Don't tell me that the markets have nothing to do with the "real economy"

[scheming daemons]

In the final 9 months of the Bush administration, my 401K lost 29.3% of its value. Since Obama took office, it has gained 34.4%.



Since Obama was sworn in, my 401K account has swelled by over $38,000.... . basically restoring all of the losses Bush's last year cost me.



I'm a middle-class guy in a middle-class neighborhood with a middle-class house. I've worked for 20 years to build up my 401K savings. Nearly 50% of the population has a 401K or Roth IRA.


Middle-class families are invested in the stock market.


The Dow was 7,900 the day Obama was sworn in. It's over 11,000 today.



This stuff matters.... and not just to the "rich".

[NJmaverick]

1. You raise some very important points that should be heeded by all

[paulsby]

2. i agree

this myth that the stock market only affects "wall street fat cats" etc. is simply dismissive of evidence.

a very substantial proportion of the population has market exposure.

good post

[Statistical]

6. Delete - wrong spot.

[TexasObserver]

3. Yes, indeed. The DOW peaked around 14k in 2007.

It trailed off to 13k by early 2008, dwindled down to 12k, and then fell below 11k for good in September 2008. It dropped several thousand points under Bush, then turned somewhat optimistic following Obama's election.

After Obama took office, the TV business talking heads talked the market into a plunge, and it fell below 7K in March, 2009. I told everyone I know to get back in as soon as it fell below 7k. Those who listened have made a bunch of money. Those who didn't waited until it hit 9k or 10k to get back in. There are sound investment reasons for taking longer to get back in, but it's always about being smart getting in and getting out.

I don't address day trading, which is simply gambling on hunches. I prefer betting long term trends and not pretending that one day or one month matters that much.

The DOW piercing 11K is an important milestone. I believe we are halfway back (in terms of time) to the previous high of 14k. I fully expect the DOW to be hovering near 14K by early 2012. So, suck on that GOP!

I also expect unemployment to be back down below 8% by early 2012, maybe sooner.

[Larkspur]

4. I still can't find full-time work. I'm stuck with 3 month contracts

and hope they get extended.

What is Obama's plan for helping us 40+ year olds get good paying jobs and good benefits?

[OHdem10]

5. At some point the Market must must must reflect what is going on

in the real economy.(country).

Surging Stock market should reflect a surging real economy.

Sagging Stock Market should reflect a sagging real economy.

Surging Stock Market and Sagging real economy equals a bubble
in the Market.

Surging Stock Market and Sagging real economy can mean the
Casinos are wild on Wall Street. This is what happened prior
to the crash.

[Change Happens]

36. The markets are leading indicators, meaning a nice upturn in the economy is few months ahead...

The markets never get this fact wrong!

The markets are up BECAUSE the recovery is here!

Obanomics is working...

[girl gone mad]

87. "The markets are leading indicators"

Prove it.

Extraordinary claims such as this one demand extraordinary evidence.

[Statistical]

7. Thanks. I am tired of the wallstreet = fat cants and trillionares meme.

I too am am a middle class guy who will never have a pension.

If I don't want to be a 70 year old Walmart greeter and buy catfood daily (despite not having a cat) I need to finance my own retirement.

Fill up 401K while I work (employer match is an optional pay-raise, take it or leave it). Then dump 401K to IRA, convert IRA to roth (paying taxes) to have tax free money for life. Goal is to get rich slow. Due to some nice buying at the bottom and put spreads on the way down I am well above my peak and the DOW is only at 11K.

For millions of Americans that wealth does affect buying/spending habits. I have cut spending to the bone over last 18 months. This weekend we loosened up and spent $200 at Lowes (fertilizer, some plants, an "arch thing" for my wife, and some sod for bare spots in lawn).

If everyone who had disposable income spent $200 extra that would drive employment. The idea they are completely separate is foolish.

[Change Happens]

38. Most listened to Liberal radio talker: Thom Hartmann slams the markets all day long

He really keeps talking down the market, keeps saying he thinks we are going to have a HUGE drop again, back down to DOW 6000...etc. The rich are artificially inflating the numbers...etc.

He admits on the air that ALL his money is in gold today...I always feel like calling him to tell him to stop bad mouthing my little nest egg!

[defendandprotect]

49. Correct because people actually did "lose" money which was never replaced ...

What about those who were totally wiped out?

The money simply goes into different pockets--

Gold -- it's all playing the "for profit" -- value everything by a dollar bill game.

In time of crisis, who's going to be carrying their gold around?

[cbdo2007]

85. A very small amount of people sold at the bottom, which would have been stupid...

and can't really be blamed on Wall Street.

