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Astonishingly strong US jobs report sends stocks wavering

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Re: Astonishingly strong US jobs report sends stocks wavering

#91

Post by horsawlarway »

mastax wrote: post #39
horsawlarway wrote: post #20

Earlier quoted context omitted.

You seem to be saying essentially the same thing. The fed has been pretty clear that it sees wage growth as a serious inflation problem (because it's sticky) and they're intentionally raising rates to force cuts to wages and employment. Personally - I'm a little mixed, since I believe rates were far too low and have created a very strange economy where you have companies that never actually make money become househol…

The Fed did raise rates during the good years before this. And that was with a certain president threatening to fire the Fed chair for raising rates.

raised 225 points in the years between 2015 & 2018 (very slow return to some sanity after the cuts in 2008 down to nearly 0)

Immediately dropped by 75 points in 2019 due to trade war concerns (pre covid), then dropped another 150 points in 2020 due to covid.

So back to 2008 levels.

Raised by 450 points at the threat of "wage growth" and hot employment causing inflation over the last 11 months.

---

So yes, they were ever so slowly hiking rates back up, but I think the current approach definitely hints at what their priorities are.

To be fair - I don't really believe the fed is entirely responsible - they don't have many good levers to pull to influence the things they've been tasked with influencing.

But I think the timing shows the priorities pretty well. The existence of huge zombie companies hollowing out real markets, only alive because of incredibly cheap cash, was not a serious problem.

Wage growth - now that's a thing to be feared.

Re: Astonishingly strong US jobs report sends stocks wavering

#92

Post by bubbleRefuge »

The fed is stimulating the economy by raising interest rates. Interest rate increases mean more federal funds flow into the economy via increased paymentsto treasury bond holders and the like. Since our national debt outstanding vs GDP is very high its having a large effect and the is seemingly blind to this.

Re: Astonishingly strong US jobs report sends stocks wavering

#93

Post by harimau777 »

kspacewalk2 wrote: post #82
dougmwne wrote: post #43

Earlier quoted context omitted.

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…

Inflation (but not hyperinflation) benefits people in debt, and hurts people with savings. Is having savings nowadays considered intrinsically less moral or something? Inflation targeting of, say, 2%, is the balance that takes into account the sometimes competing interests of all these groups (savers, borrowers, wage earners, people who live off investments, etc). Deviation into either direction causes long-term stru…

In my experience, service sector working class people generally have no savings due to low wages and high cost of housing. I think it's not that people view saving as immoral; rather they view it as a class indicator.

It appears that if the lower class starts seeing wage increases, then our economy falls apart and/or the Fed steps in to stop it. That suggests that our economy is broken with respect to the lower class.

Re: Astonishingly strong US jobs report sends stocks wavering

#94

Post by lazide »

gymbeaux wrote: post #65
Reason077 wrote: post #62

Earlier quoted context omitted.

> "Inflation benefits people in debt" Only if that debt is at fixed rates of interest, like corporate bonds or a fixed-rate mortgage. If your rate is variable, then inflation leads to higher interest rates which increases the cost of servicing that debt. Note that the US mortgage market is unusual in that 30-year fixed rates are quite common. In most of the world, mortgages are variable-rate, or fixed for much shorte…

Actually, higher inflation doesn’t necessarily correspond to higher variable interest rates. Indirectly, yea, but only because the fed is raising the benchmark rate to “fight inflation”.

No one is going to write a mortgage for a lower rate than inflation unless they’re crazy (so the gov’t might, but even then not usually!). They’d be signing up to 100% burn their cash doing so.

Inflation absolutely impacts mortgage rates, and all other lending.

Re: Astonishingly strong US jobs report sends stocks wavering

#95

Post by GAN_Game »

looping__lui wrote: post #79
GAN_Game wrote: post #69

Earlier quoted context omitted.

> Isn’t income equality (government interventions in some aspects aside) a mere reflection of people’s contribution to a economy and their ability to negotiate? So, are you assuming/applying everyone more or less has the same contribution or do you want everyone to be paid the same irrespective? Sure, the heirs from Rich Kids of Instagram are living off their rentier expropriation as a "reflection of people’s contrib…

So you are mainly talking about passive income inequality? I was talking about income that is earned. Well, what do you want me to say: the country I live in we have a high tax on inheritance, capital gains etc. But to me personally: I am grown up enough to not care how many Porsches my neighbor has. How does this matter? There are resources that cover basic needs such as health, living, education and food. But in Eu…

> But to me personally: I am grown up enough to not care how many Porsches my neighbor has. How does this matter?

