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Why Are Corporations Hoarding Trillions?

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Re: Why Are Corporations Hoarding Trillions?

#341

Post by ScottBurson »

petercooper wrote: post #91
analyst74 wrote: post #43

Earlier quoted context omitted.

The trick is, you don't invest during the downturn, hence all the cash hoarding. You invest after it bottoms out for a while. Macro economies do not recover like a rocket, the window to invest is very large, so large that if you only recognized the bottoming out a couple years later, you still haven't missed the opportunity.

That is a really interesting point. So I've never invested in stocks before (preferring to invest in my own business) but have decided to diversify and am only seeking returns in a 5-15 year bracket (but want to minimize 1-5 year downside so it could potentially work as an extra emergency fund too). I had assumed being 20%+ off of the highs, it'd be a good idea to start getting involved now, but.. maybe I should wait…

I can only offer you my personal opinion, which could well be wrong. I can take no responsibility for what you do with your money.

That said, my opinion is this: there's far more risk than potential reward in the market right now, even after this drop. This is probably the beginning of a bear market that could last, I don't know, anywhere from maybe 6 to 18 months. I would definitely not suggest buying until it's clearly over.

EDITED to add: here's a good summary: http://seekingalpha.com/article/3825236-bear-market-phases-s...

Re: Why Are Corporations Hoarding Trillions?

#342

Post by mc32 »

rchaud wrote: post #340
mc32 wrote: post #233

Earlier quoted context omitted.

Understood, but if there is no market for their labor due to structural changes in the economy (automated taxis, automated check out, mechanized fruit picking) as well as a better educated domestic workforce (high school grads) now willing t work at $15/hr what jobs exactly would they be coming for?

People in desperate situations aren't going to be stopped from coming to the US because the Fed/WSJ/BLS says there is no market for their labor. Migrant communities are extremely resourceful because they likely have experience in finding opportunities that others would pass on. For a lot of people, decision making is based on which option allows them to just live another day; relative to their circumstances, we are e…

You're thinking about the state of the economy today and yesterday. Maybe you're only thinking about people who grew up south of the southern border. Low skill immigrants come from many places. Many pay lots of money to get here, if they don't see a market for their low skills, there is no reason to come here. Low hanging fruit [low skills jobs] are being replaced by automation, slowly, but it's on its way. Currently there is a net negative low skills immigrant flow. As automation accelerates, it's likely to increase low skills immigrant outflows. Conversely, we may see more net inflows of mid and high skills immigrants.

And, as minimum wages go up, high school graduates become more willing to work. At $10 you may not find manual labor worthwhile, but at $15 it looks more enticing. Now, immigrants typically work a little harder, but not so much to overcome a lack of education and poor communication skills --which can take years to develop if Eng is not their native lang.

As tech advances and "hollows out" low skilled labor from advanced economies, these economies will struggle to keep their mid skills labor market employed.

Re: Why Are Corporations Hoarding Trillions?

#343

Post by greggman »

roymurdock wrote: post #320
EvanPlaice wrote: post #296

Earlier quoted context omitted.

I'll try by best not to sound like a raging sociopath here. In pure economic terms, curing cancer has little benefit to society. Cancer is not any one specific disease. It's a class of diseases, of which there are thousands (or more) of variants. We may stumble on some amazingly technologically advanced cure to some forms of cancer but the more rare the form, the less likely there will ever be a treatment. Most peopl…

I've been thinking along similar lines recently. One counter to this argument is that as this process of overpopulation (relative to useful jobs) begins to happen, standard of living decreases.* As standard of living decreases on average, people start to have less children. So the imbalance is somewhat self-correcting, it's just that human lives are getting to be longer while the time between inventions that obviate…

> As standard of living decreases on average, people start to have less children

That seems counter to all actual evidence doesn't it? The places with the poorest standards of living have the most children and visa verse.

Re: Why Are Corporations Hoarding Trillions?

#344

Post by jganetsk »

massysett wrote: post #295
TeMPOraL wrote: post #268

Earlier quoted context omitted.

Of course there is. The point is, we've reached the stage of our advancement when, on aggregate, we produce more than we actually need. Our current issues are with distribution of what is being produced.

The poor would love to have newer cars, consume more services, have nicer homes, etc. So then how are we producing more than we need?

The statement "the US is out of demand" is equivalent with the statement "we are producing more than we need". Don't argue with me, argue with the parent.

What I'm arguing for is on how we should look at universal basic income. Some people see UBI as a way to increase aggregate demand. I see UBI as a way to get rid of poverty, so there would be no such thing as what you call "the poor". The difference is that I don't see a lack of aggregate demand as a problem. If we could rid our society of poverty without making a dent in aggregate demand, I see that as a win.

Another way to think about it is in terms of productivity. Do we really need to make everyone more productive? Do we need to be make the poor maximally productive before lifting them out of poverty? Why can't we just lift them out of poverty?

Re: Why Are Corporations Hoarding Trillions?

#345

Post by deciplex »

TeMPOraL wrote: post #268
refurb wrote: post #235

Earlier quoted context omitted.

We have succeeded as a civilization: we are providing far more than we could ask for. Really? There is nothing you could improve in the human condition that would make life better?

Of course there is. The point is, we've reached the stage of our advancement when, on aggregate, we produce more than we actually need. Our current issues are with distribution of what is being produced.

It seems like what you're trying to say is more that we're trying to optimize economic and industrial processes that are already more than optimized enough for what we need, rather than we've "run out of demand" as such.

Re: Why Are Corporations Hoarding Trillions?