I've never understood the "gold" thing because I see it the same way you do. I even asked about this in a Gold thread in the Economy forum once. If the rest of the economy collapses, gold will collapse right along with it because you can't go to the grocery store and scrape off some gold to pay for your groceries. It just isn't going to happen. IF the entire economy collapsed to the point the gold crazies think that it will be the standard, the govt. will just stop printing money and devalue it and people will go on with their lives.

[defendandprotect]

118. Often money is made by exploiting people who don't know any better . . .

nothing new there --

As long as we all keep playing capitalism's games, we're all victims ---

Time to move on --

Re gold -- there's an old saying . . .

"You can only own what you can carry on your back" --

[Lagomorph]

125. the problem is there for anyone to see...

http://www.usatoday.com/news/washington/2010-04-12-deficit_N.htm

[Better Today]

8. Please explain how your, or anyone else's, increased 401K is positively

effecting the day to day economy that the average person needs to thrive in order to have a job.

Are you spending that money? No. Is anyone else that doesn't have to? No.

It doesn't help the economy, it helps your impression of your own personal worth. I read that soon the CRE will collapse, and the foreclosures are on the rise from unemployment rather than risky sub-prime loans and that there is still another round of adjustable loans that may trigger another round of increased foreclosures. So if and when any of these hit and a second dip into depression/recession hits, you'll be rue to realize that your 401K increase you see as so valuable now was just a spectre encouraging you to be complacent about real economic recovery.

[NJmaverick]

9. Better 401Ks mean more spending by seniors as well as people retiring earlier

and opening up their jobs for others who need one.

[Better Today]

12. I'm asking to OP to be specific as to how his 401K relates to his personally

helping the day to day economy.

That being said, your idea of what might be happening is reasonable, but I've seen no real evidence to support it. Most seniors I know are still living as tightly as possible just in case, regardless of their 401Ks or in some cases are actually have to pay off debt incurred over the past three years with some of it. Nor do I know any willingly giving up on their employment because the stock market is up, they fear a re-dip, they recognize they are still under where they were 3-4 years ago when the market was at 14,000. Nope, what you say may be logical, but it isn't reality for anyone on main street.

I know you like to be hopeful, and some need to be no doubt. Truth is the stock market has regained nearly 4000 points, and yet the average citizen is still faced with stagnant or declining wages, unemployment, and mortgage issues. And for most people, 401Ks are not discretionary, liquid assets and only give a sense on one's potential value many years into the future.

[NJmaverick]

15. You raise a good point about fear holding back our economy

[Better Today]

114. Fear, when based on reality on the ground, is wise and sensible.

[Yavin4]

17. I Can Answer Your Question

I am unemployed, and I'm living on UE checks at the moment. I have $5000 in a Roth IRA. Last year at this time, it went down to $3100. Today, it may have recovered the full $5000. If it goes higher, between my Roth, my savings, and my UE checks, I will have enough assets to buy some more books for my re-training and I may be able to upgrade my operating system and buy new software also for my re-training.

That additional spending will go to book sellers and software vendors, and that translates into increased jobs.

[defendandprotect]

124. Won't the government help you with those expenses for retraining to add another taxpayer to rolls?

[Hannah Bell]

55. 401Ks only started becoming common in the 80s. ergo, most seniors don't have 401ks at all.

[Raineyb]

75. That's a small bit of fact that won't penetrate that bubble.

Neither does the fact that most of the stock are owned by the upper 10% of this country. But we're supposed to cheer every time the stock market goes up as though it means a damn thing for the rest of us.

I'm looking for a job. Funny how stocks tend to go up when companies announce job cuts. Do these people expect us to cheer that too?

[laughingliberal]

102. I'm glad you made that point. The stock market often rises on news that is bad for workers

Company announces huge layoffs: stocks surge. We have got to get out of the boom/bust cycles. The President has talked about the need for a change but we have not seen any changes to the system that got us where we are. How is this not another bubble?

[Hannah Bell]

116. your 401k side is supposed to cheer it as your unemployed side spends down your 401K.

the ptb wanted workers dependent on the market to put a damper on political activity -- as well as to have more suckers to rob.

[defendandprotect]

120. Exactly . . . . . Stocks owned by upper 10%, but bailed out by us all when needed . . .

Everytime there's a hit on the market and it collapses someone makes a

huge windfall profit --

it's not us --

It's all a game -- which is why they wanted to get Social Security money into

it -- more action, bigger profits, bigger collapses!

[Juche]

129. 80% are owned by the top 10%

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

[defendandprotect]

119. And not all 401Ks fluctuate downward with the market . . .

[Change Happens]

41. 401Ks generate $600 billion a year in dividends, that alone

is stimulus!

Much of this money is spent back into the economy, more buying power in people's hands...etc. It simple really, money makes money.

[Hannah Bell]

56. only if you think it's common or wise for people to spend their 401ks.

