General Forums => The O' Club => Topic started by: ghi on August 24, 2015, 02:04:59 PM
Title: Stock markets doom !
Post by: ghi on August 24, 2015, 02:04:59 PM
Wall Street and TSX here in panic mode after China ; Are we heading for another recession?! :headscratch:, they call it "correction" ;Dow Jones index this morning; but after a couple of hours was back up to -100 points , now... goes back down;
If you get enough beans, you can self-power your own fallout shelter with methane. :aok
:rofl
that would be a crappy situation!!
Title: Re: Stock markets doom !
Post by: jeep00 on August 24, 2015, 04:44:20 PM
Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa! ..... Oh wait, this is stocks right? The thinguates tegular that fluctuates regularly? Never mind...
Title: Re: Stock markets doom !
Post by: Brooke on August 24, 2015, 07:01:05 PM
I think that the US might already be in recession. We might see that when GDP and other stats are revised in the future.
My view is that the state of finances in the US and the rest of the world is crazy. There is an absurd amount of debt, absurd evaluations, and trillions of dollars have been completely wasted on useless (or worse, on economically ruinous) activities in the US, Europe, China, Japan, and emerging markets.
I believe that the world's foolish experiment with megaKeynsianism will work out badly.
If so, look for Paul Krugman to tell us that we failed by not pouring enough Keynsian gasoline on the raging debt fire.
Title: Re: Stock markets doom !
Post by: Nefarious on August 24, 2015, 07:56:22 PM
I think that the US might already be in recession. We might see that when GDP and other stats are revised in the future.
My view is that the state of finances in the US and the rest of the world is crazy. There is an absurd amount of debt, absurd evaluations, and trillions of dollars have been completely wasted on useless (or worse, on economically ruinous) activities in the US, Europe, China, Japan, and emerging markets.
I believe that the world's foolish experiment with megaKeynsianism will work out badly.
If so, look for Paul Krugman to tell us that we failed by not pouring enough Keynsian gasoline on the raging debt fire.
Yep. +1
Title: Re: Stock markets doom !
Post by: DmonSlyr on August 24, 2015, 08:56:06 PM
Sit back, hold tight, buy some cheap shares of the company you've been eyeing for the past 8 months. Profit. This was a nasty correction but it needed to happen.
Title: Re: Stock markets doom !
Post by: ghi on August 24, 2015, 09:33:16 PM
I didn't know they have this safety valve, in normal days kicks in aprox. a dozen of times and stops panic trading ,...but today "Trading was halted 1,200 times Monday ........................................ Installed after the May 2010 flash crash, the so-called circuit breakers are designed to slow down dramatic selling or buying. They are typically triggered when stocks dive or spike by a certain amount in a matter of minutes. Think of it as a time out. Trading is halted for five minutes, giving investors a chance to calm down and allowing cooler heads to step into the market."
more on CNN http://money.cnn.com/2015/08/24/investing/stocks-markets-selloff-circuit-breakers-1200-times/index.html
Title: Re: Stock markets doom !
Post by: Ripsnort on August 24, 2015, 10:13:16 PM
Sit back, hold tight, buy some cheap shares of the company you've been eyeing for the past 8 months. Profit. This was a nasty correction but it needed to happen.
:aok And like in '08-'09, there will be those who are foolish to sell off everything. Ebb and flow, that's the market. It's not for the faint of heart either. So if you do sell off, remember I'll be there buying it when it is near the bottom, just like I did in 09.
Title: Re: Stock markets doom !
Post by: Patches1 on August 24, 2015, 10:19:42 PM
<tongue-in-cheek>Hunkering down in my survival bunker with all weapons locked and loaded waiting for the economy Zombies to scare the pants off of me!</tongue-in-cheek>
<tongue-in-cheek>I'm curious...how did the fall of the Greek economy make the Chinese economy fall?</tongue-in-cheek>
Ignorance is bliss!
Title: Re: Stock markets doom !
Post by: branch37 on August 24, 2015, 10:23:17 PM
There's nothing to worry about. I reload my own ammo.
Title: Re: Stock markets doom !
Post by: 68ZooM on August 24, 2015, 10:28:28 PM
The markets been artificially inflated by multi million dollar investors for years, it's about time it comes back down to reality.
Title: Re: Stock markets doom !
Post by: Brooke on August 24, 2015, 11:17:16 PM
Sit back, hold tight, buy some cheap shares of the company you've been eyeing for the past 8 months. Profit. This was a nasty correction but it needed to happen.
My belief is that those cheap shares will get very much cheaper. The market is not down much yet from its peak. We haven't seen nasty yet.
Title: Re: Stock markets doom !
Post by: Brooke on August 25, 2015, 12:06:21 AM
:aok And like in '08-'09, there will be those who are foolish to sell off everything. Ebb and flow, that's the market. It's not for the faint of heart either. So if you do sell off, remember I'll be there buying it when it is near the bottom, just like I did in 09.
If you sold off late 2007 or very early 2008, you avoided a 50% drawdown. The market didn't get back to breakeven until 5 years later. People knew the real-estate market was completely nuts by late 2007, but only some people knew how gigantically insane the mortgage and derivatives market was. So, there was an inkling to get out for all, but a strong warning only to experts. So, not the strongest of warnings for the average person, I grant you.
In 2000, the warning was there for everyone, as the .com bubble was enormously clear. For people who sold off in 2000, they avoided a 50% drawdown on the S&P 500 and an 80% drawdown on the Nasdaq. It took the S&P seven years to get back to that level, and then it promptly crashed again and took another 5 years to get back to that level. The Nasdaq only now is about where it was in 2000 -- 15 years later.
Today, in my opinion, we have very clear warnings. We have had: -- the unprecedented 7 years of interest rates at zero, -- trillions of dollars in free money, -- crazy charts of monetary base, -- crazy amounts of reserves at the Fed, -- crazy Fed balance sheet, -- much larger debt than at the peak of 2008, -- enormously more money in derivatives than at the peak of 2008, -- housing prices that are nearing their peaks of 2008, -- Shiller PE/Tobin's Q that (prior to the last 3 days) at the 4th highest mark in history (the other three being just prior to gigantic crashes), -- historically gigantic levels of margin debt in the US and China, -- Bank of Japan printing money to buy the bonds issued by Japan, monetizing their debt, -- China building ghost cities, -- periods of negative interest rates across large swaths of European government debt, -- horrible percent of Americans fully employed (and we have it great compared to young people in Europe).
Additionally, in recent weeks: -- Greece is finally in its end game of default, -- Puerto Rico has defaulted on its debt, -- Commodities (especially oil and copper) are crashing, -- China's absurdly valued stock market has finally started its crash, which can't even be stopped by the totalitarian power of the Chinese government making shorting illegal, ordering many institutions to buy stocks at any value, arresting speculators here and there, stopping trading on half or more of their stocks, pouring trillions of renminbi into the purchase of stocks.
Today, the US market has had a day where stocks such as JP Morgan Chase, CVS, Home Depot, Verizon, and many others gapped down 20% (!) at the beginning of the day before climbing up to only a several-percent loss.
I understand the buy-and-hold argument. I understand that timing is usually difficult. I understand that I could be wrong -- but to me things seem very ominous right now.
Title: Re: Stock markets doom !
Post by: Patches1 on August 25, 2015, 12:59:26 AM
Is Rand Paul correct with his warnings?
Title: Re: Stock markets doom !
Post by: Traveler on August 25, 2015, 01:41:10 AM
roomer out there that china called the US debt. US has 30 days to come up with 17 Trillion or default.
Title: Re: Stock markets doom !
Post by: zack1234 on August 25, 2015, 01:46:41 AM
Recession :rofl
Safe banks :rofl
The Chinese population dont give a wet fart about monertary problems, having food on the table is good enough for them.
Its only clowns with credit cards who poo thier pants.
The end is nigh apparently :rofl
Its the North koreans again or maybe the French, yes its the French using the immigrants at Dover to destabilise the IMF and the Yanky dollar.
Title: Re: Stock markets doom !
Post by: Brooke on August 25, 2015, 02:19:20 AM
The Chinese population dont give a wet fart about monertary problems, having food on the table is good enough for them.
Its only clowns with credit cards who poo thier pants.
The end is nigh apparently :rofl
Its the North koreans again or maybe the French, yes its the French using the immigrants at Dover to destabilise the IMF and the Yanky dollar.
That's only partially correct. It's the Illuminati influencing the French (through old ties with the Knights Templar) to use immigrants to destabilize the UK political framework, and it's the Illuminati influencing the North Koreans (the Kim line are reverse Manchurian candidates secretly controlled through the Bilderberg Group) to blow up Chinese port facilities in order to destabilize the Chinese stock market. Both are mere diversions for what is coming next.
Title: Re: Stock markets doom !
Post by: RotBaron on August 25, 2015, 03:34:16 AM
I don't believe we were ever out of a recession.
And like Morph said, corrections make good buying opportunities. Timing it, that is much more difficult.
OP, if you don't know what the definition of a "market correction" is, you've got a long way to go before you should be looking at investing...jus sayin.
Happy investing!
Title: Re: Stock markets doom !
Post by: SysError on August 25, 2015, 06:11:57 AM
That's only partially correct. It's the Illuminati influencing the French (through old ties with the Knights Templar) to use immigrants to destabilize the UK political framework, and it's the Illuminati influencing the North Koreans (the Kim line are reverse Manchurian candidates secretly controlled through the Bilderberg Group) to blow up Chinese port facilities in order to destabilize the Chinese stock market. Both are mere diversions for what is coming next.
:rofl
Doom off, China lowered the interest rates; DoW futures up 500 points; 5 min before opening ; :banana: I can drink my fluoridated coffee and enjoy the chemtrails :rock
Title: Re: Stock markets doom !
Post by: SysError on August 25, 2015, 08:34:34 AM
Doom off, China lowered the interest rates; DoW futures up 500 points; 5 min before opening ; :banana: I can drink my fluoridated coffee and enjoy the chemtrails :rock
"...the stock market is a terrible guide to the economic future: Paul Samuelson once quipped that the market had predicted nine of the last five recessions, and nothing has changed on that front."
Title: Re: Stock markets doom !
Post by: cpxxx on August 25, 2015, 08:54:38 AM
I don't know, my wife and I got our fingers burned the last time after our 'safe investment' took a huge hit. It's only just recovered. We bought in in 2007 just before it all went bad. What was really annoying was the people who invested in 2009 caught the rising wave but we were screwed because it took so long to get back our original investment.
I think we need to get out now and wait for it to bottom again. Then re-invest. We can get out now without taking a hit.
Title: Re: Stock markets doom !
Post by: zack1234 on August 25, 2015, 11:43:53 AM
I ran the archive for RBS in Ireland. (first active)
Giving mortgages to people who could not obviously afford to pay it back.
:rofl
Sorry its not North Korea fault its Irans fault i think or Iraq or Syria.
Has anyone questioned Woody Allen, he is a wrong un and looks the sort to destabilise the finacial system.
Title: Re: Stock markets doom !
Post by: Brooke on August 25, 2015, 01:05:03 PM
Because it is a double reverse false flag operation.
You would know these things if you had paid any attention during your senior year in high school. :rock
logic gates?
Title: Re: Stock markets doom !
Post by: RotBaron on August 25, 2015, 07:00:24 PM
This market correction has been a long time coming.
People like Gary Kaltbaum have been saying tread carefully for years. He's also been saying companies with zero sales, like many biotechs, will be the hardest hit.
This may get worse than the normal ~10% correction because it has been such a long time coming.
If you are a long-term investor this should be no more than a blip on the screen however.
All the above only applies, if this is an actual correction; only time will tell if it is.
Title: Re: Stock markets doom !
Post by: SysError on August 25, 2015, 07:11:05 PM
When is it time for a North Korean pitch fork incident
Damn perma bulls or congressional insider trading and somebody hit the buy button. Grrrr, the US really needs a reset so ppl realize how bad the economy really is; funny how the stock market is a barometer to some, ehhh DC ppl, when it fits their agenda and when it doesn't it has nothing to do with the economy. :rolleyes:
Title: Re: Stock markets doom !
Post by: ghi on August 30, 2015, 10:37:56 AM
Before this market meltdown, august 9th;
"China Slashes U.S. Debt Stake by $180 Billion, Bonds Shrug " http://www.bloomberg.com/news/articles/2015-08-09/china-slashes-u-s-debt-stake-by-180-billion-and-bonds-shrug
Title: Re: Stock markets doom !
Post by: CptTrips on August 30, 2015, 05:58:31 PM
I've been reading this guys stuff a lot: http://www.hussmanfunds.com/wmc/wmc150831.htm (http://www.hussmanfunds.com/wmc/wmc150831.htm)
And this stuff just scares me: http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php (http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php)
Bunker up!
Wab
Title: Re: Stock markets doom !
Post by: morfiend on August 30, 2015, 06:24:09 PM
Yes safe banks,not in the US in Canada! We didnt need to bail them out,they made record profits instead and we have strict rules that dont allow a bank to give a mortgage to a person who cant afford it.
But I would like to sit down and have serious talk some day Zack,I think much as you do and carry no debt,even tho I only pay prime plus 1/2 on my cards,which is about 2%.
No mortgage,no car payments and I plan to keep it that way.
My wife was a banker until she retired.......
:salute
Title: Re: Stock markets doom !
Post by: Brooke on August 30, 2015, 09:07:04 PM
I've been reading this guys stuff a lot: http://www.hussmanfunds.com/wmc/wmc150831.htm (http://www.hussmanfunds.com/wmc/wmc150831.htm)
And this stuff just scares me: http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php (http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php)
Bunker up!
Wab
Those are a couple of good articles in my opinion, too, Wab.
Corporate profits are running about 11% of GDP right now, but historically they have always returned to the average of 5.5%. You could claim that "this time is different" and that technology has made us more profitable but that would also have increased GDP proportionally. That ratio to GDP is a pretty consistent measure across time.
It will fluctuate but generally increase above the average in one time period are matched to lower than average performance later. For instance, if you were a CEO who wanted to maximize your short term compensation, you might try a manipulate near term profits by shedding trained workforce, forgoing capital and R&D investments,etc. You might can leverage the profits higher for a while, but those tactics will reap lower earnings later. But Heck, by then you may have already retired to one of your 6 houses in the Hamptons. :t
If those profits start reverting to their historical mean, the current valuations will start to look insane. Maybe insane by half.
Oh more fun. Most of us wouldn't borrow money the invest in the stock market. I know there are sophisticated investors out there that do, but I suspect most of them are snorting coke.
However many corporations are borrowing cheap money now to buy back their own stock to inflate the values. I'm not talking about buying back your stock with money you've earned. I'm talking about taking on debt to manipulate stock values. And these purchases are price insensitive so that only serves to further inflate current prices. And when there rest of us by that stock, we are buying the debt.
Quote
The larger problem with repurchases is that debt-financed buybacks effectively put investors on margin. As corporations have borrowed in order to aggressively buy back their stock near the highest market valuations in history, existing stockholders have quietly become heavily leveraged, without even realizing it.
Yes safe banks,not in the US in Canada! We didnt need to bail them out,they made record profits instead and we have strict rules that dont allow a bank to give a mortgage to a person who cant afford it.
But I would like to sit down and have serious talk some day Zack,I think much as you do and carry no debt,even tho I only pay prime plus 1/2 on my cards,which is about 2%.
No mortgage,no car payments and I plan to keep it that way.
My wife was a banker until she retired.......
:salute
I had a bad credit rating because i had no debt :rofl
They will have sore eyes looking for my money :rofl
Its the North Koreans or Irainians fault that everyone got into debt!
i worked in the archive for RBS, you cannot fix stupid :old:
Its also Cubas fault.
Title: Re: Stock markets doom !
Post by: CptTrips on August 31, 2015, 08:59:41 AM
Hi Wabbit, nice to see you again ! :cheers: still shooting the night sky?
Howdy Ghi!
I've been so busy with work I haven't done any in a while. I was just thinking the other day when things start cooling a little I'd like to get some more scope time again.
regards, Wab
Title: Re: Stock markets doom !
Post by: DmonSlyr on August 31, 2015, 01:57:03 PM
Corporate profits are running about 11% of GDP right now, but historically they have always returned to the average of 5.5%. You could claim that "this time is different" and that technology has made us more profitable but that would also have increased GDP proportionally. That ratio to GDP is a pretty consistent measure across time.
It will fluctuate but generally increase above the average in one time period are matched to lower than average performance later. For instance, if you were a CEO who wanted to maximize your short term compensation, you might try a manipulate near term profits by shedding trained workforce, forgoing capital and R&D investments,etc. You might can leverage the profits higher for a while, but those tactics will reap lower earnings later. But Heck, by then you may have already retired to one of your 6 houses in the Hamptons. :t
If those profits start reverting to their historical mean, the current valuations will start to look insane. Maybe insane by half.
Wab
And this is what is happening, CEOs are more geared to the short term now more than ever. So in the short term, all of the companies are hiring labor as cheap as they can, while reaping all of the growth in the short term, but in the LR this will fail as a whole because just like a small business that is cutting everything to make better profits, they are forgetting that sometimes you have to raise value of employees and R&D and take a hit to make a healthy increase in growth over time. In the bigger picture, we need to take a hit by increasing the labor market income in this country or consumers just wont buy many things and our overall production will decrease/stagnate due to lack of demand. In the long run, at this rate, the people who make the foundation of this country in the working force, are being limited by a market salary that is incredibly damaging to the foundation of America. IMO, it will come back to bite everyone in the ass.
Other countries have finally caught up with us in the industry market. If we keep giving too many cheap jobs away over seas and keeping our citizens low on the income scale, we will never be able to strive higher as a country. All of these charts are being manipulated with false growth and quick leveraged financing, instead of a strong backbone of the labor force who invest and the drivers (middle-low class workers) who are the production in the US. It will crumble from in the inside.
Too many people today are investing in companies that make no profit and the SHs are the backbone of the business, giving them support to keep operating. This is exactly how our nation is being ran and once things start declining again, the market crashes because there are no profits to support a indebted entity, once the SHs bug out, the company cannot compete and buy supplies it needs for projects and it slowly becomes weak from the inside. This is something I am very scared of in this country going into the future.
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 01, 2015, 08:52:26 AM
We are seeing first hand what a "Walmart economy" looks like across the globe. This is what happens when you have cheap goods with cheap labor. It ruins other countries Business models, growth, and structure. The majority of the people are poor as hell, they can no longer create growth inside the country. Now counties are fighting back against this model and that is why China is disrupting everyones market right now. IMO, it is a hit we needed to make to stop china from tanking the rest of the world's assets.
Title: Re: Stock markets doom !
Post by: Brooke on September 01, 2015, 10:22:38 AM
However, reduction in price of goods as a result of productivity increase is a good thing for economies and for most of the people in those economies. You end up with more goods for a given amount of labor and capital.
Title: Re: Stock markets doom !
Post by: SysError on September 01, 2015, 12:31:28 PM
However, reduction in price of goods as a result of productivity increase is a good thing for economies and for most of the people in those economies. You end up with more goods for a given amount of labor and capital.
IMO, you almost have it, but not quite. Increases in productivity usually mean a reduction in prices in the long run, however, if wages are not adjusted to reflect a more productive work force – you end up with a workforce that cannot afford a given basket of goods even at the reduced prices.
Starting with WWII, industrial owners and unions had a pact; increases in productivity (increased output per man hour) would be shared. In order to realize the benefits (profits) of a work pattern change from an increase in productivity, usually a reduction in work force is required. (The obvious exception being when the productivity gains cause a shift in the production possibility curve with prices at equilibrium.)
