101–110 of 204 posts
This wins today's award for least necessary question mark.
Of course, that's entirely independent of whether the points are valid or not.
Here's what I don't get: this article claims that big (since that's what matters for stock market index levels) business sits on a mountain of debt. At the same time many economists (e.g Yanis Varoufakis) claim that big business sit on mountains of cash kept in tax heavens rather that "working" for the benefit of the economy. Which way is it and are there any confirmed statistics to check it?
Both. Racking up domestic debt using offshore cash as collateral. It's like getting a low interest loan using your 401k.
Yes. Aggregate corporate profits have not gone up at all: https://fred.stlouisfed.org/series/A053RC1Q027SBEA There's a long way to go down to normalize this situation. I'm not saying this will happen, but the downside potential is enormous. Also, don't forget about the 50% of US GDP ($11T) that have been loaded into US capital markets (both debt and equity) by foreigners. This is also hugely out of balance: https://f…
It wont, they just showed that they rather let the system explode than implode; the balance, proper self-organization, invisible hand etc, was lost ten years ago
Earlier quoted context omitted.
Are you sure about that? All the people in your town would also have to shop at those alternatives as well. Do you think that there is enough inventory and stock to go around? Would those alternatives replenish their inventory in a timely fashion? Would you seek alternatives to your normal shopping? I think people vastly overestimate the capabilities of their local options.
People also vastly underestimate how hard it is to produce commodities. Like, if Amazon disappeared overnight then we'd just all switch to something else and no issues would arise. What nuttiness!
Do people not expect the market to go down when business revenues have been forced lower due to unforeseen circumstances? The fact is a valuation made in November 2019 had no way of taking this into account. This isn't to say whether or not it's a bubble, but I am surprised at the number of people who think that stock prices going down is due to financial health of companies rather than people attempting to sell stoc…
"It's like, if there are four partners in a partnership and two decide to buy out the other's shares, their shares are now worth twice as much, assuming the corporation continues making revenue." - I don't understand how you calculate that. Let's say there is a company with 4 shareholders with equal shares and with discounted future earnings of $2 million plus $2 million of cash. That makes the company worth $4 milli…
Earlier quoted context omitted.
I don't think it will be so straight forward as that. Power is handed down, and people who have power generally don't want to give it up.
This is a good point, but I've been getting the feeling that the working class is getting more and more fed up with our conditions as we're squeezed for every last dollar of surplus value. At the end of the day "the people in power" have power because the masses allow them to. If enough people refuse to participate in the system then the system will fall apart - e.g. the state only has the capacity to process so many…
‘A banker, a worker, and an immigrant are sitting at a table with 20 cookies. ‘The banker takes 19 cookies and warns the worker: “Watch out, the immigrant is going to take your cookie away.”’
If the ruling class plays it right the working class will go after each other instead of the ruling class. And so far they seem to do really well.
Yes. Aggregate corporate profits have not gone up at all: https://fred.stlouisfed.org/series/A053RC1Q027SBEA There's a long way to go down to normalize this situation. I'm not saying this will happen, but the downside potential is enormous. Also, don't forget about the 50% of US GDP ($11T) that have been loaded into US capital markets (both debt and equity) by foreigners. This is also hugely out of balance: https://f…
Yes. Aggregate corporate profits have not gone up at all: https://fred.stlouisfed.org/series/A053RC1Q027SBEA There's a long way to go down to normalize this situation. I'm not saying this will happen, but the downside potential is enormous. Also, don't forget about the 50% of US GDP ($11T) that have been loaded into US capital markets (both debt and equity) by foreigners. This is also hugely out of balance: https://f…
I thought the same, and had to ask some friends to provide another point of view: If a company like amazon generates very little corporate profit, is that unproductive growth? Aggregate corporate profits are not the only stat that matters when discussing economic growth/value.
Of course not. There would be more employees, more taxes paid, more buildings being built, more assets, etc. thus more money going into the economy.
I've always dreamed that companies should run with zero profit (like the outdoor store co-ops like REI or MEC in Canada). They could price their products so they don't make any "extra" money each year after all expenses and salaries, etc.
I think we'd live in a better world if a company like Apple didn't exist to make ever increasing profits, but existed just to create the products they create.
The bubble has been enabled by the Federal Reserve. Quantitative easing and money printing has served to inflate asset prices over many years. For some reason markets going up is fine but when they inevitably decline sharply this is viewed as 'disorderly' and the Fed prints money to keep asset prices high. The Fed ensures that hedge funds have counter-parties to buy their toxic overvalued assets. It's now clear that…
Everyone always seems to knee-jerk forget that corporations are employers...the economy is run for people. People work for companies. Companies compete, and the financial gymnastics they do to get there is done by people also. Companies are not sentient. (you could argue that they have some meta-sentience, but it is pretty unspecific)
I can't imagine what would happen if you gave every citizen 10k. I would think there would likely be something akin to a revolution that may or may not result in a more robust economy. What the gov't is doing by giving so much money to existing companies that have already failed vs individuals with the possibility of failing is very much protecting the existing social structure of society.
Corporations like these are a hierarchy that generate implicit social striations in our society. By maintaining this regardless of the fundamental success of the product or competence of the management, they act only to preserve the class structure enforced by the institution and thus the stability of society in a configuration with marginal utility as regards productivity.
They're clearly ensuring their own future.
Earlier quoted context omitted.
Both. Racking up domestic debt using offshore cash as collateral. It's like getting a low interest loan using your 401k.
Ok, thanks. Then the premise of this article is even weaker. Companies do generate huge profits albeit most of the hidden through accounting engineering. It's more likely that the inflated stock prices represent the actual "value".