[defendandprotect]

121. The middlemen make the profit based on service -- something pensions didn't provide --

Who gets it and who spends it?

That's the question --

Money doesn't make money -- it makes a mess -- an environmental mess, bubbles we

later bail out -- and political corruption just to name a few things.

The dollar bill is an artificial entity -- but it's used as a yardstick of "value" --

"worth" and "wealth" -- which is ridiculous!

Nature, humanity, animal-life are "wealth" -- not a dollar bill!

[Raineyb]

66. It doesn't. The best thing Wall Street ever did (for Wall Street of course) was

to convince the "little people" that when it goes up that everyone benefits. Meanwhile the vast majority of the money in the stock market belongs to the upper 10% or so. But that money they can't touch at all has gone up a bit so it must be great! Meanwhile the fact that said money could be entirely wiped out the next day or some time in the future when they might actually NEED it is completely ignored.

PT Barnum must be working on Wall Street in his current incarnation.

[Juche]

130. There are other problems ahead

The CRE will go down, but a variety of residential option mortgages will reset in 2010-2012, and it will be as bad as the subprime mortgage collapse.

Plus the foreclosures due to unemployment. And w/o meaningful financial regulation I don't know if anyone will really feel safe again.

[ixion]

10. And when the DOW first broke 10k in 2000

the economy was on fire. Now the DOW is doing great, and the economy is in the tank. I don't see the correlation.

[NJmaverick]

11. Time does matte, there was a time when 5000 was a great number for the DOW

now it would be a disaster

[NNN0LHI]

21. Dow first broke 10,000 on March 29, 1999

[ixion]

25. And the economy was good

[Odin2005]

13. The 401K is a scam designed to channel money into the Wall Street Casino.

And the Wall Street thieves laughed their way to the bank. They will let it go up and then short sell all the suckers that thought their 401K would pay for their retirement.

[DURHAM D]

16. Ok - 401K - bad idea. Any market investment - bad idea.

Where do you have your savings invested to keep up with inflation?

If you don't have any savings now but you get some later - where will you park it?

[Better Today]

20. So you support the idea that in order to have some interest on savings,

we should all be forced into the gambling risk as known as the stock market? Sad.

[DURHAM D]

26. Your post is insulting and a non sequitur. nt

[Better Today]

34. It wasn't intended to be, it was intended to point out one of the primary

causes of the whole mess we find ourselves in. The way that folks as you rightly point out, have no incentive to save safely, but instead are encouraged and to extent forced into a gambling racket with their savings and their retirement, both personal retirement like IRAs and group retirements, like pensions.

We are all upset about forced mandates with no public option. This to me is the same, forced gambling with no other options. It used to be "wisedom" that you shouldn't put into the markets anything you couldn't afford to lose, and most prospectuses essentially tell you the same thing. Are you telling me that everyone's retirement and most of their savings should be handled that way?

I cannot imagine why you'd be insulted by any of this or how you can't see it.

[DURHAM D]

44. I understand it all.

You responded to a post I made to another poster. You butted in, changed the subject and acted in an insulting manner, treating me as if I am stupid, not once but twice. I am not.

You are an angry bully.

done

[Better Today]

52. An angry bully? Well, you're clearly having a bad day.

Buck up, you're really over-reacting. But hey, I guess some folks have to do that when their point is recognized as valid, such as your point that there is no reasonable place to put one's savings or retirement except in a crap shoot. You bring it up, I agree with you, and you're offended? Are you a two year old or what?

[Hannah Bell]

57. oh, horseshit. he made a legitimate point without any personal comments at all.

as for "butting in" -- this is a discussion thread, not a private conversation.

[Raineyb]

69. The poster wasn't being insulting.

I can't say the same for you.

YOU are out of line. And you're also wrong but you'll probably interpret that as being an angry bully.

[girl gone mad]

89. It wasn't a change of subject..

and Better Today is dead right.

Most people should be investing their retirement savings in less risky vehicles. Equities were never really designed to provide stable retirement income. Seniors are getting killed by the artificially low interest rates designed by the Fed to keep the markets pumped up.

[DURHAM D]

27. double post - deleted

[dionysus]

68. standard 401k plans offer many low risk stock, cash and bond choices. you're making a false argument

[sendero]

48. You should be thinking about..

... return OF capital instead of return ON capital.

The stock market is a rigged game. Play if you want to but don't for a second think that stock prices aren't being controlled by the big players. And THEY will decide when the next crash will come and they will take your money and get out beforehand.

[DURHAM D]

92. Completely agree with "of" vs "on".

I am pretty conservatively invested and have not one but two financial advisers telling me I need to be more aggressive. I will be retiring in a few months so I just keep blowing them off. Right now I am pretty liquid and just waiting for the crash of 2010 before making anything other than minor changes.