Unions often accepted productivity changes along with the reductions in work forces in exchange for a negotiated share of the realized improvements. This pact stayed in place until about the late 1970s when some manufacturers decided to not share in the productivity gains but instead demanded reductions in work forces at stagnant wages. Starting in the 1980s, this practice went into overdrive, in the 1990s it went on steroids and in early 2000s it became pornographic.
I can get into the China thing later -- got to run.
Title: Re: Stock markets doom !
Post by: RotBaron on September 01, 2015, 03:06:09 PM
Syserror is a teamster?
I was with you in the beginning, sounds like you may have a business degree? I do.
Title: Re: Stock markets doom !
Post by: Brooke on September 01, 2015, 05:53:55 PM
Starting with WWII, industrial owners and unions had a pact;
Nobody had any pact. On average, people act for what they see as their own benefit.
People working for their own benefit works fine -- on average, and over time -- if you have a free market and the rule of law. There, transactions happen only when both parties are willing and perceive benefit, so all transactions are net benefit.
If you don't have that, on average and over time, you have problems. In the case of government mandating transactions, both parties aren't always willing and don't always benefit, so not all transactions are net benefit.
I lived near Detroit for a large part of my life, and Detroit is steeped in unions. I worked for GM for some years. I've had a very thorough view of how Detroit/auto industry unions worked. Even decades ago, that situation was clearly headed for ruin.
I'm not against all aspects of unions, by the way. Unions are fine as long as the government doesn't grant them special rights unavailable except to unions. In a free market, people should be free to organize as they see fit and to negotiate contracts as they see fit; and corporations should be free to propose deals as they see fit, to establish business where they see fit, and to fire people as they see fit -- as long as it doesn't violate any contracts (which is a critical caveat). I'm in favor of rule of law by contracts.
I am against union cronyism, corporate cronyism, and government cronyism. Cronyism exists because government can give out money and favors. As you reduce the ability of government to run people's lives, take money from one person and gift it to another, and regulate everything, you reduce the motivation for cronyism, special interests, lobbying, and corruption.
Back onto the topic of wages, in a free market, everything is worked out in a giant feedback loop. But it works only over time and on average. If productivity increases, the reason prices go down is that one company feels that it then has the margin room to reduce prices a little and sell more product. It then gets more of the market, but then other companies act to do the same. In the end, you have more product being made at a lower price point. The same dynamic happens -- on average and over time -- with respect to wages. If a worker can be more productive, a company will hire him for a little bit more than a less productive worker.
Where you can have these dynamics ruined is when the government decides to control the economy, the market, and industries. You get perverse incentives like have been happening in recent times. Companies can make their stock more valuable not by increasing productivity or even selling product. They can do financial engineering, such as borrowing at near-zero interest rates and buying back stock. They can work out deals with the government for money that doesn't make economic sense and hence is a misallocation of labor and capital. They can appeal to "gee whiz" ideas to boost stock value in a market overheated by injection of printed money. They can create temporary wealth out of synthetic securities and financial games that will completely crash once the government stops printing money or a financial pyramid gets larger than is stable.
The problem of our day -- in my opinion -- is that the people of the world have not yet learned the lesson that centralized control of economies and straying from principles of free markets and rule of law is the wrong way to go. People do not take even 5 hours out of their entire lives to read one simple book -- like Economics in One Lesson, by Hazlitt, or Basic Economics, by Sowell -- and thus are susceptible to egregious lies and falsehoods regarding economic policies.
Title: Re: Stock markets doom !
Post by: Rolex on September 01, 2015, 09:14:54 PM
I've never heard of, or seen, a pact between unions and industrial owners.
I was around the hard-core industrial sector for quite a while as an engineer, engineering manager, factory GM and Division GM with 3 factories and almost 1,000 factory workers... mostly union members.
I was a guy who thirty years ago saw young, easily swayed shop stewards influenced by union HQ pukes flying in to force our factory workers into a work slowdown and strike. I remember telling a young, single mother working for us that she would be out on the street during a strike, but the union HQ guy would be collecting his salary as he flew back to New Jersey, first class.
I was trying to keep a plant in Chicago open, because foreigners were offering free land for construction, low-interest construction loans, no taxes for 10 years, paid training and wage assistance for the first year for the skilled workers we needed in the new, non-union location... the foreign land of North Carolina.
I was offering to keep it open with reachable production quotas with bonuses tied to production - the same level of production we had five years prior. The union wouldn't budge. They demanded a 10% across the board raise, regardless of competence or qualifications.
I had to lay off over 100 people with families because of union arrogance and greed. If you have never done that face-to-face, you never, ever want to. It is heartbreaking and gutwrenching.
The hell with unions today.
Today, I'm CEO of a high-tech company that's vertically integrated from hardware, firmware, wireless protocol, algorithms and software - all in house, and I've never seen much of this "CEO's are more geared to short term profits than never before..." stuff said here.
In the economy of today, all CEO's are competing for talented people to hire and retain. You can't survive without mature, competent engineers and programmers who have some specialization in the technology a company needs.
I need people who can program in C++, know graduate-level mathematics and more often than not now, need to have at least a Masters degree in engineering or the sciences.
I have to hire foreign talent because of this:
Number of Graduate EE Students The University of Texas at Arlington: US Students - 16 | Foreign Students - 229 The University of Houston: US Students - 16 | Foreign Students - 180 Illinois Institute of Technology: US Students - 31 | Foreign Students - 400
The US students are learning "Ruby on Rails" or some other useless languge. The real world runs on C++ and some embedded languages. US students don't want to learn it these days because... it's hard.
Companies always act to retain good employees, but will not act to retain mediocre ones. There are too many red herrings and myths about how CEO's "act." We act in the best long-term and short-term interest of our companies, and companies are comprised of people.
Title: Re: Stock markets doom !
Post by: BaldEagl on September 01, 2015, 11:54:43 PM
I'm currently in the financial services industry and have, in the past, been a grunt union employee as well as a highly compensated executive of more than one publicly traded company.
The current market disruption is nothing to worry about long term. It's news based fear centered around China (not the first time). I view it as a buying opportunity. US companies in particular have never been more profitable or had as much cash sitting on their balance sheets as they do today. They are poised to leap forward once the economy in general shows signs of recovery, however, political turmoil in Washington has reduced confidence among both consumers and corporations that things will improve greatly any time soon. That said, PE ratios are near historic highs. That doesn't mean they can't be sustained, however to do so means companies must grow profits. Thankfully the world population continues to grow and in doing so grows the demand for goods and services.
Lets compare the recent market decline to the Great Depression, the Great Recession, The 90's oil crisis, the 00's dot com bubble burst. The first three had reasons for happening. The dot com bubble was simply over exuberance in new technology and a bull market. And lets not forget the 20% loss and daily volatility the markets saw in Q3 2011... based on nothing. Regardless of the market calamity the markets rebounded and went ever higher. Why? A number of reasons but the driving force is always population growth. Do you truly expect that to diminish any time soon?
The final point I'll make is that, yes, we now live in a global economy. More and more we have to be concerned with what's happening in other parts of the world. But we haven't yet reached 100% globalization and it will still take a long time to do so. To ultimately get there living standards across the globe will have to normalize. That means most Western nations will have to take a step backward for third world countries to improve. Until that happens the richer countries will be at a disadvantage to third world countries in terms of labor costs unless governments impose restraints. I don't expect this to come quickly or easily so at this point in time I'd be more concerned with my own government than that of a country on the other side of the world.
OK. I'm going to make one more point. The only people who should be worried by the current market turmoil are those who are retired and didn't enlist a professional to help them structure their retirement assets to weather a storm like (or much worse than) this. On the other hand, if you're accumulating, stay the course and rejoice that you're buying cheap.
Title: Re: Stock markets doom !
Post by: zack1234 on September 02, 2015, 12:26:31 AM
:rofl
Blah blah blah!
Lots of paragraphs here.
If the US is broke how can it be fighting wars?
If the US is broke how can it be fighting wars?
Your all being played
:rofl
Title: Re: Stock markets doom !
Post by: Brooke on September 02, 2015, 12:37:58 AM
Title: Re: Stock markets doom !
Post by: zack1234 on September 02, 2015, 01:22:28 AM
Keep out of this or i will show everyone those photographs!
At your age :old:
Do you take vitamins?
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 02, 2015, 08:39:21 AM
The way I see it, and I'm 24, so I still have a young perspective, is that people my age give or take 10 years are taking out huge loans to enhance their "skills" in college while businesses are paying low dollar wages to these graduates because they don't respect the "skills" they've learned, where most of them still have to live with their parents or live with 2-3 other roommates, factor in transportation cost, insurance, and 350 student loan payment that they have to pay after 6 months of graduating and 30K is a Fing joke. College graduates are basically getting scammed. This is everyone's fault. College graduates will take low skilled jobs to pay back these loans while low skilled workers "with no degrees" will be stuck in Min Wage jobs are not have a job because college students are taking them.
I have an extremely bad feeling that what we have created here are highly educated students who have to pay back loans with jobs that pay idiotic wages. So here's what's going to happen. People are not going to be buying new cars or morgage a house any time soon, the majority of my generation will be stuck in debt right when they graduate high school out of peer pressure to get a degree, they won't make enough money to do watermelon until they are 35, good luck if you have a child, and companies will keep devaluing skills for years to come, while the global market takes off and the American citizens are SOL because cheap labor will enter the market.
So instead of increasing demand nationally by paying real living wages in order to increase supply and prices to raise profits and growth. We are increasing prices to raise profits while demand and supply remain stagnant or decrease. In the end the artificial price increases will only benefit the officers of the company in the short term, but they will eventually have to downsize and lay off people anyway due to not having the same demand but still artificially keeping profits the same. This intern downgrades the business because without productivity of the workers, they cannot keep producing the same supply while at the same time demand decreases.
So given that the stock markets depend on ever increasing P/Es, net profits, revs, and earnings, this is scary because like Walmart for example, blamed their decrease in net profits due to paying people better wages, the shareholders think they are losing value in the company, and large shareholders sell off not beating estimates. If every large corporation did this who pays low salaries, you'd see the market shrink across the board. However, in the long run it would benefit everyone because economically those better paid workers will provide more to spend in the economy while also being able to invest in the markets and save. If we keep artificially increasing growth while never giving back to the full time long hour workers who developed skills or have worked at a place for years, we will fail from the inside. It's starting to happen all over the world.
China is a great example of why making cheap products with big demand and large supply is the wrong way instead they need to increase demand with better wages to fundamentally increase the supply and growth in a healthy way.
Title: Re: Stock markets doom !
Post by: Rolex on September 02, 2015, 09:21:56 AM
Wages in China have risen substantially. I know, because I have over 100 people there. CE graduates salaries in Beijing are as high as Silicon Valley. Factory wages have soared also in the past few years.
You have to know the territory from ground level to know reality. Western reporting is staggeringly wrong or tainted on purpose about China.
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 02, 2015, 09:51:14 AM
Wages in China have risen substantially. I know, because I have over 100 people there. CE graduates salaries in Beijing are as high as Silicon Valley. Factory wages have soared also in the past few years.
You have to know the territory from ground level to know reality. Western reporting is staggeringly wrong or tainted on purpose about China.
How are they still able to produce so cheaply then? And why are so many countries sticking it to them with tariffs and Anti-dumping laws? It seems to me like countries are attacking china because china is stealing a large portion of the manufacturing industry away from their economies because it is so much cheaper. Do you think countries are fed up with this and have finally realized that china is stealing GDP from countries by providing the cheapest possible products? Is India going to be the same way?
Or do you think China is taking the hit it needs to take by increasing these wages overall?
Title: Re: Stock markets doom !
Post by: Rolex on September 02, 2015, 10:54:14 AM
China is no different than North Carolina was 30 years ago - "stealing" factory jobs from the traditional factory centers in the north. They cause the rust belt.
Politicians will always find foreign boogeyman to blame and stick tariffs on.
Markets go up and down. Currencies go up and down. The problems in the US economy and the stock market now are no more the fault of China than saying the US economy and actions by the FED caused the drop in the Chinese market.
Manufacturing has always, and will always, move to cheaper options. People have to train and be educated for different (higher level) jobs that have higer accompanying wages.
Manufacturing is already moving from some areas of China to cheaper areas of China. The rush to lower cost is inevitable. The Chinese are not always driving prices down. The quality and price is determined by the Buyer, not the Seller or Manufacturer.
There is an old joke about two buyers going to visit a Chinese T-shirt factory. The Japanese buyer has 3 assistants and they spend a week studying in excruciating detail every facet of material sourcing, and the manufacturing process - focused solely on quality and packaging.
The US buyer shows up, takes a glance at the shirt and says, 'Yeah, that's fine. Now, let's negotiate this price to get it lower. How can we makes things even cheaper."
That is the part about supply and demand that is unknown to most people. The Chinese factories build to the spec and quality the buyers demand. Go blame Walmart for the crappy quality stuff filling your house. :)
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 02, 2015, 01:35:05 PM
I guess my understanding is, at what point is too cheap to where supply grows to its max production and prices would then have to be increased to offset the demand to where even the cheapest goods would have to be increased, but at the same time demand would diminish depending on the good, so instead of growing supply with a higher price/demand you would have to sell cheap and run out of supplies based on what the buyer wishes, which would hurt the business? If scarcity were to happen because of cheap products and higher capacity for supply, wouldn't that hurt the economy? At some point prices have to be raised to maintain the scarcity level, But if these prices increase artificially due to scarcity demand, while the consumer demand decreases in countries because the working class doesn't reap any business growth, wouldn't that also hurt the overall economy?
Sort of like what is happening to oil right now.
They have to keep prices high because of scarcity, even though the demand has shrunk so they cannot make higher profits, this intern causes layoffs because they have no other way to cut expenses in order to keep having better profits.
So instead of healthy growth in the market. We are striving for the cheapest possible products/materials which only increases the impact of scarcity and therefore prices artificially increase while not benefiting anyone. Instead of getting paid more because of a higher demand for the businesses products with higher prices and productivity, we are taking the cheap route and passing off to the workers who intern either get laid off or paid minimally, thereby causing demand to go down in the market while being forced to increase prices.
Am I making sense?
Title: Re: Stock markets doom !
Post by: FLS on September 02, 2015, 02:19:28 PM
Why are you biased towards central control which has never worked vs the free market which always has? Seriously, where did that notion come from?
Again, look at Venezuela now after years of wage and price controls. The only control any government has over the economy is the ability to screw it up.
Title: Re: Stock markets doom !
Post by: zack1234 on September 02, 2015, 02:40:02 PM
China is not stealing anything, US investment conglomerates are investing in China.
US investments are invested in China.
They dont give a rats bellybutton about american.
Blah blah blah
Americans have fought in wars to end communist tyranny and see what they have got for it :old:
China reaping the rewards
Title: Re: Stock markets doom !
Post by: Brooke on September 02, 2015, 04:06:45 PM
DemonSlayer, you should read this:
Economics in One Lesson, by Hazlitt
(or if you are OK with book that is longer but a little more thorough along the same lines: Basic Economics, by Sowell)
Those books will answer all your questions and more.
The reason young people like you are screwed by today's economic environment is because people support policies that go in exactly the opposite direction of what works, as explained in either of those books.
Title: Re: Stock markets doom !
Post by: morfiend on September 02, 2015, 04:38:17 PM
Why are you biased towards central control which has never worked vs the free market which always has? Seriously, where did that notion come from?
Again, look at Venezuela now after years of wage and price controls. The only control any government has over the economy is the ability to screw it up.
I'm not saying Gment needs to mandate price controls and stiff tax codes, that is not the solution I am encouraging. Although I do think regulations do need to be placed in to keep the work environment and products safe for the workers and consumers, also to encourage better business ethics. What my solution is encouraging is for companies to create a better socitey for people in America by paying them better. I don't think this so called "market wage" is good for our economy and is very much limiting the consumer spending in this country. That's going to be even worse when 35% of the nation has student loan debt crippling them even further from consumer spending. The education and skills I've learned in college don't even come close to how much I spent for that compared to the "market salery" for college graduates, and I'm lucky. Just wait till that starts to build up even further. People my age are giving 25% of income in taxes and SS while giving another 350 a month on loans. That's close to a grand we are shelling out to the Gment every month on top of living expenses. It's simply not feasible with these "market wages" at 30K for a 25 YO trying to get out the parents house. So much for college.
I'll really have to get to reading those books Brooke. I'm eager to learn about what they have to say. I like the free market and I've always been a capitalist, but if we don't start making our country better again by providing real wages, our markets will be extremely overvalued with artificial growth and it will collapse while regular people will have nothing to fall back on.
Title: Re: Stock markets doom !
Post by: ink on September 02, 2015, 05:17:46 PM
I hate to inform you of this...but I can not read anymore without saying something.....
in absolute seriousness....
everything that has been said here is absolutely pointless....
all are just smoke and mirrors...to confuse and divide...
The ENTIRE systems needs an overhaul.
don't fret it is coming.;)
Thats true man, just gotta be a go getter in this world.
I just talk about what I see and read around me and I really enjoy economics.
I am not talking about small businesses who are already suffering for a profit, that part I get. A company that pulls in 260k a day for one store shouldn't be paying people lousy salaries for working 10 hours of their day. It's a business ethics issue for me and the way we are shaping the work force.
Title: Re: Stock markets doom !
Post by: icepac on September 02, 2015, 06:05:52 PM
I've noticed my brand of socks are getting smaller every year.
Title: Re: Stock markets doom !
Post by: ghi on September 02, 2015, 06:32:07 PM
We are officially in recession here in Canada, since yesterday morning all the news are talking about it; low oil prices messed up economic growth and cad exchange rate, (0.75usd). :frown:
Btw, dont mess with the China, here they come :devil :noid
"Five Chinese Navy Ships Are Operating in Bering Sea Off Alaska Coast" :furious
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 02, 2015, 06:45:40 PM
I am glad to hear the opinions of real business owners and officers such as yourselfs. I know there has always been the employee/owner battle and I don't agree with unions either. I'm just looking for ways to create growth in America from the inside so that our stock market will be sustainable as the future generations move up. And I'll be honest, its not very encouraging for us right now.
Title: Re: Stock markets doom !
Post by: Rolex on September 02, 2015, 09:14:14 PM
The world stock markets are nothing like they were 30 years ago. They are no longer sources of working capital to fund quality companies. They are manipulated to the point that they are no longer truly markets.
The more free markets become, the more true markets they are, and usually the more free the society is that they are designed to serve. The markets don't serve society anymore. They serve the bankers and market manipulators.
The writings of Von Mises are another source of excellent, timeless insight. Read on...
Title: Re: Stock markets doom !
Post by: zack1234 on September 03, 2015, 01:45:13 AM
So the US wins WWII Europe is broken and they introduce the Marshall Plan.
It was all explained in that book written in 1860 which evokes an immediate forum violation.
There has not been a free market economy since 1945, its been based on the above.
The only way to keep this charade going is having wars and blaming someone else.
1. Iraq 2. Iran 3. Putin 4. That fat bloke from North Korea 5. Gaddafi 6. The Red Coats and tea bags 7. The Contras 8. The Brewster 9. China :rofl
Why do you think the EU is allowing the Ukraine into the EU? Because they are hard working and democratic :rofl
When the 2nd cold war comes the conglomerates will need more factories in China for the money they are going make.
Title: Re: Stock markets doom !
Post by: Mar on September 03, 2015, 03:14:39 AM
Zack rules. :old:
Title: Re: Stock markets doom !
