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How can Wall Street be so healthy when Main Street isn’t?

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Re: How can Wall Street be so healthy when Main Street isn’t?

#71

Post by treis »

recursivedoubts wrote: post #27

By holding interest rates so low, the Fed has created a double-bind: despite the systemic risks (which are very high) people who have investable cash have two options: the stock market or paying down debt. The stock market is being "invested" in not because it is a good investment at this point (it isn't) but because there is no where else to go. If interest rates ever revert to anything normal, it will get crushed.…

>Steve Keen outlines our best hope, a modern debt jubilee, here:

>http://www.profstevekeen.com/modern-debt-jubilee/

This doesn't really make sense. If you force me to pay down debt and I want cash then I'm just going to take out more debt.

Low interest rates or high debt aren't really the fundamental problem. The problem is a concentration of cash/wealth. Adam Neumann is a billionaire because he convinced some morons in Japan to give his company 10s of billions of Saudi money. But an average Joe would be laughed out of a bank if they asked for 10s of thousands to start a business.

If we are worried about a deflationary spiral the solution is simple. Give everyone money.

Re: How can Wall Street be so healthy when Main Street isn’t?

#72

Post by ghaff »

giantg2 wrote: post #68
ghaff wrote: post #52

Earlier quoted context omitted.

It is with people moving out of cities. But a hot market is exactly when you probably don't want to invest, especially when there's at least some possibility that a couple years from now, the exodus from cities will be seen as a panic overreaction. As for real estate in cities, property prices mostly don't yet reflect people moving out and a likely commercial real estate collapse. The other question is whether, to th…

I guess I should add that the market has been hot for the past few years and hasn't slowed down. I think the bigger threat to property values will be if interest rates rise significantly. Barring a complete economic collapse, I think raw land or residential rentals should be fine, especially if we see inflation from the current monetary policy. Personally, I would never buy real estate in a big city. I might be biase…

I live outside of Boston/Cambridge so I've been more tempted over the years and I do like visiting. But the prices have managed to continuously outpace my appetite for having a place in town. I will keep my eye on the market as the current situation plays out but I don't really expect a major drop; there wasn't in 2008.

Re: How can Wall Street be so healthy when Main Street isn’t?

#73

Post by recursivedoubts »

treis wrote: post #71
recursivedoubts wrote: post #27

By holding interest rates so low, the Fed has created a double-bind: despite the systemic risks (which are very high) people who have investable cash have two options: the stock market or paying down debt. The stock market is being "invested" in not because it is a good investment at this point (it isn't) but because there is no where else to go. If interest rates ever revert to anything normal, it will get crushed.…

>Steve Keen outlines our best hope, a modern debt jubilee, here: > http://www.profstevekeen.com/modern-debt-jubilee/ This doesn't really make sense. If you force me to pay down debt and I want cash then I'm just going to take out more debt. Low interest rates or high debt aren't really the fundamental problem. The problem is a concentration of cash/wealth. Adam Neumann is a billionaire because he convinced some moron…

> If we are worried about a deflationary spiral the solution is simple. Give everyone money.

Yeah, you might want to spend a bit more time thinking and reading about it. Keen has been ignored and mocked by the economics establishment, but he's the only guy I know who takes debt seriously and has developed computer models for dealing with the natural instability of exponential growth in it (Krugman famously has said "we owe it to ourselves").

You need to bring the total debt load down, to bring the absolute payment load down to a sustainable level and handle the exponent in debt growth. Giving everyone money without forcing them to pay down debt doesn't accomplish that, it's a linear response to an exponential problem. There's a reason debt jubilees were built into most pre-modern societies.

Re: How can Wall Street be so healthy when Main Street isn’t?

#74

Post by giantg2 »

ghaff wrote: post #72
giantg2 wrote: post #68

Earlier quoted context omitted.

I guess I should add that the market has been hot for the past few years and hasn't slowed down. I think the bigger threat to property values will be if interest rates rise significantly. Barring a complete economic collapse, I think raw land or residential rentals should be fine, especially if we see inflation from the current monetary policy. Personally, I would never buy real estate in a big city. I might be biase…

I live outside of Boston/Cambridge so I've been more tempted over the years and I do like visiting. But the prices have managed to continuously outpace my appetite for having a place in town. I will keep my eye on the market as the current situation plays out but I don't really expect a major drop; there wasn't in 2008.

I'd actually like to move to a more rural area with a lower cost of living. Prices and taxes constantly increase here. It seems like there's also an ever increasing number of invasive laws or policies.

Re: How can Wall Street be so healthy when Main Street isn’t?

#75

Post by treis »

recursivedoubts wrote: post #73
treis wrote: post #71

Earlier quoted context omitted.

>Steve Keen outlines our best hope, a modern debt jubilee, here: > http://www.profstevekeen.com/modern-debt-jubilee/ This doesn't really make sense. If you force me to pay down debt and I want cash then I'm just going to take out more debt. Low interest rates or high debt aren't really the fundamental problem. The problem is a concentration of cash/wealth. Adam Neumann is a billionaire because he convinced some moron…

> If we are worried about a deflationary spiral the solution is simple. Give everyone money. Yeah, you might want to spend a bit more time thinking and reading about it. Keen has been ignored and mocked by the economics establishment, but he's the only guy I know who takes debt seriously and has developed computer models for dealing with the natural instability of exponential growth in it (Krugman famously has said "…

> bring the total debt load down

You saw the part where I said people would just take out new debt, right? You can't force people to lower their debt load unless you also prevent them from taking out more debt.