Thank you are making a thoughtful response.

[SOS]

80. Based on the last decade

You would have done better with 10 year bonds than an S&P 500 index fund.

[dionysus]

67. unless you, you know, invest in cash, bonds, or low risk stocks in your 401k

please think before you type.

[greencharlie]

127. DING DING DING! nt

[ipaint]

14. 50% if you count people with $6000.00 or less.

But you know that. The claim that the middle class is heavily involved in the stock market was debunked with facts in this thread you started with the exact same flawed premise.

From post #11 in the linked thread below, once again...

"At the under 6k level, i.e. trivial money, you have 49%.

At the over 6k level, meaning people with actual investment money with long term value - you've got 34%. That's thirty four percent of all families from richest to poorest. The dispertion of that 34% skews overwhelmingly toward the super rich. So of that total 34%, you've got like 90% of it coming from the super wealthy.

The result? Hardly any middle class or working class families have any significant investment in the stock market. It's a rich person's game, and is then spun as some sort of "bastion of middle class savings" which is a straightforward lie."

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7370786

[izzybeans]

19. This isn't going to be true for younger workers who have no

access to pensions, which are institutional investors not included in those numbers, btw.

[girl gone mad]

90. Young people today are less likely to invest in stocks than there parents were..

at their age. I think the previous bubble collapse has something to do with that. I also think kids in their formative years now will shy away from the stock market long term (and from debt, too).

[iris27]

42. Well, I'm 28 and all $18k of the retirement I've been able to save so far is in

the market. I know I will never have a job with a pension, and I have serious doubts that I'll be able to count on any Social Security. It's the only weapon I have to beat inflation in my attempts to save.

Edited to add: And if it matters, which apparently it might looking at that other thread, I am anything but rich. I am lucky to have a full-time job (38 hrs/wk) with health benefits, but I only make $27k a year.

[izzybeans]

18. Take out the middlemen in the stock market

and it is the largest socialist institution we have to date.

Public ownership of private capital. We all sink or swim for better or worse with it.

[ipaint]

22. From 2003- The richest 10 percent own 85 percent of all stock.

The Wealth Divide
The Growing Gap in the United States
Between the Rich and the Rest

snip

MM: To what extent is the wealth inequality trend simply reflective of the rising level of income inequality?
Wolff: Part of it reflects underlying increases in income inequality, but the other significant factor is what has happened to the ratio between stock prices and housing prices. The major asset of the middle class is their home. The major assets of the rich are stocks and small business equity. If stock prices increase more quickly than housing prices, then the share of wealth owned by the richest households goes up. This turns out to be almost as important as underlying changes in income inequality. For the last 25 or 30 years, despite the bear market we’ve had over the last two years, stock prices have gone up quite a bit faster than housing prices.

MM: A couple years ago there was a great deal of talk of the democratization of the stock market. Is that reflected in these figures, or was it an illusion?
Wolff: I would say it was more of an illusion. What did happen is that the percentage of households with some ownership of stocks, including mutual funds and pension accounts like 401(k)s, did go up very dramatically over the last 20 years. In 1983, only 32 percent of households had some ownership of stock.

By 2001, the share was 51 percent. So there has been much more widespread stock ownership, in terms of number of families.

But a lot of these families have very small stakes in the stock market. In 2001, only 32 percent of households owned more than $10,000 of stock, and only 25 percent of households owned more than $25,000 worth of stock.

So a lot of these new stock owners have had relatively small holdings of stock. There hasn’t been much dilution in the share of stock owned by the richest 1 or 10 percent. Stock ownership is still heavily concentrated among rich families. The richest 10 percent own 85 percent of all stock.

http://multinationalmonitor.org/mm2003/03may/may03interviewswolff.html

[gleaner]

23. I couldn't tell you that it has nothing to do ..

with the economy. Only that is is just one factor and not the whole picture. I had friend who lost 40% of the worth of her retirement account on 9/11 and it never came back to full value under Bush. Her retirement account consisted of money deducted from her paycheck and spread over a wide array of different stocks which is the safest way to invest. It has never regained full value. She has resigned herself to working longer than she wanted to. That retirement account was going to help her with an early out from her job.

The stock market is a big factor in the economy, and it is tied to the stock markets of other countries like Japan so it is a big factor in macro economics too. But you also have to consider unemployment, inflation of prices for goods and services, the use of credit, purchasing ability of middle class families and the going rate of inflation, the ability to pay for a home and live in it and whether or not you can get and pay for health care. Because if you are dead or near death with no hope nothing else much matters.

