socrateazz

How Can We Get the Economy Back on Track?

I agree with all but number 6 That is an excuse to justify wealth in businesses which are mostly losing value because their production is not currently toward increasing business wealth as much as trying to hold the wealth coming in. The good economy I believe is the result of pulling wealth out of companies for the last twenty years and moving it through society. The problem is: Most of that source of wealth is gone and will not be back. The attempt of taking wealth from the people will not be accepted as easily. For one thing the middle class has been inudated by income tax creep. Those close to poverty used to pay nothing. Now they are the source of income. Progressivity at work! If the balance of trade does not even out, there will be no help for US citizens for the wealth has been sucked over seas. Government grows to believe it is essential for their country so it inflates until their is little left for the workers. Dark ages revisited. My take....What goes around comes around. And it is coming fast!

Liars, Damn Liars and Averagers: The Wall Street Journal on Stimulus

I believe stimulus can work. But the effect is a later dampening in the economy from taking wealth back out of the economy. On the other side calling The actions of the last year a stimulus is like blowing up a balloon and saying the balloon is lighter because we added hot air. Seems to be true but is it? Stimulus is a short term thing and the Bush tax cuts were a very good example of such. The problems within the economy are systemic and manipulated by people I would call stupider than fools. They are so sure their beliefs are real that they ignore reality in favor of belief which does incidentally seem to be actuality

The FDIC Just Doesn't Get the Economic Situation

I think the prepaying is an attempt to keep from raising premiums. There are enough groups working in arrears right now with out the insurance needing to be under water also. I guess we can all drown in debt together. That is what Germany was looking at in the early 1930's See where it went? The military complex brought Germany out of their problems. But once produced there are incentives to use such. Especially when Germany thought all their neighboring countries had evil governments from their viewpoint. Fix europe by force was a strong belief. Of course the belief ones worth is in ones power did not hurt the leaders at that time either.

The Taxman Comes Knocking

So true. But who will have the moneys to pay? Will the wage earners? Not likely! Will the businesses? Highly unlikely? Only those with wealth or collecting wealth now. Ok the foriegners who loan the money. Only in the sense they will not get their wealth back. Only those who have wealth can pay it. I expect they will move their wealth elsewhere before it can be confiscated by the wonderful leaders. I do not really think that is enough. So the future generations will be slaves unto the current brilliant policies! Is that evil? Of course evil is just a view based on others beliefs. And the beliefs will change when forced to! How interesting Obama's change will be! LOL LOL LOL

The Metamorphosis of a Bear into a Bull

Roses are red violets are blue. I expect to see more violets than roses in the near future. Until and unless the labor situation improves, Stocks may increase in prices, but I think their real values should decline. Of course lack of places to put wealth released by government may prove my expectations wrong. But not really.Helium may make a ballon float in air. What happens when the helium leaves the balloon? Or it pops?

Recession May Be Ending but Unemployment's Set to Rise

I agree with what you say. What worries me is that I think many businesses will have so little monetary backing that they will persist until they go bankrupt. The money was in businesses fifty years ago. Now it seems to be in the hands of non-producers. I really am convinced money has gone to the stock market because there are few other choices. There are enough people who have been waiting to enter the market that there are more afraid to get left behind than afraid the market will fall. Or that their stocks are not worth anything. If you base value on the underlying values relative to other periods of time then you will find the market is very extremely over priced. If you compare within the current market, it appears to be priced OK. I think too much wealth chasing too little value. The inflation is going toward stock values. Will it stay there? I am yet to be convinced. Maybe at the next stock peak I will again give in and get burned by the market going down. Intuitively I know that stocks are not worth much when strategies too withdraw wealth from those businesses become excessive. There is so much out of balance and geting worse today that I can not see a easy way out which is what most people expect. I hope I am more ignorant than I think I am!

The Problem with Free Markets? Look in the Mirror

The problem is not so much a blind spot per se. People see what the imediate effect of certain decisions are and assume the same decisions will produce the same result and thus value those similar future decisions the same. The thing is most first decisions which are effective actually move supply or demand toward a greater balance. The subsequent decisions make further movement toward balance until later overshooting balance. If not stopped soon a serious opposite imbalance will occur. The random walk graphs often illustrate those cycles. If you had serious problems in the near past them a quick reversal is probable. If the past imbalances have been minor as with the recent economy then a serious imbalance could hit hard. People do not react to reality until reality has become obvious. Until the US let Leman sink, there were not any adverse reactions. A little reality allowed to escape and serious things happened.

Economics and Its Discontents

I may be wrong. I think economists overvalue the short term effects of decisions made to correct imbalances. And they undervalue the consequences of future effects of those decisions. Major economic rules changes since 1980 have been few but really has put us where we are now. In the early eighties, Reagan pushed taxes on higher income people down. Because supply of goods was being overwhelmed by excess wealth going into the workers hands. Those workers attempted to spend that wealth causing a demand which pushed up prices. Inflation was the way of the future at that point. Reagan's policies caused a reversal. Some of those policies needed to be reduced in the 1990's because they were pushing too much wealth into the hands of the few. Instead they were pushed even further toward wealth redistribution toward the rich. Much continues today. Financial controls protected the banks from serious idiotcy for years. They kept banks from making decisions which would be good for the banks short term but had elements which could cause serious imbalances within banks. The problem is: Things which look good short term also have hidden consequences long term. I think we are in the beginings of a depression and I think the short term actions taken so far by those in control will have little positive long term effects. What do I know? Time will tell.

