrina is the best example of what I'm talking about.

With the way things are going we will soon be a 3rd world nation and we will be on our own.

Time to take the ball and the control out of those fuckers hands.

[FrenchieCat]

56. Anyone with an Ira, 401K or other pension investments will be more than happy

to receive their next statement showing that the valuation of their investment is back pre Sept 2008 levels. These folks are middle class folks who have attempted to prepare for later retirement by squirreling away some of their earnings. I think this part of the entire view of the DOW needs to be kept in mind. This is not just about Wall Street...it is also truly about Main street. The two are entwined, even if keeping them separate makes easier to attack one as opposed to the other.

[janx]

64. Wall Street/Main Street--yet another illogical media cliche.

You're right, Frenchie; it's not an either/or situation, but somebody makes up a little saying like that and people parrot it to no end. :hi:

[lyonn]

59. 10,000 tells me that Wall Street loves Congress

Things must really be looking up for them! No so much us, we the people. Insurance Companies like how Congress votes, Banks like de-regulation and it looks like it will continue to allow them to use Our money as they please.

Sheesh, forgot about the Feds that are suppose to be our watchdogs failing us.

[Spike89]

62. Another factor to consider

I work for a modest sized non-profit with an annual budget of approximately $15. As you probably know, non-profits can't "break even" every year, some years are good, and some are bad. Virtually all successful non-profit businesses maintain an investment fund that gets the "profit" from the good years and is used to pay the bills during the bad years. Guess what--those investment funds are partially in the stock market. Ironically, we had a good year last year, but almost had to dive into the investment funds because we lost so much in those investments.

Our organization would love to expand (hire more people) because as I mentioned, we're doing very well. However, we need our stock investments to be stable in order to afford it. A rising stock market can improve the economy and bring new jobs in, but only in a slow, lagging manner.

[paulsby]

67. the dow is not a proxy for the economy as a whole

so much as it is representation of the perceived value (and more correctly - the future value as the DOW is a forward looking mechanism) of the top 30 industrial stocks in the nation.

those are not the same thing.

i am a stock and futures trader fwiw.

you can argue the current boom in the dow is irrational, but the market (in the short term) is often irrational.

there is an old saying "the market can remain irrational longer than the stubborn trader can remain solvent"

and OH how true that is.

fwiw, i am currently short the dow as of close today. so, if it keeps going up past today, i will lose money. i have a stop loss on this position of course. what we need is a trigger. right now the market is in a euphoric state.

[MajorChode]

74. Wal-Street is not "boombing"

On Oct 7 of 2007, the DJIA was at 14,164.53 and today it closed at 10,015.86. That's more than a 40% loss. Even if the DJIA closed above 14,000 today, there would still be a zero gain over a 2 year period.

If the DJIA closes say in the 17,000 range in the next year or so and there's still 10% unemployment, you might have cause to be offended, but I really don't see that happening.

[Warren DeMontague]

79. I wonder how many of the people pissed off about this were the ones screaming "SELL NOW!!" in March.

"We're doomed! 6,000 is just the beginning! It's going down to 3,000... 2,000... NEGATIVE FUCKING NUMBERS, BABY!"

"No, no, I'm not bitter. Personally, I'm glad I panicked, and put all my money in gold, zinc, beef jerky and nail clippers. Really."

[redqueen]

85. ...

:rofl:

Thanks, I needed that. :)

[janx]

86. . . .

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6773457#6773974

[Geek_Girl]

84. They say employment is a trailing indicator

meaning stock market goes down then unemployment follows and when stocks go up then companies start hiring.

But the truth of it is companies are slashing costs by laying off workers so their profits are on the rise.

Either one or two things will happen companies will start hiring again thus increasing consumer spending (and increase profits) or they won't hire and eventually they'll lay off so many people (in order to keep their profit margins up) that they will not be able to produce the goods and services to stay in business.

[Statistical]

91. Nope you are a qtr late.

Q2 companies were making profit by slashing costs. You can tell that because the "top line" (gross revenue) was down but the "bottom line" (earnings = profits) were up.

Most of companies announced in Q3 so far are showing REVENUE up. You can't increase revenue by firing someone. Revenue means someone is buying more. Eventually you need to increase employment or your revenue growth stops.

[girl gone mad]

92. The profits are still directly attributable to cost cutting.

The only increase in revenue was coming from Asia, where governments are pumping tens of billions into the economy. N. American sales are still dismal.

http://money.cnn.com/2009/10/14/news/economy/dow_economy_forecast/index.htm?postversion=2009101413

"Several experts point out than many of the relatively strong earnings reports helping to lift the markets in recent days are being driven by cost cuts, rather than strong revenue growth that would be a better indicator of consumers and businesses being willing to spend again. If businesses keep cutting costs to make the numbers that Wall Street wants to see, that can only put more downward pressure on jobs and wages, and result in weaker economic growth or another downturn.

"The companies are cutting fat, and in many cases cutting bone and muscle. There's no organic economic growth there," said Yamarone.

Barry Ritholtz, CEO and director of equity research at Fusion IQ, said that despite their reputation as a leading indicator, the stock markets do a terrible job forecasting the economy.