#346

Post by throwaway_1010 »

zardo wrote: post #133
throwaway_1010 wrote: post #95

Earlier quoted context omitted.

The logic of this plan is basic and has stood the test of time in any multi-party market. You can save and spend at the same time, I do it all of the time, it's called budgeting. You are mired in theoretical perfection, absolutism, and a misunderstanding of how to profit from investing or trading. On the Street this "plan" is referred to as "Keeping the Powder dry". You don't [rationally] blow the whole keg of powder…

>What is your investment strategy? Invest at the market/stock highs? I try to keep in mind that markets are unpredictable, and missing out on growth while you wait for the next crash can cost you money too, even if it doesn't feel as bad as a position you hold losing value. I invest about the same amount every paycheck whether people are crying bear, bull, bubble, or apocalypse.

Succinct. Exactly. Dollar Cost Averaging. For buys and when buying call options or selling puts, I increase commitment while maintaining the core strategy. Highs and lows are arbitrary in an irrational market. Profits can be increased if buying at "relative" lows or selling at "relative" highs. If a stock that trades at its highest yet value of $100/share falls to $80/share over a week because of a lawsuit claim or other similar construct, but the company is otherwise outperforming, that may be a buying opp (it may be a total loss, but that differential is risk/opportunity). That stock, at $80/share is at a "relative" low as compared to its high of $100. That is what I meant by low and high. Perfect maximization is possible, though almost always unlikely. Which is why your DCA strategy should outperform (depending on your investment choices, of course).

Re: Why Are Corporations Hoarding Trillions?

#347

Post by jganetsk »

refurb wrote: post #235
jganetsk wrote: post #204

Earlier quoted context omitted.

A basic minimum income is the right answer, but not for the purpose of increasing demand. People demanding to increase demand is utterly silly. We have succeeded as a civilization: we are providing far more than we could ask for. In the big picture, what does increasing demand really do for us? But there's definitely a need to reduce poverty. And there's a need to allow ourselves to stop working as hard as we do. A b…

We have succeeded as a civilization: we are providing far more than we could ask for. Really? There is nothing you could improve in the human condition that would make life better?

I should have said that "we are providing the maximum that we possibly can". It just seems like there's no marginal benefit to increased productivity right now. There's lots we could do to hurt the human condition: we could always just put a bunch of people to work building weapons, and have those weapons kill a bunch of unemployed people. But if there could exist some grand new way to improve the human condition right now, the money and the jobs just don't seem to be materializing for that. And there's plenty of money and plenty of workers around.

Re: Why Are Corporations Hoarding Trillions?

#348

Post by chii »

specialist wrote: post #226
jmorrow977 wrote: post #183

Earlier quoted context omitted.

I'm coming around to the opinion that taxes on income are a bad idea. Income flows to people as they're trying to accumulate wealth, trying to climb from lower to middle to upper class. Higher taxes on income, especially highly progressive taxes, make it harder for people to move between social classes. The focus on income tax creates a situation where the person who makes $200k/yr but has a net worth of $0 gets taxe…

opinion that taxes on income are a bad idea Do you mean earned income, aka labor? vs unearned income, aka capital? If you are advocating the shift of tax burden from labor back unto capital, reversing policy of the last 35 years (Reaganomics), then I agree with you.

>unearned income, aka capital

capital isn't unearned - it has to have come from somewhere (perhaps the grandfather generation).

Re: Why Are Corporations Hoarding Trillions?

#349

Post by throwaway_1010 »

forgetsusername wrote: post #212
throwaway_1010 wrote: post #95

Earlier quoted context omitted.

The logic of this plan is basic and has stood the test of time in any multi-party market. You can save and spend at the same time, I do it all of the time, it's called budgeting. You are mired in theoretical perfection, absolutism, and a misunderstanding of how to profit from investing or trading. On the Street this "plan" is referred to as "Keeping the Powder dry". You don't [rationally] blow the whole keg of powder…

> "On the Street this "plan" is referred to as "Keeping the Powder dry". Oh, I know what it's called "On the Street". And it's bull. > You can save and spend at the same time, I do it all of the time, it's called budgeting. " Huh? > $2k at a current market/stock low and keep the rest "dry". But why just $2k? That might be the bottom, and then you've missed out putting those dollars to work. > What is your investment…

Troll, Google my "aphorisms" in quotes. I don't seem to come up with any results in google. I'm not a genius, I didn't come up with the concepts of "Keep some Powder dry", "Buy low, Sell high", or basic arithmetic. You offer exactly nothing in terms of "strategy". I'd love to see your Series 7 exam results.

"Always be comfortable with losing what you invested, because you might lose it." - Google it.

Re: Why Are Corporations Hoarding Trillions?

#350

Post by dclowd9901 »

pavedwalden wrote: post #283
reddytowns wrote: post #263

Earlier quoted context omitted.

One thing I don't understand about basic income is how to deal with children. If the parents get the basic income of a child, then that will incentivize some people to have more kids simply to get more money. If you don't give basic income for kids, then people with a lot of kids won't be able to live. Of course, you can adjust the amount between the too extremes of full basic income and no basic income for kids, but…

I've never bought the idea that welfare recipients would bear children strategically. Surely after the first child, they'd realize that this was a difficult way to increase their top-line income. Not sure where I'd look for data on this, but my gut feeling is that poor people who have a bunch of poorly-cared-for-children get pregnant because they're bad at planning ahead, not because they've been inventivized by a su…

I think you're mistakingly assuming the kind of person who would do this would provide a similar (or any kind of) quality of life to their kids that you would.

I know of 3 small children in my own life whose parents collect welfare, and are meth addicted.

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