Post by: rabbidrabbit on September 03, 2015, 08:13:18 AM
I am glad to hear the opinions of real business owners and officers such as yourselfs. I know there has always been the employee/owner battle and I don't agree with unions either. I'm just looking for ways to create growth in America from the inside so that our stock market will be sustainable as the future generations move up. And I'll be honest, its not very encouraging for us right now.
So start up your own company and run it the way you want.
Title: Re: Stock markets doom !
Post by: Thruster on September 03, 2015, 08:32:49 AM
"The world stock markets are nothing like they were 30 years ago."
Really? Google "Milken" or "Boesky". Not all that different. Actually pretty much unchanged. And that's in many respects the "problem".
Title: Re: Stock markets doom !
Post by: Brooke on September 03, 2015, 04:31:03 PM
The markets for stocks, commodities, bonds, and precious metals are very different today than they were prior to 2008.
I agree with Rolex.
If you don't have a free market (that let's prices be determined by the market itself) and instead have a manipulated market (where prices are determined by the actions of a small committee of people in government), buyers and sellers must focus on what that committee does and is thinking instead of on intrinsic value. That leads to malinvestment, misallocation of capital and labor, and an eventual disaster.
Title: Re: Stock markets doom !
Post by: SysError on September 03, 2015, 08:32:33 PM
I am no fan of the Teamsters. I should say, however, that I have not looked at them since the DOJ lawsuit, so to be fair I should say I don’t know.
But in all honesty, there are very few US unions that I do like. It is not because I am anti-union. Far from it. I think that unions improved the living conditions of their members, created a middle class and yes, often helped to improve US manufacturing. If you plot the decline of union membership from its height (25% of workforce) until today you will see an eerie correlation with the decline of the middle class.
One of the unique problems that US unions face is the Taft–Hartley Act of 1947. The law was meant to restrict labor and it did that and more. It made it easy for national unions to exist as long as they, in effect, just agreed to be ineffective. And national unions, while they could have chosen to counter key provisions of the Act, in the end just found it too easy to go along. (At least that is one version of the story).
One of the people who had a huge impact on Taft–Hartley was Sewell Avery, Chairman of Montgomery Ward. Mr. Avery is what I would call a true right wing nut. He hated FDR and worked to undermine him throughout WWII. In fact, Mr. Avery refused to accept a voted in union and despite several legal procedures that went against him, he disrupted the flow of essential of supplies to the War effort. After several warnings, FDR literally had to have the Army physically remove him from his office and had MW run by a trustee until after the war.
Avery regained control of MW after WWII at which point he proceeded to drive it into the ground. For the next ~10 – 15 years, at every level and at every turn, Sears thrashed MW. It wasn’t until Avery left that MW started a slow recovery process. It never really did catch up to its once second rate competitor.
It is important to note that Avery, while an extreme case, was not alone in his distain of FDR or “his war”. Most of the captains of industrial manufacturing only agreed to join the “Arsenal of Democracy” once they were guaranteed profits above their historical averages. When questioned about these guaranteed Government backed profits, I think it was FDR’s Secretary of the Treasury who said something to the effect of: We live in a capitalist society and that is just how we do things.
Well I for one am glad that the job creators of their day discovered their sense of patriotism, (albeit through the detour of the profit margin), just in time to defeat the Axis powers.
BTW, and this is important. Not all influential leaders acted in this way. One notable exception was Alfred Loomis. Loomis was a very successful Wall Street tycoon and a first class amateur scientist. He hated FDR and the New Deal and was a very influential backer of efforts to challenge FDR and his programs at every turn.
When war broke out, however, not only did he put aside all of his political views, he signed up to help the War effort in extraordinary ways.
Prior to the war Loomis was known as a bit of an eccentric millionaire. He turned his home at Tuxedo Park NY into a scientific enclave. Loomis brought many of the day’s top scientists to Tuxedo Park for short and extended conferences or for informal get-togethers. He built a first class laboratory which was an immense draw to scientists who could not get access to the equipment that they needed in their own circles.
With the entry of the US into WWII, Loomis made his laboratory and scientific equipment available to the War effort.
Not only did he serve as a senior administrator, but on a number of occasions when it became clear that a lab space or piece of equipment was immediately needed, or that a payroll had to be met, Loomis would take out his own check book and fund what was needed on the spot. Far too often government bureaucrats were often still trying to figure out how to frame the requisition when Loomis’ checks were clearing the banks.
Besides his ability to fund key projects, (for which he was usually, but not always, reimbursed by the Government), he understood the language or mentality of scientists, and as such he was able to help formulate reachable scientific goals and to build an organization that was focused towards those ends. MIT would not have made the scientific advances in Radar technology that proved to be so critical in the Atlantic and elsewhere without Alfred Loomis.
Loomis also played a critical role in the success of the Manhattan project.
I do not think that it would be unreasonable to wonder on what different time line and on what different terms WWII would have come to an end without Alfred Loomis.
Wow – that was a bit of a drift!
Look, I am not a Teamster, and I don’t really know what to think of their current day structure.
If you are interested in a union story about a nurse union in the south west…..you should pick up: http://www.amazon.com/Raising-Expectations-Hell-Fighting-Movement/dp/1781683158 Raising Expectations (and Raising Hell): My Decade Fighting for the Labor Movement
I really doubt that you will agree with much in it, however, I am sure that you will find it interesting.
I say this in part because I believe that anyone who still supports the Snyder is not going to be motivated by facts, but rather by fantasy. Who says the front office is worthless? I mean, it only took them how long to drop RGIII?
Title: Re: Stock markets doom !
Post by: SysError on September 03, 2015, 10:42:35 PM
I knew that when I used the word “Pact” that I might perhaps draw some criticisms, but I quickly said to myself, don’t be prejudicial, assume some reasonable level of antecedent knowledge here, and I was also in a bit of a rush.
So you have presented an “I never heard about it so it must not be true” rebuttal.
OK, fair enough.
So let us just go straight to the pictures.
(http://i62.tinypic.com/15g9wub.jpg)
(http://i60.tinypic.com/716al4.jpg)
These two charts pretty much show the same thing. Since the end of WWII until the ‘70s, wages more or less tracked with productivity increases. You can argue that that was a coincidence or that it didn’t happen, or you can read up on the early history of the NLRB and what happened with Taft–Hartley Act of 1947. I think James Gross is still considered the (or perhaps now just an “a”) authority in this area.
Starting in the mid to late 1970s, when worker productivity increased their wages did not.
Let me anticipate some of the more common criticism of this sort of chart/analysis:
1. This is some sort of a Krugman Illuminati Darth Vader mind trick. http://krugman.blogs.nytimes.com/2013/12/06/what-i-said/?_r=0
2. He is counting Y and Z when he should be comparing X to Z. (It is an argument that is often made and these arguments are either inaccurate or irrelevant. One reason that I put up two charts with slightly different measurements was to show that the trend is there with whatever reasonable factors you want to use).
3. I don’t care; I’m just going to ignore this. (I kid you not; I saw a twit on Bloomberg make this exact point.)
I am not sure what other challenges are out there, but until I am shown valid proof to the contrary, I am not inclined to change my position.
So your original point to which I responded to:
“However, reduction in price of goods as a result of productivity increase is a good thing for economies and for most of the people in those economies. You end up with more goods for a given amount of labor and capital.”
I contend that is inaccurate. If gains in productivity are not shared, which since the 1970s has increasingly been the case, outcomes are clearly not “… a good thing for economies and for most of the people in those economies.”
In fact, in your construction, the effects are usually extremely beneficial to the 1% and devastating towards working families.
“People working for their own benefit works fine -- on average, and over time -- if you have a free market and the rule of law.”
Really?
First I must say that your qualifier “…on average, and over time…”, reminds me of Keynes when it was put to him that in the long run everything works out fine and his famous retort that “In the long run we are all dead.”
But I suppose that your point is that people “…for their own benefit works fine… if you have a free market and the rule of law”.
OK, let us think about that.
Have you ever read say a Dickens novel? Have you ever studied working conditions in late 18th to 19th century in industrial Manchester or Birmingham? How about stories of the now famous, (and yes probably exaggerated), living conditions in the underground Edinburgh Vaults?
Closer to home, have you ever thought what it really must have been like to have worked for Carnegie steel, or as a coal miner for a Rockefeller when he had national and private guards come sweep down and massacre you and family while you were in your tents?
Ever heard of the Battle of Blair Mountain?
Think about it, all those people, acting as free agents, engaged in a mutual agreed relationship for the benefit of all parties under the rule of law, did so under a perceived future benefit.
Well blow me over; I do not understand, what went wrong?
Unregulated capitalism, when operating within a free for all market, is nothing more than a race to the bottom.
Societies, communities and families are destroyed by it.
Good decent men are broken in half.
There is no such thing as a future “free market”. It is a fantasy to say that there is one. The only time there was a “free market” was in antediluvian times. When societies are encouraged and in fact move towards this utopia of a free market state, it is an unmitigated disaster.
BTW the Homestead Strike happened because workers (and engineers) figured out how to dramatically reduce production costs while improving steel quality. Yep, it was a massive improvement in productivity. Any guesses as to what Mr. Carnegie decide to do?
A) He thought about it for a moment and said well I guess it’s a good idea, but I couldn’t be bothered.
B) He planned out the construction of the new plant equipment, brought in the workers who had made his plants successful and had helped figure out the new production method and said to them: “OK, let’s figure how we are going to staff these new plants and how we should help transition those that we will not be able to accommodate”
Or, (wait for it)
C) Build the new plant, immediately fire all of your skilled workers, bring in a slew of unskilled labors at a fraction of the cost, and bring in the Pinkertons when you need to take care of what the Romans euphemistically used to call “their mortalities”. After all this, trot back to Scotland for some fly fishing and wonder whether or not you will ever meet your mother’s definition of success for you.
And boys and girls, if you picked C don’t worry. Set up a foundation to build a few public libraries here and there and to fund a PBS program on the wonders of butterflies.
All will be good.
Title: Re: Stock markets doom !
Post by: BaldEagl on September 03, 2015, 11:40:50 PM
At a fundamental level the markets are very simple. Can I, as an individual, create enough value for others to maintain the lifestyle I want. Period. End of story.
At another level companies ask the same question of themselves but the recipient is now a shareholder. So the question becomes can we as a company, create enough value for others to attract investors. Companies that do so survive, those that don't don't. The survivors create jobs and those that lose put people on the street.
As these two forces meet (employers and employees... and lets not forget every employer is also an employee themselves) they agree to a cost/work value. Employers who don't pay enough get fewer or lesser employees and those who pay more get more or better (or a combination of both) employees. Each side; employees and employers, agree to the cost/work value relationship.
Competition between employers to attract, and employees to attain value ultimately creates equilibrium within margins of error. This is a free market at it's best.
So back to the beginning. If you want a job that's been shipped overseas you have to be at least as skilled as the overseas worker and be willing to accept a lifestyle equal to their exchange adjusted income or be cheaper, but if you really want to excel you need to be smart, educated and provide exceptional value.
Title: Re: Stock markets doom !
Post by: SysError on September 04, 2015, 12:05:58 AM
The reason why people don’t need to pay any attention to the likes of Hazlitt, Sowell, Von Mises, et al, is that because after spending about 35+ years of implementing their ideas on deregulation, government defunding, free markets, principles of self-interest, etc. etc., they brought the world to the very brink of an utter total irreversible financial ruin.
When you screw up like that you are no longer allowed at the grown up table, and yes, you are going to have start using a sippy cup again.
It all started as some sort of comic masquerade in the form of the Laffer curve, which purports to show that a reduction of tax rates would result in an increase in government revenue. Laffer claimed that the idea came to him at the kitchen table in California one morning while he was trying to recover from a slight hangover, or just the morning mist before the coffee kicks in (take your pick I guess), when EUREKA it came to him!
As he recalled it, he grabbed a napkin (a paper one I assume) and proceeded to draw an X Y axis, labeling one Government Revenue with increasing scale and the other as the Tax Rate, again with an increasing scale. He then plotted down a half circle, and well the rest is history as they say!
Public figures loved what he had to say. I’ll cut your taxes and we will all have more bounty.
A couple of problems; macro-economic theory says that one of three things can happen: revenues can go up, revenues can stay the same or revenues can go down.
Another problem, after implementation, except for the already converted evangelists, not many people agreed that the effects that Laffer had predicted came about. As I recall, the most generous thing a kind person could say was, that if it had had an impact it was slight and short lived.
Anyway, for several years, from time to time, I could humor myself by reading a piece here and there in the NYT or WSJ about supply side theories while downing a morning coffee and donut. (Actually I was much more of NYT/Nation guy and my wife was the WSJ/Economist reader).
Not too long ago I saw a debate which included Laffer where he said with a straight face, that the prosperous swinging ‘20s were all made possible because of aggressive tax cuts.
OK, so did you happen to turn the page to the next chapter to find out what happened in the next decade?
I don’t know, maybe he grew up in a school district that in the name good stewardship, frugality and economy, the local council cut the school budget such that they were only able to afford volume I of American history which ended with the ‘20s.
A final note on Laffer, by all accounts he is a kind and well-meaning individual. I just think that it would have been better for us all if he had pursued a degree in say Sociology or anything else, as long as it didn’t scare the children or startle the horses as they say.
So let us fast forward to today. After 35+ years of:
• - Deregulating industry and financial sector • - Defunding government oversight • - Bashing unions to a pulp • - Defunding schools • - Failing to pay for infrastructure • - Squandering the country’s inheritance of physical natural resources and air spectrum • - and of course handing over one bloated government contract after another to the “efficient and effective” private sector
after all this, and a hundred other self-emasculation acts in the name of a free market, what other reasonable set of outcomes could one have expected other than what happened in 2008?
Don’t try to say that it was too much regulation that brought on the crisis and that too much regulation will cause another crisis.
If it didn’t work with everything that you guys got these past 30 years, it is never going to work.
And I am not going to accept some modern day variant of Zeno’s The Tortoise and Achilles Paradox as an excuse to just keep pursuing the attainment of a free market Nirvana.
And BTW, an argument that says “Hey it wasn’t us” is not going to wash.
Here is probably one of the most stunning moments of the aftermath of the 2008 crisis.
https://www.youtube.com/watch?v=R5lZPWNFizQ
It is really is like the Pope saying that he has just figured out that there is no God.
Alan Greenspan, a Chicago School guy was an admirer of Milton Friedman, the original tax-cutting and antigovernment economist.
Greenspan was also quite literally a disciple of Ayn Rand, a Soviet immigrant and author of The Fountainhead and Atlas Shrugged. (Rand’s objectivist philosophy gave a sort of moral license to sadists who masquerade around as human beings. My favorite quote attributed to her was when she was asked, given her fierce antigovernment positions, why she was accepting Social Security and Medicare -- she replied that she was only accepting the payments as reparations. Usually it is white adolescent middle class males who become enamored with her works. A boost to their libertarian proclivities at a young age I suppose. It is unquestionable that large segments of society would be spared countless hours of dribble if these young men instead found their way to their father’s private magazine collection.)
And let’s not forget Greenspan’s admiration of Friedrich Hayek of the Austrian School.
Greenspan, by far, has been the most influential and most prolific free market guy in a position of real power in the 20th century. Deregulate everything; defund the government, let the free market reign supreme and have enlightened self-interest to be our only guide.
Upon retirement in 2006, he is reputed to have said of his unfinished goals that most things were set on a trajectory towards a desired state. One of his biggest regrets: that he didn’t get to privatize social security.
Good Lord above!
Title: Re: Stock markets doom !
Post by: zack1234 on September 04, 2015, 12:41:46 AM
At a fundamental level the markets are very simple. Can I, as an individual, create enough value for others to maintain the lifestyle I want. Period. End of story.
At another level companies ask the same question of themselves but the recipient is now a shareholder. So the question becomes can we as a company, create enough value for others to attract investors. Companies that do so survive, those that don't don't. The survivors create jobs and those that lose put people on the street.
As these two forces meet (employers and employees... and lets not forget every employer is also an employee themselves) they agree to a cost/work value. Employers who don't pay enough get fewer or lesser employees and those who pay more get more or better (or a combination of both) employees. Each side; employees and employers, agree to the cost/work value relationship.
Competition between employers to attract, and employees to attain value ultimately creates equilibrium within margins of error. This is a free market at it's best.
So back to the beginning. If you want a job that's been shipped overseas you have to be at least as skilled as the overseas worker and be willing to accept a lifestyle equal to their exchange adjusted income or be cheaper, but if you really want to excel you need to be smart, educated and provide exceptional value.
You actually believe what you have written?
:rofl :rofl :rofl :rofl :rofl :rofl :rofl
One day you could be president :rofl :rofl :rofl
Its North Koreas fault :rofl
I deleted my original reply as the above was too funny :rofl
Title: Re: Stock markets doom !
Post by: SysError on September 04, 2015, 07:50:01 AM
Bloody hell. So it looks as if I chose to spend a few hours last night replying to posts when I could have been flying! :bhead
(Given the very limited amount of time that I have these days to play, at a minimum my choice in priorities is either really messed up, or, or I don’t know what.) :bhead
Travelling again this weekend. Will not be able to play, but, if I wanted to, I could post…. :bhead
(http://i59.tinypic.com/2dsomqr.png)
Title: Re: Stock markets doom !
Post by: zack1234 on September 04, 2015, 10:40:08 AM
:rofl
Dogs are awesome
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 04, 2015, 10:40:34 AM
Bloody hell. So it looks as if I chose to spend a few hours last night replying to posts when I could have been flying! :bhead
(Given the very limited amount of time that I have these days to play, at a minimum my choice in priorities is either really messed up, or, or I don’t know what.) :bhead
Travelling again this weekend. Will not be able to play, but, if I wanted to, I could post…. :bhead
(http://i59.tinypic.com/2dsomqr.png)
I've enjoyed reading your post. So you didn't write it all for nothing.
The government needs to be there. This is why our founding fathers created one. They realised that even though people deserved to live free of oppression, a rule of law, liberties, and social philosophies should be discussed and debated, so that good prosperity would happen for the people in their society. They had the right idea with the capitalist economy and "free market" ideals.
What we have turned capitialsm into is another sweat shop for the workers. We have created so much productivity and technological capabilities to create sustainable growth in productivity, yet, we still work 8 - 10 hours a day to maintain that growth, which looks great on paper. But instead of making lives easier with growth, we have limited the majority of Americas because of a certain perceived skill level/pay ratio that doesn't back up the productivity level. IMO, a nation that is weak in middle class and lower class growth is weak on the inside. Our capitalist society has allowed businesses to pay low wages (based on skill and labor demand) to the point where citizens in the work force are still barely hanging by a limb. Now that 35% of Americans believe they have to get into piles of debt to learn skills they arent going to be fairly compensated for, its going to have a big impact on spending in America.
A microeconomy is all about a business.
A macroeconomy is all about the entire country.
You have to have a strong microeconomy in the majority of the bussinesses in order to keep a strong market economy on the macro level. Think of each microeconomy as being leaves on a tree. The more that fall off, the more the tree slowely dies. Sun and water act as equity and Revenues. Some part of the tree gets more than others, that side prospers, it has more equity and Revenues to pass through the vains to create growth for the whole tree in order to keep the weak side sustainable. If it didn't allocate those revenues to the leaves, and only uses its sunlight and water to support the bulk of the tree, the leaves die and intern the whole things falls apart.
It's crazy how you can compare a tree to a business and also a tree to an entire economy. I couldn't write a book on it.