"Beware of economists pointing to the stock market," he said. "The rallies tend to be false starts because it's a reaction to what came before. The sell-offs tend to be overdone because, as they gain momentum, they lead to panics."

Ritholtz said comparisons of current earnings to those of a year ago or stock levels to the lows of earlier this year greatly exaggerate the strength even the market sees in the economic outlook."

[pa28]

98. Don't be mad at the market.

The monetary base has doubled in the past year and assets are being bought with the excess. The fed is sponsoring this rally at the expense of the dollar(AKA people holding dollars)and the treasury seems happy to wag the finger of shame and leave it at that.

Conveniently, the dollar index broke into a brand new low today along with oil breaking out over $75. Of course we all know what's happened to gold and silver.

So, if you save you will ultimately be poorer which is reason enough to be angry but this might not be a case of Wall Street having a party but a case of Wall Street showing up at a party somebody else paid for and having a ball.

[sabrina 1]

103. Does that mean that while they are celebrating, ordinary

people's income is going down, either literally or because what are they are earning, is now worth less?

Btw, I agree with the OP, I find it offensive also to see the celebrations on Wall St.

I'll feel like celebrating when I see ordinary people able to afford an education for their children, eg, and when people are not being thrown out of their homes.

And I'll celebrate when we start seeing some investigations of those who caused the collapse of the economy.

[pa28]

110. That's how I interpret it.

Maybe a weakening dollar is the best or only way to balance our accounts but I worry about people who are struggling already with stagnant wages or fixed incomes. They'll soon feel how the equity has been stripped out of the dollar when food and fuel prices begin to rise again and imports become much more expensive.

The public celebrations of a few are certainly not pretty in the face of the millions who are losing in anonymity. I just see it as predictable though, you give wall street seemingly unlimited zero cost of borrowing cash and they are going to throw a party. That's what they do - and the idea that a new asset bubble is being financed by gouging value from the dollar irritates me more than the celebration itself.

[winyanstaz]

101. ty..good post and I agree

[Exultant Democracy]

105. If jobs are a lagging indicator and the Dow is a leading indicator it could be a sign that relief

is on its way. That of course is a big if and a jobless recovery will eventually lead to an even bigger crash if money doesn't start to flow out from the few to the many.

[4_TN_TITANS]

107. It's the financial institutions who are floating Wall Street

with temporary government cash, it won't last long and then hang on to your hat.

[CoffeeCat]

111. What if...

...I can't afford a hat?

;)

[kentuck]

108. "So long suckers! We figured out how to succeed without you!"?

Interesting.

[undergroundpanther]

109. Unemployment go up

The market go up.
How? Here is how.



In short, no perceivable improvement in the productive capacity of the real economy justifies the current rise in the stock market.

Then why is it rising?

Because people who have more money than they need have to put it somewhere; they prefer to put it where it will generate more money; these days the stock market is about the only place for it to go.

http://www.sustainer.org/dhm_archive/index.php?display_article=vn164stocksed


http://finance.yahoo.com/techticker/article/317818/Unemployment-Hits-26-Year-High:-This-Is-a-&comment_start=21

As John Kenneth Galbraith said in his introduction to The Great Crash , "While it is a time of great tragedy, nothing is being lost but money.


"Soup Is Good Food" Dead Kennedys

We're sorry
But you're no longer needed
Or wanted Or even cared about here
Machines can do a better job than you
This is what you get for asking questions

The unions agree 'Sacrifices must be made'
Computers never go on strike
To save the working man you've got to put him out to pasture

Looks like we'll have to let you go Doesn't it feel fulfilling to know That you-the human being-are now obsolete
And there's nothing in hell we'll let you do about it


Soup is good food-(We don't need you any more)
You made a good meal-(We don't need you any more)
Now how do you feel-(We don't need you any more)
To be shit out our ass
And thrown in the cold like a piece of trash.

We're sorry You'll just have to leave
Unemployment runs out after just six weeks
How does it feel to be a budget cut?
You're snipped You no longer exist

Your number's been purged from our central computer
So we can rig the facts And sweep you under the rug
See our chart? Unemployment's going down
If that ruins your life that's your problem

Soup is Good Food, Etc.

We're sorry We hate to interrupt
But it's against the law to jump off this bridge
You'll just have to kill yourself somewhere else
A tourist might see you And we wouldn't want that

I'm just doing my job, you know So say uncle
And we'll take you to the mental health zoo
Force feed you mind-melting chemicals
Til even the outside world looks great

In hi-tech science research labs
It costs too much to bury all the dead
The mutilated disease-injected
Surplus rats who can't be used anymore
So they're dumped (with no minister present)
In a spiraling corkscrew dispose-all unit
Ground into sludge and flushed away Aw geez:.

Soup is good food You made a good meal,how does it feel etc.

We know how much you'd like to die We joke about it on our coffee breaks, But we're paid to force you to have a nice day
In the wonderful world we made just for you!!!!

"Poor Rats", we human rodents chuckle At least we get a dignified cremation
And yet
At 6:00 tomorrow morning...

It's time to get up and go to work!