Shares Fall As Wall Street Starts To Understand: There's No Real Recovery
First, there's this technical definition that says there's a recovery. Why? Because some rich people are getting richer? If the economy doesn't serve the broadest group of citizens and there aren't jobs for people who want them, what kind of recovery is that? Perhaps this is why economists are so often confused.
Maybe, as Atrios says, somebody should do something?
A slowdown in American manufacturing and weak employment data sent stocks lower on Thursday as investors continued to absorb news of a weak economic recovery.
The separate reports from the Federal Reserve and the Labor Department were a fresh reminder of the slow pace of the recovery. Manufacturing, in particular, had shown tentative signs of a rebound in recent months.
The reports were enough to reverse the upward trend of the previous two days, when the market rose 1.1 percent.
“You had a one-two punch in one day,” said Doug Roberts, chief investment strategist for the Channel Capital Research Institute.
The result was a broad sell-off. The Dow Jones industrial average fell 144.33 points, or 1.39 percent, to 10,271.21. The broader Standard & Poor’s 500-stock index declined 18.53 points, or 1.69 percent, to 1,075.63, and the Nasdaq composite index fell 36.75 points, or 1.66 percent, to 2,178.95.
Financial, materials and industrial stocks all fell more than 2 percent.
The bad new is, the plutocrats would rather be at the top of a shitpile of a country than be at the top of a prosperous, advanced country.
Maybe this will make them address the whole economy, rather than just Wall Street's. Obviously middle class and poor pain isn't enough to prompt them into action, maybe some rich patrons' pain will. I hope the Dow falls at least 5,000 points.
Barack Obama: Change we can only imagine
lose billions, but if the banks lose, well, that's another story. Yea, Summer of Recovery - just wait, it will happen (maybe).
When the Dow tanks, a lot of working people's 401k's take a beating too. What a dumb comment.
In case it's escaped your obviously limited attention span, there IS pain out there. Right now. Without the DOW tanking. If it causes people to demand some real action be taken, so be it.
Barack Obama: Change we can only imagine
Lots of working people are going to suddenly learn that they cant ignore the 'risk of loss' side of risking their money in stocks.
For some reason , this blog has tried to become an economics blog in the last few weeks. In this story, the stock market is 'recognizing' the reality. In other stories, the stock market is blind to the realities of whats really going on. I guess it depends on what angle you are trying to push.
Showing such a poor grasp of understanding the subject, is not a way to get people to take your opinion on the topic seriously.
Because working people's 401k have fared wonderfully so far. Right?
CTHULHU 2012 "Why vote for a lesser evil?"
around '98 - a year long month to month loss. Finally, enough was enough. I took my meager funds (what was left) and withdrew.
... I am just fed up with the daily house negro telling me where we will get our crumbs from if the massah was to be gone.
CTHULHU 2012 "Why vote for a lesser evil?"
really?
These dumbasses need to figure out that when you starve any affluence out the middle class by cutting wages, benefits, pensions, and laying people off, there's no one left to buy your products or pay for your services, and then ta da, you're out of business too.
.
Hasa Diga Eebowai
Floodplains are a good place to grow pears.
"I mean Romney is the most conservative on illegal immigration and I don't think Ronald Reagan could get elected in California today."
Ann "Clipped" Coulter
I said it before Obama took office, he can't fix this economic mess, and had GOP won we would still be where we are.
This is a great place to start looking at protecting yourself,
In the end the answer for individuals will be foreign equities in emerging markets, commodities, hard assets, like precious metals, land (especially farm land), and real-estate (because now it's getting cheaper and will at least hold some value). Paper assets are riskier than ever now. Holding cash, treasuries, leaving money wrapped in a mutual fund 401k, stocks, etc. Not a great place.
Goodnight, Frau Blücher
a more perishable paper asset these days?
"I mean Romney is the most conservative on illegal immigration and I don't think Ronald Reagan could get elected in California today."
Ann "Clipped" Coulter
Maybe LMAO!
Goodnight, Frau Blücher
Their only hope is to buy precious metals and foreign equities.
Hasa Diga Eebowai
Their path is clear, do whatever you have to keep your head above water. A truly a shitty situation, I was there after the .com's went down for nearly 9 months. I hope to never see that again and don't wish it on my worst enemy.
You simply asked for suggestions. I was talking about those who still have a job and can do something to protect themselves because even the working will need to take measures now or risk being wiped out.
Goodnight, Frau Blücher
Peter G,
"Suggestions?"
Campaign finance reform.
Oh, and a few arrests would soothe my anger.
Neither will happen. WASF.