The economy is a complex collection of trends and factors which economists analyze and try to use to predict an eventual outcome. Rallies of the stock market alone don't do that. Also the stock market is volatile. Congratulations on the gain in your investments, but my brother in law, a retired teacher lost his shorts and a lot of his future security. Tread with caution there. Stock trading is the nearest thing to legalized gambling that we have. Good luck to you, and I hope you don't think I am being sarcastic. I'm not. I really hope you continue to do well and that more Americans can follow suit.

[laughingliberal]

28. Thank you! I get really tired of the stock market somehow being touted as the end all be all

economic indicator. If the stock market is surging, it is not necessarily a good thing if it is, in fact, another bubble inflating. I do believe the President has expressed the need for some systemic changes to stop this boom/bust cycle we have been in for almost 3 decades. We have not seen those changes yet. Therefore, there is likely some bubble inflation going on now.

[gleaner]

53. I agree ...

The stock market was booming right up to Black Tuesday which was the day that crashed it and started the Great Depression. Here is a link http://www.mysmp.com/stocks/black-tuesday.html that will take you to a website that gives a short but pretty decent explanation of why the marked crashed both in 1929 and later in 1987 causing a serious recession. There will be one pop up that turns your screen black, but just close it and it won't return. I think they are making a point with it.

The conditions before the Great Depression sound similar to what is happening in the Stock Market now. As I said in another post 9/11 gutted the stock market and I don't know if it ever completely recovered from that or just began ponging up and down under Bush but remaining volatile and unstable.

I am not an expert but I had to learn enough about it to be able to understand trading, and capital gains and losses and such for the last job I was able to work at before my MS became too severe for me to work anywhere. Anyway it is not stable yet and it does not guide the whole economy. More like vice versa.

[ShortnFiery]

24. All those people with *shiny new temporary McJobs* deserved the bail-out before GREEDY Wall Street.

http://www.youtube.com/watch?v=yge311sFhC8

[laughingliberal]

29. Thank you. nt

[DailyGrind51]

30. It does help union pensions and retirees.

[laughingliberal]

31. It does if they cash out in time. If this is another bubble, it will help nothing when it pops.

I have trouble seeing how this is not another bubble inflating as there have been no changes made to the way Wall Street does business.

[DailyGrind51]

63. Only time will tell.

[branders seine]

32. It 'matters' to capitalists

and to the citizens who have deluded themselves into believing they are capitalists

It serves the valuable purpose of putting the middle class's money in a spot where it can be controlled most effectively by the wealthy.

[conscious evolution]

33. Thanks for supporting

the destruction of unions,the offshoring of manufacturing jobs,million dollar bonuses for ceo's and the the destruction of the middle class.

[dionysus]

70. by having a 401k? are you serious?

[Greyhound]

35. And that you don't see how you are being scammed every day that

you come on here and spout your nonsense just shows how effective the scam is.

Congratulations, you helped destroy America.
:patriot:

[dionysus]

71. he's destroying america.. by having retirement funds. did you think before you wrote that?

[Swede]

37. I wonder where all these naysayers are putting their money?

You have to get a 7-8% return just to beat fees and inflation. Anything else and you are losing.

[Mike 03]

39. Fantastic Post. I am so happy that people realize what is going on around here.

Wall Street IS Main Street. Thank you for this very sane, knowledgeable and relevant post.

[Mike 03]

40. Rec to the sky. NT.

[baldguy]

43. In a real economy, you'd have a pension whose benefits wouldn't have been effected by the crash.

Don't fool yourself - 401Ks are the product of Wall St greed, and a tool to bleed cash out of the Middle Class & concentrate it in the hands of the already wealthy.

[Cha]

45. I'm happy for you!

This cheers me:D

[defendandprotect]

46. You're talking about politics . . . an economy should be based on real value ....

Also, I believe many who had their 401K's hooked to the stock market may have

changed that after the last crash?

People I'm familiar with did --

[sendero]

47. They don't..

.. but if it makes you feel better you can think so.

[defendandprotect]

50. Also keep in mind your pre-Bush $1 is probably now worth .50 cents????

[MajorChode]

51. The richest 10% own 90% of all stock equity

So while it may be true that "Middle-class families are invested in the stock market", the reality is that stocks are predominately owned by the rich.

I would agree that the stock market is a good indicator of the economy. If the stock market is growing, that means companies are growing. If companies are growing, jobs are being created.

[eridani]

59. I don't give a bloody goddam about jobs being created in China and India n/t

[MajorChode]

65. I'm not talking about the Shanghai or Bombay exchanges

nt

[conspirator]

74. Companies which thrive in the US don't necessarily have all their workers in the US nt

[MajorChode]

77. No kidding?

Try working it from the other angle. How many US workers do you think work for corporations?

For extra credit, here's a followup question:

Who pays larger salaries; mom and pop organizations, or large corporations?