What I believe is, in a capitalist economy of scale, growth comes from the revenues and equity poured into a business. The only way to keep the prosperity of growth is to provide incentives for the growth to be possible. IE, we have to pay people who work enough to shed their equity and money to all aspects of the economy in order to keep businesses sustainable and for markets to grow healthly. If we don't, we give that back in welfare to people who choose to not work as hard, or become single parents, or we devalue the" skills " to pay them less, and so thsy take advantage of the system, thus defeating the whole purpose of growth.
If we devalue our labor market too much because of the notion of cheap goods and products, we intern become cheap as a socitey and thus spending halts, creating a recession in the economy.
If we devalue "skills" in this economy with the amount of time worked, we kill the very seed that is used to create prosperity in our country. What we will have is a nation full of very smart people who are in debt but cannot afford to live a sustainable life because the skills have been devalued, thus creating turmoil in the streets and slower growth.
Title: Re: Stock markets doom !
Post by: Zoney on September 04, 2015, 12:03:29 PM
Violator, I see 2 things you can do if you do not agree with how US business conducts themselves.
Stop doing business with them.
Create your own business and show them how it should be done.
Everything else is just sour grapes. No one owes you anything because you went to college.
Title: Re: Stock markets doom !
Post by: Mar on September 04, 2015, 12:09:57 PM
Violator, I see 2 things you can do if you do not agree with how US business conducts themselves.
Stop doing business with them.
Create your own business and show them how it should be done.
Everything else is just sour grapes. No one owes you anything because you went to college.
Once I get enough experience to learn how to fully operate a business I will take that risk, although I still haven't figured out the right product/service yet either.
See that's the problem I see Zoney, people have taken the time and money to learn the skills necessary in order to make a wage where they don't have to depend on their parents anymore. At least that's what every business owner would say. Go get an education! Great we have one now, and they aren't backing up their words. The corporate or functional businesses in America are hardly paying these college students with great skills already to live on their own, much less pay insurance and other bills. So the problem is that more and more people are paying thousands to benefit their career while businesses owners aren't acknowledging those gained skills with pay. You have to realize that people are getting more and more educated which in turn is limiting the demand for higher paying jobs. If more people study busineses administration they should have the skills necessary to do a busineses corporate job, however, there are more people who have the skills so they can devalue the pay to get cheap labor based on the market demand for the position. What's happening is that 15 years from, when more careers like HR get automated, not only will less people be working, the ones who do get paid won't reap any of the productivity growth because there will be tons of educated people they can hire for cheap. As this progresses, there value of labor will shrink, while millions are already in huge financial debt due to loans they thought would get them the skills necessary to pay a proper living wage. So if college doesn't get me a good paying job, if not going to college doesn't get me a good paying job, then what we are going to see is more and more taxes being used for welfare benefit which will also hurt the busineses owners. Cheap labor comes with a future cost that eventually no one will be able to support themselves because supply of goods will deminish based of being able to buy large quantities for cheap, so prices will artificially inflate due to supply restrictions, while the middle class wont be able to purchase these supplies with the minimal salaries they make. The wage gap increases, the prices go up anyway, and the society as a whole cannot prospper because all the growth in the company is being handed out to officers instead of allocating more to the workers. It's a grim perspective I have overall on the nation. How do you make people happy so they quit squeaking and asking more from the government, you take a risk, and a hit, and you pay them better. If retail businesses could do this, socitey overall would become more prosperous, more productive or encouraged in their work, and less government handouts would need to happen, infact the tax money the Gment made from these increases would only help them as well. IMO, it's a cause and effect type situation that needs to happen or we wont be "merica" anymore.
Title: Re: Stock markets doom !
Post by: Zoney on September 04, 2015, 01:12:24 PM
I think you are making a mistake when you assume education means, "go to college".
Education, experience., talent, vision and drive all have value. This value is not set by the person that has them, they are set by those who want to use them, to take advantage of them. Taking advantage of them does not make anyone a bad person, neither the person that has them nor the person that employs someone that has them.
Title: Re: Stock markets doom !
Post by: ink on September 04, 2015, 01:20:08 PM
I think you are making a mistake when you assume education means, "go to college".
Education, experience., talent, vision and drive all have value. This value is not set by the person that has them, they are set by those who want to use them, to take advantage of them. Taking advantage of them does not make anyone a bad person, neither the person that has them nor the person that employs someone that has them.
if you take advantage of them and dont pay them for whatever "it" is worth...is most certainly wrong....
especially if what they have is a rare thing...
:cheers:
Title: Re: Stock markets doom !
Post by: Zoney on September 04, 2015, 01:33:14 PM
I did not say "take an unfair advantage of them".
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 04, 2015, 01:57:11 PM
If a person works full time 8-10 hours a day and has worked for a company for 1-3 years, and they are getting paid 9.50 an hour after a $1 raise. Honestly this is BS and does nothing to benefit anyone, they are still in the same position they were 2 years ago with a 8.50 wage. So all that selling, time, energy, dealing with customers, so on ect, has literally only granted them about $20 a week more than they were getting paid before. Even though their skills in the position have drastically increased along with their productivity. In the end, these people still cannot afford to better themselves, their children grow up in the same poverty, gaining other skills gets no notice because they don't have the credentials to show for it, they cannot simply quit their jobs because they cannot afford to be out of a job longer than a week, and now we've created a wage slave who has to accept government assistance to live their life. The more this happens in America, the more taxes and government insurance plans will have to be created to fight poverty. Highly profitable companies are shooting themselves in the foot by not paying people real salaries and intern getting eatin with higher taxes. Its a catch 22.
How is this going to benefit the market and stock market in the future? It's going to stagnate because companies overtime will lose value do to having to increase prices while middle and lower class cannot support those price increases, nor are these middle and lower class people going to be able to invest in the markets to begin with. So instead of taking a healthy hit to preserve growth in the nation and our markets by providing the working class with more to spend, business owners will continue to reap the growth of the prices going up (for now in the Short term) all while taxes soar through the roof, and then everyone will be wondering why the hell it appears we have great growing companies but realistically as a nation we are suffering in the inside. Then all the sudden companies will not grow anymore with higher prices because no one can afford to buy the product.
Title: Re: Stock markets doom !
Post by: ink on September 04, 2015, 01:59:53 PM
just the words "take advantage" has in itself a bad feeling to me....
:salute
I agree completely. When I typed it out I let it sit there for quite awhile trying to think of another word that would do the job without the negative connotations but with my limited vocabulary, I could not. Actually let's call it lazy because I could have described the same conditions with a couple of paragraphs most likely. Part of my thought process included imagining commissioning Michalangelo to do a sculpture. Something that I could not possibly do at his level. The act of commissioning said sculpture would "take advantage" of his prodigious talents.
Title: Re: Stock markets doom !
Post by: ink on September 04, 2015, 02:25:52 PM
I agree completely. When I typed it out I let is sit there for quite awhile trying to think of another word that would do the job without the negative connotations but with my limited vocabulary, I could not. Actually let's call it lazy because I could have described the same conditions with a couple of paragraphs most likely. Part of my thought process included imagining commissioning Michalangelo to do a sculpture. Something that I could not possibly do at his level. The act of commissioning said sculpture would "take advantage" of his prodigious talents.
:cheers:
:salute
Title: Re: Stock markets doom !
Post by: Zoney on September 04, 2015, 02:26:06 PM
If a person works full time 8-10 hours a day and has worked for a company for 1-3 years, and they are getting paid 9.50 an hour after a $1 raise. Honestly this is BS and does nothing to benefit anyone. .
If this is true, would you agree that this person has an obligation to quit, therefore reducing the assets available and therefore increasing the market value?
Title: Re: Stock markets doom !
Post by: Zoney on September 04, 2015, 02:27:29 PM
Ink :salute
Title: Re: Stock markets doom !
Post by: FLS on September 04, 2015, 02:33:38 PM
Ah yes, the esoteric Chauncey Gardener School of Economics . . .
It's there we be.
Title: Re: Stock markets doom !
Post by: Zoney on September 04, 2015, 02:47:09 PM
Violator, I'm enjoying this discussion.
Let's do a thought experiment please.
3 guys absolutely equally qualified apply for one position. One guy says he will do it for 19 an hour and the other 2 say they will do it for 20 an hour. The 19 an hour guy is hired. Whom has determined the value of that job?
3 guys equally qualified apply for 3 positions exactly the same. One guy says he will do it for 19 an hour and the other 2 say they will do it for 20 an hour. All are hired at the proposed rate they asked for. The first day of work while at lunch, they have a discussion and the 19 an hour guy finds out he is being paid less. Who's fault is is that he is paid less? Is he legally or morally entitled to demand the extra 1 hour an hour his buddies are getting?
3 guys equally qualified apply for one position. All of them say they will do it for 20 an hour and they discuss this among themselves and agree not to take less. The employer declines to hire any of the because he wants to pay 19 and hour and tells them, "I will keep looking for someone who will do it for 19 an hour". They all go home an tell their wives they did not get the job because it paid 5% less than what they wanted. One of the guys wife says,"You have been out of work for 6 months. Get your butt back there right now and take that job for 19 an hour. Who determined the value of that job?
Title: Re: Stock markets doom !
Post by: Aspen on September 04, 2015, 03:17:23 PM
I will take stab at it. In each scenario, the potential employees and the business both determined the value of that job, as it should be. In scenario #3, the wife affected the husband's determination of the value of the job. Just like a zillion other outside factors like the price of gas, hours required, ability to afford to keep looking, potential for a better job, future of the industry and the repo guy outside hooking up that new Silverado he can't make payments on.
In scenario #2, the $19/hr guy is welcome to demand the additional dollar. The employer is welcome to approve or deny that request. The employee is welcome resign and go the competition if they pay $20/hr, but may stay if the competition only pays $17/hr.
Title: Re: Stock markets doom !
Post by: Rolex on September 04, 2015, 09:11:45 PM
The best lesson in economics and business is to learn to apply an economy of words.
Title: Re: Stock markets doom !
Post by: Ripsnort on September 04, 2015, 09:36:21 PM
I think you are making a mistake when you assume education means, "go to college".
Education, experience., talent, vision and drive all have value. This value is not set by the person that has them, they are set by those who want to use them, to take advantage of them. Taking advantage of them does not make anyone a bad person, neither the person that has them nor the person that employs someone that has them.
Granted, in our day and age, Zoney, a HS diploma was enough to get a good paying job. Hell, my father had nothing more than a HS diploma when he accelerated in his career to one notch below VP at the now defunct Boyle Midway company (Easy On, Easy Off, Black Flag products, household products)
It's a bit different today. with the influx of highly educated Asians and other immigrants with higher educational standards into our country, those higher paying jobs are going to those who have a 4 year degree or better unless it's a specialty 2 year degree like Welding, Composites, etc.
Auto mechanics (2 year degree) used to be a good living, not anymore for the majority, the avg wage is $38k a year, barely enough to sustain a family of 4.
If you've ever had the chance to read "Strength Finder" it does not differentiate those that go to college and those that do not. When I'm assisting HS students with the recruitment process for collegiate sports I always tell them to pursue the college based on A) The campus. Can you live there for 4 years and finish? B) What you're studying...your degree. Your passion. Are your 'strengths' aligned with the degree you're are pursuing? and then finally C) Does the college fit your expectations as an athlete?
I've seen too many kids who THINK they're "all that" in athletics get recruited by top colleges only to end up never seeing the field until their senior year in a high scoring game, as a back up.
A HS diploma today gives you minimum wage in most cases, and will give you nothing more financially unless you network (know someone) or you find your strength and expand your education.
Title: Re: Stock markets doom !
Post by: SysError on September 05, 2015, 12:54:15 PM
I've enjoyed reading your post. So you didn't write it all for nothing.
Thanks.
So not a complete waste I guess.
I should say that I just went back to read and re-fresh my memory on what the heck I said the other day in those three posts. I see that I got a little more caustic with just about every other paragraph or major section.
There was no need for me to be so polemic. I could have, and I should have, made my points with a little more civility.
I apologize if I offended anyone.
(Other than that, I noticed, in some sense, that I had a tendency, on occasion, to use far too many clauses and parentheticals).
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 05, 2015, 01:12:51 PM
3 guys absolutely equally qualified apply for one position. One guy says he will do it for 19 an hour and the other 2 say they will do it for 20 an hour. The 19 an hour guy is hired. Whom has determined the value of that job?
3 guys equally qualified apply for 3 positions exactly the same. One guy says he will do it for 19 an hour and the other 2 say they will do it for 20 an hour. All are hired at the proposed rate they asked for. The first day of work while at lunch, they have a discussion and the 19 an hour guy finds out he is being paid less. Who's fault is is that he is paid less? Is he legally or morally entitled to demand the extra 1 hour an hour his buddies are getting?
3 guys equally qualified apply for one position. All of them say they will do it for 20 an hour and they discuss this among themselves and agree not to take less. The employer declines to hire any of the because he wants to pay 19 and hour and tells them, "I will keep looking for someone who will do it for 19 an hour". They all go home an tell their wives they did not get the job because it paid 5% less than what they wanted. One of the guys wife says,"You have been out of work for 6 months. Get your butt back there right now and take that job for 19 an hour. Who determined the value of that job?
I'll think on this a bit. My mind is turned off this weekend. But that does bring some good points, I'll confess. Might as well ask for 15 and see what you can really get away with. Ehh
Title: Re: Stock markets doom !
Post by: CptTrips on September 05, 2015, 08:53:56 PM
These are kinda long, but some of you might be in to it. I'm a big fan of this guy, even though he has gotten the crap beat out of him the last 6 years for being too bearish. I think he has a better grasp on whats going on than most. I think he just couldn't make himself believe the Fed would actually keep doing what its been doing since 2009. In his defense, it is without historic precedence. Also, I believe he will be proven right in the next year or two.
Seems to me they just signaled a rate hike for Sept.
They may not have promoted growth, but they have inflated a dangerous equities bubble and promoted insane malinvestment. 1. ZIRP has closed off yield from every other safe investment so a boat load of money has been poured into the market that should have never been there. That puts pressure on stock prices to rise because of increased demand. The second that ends, that money will flow right back out to bonds, CDs, etc. Well some of it any way. The portion they don't lose as the market craters before they can get out.
2. ZIRP has made corporate earnings seem higher than they really are by lowering their carrying costs. That has allowed supported higher stock prices because it makes their P/E look better.
3. ZIRP has kept borrowing costs so low that corps have started engaging in insane malinvestment like debt-financed stock buyback to keep inflating their stock prices. Hint: this is very popular with the company executives who want to unload their stock options at good prices. Nice of the stockholders to take on all that debt so the CEO can get cash.
4. ZIRP has created a deadly level of complacency in the market. After 6 years, some younger people in the industry have come to believe that is normal. I've had people tell me it's the "new normal" and we can expect ZIRP for another decade at least. This makes people believe that the market is now under the Fed protection and will never go down significantly, only up, up, up! They are mistaken.
The sad part is, I think they did the right thing in 2008-2011 with ZIRP. After 2011 they should have VERY VERY slowly started tapering off. I agree with the need to pump money in to the economy to help stimulate things. However instead I would have liked to have seen us:
Rebuild every interstate hi-way bridge Rebuild/expand every major airport Lay gigabit fiber to every household Convert every coal-fired electrical plant to gas Create a Apollo type project to revolutionize battery technology ect, etc.
All these things could have pumped Gov money into a lagging economy (yes, I'm a moderate keynesian) without as many of the bad effect of ZIRP-4-ever. And the is would all be great investments that would pay for themselves over time in increased productivity.
The other sad part is I think the pain is baked into the cake at this point. I don't see any way of avoiding the reckoning now. And I think the reckoning is coming soon.
Please. Review your investment portfolios now and make sure they are balanced for your risk tolerance and time horizon.
Wab
Title: Re: Stock markets doom !
Post by: zack1234 on September 07, 2015, 01:33:38 AM
Has Western civilisation collapsed yet?
Come on North Korea buck your ideas up.
Come on Mel Gibson about time we had another blame the Redcoats give us our pitchfork film. :rofl
Title: Re: Stock markets doom !
Post by: Meatwad on September 07, 2015, 07:09:46 AM
That movie was rubbish :old:
Title: Re: Stock markets doom !
Post by: zack1234 on September 07, 2015, 12:12:53 PM
Billy Elliot?
Title: Re: Stock markets doom !
Post by: Bruv119 on September 07, 2015, 04:26:41 PM
Rebuild every interstate hi-way bridge Rebuild/expand every major airport Lay gigabit fiber to every household Convert every coal-fired electrical plant to gas Create a Apollo type project to revolutionize battery technology ect, etc.
These would all result in enormous boondoggle government spending and waste -- Solyndra times 1000 -- and it would suck the life out of any other productive investments as everyone scrambles to catch the gravy train.
Title: Re: Stock markets doom !
Post by: CptTrips on September 08, 2015, 12:03:05 AM
These would all result in enormous boondoggle government spending and waste -- Solyndra times 1000 -- and it would suck the life out of any other productive investments as everyone scrambles to catch the gravy train.
That's always a risk.
Out of curiosity, do you consider the government support of the transcontinental railroad, and the Apollo space program, or the building of the interstate hi-way system as pointless wastes of money?
Title: Re: Stock markets doom !
Post by: zack1234 on September 08, 2015, 01:40:15 AM
Maynard Keynes was defo a wrong un :old:
Your all a bunch of radicals and i have reported the lot of ya!
I now have a Lambretta sx180 and a Vespa Gts.
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 08, 2015, 03:24:30 PM
3 guys absolutely equally qualified apply for one position. One guy says he will do it for 19 an hour and the other 2 say they will do it for 20 an hour. The 19 an hour guy is hired. Whom has determined the value of that job?
3 guys equally qualified apply for 3 positions exactly the same. One guy says he will do it for 19 an hour and the other 2 say they will do it for 20 an hour. All are hired at the proposed rate they asked for. The first day of work while at lunch, they have a discussion and the 19 an hour guy finds out he is being paid less. Who's fault is is that he is paid less? Is he legally or morally entitled to demand the extra 1 hour an hour his buddies are getting?
3 guys equally qualified apply for one position. All of them say they will do it for 20 an hour and they discuss this among themselves and agree not to take less. The employer declines to hire any of the because he wants to pay 19 and hour and tells them, "I will keep looking for someone who will do it for 19 an hour". They all go home an tell their wives they did not get the job because it paid 5% less than what they wanted. One of the guys wife says,"You have been out of work for 6 months. Get your butt back there right now and take that job for 19 an hour. Who determined the value of that job?
Alright, now that my mind is turned on, let me discuss the situations and why this is teetering on not being sustainable in the long run.
The way I look at it is this, given how quiet companies are about how much they are willing to pay, essentially they do set the market value of the job given that they will only absolutely pay a person X amount no matter how qualified that person is. So, person 1 and 2 would never actually know person 3 undercut them for the job. Now, market value says if there is a saturated job market for that specific job, they can ultimately higher for less given that there are so many people applying for the same job. There are younger people who would ask for a lot less given experience, while there are people in the same field with 10 years experience who ask for more. It is up to the companies discretion to hire a young cheap employee for twice as less or to higher a skilled experienced worker who understands the job well. Now, when you compare skills, some jobs really aren't that difficult, so doing it for 10 years would reap a lower asking value/experience since any ole person can come by and learn the job. So as the market gets more and more saturated while the skills aren't as difficult, the price for that labor goes down and down.
Now that we have an influx of immigrants who are coming to America to better their lives by "working" in a country that pays a lot higher, they do not understand the value of a position, just as much as a young person doesn't value a position yet. So they come in and take a lot of labor jobs demanding really low wages because it's higher than what their country was offering. So we have a an influx in the job market which is becoming more and more saturated. This creates cheap labor for employers because they can get away with offering low wages to immigrants who will accept anything almost. This essentially lowers the market value of the job but does not lower the skills needed to perform it. Therefore, you are getting the same skilled labor for twice as less with double the workers while the company makes higher revs and net profits from it. (It looks great on paper).
