Re: It may go up in the long term

Another bloodbath in Wall Street

greenvillealum07 · 2018-02-09T00:36:49.757Z

This is starting to get depressing

Not necessarily. Since Reagan was elected, the goal of both fiscal and monetary policy has shifted from seeking full employment to fighting inflation.

As it happens, we are close to full employment right now and the economy is doing pretty well- that is traditionally a recipe for inflation. The Fed has raised interest rates a bit in response and is rumbling like more is in store.

Why is so much money in the stock market? With interest rates near zero for the longest time, the market was the only liquid way to make money on your money. As the rates on bonds go up, it flushes out the nervous money in the market as investors move to more balanced portfolios by accumulating more treasuries.

So why fight inflation at the number one goal? Look at whom it hurts. It hurts people on fixed incomes but a recent study (Princeton, I think) showed the wishes of the common man have zero effect on public policy (only about 12% of voters were in favor of killing net neutrality for example).

Who does inflation help? It helps the government itself (it was pretty easy to pay off all that "insurmountable" debt from WWII with inflated dollars) but regardless of political claims to the contrary, nobody really cares about that- the US can't go broke when they own the printing press. It also helps homeowners whe see real property go up as they pay off loans in cheaper dollars- but again nobody in power cares.

The only thing that matters is that it hurts the political donor class whether individual or corporate. Banks lose because they get paid back in cheap dollars. People or corporations sitting on piles of cash or existing bonds lose. The cash is worth less and the value of existing bonds goes down when newer bonds are issued at higher rates. That matters.

You just this at work in the latest tax bill. All the benefits go to the top because they won't spend it- it just add to their piles. Bill Gates isn't rushing out to buy a new big screen TV with his refund. But the relative crumbs that fall to the rest of us will all get spent and you can expect a whiff of inflation from alone.

Point is that this may be a fluke, a mere correction, but the possibility exists that could be systemic.

rjohn19

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Re: The corporate tax breaks are being used, and are directly

Feb 9, 2018, 6:23 PM [ in reply to The corporate tax breaks are being used, and are directly ]

Point by point-

Your wife might well have received an email from a higher-up but that has to be an opinion, a GOP talking point and not a fact. There is no one on earth so powerful they can speak for all of corporate America so while I might be more impressed if the email came from the CEO of General Motors, it would still not speak for all or even a majority. Trickle-down has never worked. Ever.

Will low-end workers get a boost? Hard to see how they wouldn’t- but don’t credit the tax break. Two other factors are at work here. As you must be aware, after the GOP congress refused to raise the minimum wage in the waning years of Obama, several states and cities acted on their own to raise it locally. This year another 18 states and 21 cities join that group (about 70% of states now) and raising the bottom tends to boost all hourly earners. Second, it’s a tight labor market, as I said in the main post, and that creates competition for workers and employer have to pony up to get good people.

History is not on you side here. There will not be an #### of investment. You might recall Bush the Younger had the Repatriation Holiday in 2005 allowing companies to bring home money squirreled overseas (it was only overseas on paper and I’ll explain that dodge if you’d like). 90% of that money went to shareholders directly or indirectly.

Stock buy-backs help not only individual and institutional holders but corporate execs as well who stockpile the options that are part of their compensation. And if those execs don’t care for prices of the day, they can back-date options- neat trick eh?

The whole tax plan, sneaked through without review or oversight, was a scam to help wealthy donors. Period. Unemployment was low, the market was at all-time highs and the economy was growing at a solid hopefully sustainable rate. What exactly were they trying to stimulate? And more importantly, what are they going to do when the next downturn hits for a needed stimulus? Let’s call it “premature extaxulation” to coin one.

It was a stimulus for donors to keep the GOP in power. One of the Koch Brothers and his wife shipped $500,000 to Paul Ryan before the ink was dry on bill.

On your final point- throwing money at people who will spend it is absolutely a boon to an economy. What do you think GDP is for pity sake? It’s spending and it doesn’t matter who spends it- government, people or businesses. Give ordinary people money and they will spend it. Any money you give to a billionaire that he doesn’t spend is a wasteful addition to the national debt.

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Another bloodbath in Wall Street

Do you even context, bro?***

Get in crypto brah.***

Yeah, that's really done well lately.

Haha, uh, it's still up like 300% from 2 months ago.

Re: Haha, uh, it's still up like 300% from 2 months ago.

Takes just 1 gov't regulation to kill the entire value of it***

No it doesn't. And even if it did, the Senate hearing on

Re: No it doesn't. And even if it did, the Senate hearing on

Re: No it doesn't. And even if it did, the Senate hearing on

Re: Yeah, that's really done well lately.

Re: Another bloodbath in Wall Street

Re: Another bloodbath in Wall Street

Re: Another bloodbath in Wall Street

Re: Another bloodbath in Wall Street

It may go up in the long term