[eridani]

91. If American stocks go up because of outsourcing, fuck that. n/t

[Raineyb]

73. That's not even true. Only when there's an IPO does the money go to the

company itself. Any other time it's just people trading amongst themselves. It makes the market makers a lot of money, the rest of us. Not so much.

[MajorChode]

78. So how do you explain Black Thursday in 1929?

The market crashed which was preceded by staggering unemployment that some call the Great Depression. If what you say is true, then it would have just been a few traders losing money and it shouldn't have effected the rest of the country, right? Coincidence perhaps?

How about more recent history? The DJIA averaged about 14% gains for the 8 years of the Clinton presidency. Unemployment fell significantly every single one of those years. Coincidence again?

The DJIA racked up considerable losses under the Shrub presiduncy and unemployment rose almost every year. Yet another coincidence?

[Raineyb]

82. What does that have to do with the fact that the money being traded on Wall Street

don't go to the companies themselves?

They don't. That's just a fact. Only during an IPO does the money go straight to the company.

The traders of course are representing companies (banks then investment banks) which were basically gambling, buying stocks on leverage in large numbers then when the prices tanked they couldn't pay the margin. (Or market makers who buy and sell stocks at prices they've set which can go horribly wrong if there's a huge change in the price) THAT type of thing affects the entire economy. But if you're trying to say that the activity on the stock market represents people demonstrating their faith in a company by giving that company their money, well you're just wrong. At best you can say that people are demonstrating their belief that they will make some money by owning a piece of that company (said money being in the form of dividends) or their belief that they can make money down the road by selling the stock for more than they paid for it. But by no means is a purchase of stock on the stock market an exchange of money from the buyer to the company that issued the stock. That is factually incorrect and there's no argument on that point whatsoever.

[MajorChode]

84. You completely avoided the question

Not only that, I'm not trying to suggest anything of the sort and trying to claim otherwise is simply strawman rhetoric. The DJIA only represents 30 stocks directly, but it's a damn good indicator of the stock market as a whole. Along the same lines, I'm saying that the stock market is a good indicator of the economy. History has proven this true time and time again. You might just as well argue the sky isn't blue or water isn't wet.

[Raineyb]

93. You asked for why. I told you. If you don't like the answer what the fuck do you want then?

I'm not going to argue that the fortunes of a few rather wealthy individuals is indicative of how *I* or others like me are doing. Mostly because I'm not a damn fool. Nor would I be so foolish as to do a happy dance at the good fortunes of people who are afflicted from too much good fortune is necessarily good for me. The stock market has been known to go up when the unemployment numbers go up. That is exactly the OPPOSITE of being indicative of the country as a whole. Stock prices have gone up when companies announce massive lay offs and when they send jobs out of the country. Guess what genius, when people are laid off they don't buy as much and while they may have been workers they are also CUSTOMERS. Customers who don't have a steady paycheck don't buy as much and it will end up biting them in the ass. But hey the stock price went up so there's not a damn thing wrong according to your own logic.

You asked a question vis a vis the IPO I had mentioned in a previous then got pissy when I referred to my comment to answer your question? You ought to do a better job of explaining your objection to a post before complaining about a lack of answer.

Now I remember why I had you on ignore in the first place.

[MajorChode]

111. I'm not really sure why you think name calling strengthens your argument

You completely avoided the question, so let's not pretend otherwise, OK? If you want to challenge my assertion, then please do so with something that at least approaches reason. I even tried to help you out by asking reasonable questions.

I didn't ask why Black Thursday happened, I asked why it preceded economic disaster. I also asked about two other historical events that support my assertion. Rather than answer those questions you pretended I asked something else and preceded to answer what you wish I had asked. Now instead of providing anything that approaches a historical example of your assertions, you resort to name calling.

If that's your idea of discussion, then please do put me on ignore. I don't plan on any further attempts until you grow up a bit anyway.

Have a nice day.

[Raineyb]

133. No I didn't. So you can cut the bullshit right there. You sir, and I'm using the word "sir"

extremely loosely are a liar.

I'm done with you. Back to ignore.

[DemocratSinceBirth]

96. The Stock Market Has Predicted Six Of The Last Five Recessions

~

[Lance_Boyle]

86. INITIAL public offerings are not the only kinds of public offerings.

Companies can issue new shares whenever their boards and the SEC let them.

[Raineyb]

94. And those do not represent the stock market as a whole do they? Thus the

argument that the trading of stock is indicative of companies obtaining money via investment by the individual purchaser of stock is as I had said, false.

[MajorChode]

112. So exactly who made that argument?

I'm thinking it was this guy...

http://dancleary.typepad.com/.a/6a00e5540ff48a88340112790efe3028a4-800wi

Cheers!

[Raineyb]

134. You did.

Damn fool.

[Hannah Bell]

54. half of households in the us have no 401ks or securities, and of those who do, most have

so if you have over $38K, you're on the upper end of the middle class.