So, lets look at how getting a college education or getting an education in general about any subject will over time devalue based on this concept. College students are now learning skills that took some people 10 years to achieve. Those college students do not understand the value of the job, they immediately go out searching for work at a "real" job. These students only have 6 months before they have to start paying loans off, they take a decent office job for 30K a year before realizing this is not even going to be close to making enough to really "live". The person who has spent 10 years learning the profession loses his job due to downsizing, he goes out and tries to find a job for 50K a year. Well, since companies are now hiring college graduates for a lot cheaper, they will not need to pay this guy 50K a year even though he is probably more experienced. This guy is out of a job for 6 months before his wife comes complaining for him to accept a cheaper value. So he now accepts a job for 45K even though he was worth 50k before. He now has to cut expenses and his livelyhood since he has to accept the lower pay. Now, imagine this happening to every profession out there. Overtime more and more people are getting degrees and accepting positions that completely undermine what the old standards were since they have no idea what they were valued at to begin with. This pushes the wages down and people into lowered skilled positions which undervalues skills as a whole.
So instead of doing what professional sports do and hiring the best athletes for grand amounts who will produce. Companies instead are doing everything they can to lower the value of skills in the workforce. If they undervalue the skills it takes to do the job, they can offer what ever they want knowing someone will accept it. Instead of making the position more competitive based on skilled performance, they are making it more competitive based on who will accept the cheapest pay. If they did this in football or baseball, no one would watch sports anymore because most of the teams would suck as no one would have the drive to become a professional athlete anymore. If you aren't a humanitarian, what is the point of striving to be something if you know the position ain't going to pay well anyway? 4 things are happening, 1. an influx of college students who will accept cheap wages by being undermined in the workforce, 2. A slew of people who just don't see any reason to strive for something because there are no incentives. IE, its better to live off the government because I can make almost as much without having to anything instead of working hard and barely getting anything anyway, might as well sell drugs, 3. Automation. 4. Off shoring labor. So we are creating more poverty (as the poor get pushed out of positions or don't want to work) while the working class gets devalued by the influx of under appreciated college students X automation which causes people to have to choose new careers, immigrant labor which steals easier skilled work for a lot cheaper, and offshoring labor which only benefits the company but not the economy.
This will happen for so long that in the end companies will not be making any more profits because people don't have the money to spend, they will offshore their labor to countries with even cheaper labor to make a profit, eventually prices will have to increase based on supply restraints, however the market as a whole will shrink in their home country because people will not be able to afford the products anymore. This is a huge chain reaction that will take time to accumulate and is happening as we speak. Products will become less quality and as a whole society will devalue and the standard of living will decline. If companies do not start giving back by adding wage incentives to their employees or offering better wages as a whole, our society will end up turning into a Walmart economy where only the top dogs make any real wages. It wont be a fun society to live in.
Title: Re: Stock markets doom !
Post by: Aspen on September 08, 2015, 06:30:29 PM
Thats some serious glass-half-full thinking. Our economy is dramatically different than it used to be but there is opportunity everywhere. With the internet and smart phones, an individual can have a business with a world wide presence in about a week. If labor rates are below market due to corporate greed, Government safety nets, too much immigration, the Feds using a dull pencil or the wage fairy running out of pixy dust, then scoop up some of that "cheap" labor and start producing.
My four closest friends are all either college drop-outs or just skipped it, all own their own business and all are pretty successful. One has a trucking company, one is directional driller (horizontally under roads, rivers, etc), one is a TV personality/pro-staffer in a recreation industry and the other sold his garage-born product business to a conglomerate and semi-retired at 45. They all came from zero family money, all took huge, "that will never work" risks and they all sacrificed a bunch to get things rolling. The semi-retired guy lived in the first tiny warehouse space he rented, joined a gym so he could take showers and slept on a mattress with his business partner for a couple weeks until they got classy and both had their own mattresses on the floor.
They all also failed miserably in a prior venture or two and worked any crap job they could to pay off debts & continue eating while they shifted gears.
Yes, there are a zillion things wrong or unfair about our economy, regulations, taxation, immigration, Federal reserve system, etc, etc, etc. Andy Dufresne was right when he said "I guess it comes down to a simple choice, really. Get busy living or get busy dying."
Title: Re: Stock markets doom !
Post by: Ripsnort on September 08, 2015, 08:38:18 PM
Alright, now that my mind is turned on, let me discuss the situations and why this is teetering on not being sustainable in the long run.
The way I look at it is this, given how quiet companies are about how much they are willing to pay, essentially they do set the market value of the job given that they will only absolutely pay a person X amount no matter how qualified that person is. So, person 1 and 2 would never actually know person 3 undercut them for the job. Now, market value says if there is a saturated job market for that specific job, they can ultimately higher for less given that there are so many people applying for the same job. There are younger people who would ask for a lot less given experience, while there are people in the same field with 10 years experience who ask for more. It is up to the companies discretion to hire a young cheap employee for twice as less or to higher a skilled experienced worker who understands the job well. Now, when you compare skills, some jobs really aren't that difficult, so doing it for 10 years would reap a lower asking value/experience since any ole person can come by and learn the job. So as the market gets more and more saturated while the skills aren't as difficult, the price for that labor goes down and down.
Now that we have an influx of immigrants who are coming to America to better their lives by "working" in a country that pays a lot higher, they do not understand the value of a position, just as much as a young person doesn't value a position yet. So they come in and take a lot of labor jobs demanding really low wages because it's higher than what their country was offering. So we have a an influx in the job market which is becoming more and more saturated. This creates cheap labor for employers because they can get away with offering low wages to immigrants who will accept anything almost. This essentially lowers the market value of the job but does not lower the skills needed to perform it. Therefore, you are getting the same skilled labor for twice as less with double the workers while the company makes higher revs and net profits from it. (It looks great on paper).
So, lets look at how getting a college education or getting an education in general about any subject will over time devalue based on this concept. College students are now learning skills that took some people 10 years to achieve. Those college students do not understand the value of the job, they immediately go out searching for work at a "real" job. These students only have 6 months before they have to start paying loans off, they take a decent office job for 30K a year before realizing this is not even going to be close to making enough to really "live". The person who has spent 10 years learning the profession loses his job due to downsizing, he goes out and tries to find a job for 50K a year. Well, since companies are now hiring college graduates for a lot cheaper, they will not need to pay this guy 50K a year even though he is probably more experienced. This guy is out of a job for 6 months before his wife comes complaining for him to accept a cheaper value. So he now accepts a job for 45K even though he was worth 50k before. He now has to cut expenses and his livelyhood since he has to accept the lower pay. Now, imagine this happening to every profession out there. Overtime more and more people are getting degrees and accepting positions that completely undermine what the old standards were since they have no idea what they were valued at to begin with. This pushes the wages down and people into lowered skilled positions which undervalues skills as a whole.
So instead of doing what professional sports do and hiring the best athletes for grand amounts who will produce. Companies instead are doing everything they can to lower the value of skills in the workforce. If they undervalue the skills it takes to do the job, they can offer what ever they want knowing someone will accept it. Instead of making the position more competitive based on skilled performance, they are making it more competitive based on who will accept the cheapest pay. If they did this in football or baseball, no one would watch sports anymore because most of the teams would suck as no one would have the drive to become a professional athlete anymore. If you aren't a humanitarian, what is the point of striving to be something if you know the position ain't going to pay well anyway? 4 things are happening, 1. an influx of college students who will accept cheap wages by being undermined in the workforce, 2. A slew of people who just don't see any reason to strive for something because there are no incentives. IE, its better to live off the government because I can make almost as much without having to anything instead of working hard and barely getting anything anyway, might as well sell drugs, 3. Automation. 4. Off shoring labor. So we are creating more poverty (as the poor get pushed out of positions or don't want to work) while the working class gets devalued by the influx of under appreciated college students X automation which causes people to have to choose new careers, immigrant labor which steals easier skilled work for a lot cheaper, and offshoring labor which only benefits the company but not the economy.
This will happen for so long that in the end companies will not be making any more profits because people don't have the money to spend, they will offshore their labor to countries with even cheaper labor to make a profit, eventually prices will have to increase based on supply restraints, however the market as a whole will shrink in their home country because people will not be able to afford the products anymore. This is a huge chain reaction that will take time to accumulate and is happening as we speak. Products will become less quality and as a whole society will devalue and the standard of living will decline. If companies do not start giving back by adding wage incentives to their employees or offering better wages as a whole, our society will end up turning into a Walmart economy where only the top dogs make any real wages. It wont be a fun society to live in.
HOLY DEBBIE DOWNER BATMAN!!!!
You know, a fellow told this same story, plus or minus other 'current events" occurring in the 1960's and my Dad essentially blew him off regarding the market volatility. Dad retired in 1987 at age 57 with $800k invest in the market and some good 'cash' in the bank, along with his 40 acres and new home.
Today he is 85, net worth is 2.7 million (lost 5% in the last 2 weeks, big squealing deal ;) )
Bottom line, prepare not only your life for the worst case scenario, but your portfolio as well. There are Preppers like Dad for emergency situations at home, and in his investments. I'm certainly glad he's been my teacher. :)
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 08, 2015, 10:31:44 PM
Yeah, I realize this sounds like a grostesque situation. It probably won't get that bad. I just see a grim structure approaching if we cannot maintain a status quo in the work force of paying full time independent workers a semi livable wage who work in multinational multibillion dollar companies. It's the first step to prosperity in a nation to gain momentum. You also have to realize that not everyone can own or operate a busineses. There are people who do much better at specific job functions and we should appreciate that.
I have finally began investing in companies this year in the stock market and I've got to say its been pretty interesting and very volital, wish I had 10K to play with. It's exciting to finally be able to grow money. I plan to be very good at investing. My goal is to be able to play the stock market until I can save to possibly go all in and start a business or just play stocks all day. That is a tough transition to make I imagine. It's always been a dream of mine. Haven't decided on a product either and I think I need more experience. Luckily, I got an accounting Job and I've really learned how to disect a business. I plan to do everything I can to stay afloat in this society in a prosperous way by reaching higher goals I've set and to save and Invest. I do my best to sticking to worrying only about me and to be my best, but I see something happening and I don't quite know how it's going to effect our socitey and market in the next 15 years.
Title: Re: Stock markets doom !
Post by: RotBaron on September 08, 2015, 11:50:57 PM
Rip, nothing personal but do you know what that ROI is?
That 5% he just lost in two weeks took him one of those 28 yrs to make.
Title: Re: Stock markets doom !
Post by: zack1234 on September 09, 2015, 01:36:55 AM
:rofl
Do people actually read history books.
Has anyone read that book written in 1860's which envokes a immediate forum violation.
I got a 25% payrise last year and this year cause i am cheap. (I bought a Ł4500 vespa gts with cash)
The fact that there are replies of 7 or 8 paragraphs is a clear example of the stupidity of people.
The North Koreans are to blame :rofl
Title: Re: Stock markets doom !
Post by: CptTrips on September 09, 2015, 08:46:31 AM
I have finally began investing in companies this year in the stock market and I've got to say its been pretty interesting and very volital, wish I had 10K to play with. It's exciting to finally be able to grow money. I plan to be very good at investing. My goal is to be able to play the stock market until I can save to possibly go all in and start a business or just play stocks all day.
In Amerika...the Stock Market plays YOU!
Title: Re: Stock markets doom !
Post by: RotBaron on September 09, 2015, 06:08:24 PM
I have finally began investing in companies this year in the stock market and I've got to say its been pretty interesting and very volital, wish I had 10K to play with. It's exciting to finally be able to grow money. I plan to be very good at investing. My goal is to be able to play the stock market until I can save to possibly go all in and start a business or just play stocks all day. That is a tough transition to make I imagine. It's always been a dream of mine.
If this is something you really want to do, play with other ppl's $. Get a degree in Accounting or Finance, move to NY or Chicago and take any job on the floor you can get your hands on. Bust tail and get in the door, work on your MS on the side and then become a CFP and start your own business. By then you'll be playing with other ppl's money all day long and have learned to avoid a lot of pitfalls.
The market eats noobs alive, heck it eats experts everyday. I've said this in other threads, it's gambling if you are playing stocks in the short-term.
Title: Re: Stock markets doom !
Post by: SysError on September 09, 2015, 08:28:03 PM
These are kinda long, but some of you might be in to it. I'm a big fan of this guy, even though he has gotten the crap beat out of him the last 6 years for being too bearish. I think he has a better grasp on whats going on than most. I think he just couldn't make himself believe the Fed would actually keep doing what its been doing since 2009. In his defense, it is without historic precedence. Also, I believe he will be proven right in the next year or two.
I watched the first vid. Interesting. I plan to watch at least another piece or two by him. I do not know if I’ll end up agreeing with everything he might say. But he seemed for the most part to have a number of reasoned observations backed up by data that he had processed through the lenses of standard economic methodologies.
I should say that at first I thought that he was some type of economic public policy guy, but then I realized that he really did not seem to fit that mold. I then thought he was some kind of an industry sector or perhaps even a specific company investment advisor. I then waited to see if he was going to tell us about an upcoming special opportunity to purchase some Acme Corp limited availability Class D shares. Nope.
I guess he is some sort of an investment advisor with a focus on macro level economic issues.
Much of what he presented, to my ear, was a “Here is what is going on, some of it is a bit nuts if you ask me, but here is perhaps how you might want to think about it”.
BTW, starting a conference by stating that the purpose of finance should be to fund productive activity in the economy is probably going to get him labeled as a communist in some circles.
But let us move on.
His criticism of QE/QEII is not necessarily unique, and yes there is wide agreement that at some point monetary policy becomes in effect close to pointless. His suggestion that at levels above nominal 6% GDP, the effectiveness of QE drops off like crazy (and ends up boosting the stock market), is perhaps reasonable (I had always thought that economists who thought along these lines said that the number was closer to 3 – 4%, but I have a pretty poor memory on this sort of stuff).
I think every main stream economist believes that there are diminishing returns. There are disagreements as to the trigger points and the long term impact. A question that he didn’t address was in an environment where fiscal policy is an utter no go, what other choice is there?
I thought that his explanation of high corporate profit levels with low wage rates was perhaps his weakest point. I think he needed to go beyond an explanation in which he says that he thinks it has all been a result of unbalanced equilibrium forces working themselves out. (Am I mischaracterizing him here? Could be, listened to him over the screams of kids at the pool).
For example, I thought that within his chart of the 3 year change in government and personal savings compared to the numbers for 3 year growth in corporate profits, that there was what looked like a period of about 10 years that showed the exact opposite of what he was claiming. At least that is what it looked like to me.
Not to discount his reasoning behind his thoughts on high corporate profit levels with low wage rates, I think a reasonable explanation of what has been going on could include the following (and other) factors:
• The growth of monopolization within certain sectors • Weakened unions • The shrinking middle class • Globalization • The lack of effective regulation and oversight of the financial sector • And etc. etc.
Going down to these levels may not be his thing. He did seem like a high level kind of guy.
I think that he was spot on when he called for more Gross Domestic Investment in order to generate real GDP growth. What I didn’t hear was what his views were on how to do that. Modifying monetary policy may be a prerequisite to any plan, but I think he should have explained himself on how to increase productive economic activity. After all, it is probably the main public policy issue that economists disagree on.
I am wondering if he avoids economically partisan topics that are only tangential to the main point he is trying to convey.
BTW: loved his point on the multiplier effect of the bank reserve requirement. Reminded me of a very old argument I had had as a kid. I had forgotten all about it.
Title: Re: Stock markets doom !
Post by: SysError on September 09, 2015, 08:30:07 PM
The market eats noobs alive, heck it eats experts everyday. I've said this in other threads, it's gambling if you are playing stocks in the short-term.
“It’s a racket. Those stock market guys are crooked.”
Al Capone
Title: Re: Stock markets doom !
Post by: SysError on September 09, 2015, 09:20:31 PM
Seems to me they just signaled a rate hike for Sept.
They may not have promoted growth, but they have inflated a dangerous equities bubble and promoted insane malinvestment. 1. ZIRP has closed off yield from every other safe investment so a boat load of money has been poured into the market that should have never been there. That puts pressure on stock prices to rise because of increased demand. The second that ends, that money will flow right back out to bonds, CDs, etc. Well some of it any way. The portion they don't lose as the market craters before they can get out.
2. ZIRP has made corporate earnings seem higher than they really are by lowering their carrying costs. That has allowed supported higher stock prices because it makes their P/E look better.
3. ZIRP has kept borrowing costs so low that corps have started engaging in insane malinvestment like debt-financed stock buyback to keep inflating their stock prices. Hint: this is very popular with the company executives who want to unload their stock options at good prices. Nice of the stockholders to take on all that debt so the CEO can get cash.
4. ZIRP has created a deadly level of complacency in the market. After 6 years, some younger people in the industry have come to believe that is normal. I've had people tell me it's the "new normal" and we can expect ZIRP for another decade at least. This makes people believe that the market is now under the Fed protection and will never go down significantly, only up, up, up! They are mistaken.
The sad part is, I think they did the right thing in 2008-2011 with ZIRP. After 2011 they should have VERY VERY slowly started tapering off. I agree with the need to pump money in to the economy to help stimulate things. However instead I would have liked to have seen us:
Rebuild every interstate hi-way bridge Rebuild/expand every major airport Lay gigabit fiber to every household Convert every coal-fired electrical plant to gas Create a Apollo type project to revolutionize battery technology ect, etc.
All these things could have pumped Gov money into a lagging economy (yes, I'm a moderate keynesian) without as many of the bad effect of ZIRP-4-ever. And the is would all be great investments that would pay for themselves over time in increased productivity.
The other sad part is I think the pain is baked into the cake at this point. I don't see any way of avoiding the reckoning now. And I think the reckoning is coming soon.
Please. Review your investment portfolios now and make sure they are balanced for your risk tolerance and time horizon.
Wab
As bad as it is, ZIRP and QE, in the short run the argument goes, avoids the nightmare of deflation.
I think that I agree with your four points.
I have always thought that the Fed needed to accept a small inflation rate. With inflation at or very near zero, a CEO can be seen as being safe by just keeping a very large cash on hand position. Which is what a lot of large corporations have been doing for a while. Say you had an inflation rate of say 1 – 2 %. By keeping a large cash on hand position you are going to be seen, on a nominal basis, as losing value.
BTW: I wonder what increasing inflation would have on the velocity of money in Hussman’s analysis.
In other words would a small inflation rate kick CEOs in the pants to invest in value creating activities and perhaps be of a long term benefit?
I too think that another reckoning is coming, but I do not know if you and I see the same causes. To me, a big reason for the size of the 2008 crisis was the 30 year push to deregulate the financial sector.
Here are two comedians sharing their thoughts on the financial crisis. They are really funny and perhaps a bit worrisome at the same time. A good explanation as to what happened and a suggestion as to what might happen. (I think that there was only one major issue that boomeranged on these guys – Spain – but other than that ….)
Bird & Fortune - Silly Money - Investment Bankers
https://www.youtube.com/watch?v=9z70BKwfSUA
Bird and Fortune - Subprime Crisis
https://www.youtube.com/watch?v=mzJmTCYmo9g
Title: Re: Stock markets doom !
Post by: RotBaron on September 09, 2015, 09:40:50 PM
These would all result in enormous boondoggle government spending and waste -- Solyndra times 1000 -- and it would suck the life out of any other productive investments as everyone scrambles to catch the gravy train.