The people of privilege will always risk their complete destruction rather than surrender any material part of their advantage." J.K. Galbraith
other than massive govt cash infusions into the economy, what has really changed? the financial reform had some great aspects but didn't really, imo, address some of the structural issues we face.
the sad fact is that we live in a consumer driven economy where the consumers don't make enough money to drive the economy without relying on cheap credit. and unless there is a way to get more money to those that will spend it, its hard to see how things get better without continued govt intervention.
Exactly. Just what is supposed to revive the economy? Manufacturing? Oops, well, maybe not.
We can't just mow each others lawns and flip each others burgers, we've got to start making things again, and if that means tariffs and protectionism, so be it. I seem to recall a certain somebody was going to revisit the "free" trade treaties, haven't heard a peep about that though. Now would be the time...
maybe if the left wasn't so weak and would quit kissing obamas ass something would get done. you know there is a reason why the white house doesn't care who wins in november.
i am starting to think they aren't the only ones who have been co-opted. John Turley makes a good point this morning. nobody is holding the white houses feet to the fire with regards to the deception they perpetrated regarding the spill.
the white house is a sole entity belonging to your corporate masters!
spending fueled by credit derived from inflated housing costs good for the environment? Isn't third world disparagement elitist?
"I mean Romney is the most conservative on illegal immigration and I don't think Ronald Reagan could get elected in California today."
Ann "Clipped" Coulter
is missed only when buried.
Hasa Diga Eebowai
The Wall Street indices have not been a true indicator of the health of the economy for over 20 years.
Just as folks inside the Beltway live in an alternate universe, so do the folks on Wall Street and in the financial services industry.
"Anyone that makes less than $150K in this country, has no business voting Republican."
You have to increase demand by increasing wages. To do this you need to increase minimum wages and have mandatory 2x Overtime for everyone. You also need to cap interest rate for consumer loans to prime plus 5%.
deficit. The tax cuts should not only have been killed but a temporary increase put into effect for the wealthy to cover the damage already done by those cuts. The middle class is in a death spiral and .... Obama smiles a lot.
Want to jumpstart the economy? Make revolving credit interest tax deductible.
"Anyone that makes less than $150K in this country, has no business voting Republican."
the market is too unpredictable to forecast any confidence. the economy is growing at just about 3% instead of 7% usually seen early part of economic expansion. the foreclosure and unemployment cycle hasn't been able to be controlled/slowed enough. in certain parts of the country the jobs aren't their. people aren't buying homes in fear that prices could further decline. not sure will see a "double dip" but we may experience a cycle of deflation. many of our jobs/corporations have moved abroad. we've lost not only jobs but also tax revenue. i believe these words come to mind to help explain the near future:
deleveraging, austerity, deflation, japan like economy, saving and lack of consumer participation.
The DOW almost always falls on Friday. The market is way above the 6000 level it was at a year and a half ago. You want to see it get better faster? Quit bitching about the slow pace of recovery under Obama and start bitching about the repugnacans obstructing the recovery. Put the blame where it belongs. Obama isn't perfect but he's better than what you would get from any repug.
You say it as if that was some kind of feat.
I reckon my dog would be much better at presidentin' than that moron Bush could ever manage. Yet, I think this country should at least recognize that such ever diminishing expectations/standards are rather troubling.
Or probably we just keep getting exactly what we deserve.
CTHULHU 2012 "Why vote for a lesser evil?"
Octopus to fill in for the next republican. Hey, he kept calling the world cup correctly. That's more than any teabagger could do.
Exactly so.
Even with this latest pause in the stock market factored into it, the broad U.S. stock market is up over 60% from the bottom reached almost to the day when the Stimulus Bill was passed about 18 months ago. I'll take half that kind of return over any 24 month period, much less 18 month period, anytime.
"irrational exuberance", as Alan Greenspan was wont to say, OR merely manipulation by insiders, which has happened from time to time, OR it could represent real growth, which also sometimes happens -- OR some combination of all of these influences. Downward movement of the markets could be any of these in combination, excepting replacing "exuberance" with "panic".
But trading on Wall Street has not been an equitable "gamble" since forever, because the "House" is largely without any meaningful oversight or regulation -- really a suckers' bet. Most will find better odds at the blackjack tables in Atlantic City or Los Vegas. It is full of contrived "business cycles" and "seasonal shearing of the sheeple". That is the primary modus operandi of the private for-profit central bankers who actually control the "game".
And a recovery isn't actually the beginnings of a real recovery until what happens on Wall Street reflects what's happening on Main Street -- and Main Street still isn't doing very well. Commercial and residential real estate is still on a downward spiral. And that's because the "shearing" operation has not been completed yet. The TBTF Bankers haven't finished reacquiring their assets yet.
The bumpy ride isn't over yet, so everyone remain seated, and keep their hands on the safety bar in front of them. And please, not everyone lose the contents of their stomachs all at once -- far too messy a ride if you ask me ... but hey, isn't crony capitalism a thrill ride ??