Re: How can Wall Street be so healthy when Main Street isn’t?

#76

Post by recursivedoubts »

treis wrote: post #75
recursivedoubts wrote: post #73

Earlier quoted context omitted.

> If we are worried about a deflationary spiral the solution is simple. Give everyone money. Yeah, you might want to spend a bit more time thinking and reading about it. Keen has been ignored and mocked by the economics establishment, but he's the only guy I know who takes debt seriously and has developed computer models for dealing with the natural instability of exponential growth in it (Krugman famously has said "…

> bring the total debt load down You saw the part where I said people would just take out new debt, right? You can't force people to lower their debt load unless you also prevent them from taking out more debt.

I would again suggest reading and thinking about Keens much more extensive treatment of the topic. We aren't going to make much progress here.

Re: How can Wall Street be so healthy when Main Street isn’t?

#77

Post by throwaway_USD »

beervirus wrote: post #21
throwaway_USD wrote: post #3

Easy Congress put on bandannas and robbed the tax payers of about $18,000 each. Congress then turned around and gave taxpayers $1,200 each, of their own money, that total amount can be doubled that to account for the temporary unemployment benefits increase. The rest of the taxpayer money went to the FED so they will guarantee the prices of shit stock...the market can't lower because as many rich CEOs and investors c…

> Congress put on bandannas and robbed the tax payers of about $18,000 each. On average, sure. But people who don’t earn much money aren’t going to be responsible for that bill because they pay no (or almost no) income tax.

>But people who don’t earn much money aren’t going to be responsible for that bill because they pay no (or almost no) income tax.

Maybe, but the devaluation of the dollar as a result of this additional and significant debt is only going to effect the daily lives of people "who don't earn much money."

Re: How can Wall Street be so healthy when Main Street isn’t?

#78

Post by throwaway_USD »

GrinningFool wrote: post #70
throwaway_USD wrote: post #3

Easy Congress put on bandannas and robbed the tax payers of about $18,000 each. Congress then turned around and gave taxpayers $1,200 each, of their own money, that total amount can be doubled that to account for the temporary unemployment benefits increase. The rest of the taxpayer money went to the FED so they will guarantee the prices of shit stock...the market can't lower because as many rich CEOs and investors c…

> Easy Congress put on bandannas and robbed the tax payers of about $18,000 each. I think you're under the mistaken impression that the debt incurred by the aid packages will somehow get repaid.

Whether it gets repaid or not has no bearing on the fact that taxpayers were robbed and their future taxes were used in large part to prop up an historically overvalued stock market completely detached from traditional P/E ratios.

Plus the working class will be made to suffer as their measly incomes, taxed at significantly higher rates than capital gains, will be worth even less due to devaluation of the dollar and inflation.

Re: How can Wall Street be so healthy when Main Street isn’t?

#79

Post by whoknos99 »

recursivedoubts wrote: post #27

By holding interest rates so low, the Fed has created a double-bind: despite the systemic risks (which are very high) people who have investable cash have two options: the stock market or paying down debt. The stock market is being "invested" in not because it is a good investment at this point (it isn't) but because there is no where else to go. If interest rates ever revert to anything normal, it will get crushed.…

Numerate people understand debt is driven by ideology.

Enough people need to be enabled with skin in the game to jettison social narratives that elites must rule.

Debt is a fascistic social object intended to enable grift of the aristocracy.

It could be described in plainer math terms. But cortexes have had “facts” like “because a person has a lot of money they’re extra important” coded into them such that that’s all our limbic system can trigger as a response.

A lot of smart people hold conflicting belief there are no gods and their own personal skills make them invaluable.

France can’t even sort out who “holds” all of its national debt.

Why would the next generation or two not just argue to change the nature of this rather than feel beholden to all the people debating this today who will be long dead by then?

Nation states have hit “reset” on debt in the past. “People today” need to climb out their own arse and realize it’s not the first and last day of human existence.

Consider the real messes, environment and human tragedies, your culture is perpetuating.

Not the illusory idea that economists are more useful than real doers to a community. A lot of professional experts are just grifters extracting capital like you.

Cognitive science is showing muscle memory and hands on doing is more important than intellect and wealth when it comes to solving problems. “Educated” administrators who peddle context as king test lower on reading comprehension and have trouble thinking outside the box.

It’s not “government” that’s bad. That’s a logical straw man. Government is humans. It’s enabling human biology to exist in the state of feeling invulnerable. It leads to entitlement and fascistic defense of unrealistic idea any one or handful of people are that important.

They don’t have an information advantage. They have a social narrative advantage we’re trained from childhood to abide no different than children being taught to abide god. Elites falling will mean end times!

It’s just people saying things, doing things. Which people doesn’t matter. History clearly shows there will always be someone on every side of wavey debate. Using ones wealth to boost their side of the debate is authoritarian and anti-free market.

America is an oligarchy. Just like all of its “enemies”.

Re: How can Wall Street be so healthy when Main Street isn’t?

#80

Post by ttul »

svachalek wrote: post #47
thieving_magpie wrote: post #37

Earlier quoted context omitted.

I'd really like to read more about how tax payers are paying $18,000 each but all I can find as a source is some twitter comment and a reddit thread where the claim is disputed. Do you have something more substantial I could read? At first glance it seems extremely exaggerated so I'd like to get my head around it.

I think this is simply dividing the cost of relief packages by the number of taxpayers. It’s oversimplification of government budgeting to the point that it doesn’t mean much of anything other than to give a sense of scale.

Over-simplification in the extreme. Much of the stimulus was in the form of lending. The government will get most of that money back over time.
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