So infrastructure is government spending and waste? I rather like the freeway system, the electrical grid, water supplies and the Internet among other (wasteful) government programs "that suck the life out of any other productive investments".
With that attitude it's a good thing you're working on your survival supplies.
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 10, 2015, 07:51:23 AM
If this is something you really want to do, play with other ppl's $. Get a degree in Accounting or Finance, move to NY or Chicago and take any job on the floor you can get your hands on. Bust tail and get in the door, work on your MS on the side and then become a CFP and start your own business. By then you'll be playing with other ppl's money all day long and have learned to avoid a lot of pitfalls.
The market eats noobs alive, heck it eats experts everyday. I've said this in other threads, it's gambling if you are playing stocks in the short-term.
Nah, I really don't want to be a stock broker. I don't really want to be responsible for peoples money in a market where I cannot actually create growth myself. The market growth or shrinkage is something I could not control and I wouldn't want to test my patience with others on that note.
I mainly mean grow a portfolio myself, once I get a bit more money I'll open a ROTH IRA as another holdings account. So I'll have a 401K, ROTH, and maybe even I'll dabble in a mutual fund. I think investing is going to be the name of the game for my generation if we want to be successful. Working 8-5 in a job that gives you a 2% raise if you are lucky every year just ain't gonna work for us. I'm getting a huge headstart compared to my friends and colleagues and its crazy how many people couldn't tell you the difference between a Profit and loss statement and a balance sheet.
Title: Re: Stock markets doom !
Post by: Aspen on September 10, 2015, 01:34:45 PM
I would suggest including something tangible in your portfolio - precious metals, real estate, firearms, etc. When market swings and political changes throw wrench in paper investments, the right tangible commodities often grow. Plus, when a paper investment goes to zero, you have nothing. When your 10 acres is worth nothing, you still have 10 acres.
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 10, 2015, 03:28:55 PM
I would suggest including something tangible in your portfolio - precious metals, real estate, firearms, etc. When market swings and political changes throw wrench in paper investments, the right tangible commodities often grow. Plus, when a paper investment goes to zero, you have nothing. When your 10 acres is worth nothing, you still have 10 acres.
That's a good idea, my roommate has been getting to collecting silver. Maybe I should start getting into some of that too, since it is the most affordable commodity for me at the moment.
Title: Re: Stock markets doom !
Post by: CptTrips on September 10, 2015, 03:29:51 PM
I watched the first vid. Interesting. I plan to watch at least another piece or two by him. I do not know if I’ll end up agreeing with everything he might say. But he seemed for the most part to have a number of reasoned observations backed up by data that he had processed through the lenses of standard economic methodologies.
He is a fund manager (Hussman Funds). He was a pretty big deal back in 2000-2008. Predicted and dodged both the 2000/2008 crashes. He screwed up in 2009 thinking the market would crash again because it was over-valued. I believe he was right, however he did not predict the Fed would be as aggressive as it has for 6 years. He fully admits the error.
Their original models had only concerned valuation (I think they have that down). The part they were missing was a model for the risk tolerance of the market. Extreme valuations can continue for quite some time and even increase as long as there is sufficient risk seeking sentiment in the market. On the other hand, with negative risk sentiment, valuation can fall far below a reasonable value. The Fed slashed desperately during both the 2000 and 2008 crashes with little effect.
They now believe they have good models to quantify risk sentiment by measuring various market internals and credit spreads. Their models are now showing both extreme overvaluation and a worsening risk sentiment. That’s a really bad combination. The Fed can push that around with enough effort (i.e. debt), but you can’t fight it forever. The markets eventually revert towards the mean.
I may not agree with everything he says, but I agree with most. He puts a technical framework on what I have been suspecting on gut feel. Missing the last bull market has made him dirt on wallstreet. A lot of people laugh him off now. I believe he is the voice in the wilderness right now, but I believe he will be proven right soon.
He has an archive of weekly news letters that are fascinating reads if you are in to it: http://hussmanfunds.com/weeklyMarketComment.html (http://hussmanfunds.com/weeklyMarketComment.html)
I agree that dismantling the regulatory safeguards we put in to place after the Great Depresion was a grave error on our part. Those were bitterly hard-won lessons our grandparent put into place to spare us the pain they had to go thru. But we just had to see the elephant for ourselves. I believe Wallstreet has taken over too large a role in our society. Too many of our best minds are focused on how to game the market with algorithms and creating paper wealth instead of designing new airplanes or curing cancer.
I’m a big fan of capitalism, but I do think it needs boundaries to operate within. Unregulated Capitalism always turns toxic eventually. I don’t buy Market purist rants any more than I do hardcore Socialists. The answer is always somewhere in the middle.
Yeah, I’ve seen those Bird&Fortune skits before. Awesome Brit understated humor. ;)
Wab
Title: Re: Stock markets doom !
Post by: RotBaron on September 10, 2015, 05:06:39 PM
Nah, I really don't want to be a stock broker. I don't really want to be responsible for peoples money in a market where I cannot actually create growth myself.
I agree with a lot of your premises.
However, a CFP is far from a broker; clients pay them to manage their estate's investments (not just stocks/funds).
Title: Re: Stock markets doom !
Post by: ghi on September 10, 2015, 06:11:37 PM
The YouTube is flooded with videos predicting some sort catastrophic economic event for Sunday ,September 13th. The reasons comes from the autor of this book, published in 2012, believes everything in economy goes in 7 years cycles according with......I cant talk about it here,Google it ! Interesting connections.
The YouTube is flooded with videos predicting some sort catastrophic economic event for Sunday ,September 13th. The reasons comes from the autor of this book, published in 2012, believes everything in economy goes in 7 years cycles according with......I cant talk about it here,Google it ! Interesting connections.
Well it has to be true, there is no way this stuff would be made up just to sell a book.
Thank goodness for this link ghi, I'm going to change my entire life immediately.
Title: Re: Stock markets doom !
Post by: SysError on September 10, 2015, 08:33:28 PM
The YouTube is flooded with videos predicting some sort catastrophic economic event for Sunday ,September 13th. The reasons comes from the autor of this book, published in 2012, believes everything in economy goes in 7 years cycles according with......I cant talk about it here,Google it ! Interesting connections.
If I cancel my AH2 subscription on September 12th will HTC pro-rate that month's fee so that I can pick up the book on the 14th for a fraction of the best price I can find right now? :headscratch:
When are you getting on-line next?
You got to do more of your missions!!! :salute
Title: Re: Stock markets doom !
Post by: ghi on September 10, 2015, 09:04:02 PM
If I cancel my AH2 subscription on September 12th will HTC pro-rate that month's fee so that I can pick up the book on the 14th for a fraction of the best price I can find right now? :headscratch:
When are you getting on-line next?
You got to do more of your missions!!! :salute
:)
Not much fun left in game, MA looks sad ,almost empty and abandoned with large boring maps for 7 days and few players ,hopefully AH3 brings some fresh air and more players to build some hoarde,lol. BTW this autor has another strange book, based on sabattical years ; I watched his videos youtube, intersting bs, believes something blows this month; :noid (http://t3.gstatic.com/images?q=tbn:ANd9GcRrtI6imtM9XEzq3UuQEi4nyDMZ6UOC50YdJLPk4E9l4bxzCC8H)
Title: Re: Stock markets doom !
Post by: Brooke on September 10, 2015, 10:26:18 PM
Out of curiosity, do you consider the government support of the transcontinental railroad, and the Apollo space program, or the building of the interstate hi-way system as pointless wastes of money?
Nope. I don't consider those pointless wastes of money. The Apollo program, in economic terms, was probably a waste of money compared to alternative uses.
The government is getting much better at wasting money, though. Examples abound. Here is just one. Where I live near Seattle, they are building a new bridge to replace an old one. The new bridge is 20 times more expensive on an inflation adjusted basis -- 20! I would even be able to swallow something like 4 times more expensive (which is conceding a lot), but 20? Graft and inefficiency is far too great on grand government projects these days, even at the state level, let alone the federal level.
Title: Re: Stock markets doom !
Post by: Brooke on September 10, 2015, 10:30:33 PM
So infrastructure is government spending and waste? I rather like the freeway system, the electrical grid, water supplies and the Internet among other (wasteful) government programs "that suck the life out of any other productive investments".
With that attitude it's a good thing you're working on your survival supplies.
Today, a lot of government spending is has enormous graft and waste in it. This is especially true when there is a program specifically to pump extra money into things, where the pumping of the money becomes the main driver, not the need of the work.
I was responding to a thing like "there should be a program to pump huge money into [put your favorite here]." When that happens, you get Solyndras x 1000.
By the way, the Internet boom was not the government. The government wisely realized that it would be good to let normal citizens and private enterprise expand Arpanet/Darpanet. Until then, you would not have heard of it unless you worked at a place like Oak Ridge National Labs.
Title: Re: Stock markets doom !
Post by: SysError on September 10, 2015, 11:28:07 PM
Where I live near Seattle, they are building a new bridge to replace an old one. The new bridge is 20 times more expensive on an inflation adjusted basis -- 20!
What is the name of the bridge?
Title: Re: Stock markets doom !
Post by: zack1234 on September 11, 2015, 07:22:23 AM
However, a CFP is far from a broker; clients pay them to manage their estate's investments (not just stocks/funds).
That actually sounds like a pretty good idea. I've been thinking of doing something similar.
One career path im thinking about is to be a financial strategist, which maybe I have made up that title, but I want to be hired by companies or people to come up with the best solutions to invest and create fundamental growth in those entities through planning and proper spending, along with offering solutions to which way is the best path to take for better quality growth.
Still got a lot of learning and things to experience first before I feel comfortable getting into that sort of thing.
Title: Re: Stock markets doom !
Post by: craz07 on September 11, 2015, 03:59:52 PM
That actually sounds like a pretty good idea. I've been thinking of doing something similar.
One career path im thinking about is to be a financial strategist, which maybe I have made up that title, but I want to be hired by companies or people to come up with the best solutions to invest and create fundamental growth in those entities through planning and proper spending, along with offering solutions to which way is the best path to take for better quality growth.
Still got a lot of learning and things to experience first before I feel comfortable getting into that sort of thing.
dmonslyr you can do whatever you want with your knowledge, if you got the low down and the skills there is no limit to what you can do in the financial world, you remind me of my brother who because of being frugal and smart about finances is ahead of the game beyond me and many others...
Title: Re: Stock markets doom !
Post by: zack1234 on September 11, 2015, 04:05:06 PM
That actually sounds like a pretty good idea. I've been thinking of doing something similar.
One career path im thinking about is to be a financial strategist, which maybe I have made up that title, but I want to be hired by companies or people to come up with the best solutions to invest and create fundamental growth in those entities through planning and proper spending, along with offering solutions to which way is the best path to take for better quality growth.
Still got a lot of learning and things to experience first before I feel comfortable getting into that sort of thing.
Do play golf?
My career path is the be a pie taster
The word career makes me puke!
i have a job.
i might make life style choice and assess my portfolios.
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 11, 2015, 04:34:08 PM
i might make life style choice and assess my portfolios.
Ehh golf is a bit boring for me. I do enjoy the driving range and perhpas going out there and goofing off. I'm a tennis player. 4.5 ultimate player. Take that a bit more seriously. Atlanta has a hell of of a competition though.
Title: Re: Stock markets doom !
Post by: zack1234 on September 11, 2015, 04:45:33 PM
I have a dayton 250,lambretta 180 and a gts vespa :old:
Title: Re: Stock markets doom !
Post by: craz07 on September 11, 2015, 05:09:15 PM
i've had a 1700 cc harley the number one thing is can you afford this schit....
Title: Re: Stock markets doom !
Post by: Zoney on September 11, 2015, 05:17:00 PM
i've had a 1700 cc harley the number one thing is can you afford this schit....
That's.....................interesting. I've never heard Harley owners refer to the size of their engines in "CC's", (Cubic Centimeters), but rather always in "Cubic Inches" instead. But hey, what do I know, I've only been in the motorcycle business my entire life.
Title: Re: Stock markets doom !
Post by: craz07 on September 11, 2015, 05:19:19 PM
its critical you get the cc's correct...
Title: Re: Stock markets doom !
Post by: craz07 on September 11, 2015, 05:25:17 PM
103.7 cubic inches if your hell bent....
Title: Re: Stock markets doom !
Post by: ink on September 11, 2015, 05:40:24 PM
That's.....................interesting. I've never heard Harley owners refer to the size of their engines in "CC's", (Cubic Centimeters), but rather always in "Cubic Inches" instead. But hey, what do I know, I've only been in the motorcycle business my entire life.
:aok
being a tattoo guy I have met and been around all kinds of bikers....from the weekend warrior to the full 1%ers
first time for me also.
Title: Re: Stock markets doom !
Post by: craz07 on September 11, 2015, 05:43:36 PM
ink have you ever seen such a fabulous directment of the nation i have been neglected
Title: Re: Stock markets doom !
Post by: mbailey on September 11, 2015, 05:44:23 PM
The "History of the Decline and Fall of the Roman Empire" by Gibbon invokes a violation? Oh, wait. That was 1780.
I'm still reading it, on volume 4
If you get a chance check out Mike Duncan's Podcast "The History of Rome" 200 episodes at about a half an hr each episode. It starts from Romulus and Remus up thru the very end of the western empire. By far one of the best things history oriented I've ever heard. (I'm a Roman history junkie...can't get enough....but hey not my fault given I was born on the anniversary of its founding :D )
Title: Re: Stock markets doom !
Post by: ink on September 11, 2015, 05:45:52 PM
From http://www.wsdot.wa.gov/Projects/SR520Bridge/financing.htm Cost estimate = $4B right of way land = $90M Eastside construction estimate = $306M (http://www.wsdot.wa.gov/Projects/SR520Bridge/MedinaTo202/default.htm ) Westside construction estimate = $2.3B from: http://www.wsdot.wa.gov/NR/rdonlyres/8A0EA86F-7A41-40C3-9428-08E092FA3CBA/0/SR520_CEVP_WSCostEstimates20102012.pdf Bridge iteself then is $2.3B - $306M = $2B 6 lanes 112 feet wide 1.44 miles long (7,578 ft)
Old bridge (see http://www.wsdot.wa.gov/Projects/SR520Bridge/Photos/historicgallery.htm ) cost $21M for whole project (bridge plus other stuff) in 1961 dollars ($161M in 2012 dollars) Opened in 1963 4 lanes 1.44 miles long 60 feet wide Traffic as of 2013 is 115,000 vehicles per day
So, new bridge project is 25 times as expensive as old one in inflation-adjusted dollars. The new bridge costs $269k per foot.
Title: Re: Stock markets doom !
Post by: Brooke on September 14, 2015, 10:24:47 PM
If your intrested I can list a bunch of history related podcasts I listen to..... I at one time was going to start a squad forum here relating to podcasts, books etc that we could discuss, trade ideas or post good ones that we come across Make it an ask to join type sub forum .......hmmmm still may do it Would have to ask skuzzy if it's ok tho
Title: Re: Stock markets doom !
Post by: SysError on September 18, 2015, 09:36:00 AM
Thank you for replying with the name of the bridge, your current thoughts and the links.
I am curious as to how much common ground we have and where we differ.
I want to say at the outset that I do not engage in these community posts with any delusion that minds are going to substantially change. White middle aged (or older) western males, (or perhaps just all mature men worldwide, I do not know) rarely publicly acknowledge a change in their positions. If they do, it is usually because the issue is inconsequential to them, or, they find themselves trying to find a face saving eddy to shelter in until the storm passes. A consequence of Argument as War where learning equals losing perhaps?
For me anyway, I tend to think that because writing is a “linear” process, whereas thinking is not, that writing helps me to organize and sharpen my thoughts. In other words, it is a pretty selfish endeavor.
Let me also say from the outset that I once was, for a short period of time, exposed to the concrete construction sector and that experience colors my perspective. I am sure as we go through this, I am going to say something like, “Well, I would expect that to cost twice as much in real terms” and someone, who is either an estimator, a construction worker, a planner, etc., might say “Nope, we do that a lot more efficiently these days, so I would expect it to cost less.” In other words, I hope that anyone who has something positive to contribute, whether through experience, reason or research, does so.
If I were to phrase your thoughts on the subject as a motion, it might look something like this:
“The SR 520 Seattle replacement bridge is outrageously expensive when compared to the costs of the 1963 bridge in real terms.”
So with that as my reference point let’s begin.
Here are some of the thoughts I originally had when I saw your post identifying the bridge. (I have organized them to make an easier read.)
• It does sound like a substantial increase on adjusted basis $161M vs. $4B.
• Is the method of comparison and its calculation reasonable and accurate?
• Are the two projects really similar?
• Are there any significant differences to consider?
• Are the bridges performing the same function? (6 vs. 4 lanes is one obvious place to look at)
• Why a per foot calculation?
Many of these issues can be combined or grouped into three areas:
1. Economic
2. Project scopes and prevailing standards
3. Miscellaneous
When I followed your link http://www.wsdot.wa.gov/Projects/SR520Bridge/ (http://www.wsdot.wa.gov/Projects/SR520Bridge/) I was quickly impressed by the size, or perhaps even the boldness, of the project. It looks amazing!
(http://i61.tinypic.com/2dtycf5.jpg)
(http://i59.tinypic.com/2ept3t4.jpg)
(http://i59.tinypic.com/2j3qzuo.jpg)
I started to jump around the site looking at different topics, documents, photos, videos, live cam feeds etc. I was, and still am, quite envious of the level and quality of the information that your Washington State Department of Transportation (WSDOT) has put together. You guys are really lucky. I say lucky because over here on the east coast there have actually been cases in some jurisdictions were legislators have literary had to sue the governor to find out where funds went for this or that project! (And then, with under the threat of, or actual, court order the information is usually released in an as obscure a manner as possible).
It looks as if WSDOT provides information on a number of other projects. I do not know how much effort they put into every project, or whether they have a well-functioning quality control process or if every subject/topic that should be covered is. But to me the WSDOT’s outreach and community inclusion efforts look impressive.
For those not familiar with the bridge project, here are two videos that convey some sense of the size of the project:
Video of existing SR 520 bridge: https://www.youtube.com/watch?v=jNTWpImJFE4 (https://www.youtube.com/watch?v=jNTWpImJFE4)
Video of replacement SR 520 bridge: (IMO of the two, this is more interesting): https://www.youtube.com/watch?v=SPaLhOZU_uU (https://www.youtube.com/watch?v=SPaLhOZU_uU)
Title: Re: Stock markets doom !
Post by: SysError on September 18, 2015, 09:37:45 AM
Motion: “The SR 520 Seattle replacement bridge is outrageously expensive when compared to the costs of the 1963 bridge in real terms.”
2 of 6
The Economic Issues:
• It does sound like a substantial increase on adjusted basis $161M vs. $4B. • Is the method of comparison and its calculation reasonable and accurate?
First question: is $21M of 1961 dollars about $161M in 2012 dollars? Yes, if you use the real Consumer Price Index (CPI). So the next question is: is real CPI a good or appropriate way to measure value across time for this type of project, heavy bridge and highway construction. There is a very strong argument, in fact I would go so far as to say that the argument is conclusive, that in the case of the SR 520 project at hand that CPI is not a good way to figure out real dollars.
CPI is a measure of consumer purchases (of a common basket) tracked from one time period to another. So if you bought a loaf of bread 10 years ago and you wanted to figure out what, based on a simple measure of inflation, you should be paying for it today, use CPI. CPI is a reasonable way to look at commodities; it does not work well with say income or things like construction projects. (BTW; there is a huge issue with CPI, but that is another discussion). Economists use different means to figure out relative value in different contexts.
