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Why is the stock market rallying when the economy is so bad?

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Re: Why is the stock market rallying when the economy is so bad?

#761

Post by lithos »

mcv wrote: post #711
alasdair_ wrote: post #692

Earlier quoted context omitted.

> Individual assassinations don't change the system. Franz Ferdinand’s assassination changed a whole lot of systems.

It was the spark that ignited the fire, but the kindling was already there. It probably still would have happened without his assassination, though possible a few years later.

There's also plenty of kindling in the world today. Plenty of current top players and upcoming top players butting heads(China and Turkey being the most news worthy to Americans), plenty of players that are sour about past/present conditions (Britain with Brexit, Germany/France over their influence in the EU), and players that are seeking allies to become an upcoming top player (India being the easiest to point out).

Re: Why is the stock market rallying when the economy is so bad?

#762

Post by mcv »

lithos wrote: post #761
mcv wrote: post #711

Earlier quoted context omitted.

It was the spark that ignited the fire, but the kindling was already there. It probably still would have happened without his assassination, though possible a few years later.

There's also plenty of kindling in the world today. Plenty of current top players and upcoming top players butting heads(China and Turkey being the most news worthy to Americans), plenty of players that are sour about past/present conditions (Britain with Brexit, Germany/France over their influence in the EU), and players that are seeking allies to become an upcoming top player (India being the easiest to point out).

Plenty of friction indeed, but the big difference is that (almost) nobody wants to go to war. Just before WW1, everybody was itching for another war. China definitely does not want war with the US; they want to expand economically. Nobody in the EU wants war over anything. The US has always been the most eager to go to war, but even they seem to have learned that wars are expensive and have little benefit. Russia wants to control (pieces of) their neighbours, but again without an actual war the EU or NATO. Turkey is primarily interested in crushing anything that might start to look like a Kurdish state, but also doesn't want a war with a big player.

Wars today are mostly cold or proxy, and rarely direct.

Re: Why is the stock market rallying when the economy is so bad?

#763

Post by listenallyall »

chii wrote: post #664
listenallyall wrote: post #475

Earlier quoted context omitted.

What? Putting money in an index fund, or buying Apple stock, or a 401k, is "work"? Companies don't even get the money from secondary stock purchases, so the invested money is doing absolutely nothing. Banks use deposits to create loans whose funds go directly to the companies receiving those loans. Banks which interview the loan applicants, review financials, ask for references, and which themselves tend to be pillar…

> buying an index fund or Amazon stock and having a few irrelevant proxy votes on decisions already made, is the definition of "stashing" it away with zero utility. that's absolutely not true. The buying stocks (or indirectly via index funds) must mean somebody else is selling. The person who sold the stocks will put the money obtained from the sale to use somewhere else. It moves capital just like any other economic…

Yes, obviously, stock markets are essential and efficient capital allocators, in aggregate. Perhaps I shouldn't have simplified. But a single retiree's $500k purchase of some megacorp's stock will have effectively zero impact, like a drop in the ocean. As you say, it's up to someone "eventually down the chain" to actually deploy the capital. Investing in an index fund adds even more layers. In contrast, a community bank deposit will get multiplied and quickly deployed directly to local businesses or homeowners.

The point being, `eanzenberg`'s idea that money in a savings account just sits there idly doing nothing, is false.

Re: Why is the stock market rallying when the economy is so bad?

#764

Post by pjmorris »

Anon1096 wrote: post #648
tfehring wrote: post #598

Earlier quoted context omitted.

But the top 1% own much more than 37% of the wealth (and accordingly receive much more than 37% of the financial benefits of government spending) while only paying 37% of the taxes (which fund that government spending).

> and accordingly receive much more than 37% of the financial benefits of government spending what?

e.g. aircraft carriers

Re: Why is the stock market rallying when the economy is so bad?

#765

Post by mrep »

Supermancho wrote: post #611
eanzenberg wrote: post #585

Earlier quoted context omitted.

False, most of the stimulus went to 1) direct payments to the bottom 90% and 2) small businesses with less than 50 employees.

That was a later program. You're misunderstanding because he used the word "stimulus". There were multiple rounds. The first, was a huge corporate giveaway.

The first one was .4% the size of the cares act and it was for healthcare, not corporate giveaways:

More than $3 billion for "research and development of vaccines, as well as therapeutics and diagnostics"

$2.2 billion "in public health funding to aid in prevention, preparedness and response efforts — including $950 million to support state and local agencies"

Almost $1 billion for "medical supplies, health-care preparedness, Community Health Centers and medical surge capacity"

$1.25 billion to fight COVID-19 internationally.

source: https://en.wikipedia.org/wiki/Coronavirus_Preparedness_and_R...

Re: Why is the stock market rallying when the economy is so bad?

#766

Post by marcusverus »

ollifi wrote: post #590
marcusverus wrote: post #563

Earlier quoted context omitted.