The Poverty Rate Is Vastly Understated

What is poverty? A number does not really do it justice. I think that when 95% of your income after taxes goes to needed goods, housing, and services. And you have less than 5% left to do with what you want, you are in poverty. The lower class has less than 25% left over after needs are met for optional expenditures. The middle class has less than 40% left over for optional use. The upper middle class has between 40 and 60% left over. And the rich have greater than 60% of their wealth not needed for living expenses. If that could somehow be quantified, then the real positions of people would be evident. I think we are seeing more rich and more poor and lower middle class in the US. I wish I knew a real fair way to balance that so there are more middle class. But neither side really believes the others views are fair because they really are not.

Inflation May Be the Solution

Right now ...I think news is not moving the market because it is so frequent and so abundant. People who believe news moves the market believe if news does not move the market then the opposite trend is likely. That has worked well for many years. And it seems to work today. So when negative news comes out people wait a few minutes to a few hours and take counter actions. Because if the news was good the actions taken by the big money will all ready be in place causing an over reaction that direction. And profits can be picked up on the counter move. The logic if bad news does not cause a serious drop then an up move is imanent seems to be in play also. Maybe I am just over annalysing. Reason does not always depend upon straightforword thinking. How much do people depend upon belief over reason? Often to a great degree.

Pathology of the U.S. Debt Bubble

Government indebtedness is a nice number and good reason on the surface to indicate the problem is elsewhere. I am not sure because; Does any wealth going toward government contribute toward greater wealth? The answer is yes and no. The wealth goes to projects which when created produce something better for all. But at what cost? And what percentage does that now? I think greater percentages of government taxes go for lesser production every year. Greater amounts of the budget go toward expeditures on non-productive items. The question becomes... How much bang for the buck? As government changes from predominently regulation toward redistribution, there is an extreme amount of lost wealth for non-productive reasons. Historically all governments move toward redistribution over time. Leaders reward those who contribute to their power. Henchmen are common in dictatorial governments. In democratic governments it is the people who give the most bang for the bucks rewarded. Which people can be rewarded and still gain vote power. Rewarding the businesses only brings in votes and support of those businesses. If you make the people seem to need you then you have their vote. The income tax guarantees government expanding because it was not indexed to inflation. And even at that the government can not hold within that inflation induced growth. When you say government indebtedness has increased less than others. What you are saying is the government is pulling so much wealth out of other sources that there is not enough left for businesses to create more wealth without drawing out more debt. People in general expect to continue doing as they have in the past. But if they can not recieve as good of wages they draw wealth from the future expecting a better situation in the future. But Government takes more allowing less for the people who try to make up for it by borrowing. The businesses pay taxes often having to cut Jobs, wages and benefits to keep the business going. Loans are not really going toward new and better businesses, or even expansion of businesses. They are going toward keeping businesses open. When that happens, You know the party is near it's end. Those loans probably will pay off for many years. But The saying a shrinking business is a dying business is true

Looks Like We're All Communists Now

Don't you know communistic leaders do not really act in a commuistic way! They lead with the appearance of communism, but they are acting in their own self interests. Have you seen a communist leader actually try to live the life they expect others to follow? The fact is they reward the least effective while punishing the most effective thus evening things out. But the effective quit producing and those who do not produce have little incentive to produce. After the next generation is brainwashed in to the system, What can you expect from those who learned the less you do, You are rewarded just the same. I am sure the system is fixed toward idiotcy because if you think, you are a threat. The leadership of China actually pushes more free market trade than the leadership in the US! Which is more communistic? I think the US is at this point! Am I wrong?

CEO Pay and the Reverse Robin Hood

Each layer of these corporations push their salery up and thus by socialist mentality need to push compensation for the higher levels up so that they can justify their higher pay. Notice those at the bottom get little concideration for increased pay because if they got an increase there would not be sufficient wealth to pay the top people better. In my eyes the reason the US economy is sputtering is that the compensation divide has increased markedly. The more percentage of wealth ends up in fewer peoples hands the nore like a third world country this company will appear. The cures for these problems are becoming more drastic every year. and each cure will cause other problems. The problems are in balance. The worker is concidered less valuable because they can be replaced with almost equally qualified workers. The top tier has convinced the rest of the company middle managements they are very valuable and scare them by threatening to go other places. Other people pay them to come and work their magic for them, often not doing as well as expected. Thenm those who aspire top positions expect their compesation to increase. For that to happen, The top compensation needs to move up. Once in motion, trends stay in motion until stopped by a stronger and opposite force. Rules which limit compensation by making it less desirable to be excessively compensated might make this tendancy less of a problem. I think adding income tax brackets above the current and indexing them to inflation would be a start. I also think government needs to be encased in shrink wrap and heat applied. So many needed changes and so much effort toward magic cures. Maybe if I wave my wand all will be better! Hope is the last refuge of those who do not know where to turn. Are we there now?

Good News, Bad Market Action

I think good news is bad news lately because once the news is out there for a few minutes, those acting on the news have already made their bets and analysing how the news affected the market. One needs to compare the news with the reaction. If the reaction is not sufficient toward the most recent news, then the only logical belief would be those already excited about the news already have made their bet the prices will go the expected direction, and there are few willing to invest in that direction based on favorable news.

What's Causing Retail Investors to Be So Glum?

Interesting Retail investors probably buy more based on what looks like value. Professionals do not care as long as they think they will make money. Many of the charts and trends professional traders use say likely to go up. When some of those trends break then they will follow that trend downward. I expect unless some real fundamentals change that trend will end below the march low. I think there is also the belief things are badm so they are not likely to get worse and are more likely to improve. To that I say: What is happening today to help the economy along? Is any person better off after borrowing money for nonproductive wants? Is the current economy being helped? Or being fed depression drugs. Coke makes things seem good, but is that reality? You are being fed seratonin. How long before that fails? What will be will be. But your decisions have a big say in the result