Another quick word about CPI; it is by far the most widely quoted deflator out there. You see it in newspapers, on the news; it impacts government and most private cost of living calculations, etc. You see it everywhere. It is by far the most commonly understood measure of inflation. It does not, however, show you that because a loaf of bread that cost you a dollar yesterday and two dollars today, that a construction project that cost you 100 dollars yesterday is going to cost you 200 dollars today.
Let me back up a bit. When I saw your reply post I said to myself “I bet he is using real CPI”. Which after a quick calculation, I know for a fact that you are. The issue is that economists know that context is king.
When economists are presenting their thoughts on the economy to the general public, what they know they have to do is to get you to buy into their context of the problem being addressed. So, for example, conservative economists are always pointing to the ratio of government spending to GDP. For conservatives, most of the time, getting you to buy into the comparison of whatever you are looking at to GDP is key. Government spending is engorging the Sword of Damocles!
(http://i57.tinypic.com/ab6mh.jpg)
The end is nigh!
(http://i57.tinypic.com/24eovgg.jpg)
Liberal economists usually respond by saying; “look that relationship, when inflation is low, does not mean a thing. If inflation is low and the economy is in a slump, invest in infrastructure and boost aggregate demand, it is the cheapest time for the government to do so.” So, the buy in for liberals in this case is that you can tell if government spending is too low during a recession if inflation is low. You could almost say that liberals think “Government spending ratios to GDP are mostly, but not always, meaningless.” They might even think: you would probably be just as accurate to compare Government spending ratios to the projected organic carrot crop in any given base year!” (There is actually some proof for this!)
Again, the issue is that in economics CONTEXT IS KING.
After figuring out that you had used real CPI, I went to find a construction deflator that memory tells me exists. I googled and looked and googled and looked on just about every government site I could find. Nothing! I found stuff that was interesting, http://www.census.gov/econ/construction.html (http://www.census.gov/econ/construction.html)but not what I was looking for: A deflator for heavy bridge and highway construction by region.
I did find this: http://data.bls.gov/timeseries/WPUFD432&series_id=WPSFD432 (http://data.bls.gov/timeseries/WPUFD432&series_id=WPSFD432)
Series Id: WPUFD432 Not Seasonally Adjusted Group: Final demand Item: Construction for government Base Date: 200911
Looks interesting, but series starts in 2009.
Start here if you want to look up a series yourself: http://www.bls.gov/ppi/ (http://www.bls.gov/ppi/)
I did find the following interesting site at http://enr.construction.com/economics/ (http://enr.construction.com/economics/). From what I can tell, this looks like what we need here. Problem is that it is behind a paywall, and I don’t really know if it is something that is workable for our purposes.
My guess is that the index that I am thinking about (from many moons ago), was one that was put together by an industry group. It is not uncommon, to have/use private data series, the issue normally is the length of the series and QC issues.
(I did try to look for what I wanted in our own library. I grabbed a cup coffee, went downstairs, dusted off an old text book and I started to flip through the index and TOC. Somewhere in that bookshelf is a book on comparative economic statistics and indexes that I know has a reference to a construction index. But, after a while I thought “This is going to take a while”. I went back upstairs and I started to google away again.)
In part, their stated mission is to provide “a methodology for deciding which measure of worth is appropriate for the subject at hand.”
Now since we all know that if something is on the internet it must be true, I spent some time deciding whether or not the site was run and put together by credible people, or a group of co-conspirators trying to figure out how cheeky they can get before Skuzzy shuts them down for a violation.
Title: Re: Stock markets doom !
Post by: SysError on September 18, 2015, 09:38:42 AM
Motion: “The SR 520 Seattle replacement bridge is outrageously expensive when compared to the costs of the 1963 bridge in real terms.”
3 of 6
Economic Issues (cont.):
From what I can tell they have an impressive Board of Advisors http://www.measuringworth.com/aboutus.php. (http://www.measuringworth.com/aboutus.php.)
It looks as if the content of the site is mostly put together by these two guys: Lawrence Officer http://www.measuringworth.com/aboutusof.php (http://www.measuringworth.com/aboutusof.php) Samuel Williamson http://www.measuringworth.com/aboutuswl.php (http://www.measuringworth.com/aboutuswl.php)
And of course the content is very good. Crisp and to the point, obviously put together by educators who know how to communicate economic principles. I would say the content of the site is what you would expect to cover in a second year econ class, or possibly a second semester class during the first year, at a half way decent college or university.
They state that they have two missions:
Quote
“The first is to make available to the public the highest quality and most reliable historical data on important economic aggregates, with particular emphasis on "nominal (current-price) measures, as well as real (constant-price) measures.
The second is to provide carefully designed compartors (using these data) that explain the many issues involved in making value comparison over time.”
There are three kinds of lies: lies, damned lies and statistics. - Mark Twain
I also should say that these guys come from a tradition that I don’t usually follow or necessarily agree with. I see as them as “University Chicago” types. But that said, what they present is crisp and clear. (I am sure that a Keynesian has done the same thing, but I couldn’t find a site from their perspective).
Another way of expressing what they are doing is:
Quote
“A purchasing power calculator compares the relative value of a past amount of dollars to a present amount. A simple calculator uses only the prices of consumer purchases to do this computation, whereas a complete purchasing power calculator, such as found on this website, uses various prices, wages, output, etc., depending on the context.”
Context is King.
So let’s look at your statement:
Quote
“[The] Old bridge … cost $21M for whole project (bridge plus other stuff) in 1961 dollars ($161M in 2012 dollars)”
Go to Officer/Williamson’s calculator: http://www.measuringworth.com/m/calculators/uscompare/ (http://www.measuringworth.com/m/calculators/uscompare/)
And use the values 1961, $21 and 2012, and you get the following table result:
Quote
In 2012, the relative worth of $21.00 from 1961 is:
$161.00 using the Consumer Price Index $125.00 using the GDP deflator $192.00 using the value of consumer bundle $183.00 using the unskilled wage $219.00 using the Production Worker Compensation $352.00 using the nominal GDP per capita $602.00 using the relative share of GDP
If you need help/ determining which result is most appropriate for you, see Choosing the Best Indicator to Measure Relative Worth.
In a non-tabular format at the top you will see:
Quote
In 2012, the relative value of $21.00 from 1961 ranges from $125.00 to $602.00.
A simple Purchasing Power Calculator would say the relative value is $161.00. This answer is obtained by multiplying $21 by the percentage increase in the CPI from 1961 to 2012.
This may not be the best answer.
The best measure of the relative value over time depends on if you are interested in comparing the cost or value of a Commodity, Income or Wealth, or a Project. For more discussion on how to pick the best measure, read the essay "Explaining the Measures of Worth."
And at the bottom you will see:
Quote
If you want to compare the value of a $21.00 Project in 1961 there are four choices. In 2012 the relative:
• historic opportunity cost of that project is $125.00 • contemporary opportunity cost of that project is $192.00 • labor cost of that project is $183.00 (using the unskilled wage) or $219.00 (using production worker compensation) • economy cost of that project is $602.00
For them a project calculator means:
Quote
“A Project is either an investment, such as construction of a canal or installation of a cable network; or a government expenditure, such as the financing of Medicare or a war. Also within this category are such items as the size of a government budget deficit, and the total assets or net worth of a company.”
And using the economy cost calculator makes sense when:
Quote
Economy Cost of a project is measured using the relative share of the project as a percent of the output of the economy. This measure indicates opportunity cost in terms of the total output of the economy. The viewpoint is the importance of the item to society as a whole, and the measure is the most inclusive. This measure uses the share of GDP.
Of the choices they provide, the Economy Cost is by far the best fit.
It would be nice to have a heavy construction index for bridges and highways in the North West, but I do not have one. Using real CPI makes no sense. Using their Project measure and comparing relative value by the Economy Cost factor IMO provides you with one fair way of thinking about what that project should cost today.
So I would say that in this case, $21M of 1961 dollars does not equate to $161M in 2012 dollars.
I would say that a fairer analysis would say that $21M of 1961 dollars equates to $602M in 2012 dollars.
Context is King.
Is it perfect? No. I would accept even a 10% swing. Does it make sense to compare to a share of GDP? If you are a conservative economist it does! Is there a “liberal” way to make the comparison? Yes, but I cannot find a site that is as elegant as:
Title: Re: Stock markets doom !
Post by: SysError on September 18, 2015, 09:39:56 AM
Motion: “The SR 520 Seattle replacement bridge is outrageously expensive when compared to the costs of the 1963 bridge in real terms.”
4 of 6
• Are the two projects really similar?
In your post reply you say:
The new bridge will cost = $4B And that is made of the following pieces: • Right of way land = $90M • Eastside construction estimate = $306M • Westside construction estimate = $2.3B from: • Bridge itself then is $2.3B - $306M = $2B
You then say that the Old bridge cost $21M for whole project (bridge plus other stuff)
And using real CPI in 2012 dollars it is $161M
Quote
“So, new bridge project is 25 times as expensive as old one in inflation-adjusted dollars.”
$161,000,000.00 x 25 = $4,025,000,000.00 is how I assume you got there.
Data on the New Project:
The legislative budget cap for the project was $4.65B http://www.wsdot.wa.gov/Projects/SR520Bridge/Budget.htm (http://www.wsdot.wa.gov/Projects/SR520Bridge/Budget.htm)
From what I can tell, they saved some money here and there but they fear that they could eat up a lot of that savings later.
Quote
• The difference between 2010 and 2012 estimates for Floating Bridge, Pontoon and Eastside projects is primarily due to a favorable bidding environment and retired risks with completion of the environmental documents and permitting.
• The difference between 2012 and 2014 estimates for the remaining unfunded elements is primarily due to escalation and risks associated with delivering the remaining scope of work.
The only thing that I could see that was unfunded was $1,566 M for the I-5 through West Approach. (I assume it was budgeted, and they are just waiting on the exact funding source. But I do not know)
Overall as of 2014 overall they looked under budget by $180M. They have the SR 520 Program Total for 2014 at coming in at $4,471 M.
I know you had the just the bridge construction number at $2B, I am not sure how you got there. At one point I thought that I had it, $2.077B.
But that number is not just the bridge. It includes a lot more work than just the bridge.
I looked here: http://www.wsdot.wa.gov/NR/rdonlyres/FFB41DA9-DC53-4906-891C-C4A643ED0627/0/2015_0513_SR520ExpendituresToDate_ThruDec2014_FINAL.pdf. (http://www.wsdot.wa.gov/NR/rdonlyres/FFB41DA9-DC53-4906-891C-C4A643ED0627/0/2015_0513_SR520ExpendituresToDate_ThruDec2014_FINAL.pdf.) While it is detailed, I do not know enough about the area to go figure out what is what. My guess is if some had the patience and the local knowledge they could figure out a close enough just bridge number.
In the end I just settled on this data and said 630M+561M+696M=1,887B
Tell me, am I getting something wrong? (I really am not even sure what body of water we are actually talking about!)
So I guess 1,887B is close enough to 2B to move forward.
Data on the Old Project:
You say about the old project
Quote
“[The] Old bridge…cost $21M for whole project (bridge plus other stuff) in 1961 dollars”
I am not sure I agree with you.
Go to page 4, page 11, page 13 and page 14 of the August 1963 Bridge Opening Program. http://www.wsdot.wa.gov/NR/rdonlyres/D2751414-2ED6-435C-AE18-EDB24A7178E3/0/1963_SR520_BridgeOpening_Program.pdf (http://www.wsdot.wa.gov/NR/rdonlyres/D2751414-2ED6-435C-AE18-EDB24A7178E3/0/1963_SR520_BridgeOpening_Program.pdf)
On page 11and again on page 13 the cost of the bridge is put at $22.5M (1963 $). And as you can see, it does not include “bridge plus other stuff”. It is just the bridge. Page 14: The total construction price (which includes the construction costs of the “other stuff”) was $63.7M. When you add in the right of way the cost is $89.5M.
One big caveat, most of the line item amounts are listed as “final estimates not available – this is the contract bid price”. So I think that it would be very reasonable to expect that the actual final cost was north of that. This is all a guess, but here is one reason to accept that the final cost was probably higher.
Go to page 2 of the Washington Highway News, July-August 1963, Volume 1 No.1. http://www.wsdot.wa.gov/projects/sr520bridge/memorylane/pdfs/WHN_7-8_1963.pdf (http://www.wsdot.wa.gov/projects/sr520bridge/memorylane/pdfs/WHN_7-8_1963.pdf) Right at the top: so and so “…will officially open the $24,972,000 2.3 mile structure….This combination of the bridge and the freeway, which cost more than $ 80 million ….”
Two items standout, 1) The bridge is cited as 2.3 miles long, the old bridge is listed as 1.43 miles long. 2) The number 80 million is just too perfect a round a number, plus it is not clear if it is for construction + right of way. But what the heck. Any ideas? My guess is that it is construction only.
I am going to assume that the 1963 bridge cost $25M.
So where does that put us?
I think that comparing the 1963 bridge costs to the 2014 entire project costs is an error.
Comparing the two at a total project level does not make much sense. There are far too many things that are just different. For example, there is no East Roanoke St to NE 104th way construction in 2014.
(http://i60.tinypic.com/aue138.jpg)
A 1963 bridge cost to 2014 bridge cost seems like the logical thing to do.
Based on your original CPI approach you would be at $192M in 2014 dollars and you might claim that the 2014 project is 10 times as expenses as the 1961 bridge in real dollars.
(192,000,000.00x10.42=2,000,000,000.00) Or (192,000,000.00x9.83=1,887,000,000.00)
Based on a more appropriate deflator that number would be at $717M in 2014 dollars and it would be fair to say that the project is about 3 times as expenses as the 1961 bridge in real dollars.
(717,000,000.00x2.79=2,000,000,000.00) Or (717,000,000.00x2.63=1,887,000,000.00)
The reason I took the time to run through CPI here was to show that if you had used a bridge to bridge comparison you would not be saying that the project is now 25 times as expensive, you might say that it is 10 times as expensive.
Title: Re: Stock markets doom !
Post by: SysError on September 18, 2015, 09:41:02 AM
Motion: “The SR 520 Seattle replacement bridge is outrageously expensive when compared to the costs of the 1963 bridge in real terms.”
5 of 6
BTW: Just to make clear, as I have tried to explain; in this case the right deflator to use is not real CPI. I picked a method that I thought was more appropriate. If you think that I made a bad choice, OK, suggest another method. I would love to discuss it with you.
Check out: Tutorial 4: A Beginner’s Guide to Choosing the Best Deflator http://www.measuringworth.com/tutorial4.php (http://www.measuringworth.com/tutorial4.php)
• Are there any significant differences to consider? • Are the bridges performing that same function? (6 vs. 4 lanes is one obvious place to look at)
Saying that the modern project is just a little shay of 3 times the cost of a similar project 51 years ago and that’s OK, is a little hard to accept. At the scale of this project we are talking about $1,170M to $1,283M. That is a lot of money.
So the question that comes to mind is have there been changes in capacity, standards or function that might explain the additional funds?
These are just some of my own thoughts.
One quick side note: I know that we all like to think of a simpler time when things were cheaper and things just got done right. Well 50 years ago on the SR 520 bridge project they had to deal with (or just ignore) their “Ramps to Nowhere” problem: http://www.520history.org/1956-Present/WSDOTPeninsula.htm (http://www.520history.org/1956-Present/WSDOTPeninsula.htm)
Last paragraph:
Quote
“Two ramps connected to the new bridge across Lake Washington that opened in 1963, but the ones intended for the expressway have remained in place but incomplete and unused for 50 years.”
Here is just a high level review of the changes to capacity, standards and function over these past 50 years that have been applied to the current project.
I am leaving out standard upgrades to engineering and construction standards (which have been substantial by themselves).
My source documents are here: http://www.wsdot.wa.gov/Projects/SR520Bridge/About/BridgeFacts.htm (http://www.wsdot.wa.gov/Projects/SR520Bridge/About/BridgeFacts.htm)
• The new bridge is a little bit longer by 132 feet • You will get 2 new HOV lanes • The new bridge is light rail capable • There will be a new 14-foot-wide bicycle and pedestrian path • There will now be real shoulders on the bridge. These new shoulders will allow disabled vehicles to pull out of traffic, which you cannot currently do. On the inside you’ll have 4 feet wide shoulders; on the outside you will have 10 feet outside shoulders. • The Roadway deck width at mid span alone will go from 60 to 116 feet. 6 lanes for traffic and 14 feet (Bike Lane) + 28 feet (for shoulders) • At mid span the bridge will be 7 feet higher and east navigational channel clearance will increase by an addition 6 feet. This means that you will not have to have a draw span. You have one currently and it opens at least once a day and disrupts traffic. • The new floating bridge is designed to withstand sustained winds of up to 89 mph (100 year storm standard). Your current bridge is rated at 77 mph. • SR 520 has been designed to better withstand earthquakes.
BTW: I do not know what your thoughts are, but do you think these columns are going to stand much of a chance in an earthquake or bad storm? (I know that this is the current West Approach, but it illustrates the point)
• Rebuilt overpasses and on- and off-ramps throughout the project area will improve traffic flow • New noise-reduction solutions and techniques will lower highway noise for nearby neighborhoods and parks • Polluted runoff will be captured and filtered before being released into Lake Washington and streams • New roadway structures and fish-friendly culverts will remove fish migration barriers. (I cannot figure out if this applies to the float bridge or somewhere else.) • 75 year design life
On the issue of:
Quote
The new bridge costs $269k per foot.
Besides the issue of how one gets there, it is a little unusual to see a per foot cost in an engineering or construction context. I am not saying that some reporter on some morning show is not going to say “it cost xxx per feet”, I am saying that with a very few exceptions, in construction its per ton, per cubic yard, etc., (The only thing I can think of that is usually, but not always, quoted in per foot is concrete street gutters.)
(http://i60.tinypic.com/30t2s79.jpg)
Sometimes, but not usually, concrete sidewalks are quoted in square feet. Concrete, for example (in the US) is mostly quoted in cubic yards.
Look at it this way. Assume that the length of the bridge is fixed. If you had a four lane bridge you would take the cost of the bridge and work the per foot cost based on length. Think what would happen if you now had an 8 lane bridge.
I suppose that if someone wanted to convey a sense of expense in the vernacular, perhaps a per square foot cost might be better.
I did find something that was a little interesting though. You guys paid an average of $176.13 per cubic yard for concrete pavement and $732.52 per cubic yard for structural concrete. 4000 psi concrete (pavement concrete) over here a couple of years ago went for between $95 to $135 per cubic yard. I wonder why you guys appear to have paid a lot more for the stuff. http://www.wsdot.wa.gov/NR/rdonlyres/A8EE6CB0-46F6-4EE8-95A3-62E9B793F31C/0/CostIndexData.pdf (http://www.wsdot.wa.gov/NR/rdonlyres/A8EE6CB0-46F6-4EE8-95A3-62E9B793F31C/0/CostIndexData.pdf)
The reason it is interesting is because on average Concrete Pavement was $176.13 per cubic yard and Structural Concrete was $732.52 per cubic yard.
Title: Re: Stock markets doom !
Post by: SysError on September 18, 2015, 09:42:08 AM
Motion: “The SR 520 Seattle replacement bridge is outrageously expensive when compared to the costs of the 1963 bridge in real terms.”
6 of 6
So here is where I am.
I believe that the 2014 bridge is about 3 times the cost of the 1961 bridge.