When something I made is sold at a company, used raw materials are rebought, but then left over is the wealth I created. A portion goes to me in wages, a portion is mailed off in dividend checks to the heir who is expropriating my surplus time. It matters because the heir is expropriating surplus labor time from me, and all the wealth I create in this time. That is why it matters.

Re: Astonishingly strong US jobs report sends stocks wavering

#96

Post by PragmaticPulp »

harimau777 wrote: post #93
kspacewalk2 wrote: post #82

Earlier quoted context omitted.

Inflation (but not hyperinflation) benefits people in debt, and hurts people with savings. Is having savings nowadays considered intrinsically less moral or something? Inflation targeting of, say, 2%, is the balance that takes into account the sometimes competing interests of all these groups (savers, borrowers, wage earners, people who live off investments, etc). Deviation into either direction causes long-term stru…

In my experience, service sector working class people generally have no savings due to low wages and high cost of housing. I think it's not that people view saving as immoral; rather they view it as a class indicator. It appears that if the lower class starts seeing wage increases, then our economy falls apart and/or the Fed steps in to stop it. That suggests that our economy is broken with respect to the lower class…

> In my experience, service sector working class people generally have no savings due to low wages and high cost of housing.

Statistically, a lot of middle class people save their wealth in their houses, which are bought via mortgages.

Inflation benefits those people significantly by raising the value of their house and making their 30-year fixed mortgages (in the US) easier to pay off. It's not so great for people in other countries with variable rate mortgages, though.

Re: Astonishingly strong US jobs report sends stocks wavering

#97

Post by mempko »

kspacewalk2 wrote: post #82
dougmwne wrote: post #43

Earlier quoted context omitted.

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…

Inflation (but not hyperinflation) benefits people in debt, and hurts people with savings. Is having savings nowadays considered intrinsically less moral or something? Inflation targeting of, say, 2%, is the balance that takes into account the sometimes competing interests of all these groups (savers, borrowers, wage earners, people who live off investments, etc). Deviation into either direction causes long-term stru…

Savings and Debt are two sides of the same coin. The savings in your bank account is someone else's debt. The Bank of England has a great explanation of this here: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

In other words, loans create deposits, not the other way around. Savers are hoarding cash which leads to a decrease in aggregate demand, and also ironically their ability to save in the future.

Re: Astonishingly strong US jobs report sends stocks wavering

#98

Post by actually_a_dog »

dougmwne wrote: post #43
looping__lui wrote: post #18

Earlier quoted context omitted.

Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…

> The government is a democracy...

No, it isn't, and this isn't some "it's a reeeeepublic" rant, either. When half the population couldn't legally vote for most of the country's history, that's not very democratic. "Oligarchy" is a better fit, but apparently we only reserve that for countries we don't like. Average individuals working average jobs and making average incomes get next to no say in anything that happens at a national level, and I would be surprised if it were any better at the state level.

https://act.represent.us/sign/usa-oligarchy-research-explain...

Re: Astonishingly strong US jobs report sends stocks wavering

#99

Post by bjourne »

kspacewalk2 wrote: post #82
dougmwne wrote: post #43

Earlier quoted context omitted.

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…

Inflation (but not hyperinflation) benefits people in debt, and hurts people with savings. Is having savings nowadays considered intrinsically less moral or something? Inflation targeting of, say, 2%, is the balance that takes into account the sometimes competing interests of all these groups (savers, borrowers, wage earners, people who live off investments, etc). Deviation into either direction causes long-term stru…

Yes, savings are "intrinsically less moral" as savings are money not being used. And since wealth accumulates itself the more savings the more income inequality. It is intrinsically immoral that the wealth controlled by two dozen Western families is larger than the wealth of three billion people.

Re: Astonishingly strong US jobs report sends stocks wavering

#100

Post by [deleted] »

Loughla wrote: post #35
mensetmanusman wrote: post #13

The wealthiest 10% of Americans own 90% of these stocks. Most of you reading this are in the top 10%. Stock prices are a game among the wealthy who haven’t demanded that workers should be paid more to lower the absurdly high corporate profits.

Context, for those that were interested like I was. According to Investopedia, based on SSI data. Top .1% is $3,212,486/year 1% is 823,763 5% is 342,987 10% is 173,176 I am waaaaay under that. Education is a joke.

[deleted]
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