[eridani]

58. Nonsense. Average people have little stake in the market

I'd bet that $38K is a completely piddling amount of money compared to your salary. In contrast, having a job at that salary vs not having one is a serious matter.

http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4#the-gap-between-the-top-1-and-everyone-else-hasnt-been-this-bad-since-the-roaring-twenties-1

Stock, bond and mutual fund ownership 2007
Top 1%--50.9%
90-99%--39.4%
50-90%--9.3%
Bottom 50%--0.5%

[treestar]

60. And when it goes up, there is more activity and that leads to more jobs

The idea that the market crashing will hurt only the rich is absurd and ridiculous. It going up is always good news for all of us. That it will help "only the rich" is just false. Blindness and seeing the economy as a zero sum game.

[Political Heretic]

61. MIDDLE CLASS FAMILIES ARE *NOT* INVESTED IN THE STOCK MARKET. PROOF

http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4#half-of-america-has-05-of-the-stocks-and-bonds-3

BOTTOM HALF OF AMERICA = 0.5% stock ownership.

Would you care to revise your bullshit statement, sir?

[SOS]

79. Thank you

The notion that "everyone" is in the market is clearly false.
The bottom 90% hold less than 10% of stocks, bonds and mutual funds.

[cbdo2007]

88. Regardless of whether or not you own stocks or a 401K - the stock market effects your

life every day in every transaction you make.

[Political Heretic]

109. That's the problem.

We don't disagree.

[SOS]

131. All too true

The desire to boost a stock price cost my wife her job in a round of corporate cost cutting.
The desire for high executive pay and shareholder return leaves me with no health insurance.
The market collapses of 2000, 2001 and 2008 cost my wife most of her retirement savings.
The desire for market performance at banks keeps us in a constant state of vigilance against abuses.
The pharmaceutical drive for returns and stock prices has made my wife's migraine medicine unaffordable.
The high interchange fees charges by banks adds 3% to everything we buy.
etc. etc.

So yes, the desire for fat returns in the stock market does effect everything.
Unfortunately, none of it good.

[Political Heretic]

62. Slightly under 50% have trival money in stock. Only 34% have 6k or greater invested in stock.

Of that number - number of households with 6k or more invested in stock, something like 90% of those households are super rich.

The middle class overwhelmingly touches the stock market at trivial levels or not at all. The working class and poor don't even trivially touch it. It's overwhelmingly a rich man's game.

Source (one of many): http://www.stateofworkingamerica.org/tabfig_2008_05.html

But you already know this:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7370786#7371119

[aikoaiko]

64. neccessary but not sufficient is the way I look at the market gains

[iris27]

76. +1 n/t

[Subdivisions]

72. What will you say when the market collapses? Will you come back then and

tell us the value of your losses?

[cbdo2007]

83. The market always comes back so selling after it "collapses" would be

stupid.

[DemocratSinceBirth]

97. The Market Is In The Same Place Now As It Was In 99

That's a ten year period without any gains.

[laughingliberal]

99. +1 nt

[DemocratSinceBirth]

100. There Have Periods Like This In History

The Dow was in the same place in 52 as it was in 29* and the market was in the same place it was in 82 as it was in 66. My numbers might be a bit off but not much. There were long periods of time where the market just amilessly bounced around.

I am not saying a healthy market is a bad thing. That would be dumb. But it's hard to get excited about the economy when the CBO says unemployment won't return to historical levels until the end of the decade. I don't know how President Obama gets reeleted in that environment; no incumbent of either party has since FDR.

[laughingliberal]

103. "...no incumbent of either party has since FDR."

That's the only way I see for it to happen at this point. AFAICS, there are no really bold initiatives coming our way before the midterms. If we somehow manage to hold the majorities and the President is able to start advocating for some worker friendly stimulative efforts between now and 2012, it would pull him through. But, based on the past 16 months, I'm not expecting to see that from him. I'm still willing to be pleasantly surprised.

[DemocratSinceBirth]

104. I Don't Blame Obama And I Have No Answers

I just know to to think unemployment will still be over eight percent in 2012 is unacceptable.

[laughingliberal]

105. I'm not sure who to blame

More and more I think the hands of our elected leaders are tied by forces more powerful than they. I just wonder if there's a point at which these interests have been catered to enough that they are willing to let a little bit trickle back down.

[DemocratSinceBirth]

106. The Republicants Have No Answers But They Might Win Because They Aren't Democrats.

When you have nearly one in five Americans unemployed, underemployed, or too discouraged to look for a job you have a sick economy.