The changes to capacity, standards and function seem to explain the need for additional funds. (BTW: I would expect newer construction techniques to drive costs down, but other factors easily overwhelm this cost advantage.)
The purpose of the project seems well thought out and it looks as if you guys in Seattle will have the advantage of significant infrastructure for years to come.
You guys in WA are really lucky to have WSDOT, them seem like a first rate agency. (Have they messed up in the past? I am sure they have. Will they mess up in the future? I am sure they will. Humans and organizations make mistakes.)
There are many judgement calls in economics. But there are also are a number of worked out principles that are not judgement calls. Well, at least among the vast majority of recognized economists. Perspective is important, and it is usually most helpful when you get the context right. Context is King.
(http://i61.tinypic.com/2jd01zs.jpg)
I would vote against the motion.
Title: Re: Stock markets doom !
Post by: craz07 on September 18, 2015, 11:54:46 AM
funny in some way hahahahahha
Title: Re: Stock markets doom !
Post by: Brooke on September 18, 2015, 02:24:02 PM
White middle aged[/b] (or older) western males, (or perhaps just all mature men worldwide, I do not know) rarely publicly acknowledge a change in their positions.
I don't often see anyone, western or not, white or not, male or not, mature or not, change their opinions, publicly or not. ;)
Title: Re: Stock markets doom !
Post by: Brooke on September 18, 2015, 02:29:18 PM
On page 11and again on page 13 the cost of the bridge is put at $22.5M (1963 $). And as you can see, it does not include “bridge plus other stuff”. It is just the bridge. Page 14: The total construction price (which includes the construction costs of the “other stuff”) was $63.7M. When you add in the right of way the cost is $89.5M.
The old 520 project including building a large amount of freeway system that is not being rebuilt for the new 520. The equivalent of what is being rebuilt today in the old project, as far as I could tell, was the $21M part.
Quote
you might say that it is 10 times as expensive.
I would also say that 10 times more expensive is still egregious.
Title: Re: Stock markets doom !
Post by: Brooke on September 18, 2015, 02:57:19 PM
BTW: I do not know what your thoughts are, but do you think these columns are going to stand much of a chance in an earthquake or bad storm? (I know that this is the current West Approach, but it illustrates the point)
(http://i59.tinypic.com/5mbjiv.jpg)
I think that picture was after a barge collided with the bridge in 2006, but who knows? The WSDOT site doesn't elaborate other than to say it was "damaged".
My argument isn't need for repair or replacement. It is this: it cost $x in today's dollars originally, now it costs $25x (or in your calculation $10x) in today's dollars. I am astonished that voters are so clueless as to fall for that, but they do.
Title: Re: Stock markets doom !
Post by: Rolex on September 19, 2015, 05:11:42 AM
Because it an iBridge. An iBridge 2.0 with version 8.21 OS and duel flim flam underbelly fans.
Title: Re: Stock markets doom !
Post by: Ripsnort on September 19, 2015, 08:10:40 PM
I think that picture was after a barge collided with the bridge in 2006, but who knows? The WSDOT site doesn't elaborate other than to say it was "damaged".
My argument isn't need for repair or replacement. It is this: it cost $x in today's dollars originally, now it costs $25x (or in your calculation $10x) in today's dollars. I am astonished that voters are so clueless as to fall for that, but they do.
1/2 the voters since 1980 are transplanted Californians. I'm not surprised. ;)
Title: Re: Stock markets doom !
Post by: Meatwad on September 19, 2015, 08:55:15 PM
This is a graph of a predictor of stock market performance over the next 10 years (in blue) and the actual stock market performance over the next 10 years (in red). It is sort of like the Shiller PE ratio, but a metric that works better in the view of Hussman. From the graph, it looks like it does a pretty good job.
Our current level is about what it was in 1999, with 1 year to go before the dot-com crash.
One thing, though: today's financial environment is (in my view) way outside the bounds of anything in history (with monetary base, excess reserves at the Fed, Fed balance sheet, and interest rates waaaaaaaaay outside the bounds of anything in history). So, who knows if any previously excellent financial predictors are still applicable.
Title: Re: Stock markets doom !
Post by: NatCigg on September 20, 2015, 06:27:01 PM
1/2 the voters since 1980 are transplanted Californians. I'm not surprised. ;)
:rofl remember when the west was tough and resource utilization benefited the working man. :rofl now the sky is falling the woods are rotting and a standard home cost 400,000 lol Californians . PS don't forget the new yorker :old:
Title: Re: Stock markets doom !
Post by: Brooke on September 20, 2015, 07:08:12 PM
For those who have interest in highly contrarian bets.
If things that have been completely crushed pique your interest as possible contrarian buys, here are a couple. Keep in mind that it's not always the case that it's darkest before the dawn, as sometimes things are dark but then proceed to be completely black.
^HUI is an index of stocks of gold miners. It is at levels that were seen in 1998 when gold was at $300/oz. There is an ETF that tracks it -- GDX. It is at 20% of its 2011 peak. Gold and silver might go lower, of course, but it won't go to zero.
Coal companies BTU and ACI are at, respectively, 1.6% and 0.5% of their peaks. Among just problems in general for coal, ACI has debt problems, and BTU might have union/pension problems. These stocks could go to zero. There are other coal companies, too, all having been crushed.
Title: Re: Stock markets doom !
Post by: Brooke on September 20, 2015, 07:20:56 PM
:rofl remember when the west was tough and resource utilization benefited the working man. :rofl now the sky is falling the woods are rotting and a standard home cost 400,000 lol Californians . PS don't forget the new yorker :old:
Or, if you want to go more upscale, this one in Palo Alto is only $3.4 million:
Title: Re: Stock markets doom !
Post by: Brooke on September 20, 2015, 09:29:53 PM
By the way, with respect to coal, that play seems very risky to me. I'm not sure it's even yet a good time to gamble on them. If the economy keeps declining, so will they.
I just keep an eye on them in case sometime in the future feels right to try a little.
GDX, though, I have bought some of. I'm not confident that now is a bottom -- I think just that there is a larger potential to upside than what I think might be the drawdown from here.
Title: Re: Stock markets doom !
Post by: CptTrips on September 22, 2015, 09:28:37 AM
By the way, with respect to coal, that play seems very risky to me. I'm not sure it's even yet a good time to gamble on them. If the economy keeps declining, so will they.
I just keep an eye on them in case sometime in the future feels right to try a little.
GDX, though, I have bought some of. I'm not confident that now is a bottom -- I think just that there is a larger potential to upside than what I think might be the drawdown from here.
I'm skeptical on coal. We have too much natural gas. Long term pressure is going to be against coal. I'm skeptical on gold. I think we are heading to another deflationary collapse. Gold is a much better investment in an inflationary spiral.
Markets are very volatile right now. It kinda reminds me of how airflow over a wing becomes turbulent after it exceeds its critical angle of attack. The airflow becomes "nonlinear" and stops producing lift. Then gravity takes over.
Nothing but bad stuff ahead too. Markets are going to get a lot of triggers. Maybe one will trip off the big one.
Government shut down in Oct. 4th quarter fund tax sell-off (window-dressing) Rate hike possible in Dec.
A big one nobody is talking about, in July all those Chinese major stockholders (>5% shares) were locked in and not allowed to sell. They unlock in Dec. What they do could end up being the Black Swan.
And then in 2016 we have the election. I'm sure a President Sanders or Trump would sooth the markets. :rolleyes: That was an economic comment, not political.
I think if DJIA falls below 16000, that is the trip wire. The trend will then become clear to all and begin a feedback loop.
Wab
Title: Re: Stock markets doom !
Post by: Brooke on September 22, 2015, 10:46:34 AM
I'm skeptical on coal. We have too much natural gas. Long term pressure is going to be against coal.
I'm interested only because it is down so very far, but it can still continue down a lot. I'm just watching it.
Quote
I'm skeptical on gold. I think we are heading to another deflationary collapse. Gold is a much better investment in an inflationary spiral.
I agree, but currently I think there's a risk of stocks crashing, then bonds crashing (bonds being the biggest bubble of all time), then currencies having problems. Gold and silver will perhaps go down in the first of those three events, then up in the 2nd, and up a lot in the 3rd. But I'm not confident on the timing of these events, and so gold/silver is in there a bit as diversification vs. cash and as insurance. Of course, I could also be completely wrong on these events happening, too.
Quote
Markets are very volatile right now. It kinda reminds me of how airflow over a wing becomes turbulent after it exceeds its critical angle of attack. The airflow becomes "nonlinear" and stops producing lift. Then gravity takes over.
I feel the same way. The Fed has maneuvered the plane into extreme slow flight conditions and is now at full throttle with the stick all the way back. The stall horn is blaring, strong buffetting is starting, and Keynsian school of flying says, in conditions like this, push harder on the throttle and pull harder on the stick.
Title: Re: Stock markets doom !
Post by: CptTrips on September 28, 2015, 02:17:04 PM
Whomp! There it is!
We just broke djia 16000.
If we can hold that this week, we're in a whole new territory. Major psychological threshold.
-Wab
Title: Re: Stock markets doom !
Post by: DmonSlyr on September 28, 2015, 06:23:53 PM
But, it closed at 16001.89. So . . . time to BTFD? ;)
https://www.youtube.com/watch?v=0akBdQa55b4
Lol.
Title: Re: Stock markets doom !
Post by: CptTrips on September 30, 2015, 11:41:21 AM
This is helpful. Like him or not, Carl is no tin-foil-hatter. His opinion has to be taken seriously by the street: http://www.cnbc.com/2015/09/30/carl-icahn-i-think-markets-are-overpriced-earnings-are-mistated.html (http://www.cnbc.com/2015/09/30/carl-icahn-i-think-markets-are-overpriced-earnings-are-mistated.html)
The market fighting hard to stay back up above 16k. The real fun starts next week or so. And I don't see anything but pain for the market until at least next summer.
Wab
Title: Re: Stock markets doom !
Post by: Brooke on September 30, 2015, 02:42:36 PM
The full "Danger Ahead" video by Icahn is on his main page:
http://carlicahn.com/
Title: Re: Stock markets doom !
Post by: CptTrips on September 30, 2015, 05:29:14 PM
I'm skeptical on coal. We have too much natural gas. Long term pressure is going to be against coal. I'm skeptical on gold. I think we are heading to another deflationary collapse. Gold is a much better investment in an inflationary spiral.
Markets are very volatile right now. It kinda reminds me of how airflow over a wing becomes turbulent after it exceeds its critical angle of attack. The airflow becomes "nonlinear" and stops producing lift. Then gravity takes over.
Nothing but bad stuff ahead too. Markets are going to get a lot of triggers. Maybe one will trip off the big one.
Government shut down in Oct. 4th quarter fund tax sell-off (window-dressing) Rate hike possible in Dec.
A big one nobody is talking about, in July all those Chinese major stockholders (>5% shares) were locked in and not allowed to sell. They unlock in Dec. What they do could end up being the Black Swan.
And then in 2016 we have the election. I'm sure a President Sanders or Trump would sooth the markets. :rolleyes: That was an economic comment, not political.
I think if DJIA falls below 16000, that is the trip wire. The trend will then become clear to all and begin a feedback loop.
Wab
I have several relatives in 3 generations that said something along the same lines as this post since the stock market inception. Those that listened with paranoia to what they said were SS dependent in their later years. The ones that invested, with long term in mind, are doing very, with SS being nothing more but beer money.
Personally, I'm a long term investor, have been since 1979. And as long as one stays diversified for their age and income level, over the long haul, the market has outperformed gold AND bonds.
So keep that tin foil hat on while us old guys use our SS for beer money. ;)
I have several relatives in 3 generations that said something along the same lines as this post since the stock market
It depends on your time horizon. It took S&P 15 years to get back to were it was on 2001.
If you are less than 10 years or less from retirement, I would suggest a more defensive position now than you would in normal times. These are not normal times in the stock market.
Title: Re: Stock markets doom !
Post by: zack1234 on October 01, 2015, 12:15:44 AM
Should our investment companies invest in China?
I am a Boeing employee who wants to prepare for my retirement.
Title: Re: Stock markets doom !
Post by: Ripsnort on October 01, 2015, 07:48:37 AM
It depends on your time horizon. It took S&P 15 years to get back to were it was on 2001.
If you are less than 10 years or less from retirement, I would suggest a more defensive position now than you would in normal times. These are not normal times in the stock market.
Absolutely agree. I've been about 80% 'conservative' so these huge swings don't impact my portfolio more than 5% either way.
Title: Re: Stock markets doom !
Post by: Ripsnort on October 01, 2015, 07:52:37 AM
I am a Boeing employee who wants to prepare for my retirement.
IMO, yes, to stay competitive. This article best answers your question:
Quote
This is also a story about Chinese public policy, and it highlights at least one respect in which the country's state-dominated economic growth model (whatever its other flaws) works better than freer markets — the country can coherently pursue multi-pronged efforts to develop new domestic industries by leveraging the scale of its domestic consumer market. The Chinese want to develop a domestic airplane manufacturing industry. But building large airplanes is difficult. So they've been playing Boeing and its major competitor off each other to get both companies to help teach a Chinese company how to do it. Lenin famously said that "the capitalists will sell us the rope we use to hang them," and while neither company really wants to help create a new rival, neither is willing to cede control over the Chinese market to the other.
In total, the planes Boeing has agreed to sell are worth about $38 billion — an enormous sum of money. That's spread across three separate airlines and an aircraft leasing company, but all three airlines are state-owned enterprises, and the leasing company is a subsidiary of a bank that's also state-owned.
The deal, in other words, is entirely controlled by the Chinese government, which, of course, wants a good deal on quality airplanes but also has a larger set of policy objectives.
In the United States, privately owned airlines choose to buy large aircraft from either Boeing or Airbus, Boeing's European rival, based on a relatively narrow set of business considerations. But while the Chinese government isn't indifferent to the quality of a plane purchasing deal qua deal, it also looks at other political factors.
In recent years the bulk of Chinese aircraft purchases have come from Airbus. Not coincidentally, Airbus has a production facility in Tianjin and is opening a second Chinese factory. Boeing is now opening its own Chinese factory in part to play catch-up — and the announcement is deliberately paired with the announcement of the new sales. The message from the Chinese government to both companies is clear: Your ability to make sales in China is going to be based in part on your willingness to locate factories in China.
Read the whole article here--> http://www.vox.com/2015/9/24/9389767/boeing-china-deal
Title: Re: Stock markets doom !
Post by: DmonSlyr on October 01, 2015, 09:05:18 AM
I don't want to get political but Trump was right about what he said, we need "fair" trade not free market trade. China is selling everyone out. We cannot continue to barter with China because they are too cheap for us. They bring our economy down in more ways than any by providing cheap products and cheap labor that undercuts ours by miles. Investing is completely changing. As one guy described it, we are investing in companies now that don't even hold inventory, like google, FB, Uber, Ect, and its changing the market. The market is becoming a debt factory because people are investing in hyped up debt companies that get pumped to oblivion and then still don't make a profit. Most traders are stuck on short term gains currently and I think it's having a big impact on the volatility of the market. With the rest of the global issues facing our markets and the US being such a large barter country, it will have an impact once we stop China and South Asia from taking advantage of cheap labor and products. We have to get out of this phase if we want help grow America again in a healthy way and this will give people more to invest in our markets by having a prosperous socitey back in the US.
Title: Re: Stock markets doom !
Post by: zack1234 on October 01, 2015, 09:20:53 AM
Have you been living in a cave since 1976?
The US investment investment companies "Investing" in China is why everything is made over there.
South East Asia and China are being used by US investment companies to make money.
Free trade?
Fair?
:rofl
If this is how the average colonial thinks we stuffed.
Title: Re: Stock markets doom !
Post by: Rolex on October 01, 2015, 09:33:46 AM
I'm president of a small (just under 150 people) high-tech company. We're finishing up a round of financing this month for $XX million. All of it came from China. Zero came from the US because we actually have a product and US investors aren't interested in products now. They're investing in buzzwords and jargon.
I have an R&D facility in Beijing filled with PhD's who returned from the US, because there are no US students in US graduate schools. Brooke is an anomoly... ;)
Stupid US CS students are studying Ruby on Rails and Java, when the real world of business runs on C++.
I think the only thing misunderstood more than the collision model is China.
Title: Re: Stock markets doom !
Post by: CptTrips on October 01, 2015, 10:44:24 AM
The US investment investment companies "Investing" in China is why everything is made over there. South East Asia and China are being used by US investment companies to make money. Free trade? Fair? :rofl If this is how the average colonial thinks we stuffed.
Have you been living in a cave since 1776? To be a "Colonial" you must live on a "Colony"
Title: Re: Stock markets doom !
Post by: zack1234 on October 01, 2015, 12:17:36 PM
:rofl
fatty :rofl
Title: Re: Stock markets doom !
Post by: Brooke on October 01, 2015, 02:38:40 PM
The old 520 project including building a large amount of freeway system that is not being rebuilt for the new 520. The equivalent of what is being rebuilt today in the old project, as far as I could tell, was the $21M part.
I would also say that 10 times more expensive is still egregious.
I was at 3 times the 1960’s cost. Now that still comes out to perhaps a $1.3B difference in real terms. Now that is a lot of money.
So the question is, do changes in:
• Capacity • Standards & • Function
account for the price difference in real terms?
I listed a bunch of stuff that probably explains the difference.
If you still sense that there is bad actor somewhere in this project, I think that you might have a stronger argument to make if you focused on some problems that Kiewit has encountered.
Here is an angle for you to look at.
Kiewit built a number of structures that were questioned as substandard. Kiewit denied any problems. At first, inexplicably WSDOT supported Kiewit. Later on, a report by a state level review team affirmed the problems and highlighted a number of other issues (not all Kiewit’s fault). WSDOT came around and realized that Kiewit had indeed made mistakes, but also realized that they had mis-specced a number of important items.
To me, it is a story of people and organizations making mistakes, initially naturally going into denial and then later coming to terms with the issues.
Someone could reasonably provide a more sinister interpretation. If you went this route I think that you would have a stronger argument. (There have also been a number of accidents and fines leveled that might interest you).
Rolex,I'm still waiting on the IPO!!!!! :furious :furious :furious
I invested in google,a no inventory company..... :rofl
So far the ROR has been about 1500%.... Maybe I should have bought some new china with the profits...... :devil
If I would have listened to my own advice I would have invested in Canadian banks during the great depression of 08,I would have made a small fortune..... Oh ya I did invest in the banks...... :devil
:salute
PS: Most Canadian banks have made record profits in the last 10 or 15 years.
Title: Re: Stock markets doom !
Post by: Skuzzy on October 02, 2015, 03:19:10 PM
Yes, C# too. Hey, it was 6:30 in the morning for this old geezer when I wrote it.
That's okay. Between C, C++, and C#, I'll take C any day. There are pros and cons to all three languages.
It also depends on the development environment and what is being developed.
Title: Re: Stock markets doom !
Post by: Brooke on October 02, 2015, 06:30:52 PM
As a guy who has written in BASIC, Fortran, assembly, Pascal, Lisp, C, C++, Python, Perl, and Java, I have to put in a good word for Java. I really like Java! (But there are certainly tasks for which it isn't suited.)
Title: Re: Stock markets doom !
Post by: CptTrips on October 02, 2015, 07:59:09 PM
As a guy who has written in BASIC, Fortran, assembly, Pascal, Lisp, C, C++, Python, Perl, and Java, I have to put in a good word for Java. I really like Java! (But there are certainly tasks for which it isn't suited.)
If you like Java, you'd like C#.
Wab
Title: Re: Stock markets doom !
Post by: Brooke on October 03, 2015, 01:33:31 AM