Advocates of big government love these metrics that have been put through the academic ringer, so-as to spit out whatever tortured output is expected. Why look at this kind of esoteric figure at all? Why not look at, you know, real numbers? Spending as percentage of GDP: Denmark - 52% of GDP Norway - 55% of GDP Finland - 53% of GDP Sweden - 50% of GDP Iceland - 42% of GDP Average - 50.5% USA - 22% of GDP What does al…

Interesting numbers. Where are the spending per GDP from? IMF numbers in Wikipedia put US spending at 35%. Also should comparing the spending numbers take into account that healthcare, schools and universities are paid by government spending in the Nordics and not from household income? Honest questions, I'm really interested in these differences between systems.

Ah, I forgot to add the citation on that line. The spending numbers come from the CIA World Factbook site, [0] above.

Your number likely includes State, Regional, and Local spending (which was presumably excluded for all nations in my numbers).

Even with the 33% figure, for the US to make up the ~15% difference would require ~3 Trillion in annual spending.

The existence of Social Healthcare programs in those countries is a huge chunk of the difference, I'm sure.

Re: Why is the stock market rallying when the economy is so bad?

#767

Post by mcv »

jusssi wrote: post #756
mcv wrote: post #713

Earlier quoted context omitted.

Just reverting the tax cuts for the wealthy would already do a lot of good. I also think a steep inheritance tax for inheritances over a certain amount (1 million? 10 million?, 100 million?) to preventing these concentrations of wealth from creating a new aristocracy. But 3 billionaires owning more than the bottom half of the country doesn't have to mean if the bottom half owns nothing: >> "Their $264.1 billion in ho…

The problem with high inheritance tax is that it only hurts the rich when it catches them off guard. In otherwise free economy there are so many legal ways to circumvent inheritance tax for the lowest rate tax that is available.

That's true. My point is just that inheriting massive fortunes is a problem because it keeps wealth concentrated across generations. But there are so many loopholes around inheritance that it's not trivial to address this.

Re: Why is the stock market rallying when the economy is so bad?

#768

Post by KozmoNau7 »

chii wrote: post #660
tsimionescu wrote: post #639

Earlier quoted context omitted.

How about ripping Wal-Mart apart and replacing it with what existed before - many different shops, each owned by a local person, and many different logsitics networks, each also owned by someone in the area? People on the right often claim to be for the free market and for small, decentralized government, but then turn around and love big, centrally planned conglomerates,just as long as they are owned by share-holder…

each small store will have little bargaining power when it comes to their suppliers. therefore, each little store will end up paying "market price". Eventually, the small stores join up together to bargain for a wholesale price lower than market price to their suppliers, and thus earn a higher margin. ala, what you see at walmart today.

What you see with Walmart is singular entity, owned by an obscenely rich family, who can strong-arm any supplier into accepting their terms.

They have the massive capital to build a megamart anywhere they want, and have it run at a loss for however long it takes to drive everyone out of business. This absolutely kills local businesses and funnels money out of the area, leaving only the low wages paid to the local Walmart staff. And because it's Walmart job or no job, people have no bargaining power.

When small businesses form cooperatives for collective bargaining, they keep ownership local, they keep jobs local, and they keep the stores in the city centres running, which is better for pedestrian and public transit access, not to mention cafe life and local bars/eateries. Compare this to a megamart outside the city where you have no choice but to drive there. You get everything there and have no real reason to go into the city. As a consequence, city life dies out.

Coops and associations work with the local shop owners and communities, whereas megacorps trample and replace them with cookie cutter faceless megamarts.

Re: Why is the stock market rallying when the economy is so bad?

#769

Post by mrep »

sabujp wrote: post #716
eanzenberg wrote: post #585

Earlier quoted context omitted.

False, most of the stimulus went to 1) direct payments to the bottom 90% and 2) small businesses with less than 50 employees.

https://www.federalreserve.gov/newsevents/pressreleases/mone... , the fed is buying junk corporate bonds

They announced their intention but I don't believe they have actually bought any yet [0, 1]. Also, their balance sheet shows they are buying predominately U.S. Treasury securities and Mortgage-backed securities [2].

[0]: https://www.cnn.com/2020/05/04/investing/fed-junk-bonds-etfs...

[1]: https://twitter.com/TruthGundlach/status/1256352949787176960

[2]: https://www.federalreserve.gov/releases/h41/current/

Re: Why is the stock market rallying when the economy is so bad?

#770

Post by Datsundere »

ajuc wrote: post #724
sidlls wrote: post #295

Earlier quoted context omitted.

That cuts both ways, so to speak. Drones and even more advanced technology can replace guillotines as easily as it can be used to have a smaller police force of the kind you mention. I think some people don't quite understand what people are capable of when they are truly desperate. Right now, in most of the western world, people aren't at that point. But when they get there, billionaires' ability to hide on islands…

System controls internet, phone network, electricity, food and oil delivery. IF you want to stop a revolution in 21st century just shutdown everything and blockade roads. How long till people start dying? A week? What are the rebels gonna do? Assauls tanks and machine guns? Or starve/freeze/cook to death without electricity/oil/food? The American delusion of aremd citizens defending constitution is just that - a delu…

Army would at least make things so that us isn’t a laughing joke to the world unlike what the current administration is doing
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