[laughingliberal]

107. Yes. Anti-incumbent sentiment is high right now. nt

[Warren Stupidity]

101. +1

We are in a volatile stagnation. The last prolonged stagnation was mid 60's to mid 80's, but it lacked the volatility of this market, plus people had the option of relatively high interest money market funds to invest in, including bank CDs that locked in good guaranteed rates. The more interesting picture is the inflation adjusted dollar value of the stock markets.

http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm>

As can be seen, the stock market was very profitable, in real terms, in the 1950 to 1965 and 1983 to 2000 periods. On the other hand, it didn't perform well from 1965 to 1983, and neither it did for the last decade. Still, during these periods, it partially worked as a shelter from inflation.
http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm

[cbdo2007]

110. ha ha - there have been $$Billions and Billions of $$ of gains over the past ten

years and not just for the upper class. You think people who pulled some out 2 years ago didn't see any gains? Or that people didn't shovel $$Billions more into their accounts in Oct. 2008 when the market was down? They've surely seen some gains. How about people who've reinvested dividends over that 10 years?

True...if you look at the straight number comparison - the dow is lower than it was in 1999 but if that's how you evaluate the stock market and how to make money in it, then you're really missing all of the smaller pictures that go into making the big picture.

[DemocratSinceBirth]

132. If You Got In The Market In 1999 And You Pulled Out Yesterday You Lost Money

Historically we now have a thirty year, a sixteen year, and a ten year period without any gains.

I guess if you bought on the 29 lows you would be ahead of the game if you are still alive which is dubious.

[cbdo2007]

135. Still wrong....Even if you had bought Microsoft on 12/31/99 when it was at it's peak....

Let's say on 12/31/99 you put your whole life savings of $10,000 into Microsoft which just reached it's all time high of $58 per share. Then, beginning on Feb 1, 2000 you put another $100 per month into Microsoft, every month until today.

Your total investment of $22,800 would now be worth $24,840 which is a gain of $2,040 or 8.9%. If you pick a good company or an ETF that covers one of the indexes and you invest regularly you will ALWAYS come out ahead over the long term.

I know what your next arguments are, inflation is 3%, what about GM who was once considered a "good company", etc. That's fine - you don't have to be in the stock market but there is no better place to invest your money than in stocks over the long term.

http://www.sharebuilder.com/sharebuilder/Research/Tools/WhatIfIdInvested.aspx

[DemocratSinceBirth]

136. Even With The Collapse Of The R E Market If You Bought A Home You Would Be Further Ahead Of The Game

And you would have had a place to live too.

[cbdo2007]

137. You are definitely correct here!!

Best investment to make is to buy a home - I was referring to on top of that, assuming that people who can't afford to buy a home probably should focus on saving for that over putting money in the stock market.

[Donnachaidh]

81. Typical - "My shit is covered so the propaganda is TRUE"

:yawn:

Cognitive Dissonance all around. :eyes:

[Raineyb]

95. +1

A rather succinct summary of the OP.

[blindpig]

98. Define 'middle class'

the mushiest, most deceitful term in the American political lexicon.

That portion sometimes referred to as the 'upper middle class' is the true middle class, the rest of us are working class, a term that has largely disappeared with the Cold War suppression of the Left in this country.

Congratulations, you are of the marginally elect.

[Political Heretic]

108. Here's a picture of you shouting about how representative of the "middle class" you are:

The majority of Americans, from median income downward, are not invested in the stock-market at all, or their total investments are less than 6,000k

Of those with investments larger than 6000k, including 401ks (just 34% total) the majority for investors have incomes within the top two fifths of America.

You are, by the numbers, an exception to the rule of "middle class." It would be interesting for you to list your annual personal gross income and then annual household gross income and let us be the judge of how middle class you are. :) But of course you're not going to do that.

[laughingliberal]

113. Lol! Priceless. nt

[divvy]

117. You seem immensley clueless .......

Just because you cannot figure out how to buy a mutual fund does not make you any more representative of the middle class than the man in the moon. My guess is that your gross annual income is somewhere around 18k to 22k.

[Political Heretic]

122. You are helping my point, not hindering it. :)

Thanks

[depakid]

123. Actually I think the poster misses your point entirely

[ibegurpard]

115. your point?

mine did too.
and yet people are still being laid off all around me.

[greencharlie]

126. 401K... your personal PONZI scheme?

[Juche]

128. That is good

People at my old job were really worried too. Some lost 30-40% of their retirement savings. However last time I talked to them, they said they were back where they started. They are all in their 50s, and I know it really worried them.

However the joblessness is a huge problem. I really really hope we address that. If you can get millions of people off UI (I am on UI) and into jobs where we are paying taxes rather than collecting UI, it is really going to signal improvement. Right now all the benefits of the recovery are passing people like me by. I am new to the workforce and don't have a 401k. So the stock market, corporate profits, worker productivity, etc. are all good but I'm still unemployed along with over 10 million other people.