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
If all the irrational exuberance hasn't been wrung out of the market by now, I guess it never will be.
And, yes, nobody makes any money off a market where there isn't any "churn". So long as it continues to swing up and down, there's money to be made, no matter the direction.
These investors have been chasing the absolute highest rate of quarterly return, often regardless of the potential risk, hence the huge market for the artificially pumped-up value in the derivatives market that brought us the September 2008 economic meltdown. Wall Street used to self-insure back in the day when there was actually some regulatory oversight of the market. Now it is "Privatized profit and socialized risk", with the taxpayer expected to be on the hook for making good the investors "gambling habit". Unfortunately, the Obama administration and the Democratic Congress have failed to completely end such risky investor behavior.
It isn't as if the TBTF Bankers and Wall Street Mobsters are busy investing more than a pittance in Main Street USA, in spite of what the Obama administration might have hoped -- but then, there were no such requirements made when the bail-outs occurred, either. That might be construed as naivete, or perhaps acquiescence -- it isn't as if Obama didn't have the Wall Street "talent" already in-house to warn of such financial maneuvers.
For example, one of the TBTF banks, Wachovia / Wells Fargo, got approximately $3 Billion USD as their bail-out fund, but rather than investing that money in Main Street, they invested $1.8 Billion USD in a Spanish private for-profit toll road -- a good ROI especially as those profits are USA tax-free. WTF? USA taxpayer money, on credit no less, diverted to the investment in a foreign infrastructure bond. And this is a modus operandi that Wachovia has been famous for for at least 7 or 8 years -- they averaged $3.5 - $4 Billion USD per annum profits with ZERO USA taxes paid, a pretty horrible record for a regional bank that should have been investing in their regional economy instead of being a net negative.
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
goes for G.M., Whirlpool and the rest of those bastards. How can anyone say that the fate of the average american was of the slightest concern to them?
... may be at work here.
Could it be that the market has turned into a gambling casino? Rich people sitting on a lot of cash buying shares, driving up the share price and the little investor getting in on it, and then be one of the first to sell and rake in the profits.
It just doesn't seem to make much sense why some news in one industry affects all the others. A company doesn't meet their estimate (which is an educated guess by some bozo) and the cry goes out SELL!! SELL!! SELL!!. Then nothing happens, and here they are back buying what they just sold.
A process that is similar to 'redistribution of wealth' upwards. A suck0it-up economy.
If you need funds to pay for essentials, you have a revenue problem
If you need funds to pay for frivolity, you have a spending problem
A recession is defined as: "is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters."
Historically, recoveries have seen higher rates of GDP and that is what everyone has been talking about with such doom and gloom, it's a long slow recovery....lately that is. But it is growing, don't fool yourself. The beginning of last year saw some pretty good growth, but that has slowed and I attribute it to the rich bastards not reinvesting the massive profits they've been getting. I think many of them are doing it just to help Republicans get control of the House so they can help them make even more profits in the long run.
We ARE in a recovery whether you like it or not, Susie. And really, changing the definition of a recovery doesn't change the reality. It may make you feel better about bashing everyone and everything...but it isn't real.
True.
The Free-Market Capitalist talking heads on CNBC are unhappy because this particular Democratic administration recovery from a hellish Republican administration cluster f*ck of an economic downturn hasn't performed as spectacularly well as the previous half dozen or so Democratic administration recoveries from Republican administration cluster f*cks of economic downturns.
It appears Republicans are getting BETTER at producing and presiding over challenging economic downturns resistent to any sane and timely recovery under any circumstances. Give them one more try and they'll have probably perfected their mastery of the ultimately unsolvable cluster f*ck of an economic downturn. Personally, I'd rather not give them that opportunity. Ever.
But we ARE experiencing a recovery. And a steady and resilient one at that. In spite of hundreds of thousands of census worker layoffs, every one of whom qualifies for unemployment benefits, and a full quarter of the USA crippled in hiring and business activity all Summer by the results of the "Drill Here, Drill NOW!" crowd getting their way in the Gulf Coast, we are not seeing a negative GDP quarter now or on the near horizon and a net gain in private sector jobs creation was more than double in July what it was in June.
I know the complete situation can not be resolved easily, but if the US were to outlaw outsourcing and bring all those jobs back to America that would sure put a "dent" in some of the problem.
I know this is unfair to the other countries doing that outsourcing, but if the US economy fails in part due to outsourcing and other reasons then when the company eventually goes under for economic reasons then those other countries go unpaid anyway.
Sorry I say this with no prejudice, I swear. I'm just trying to make a suggestion to resolve some of this.
The US will always need to "outsource", since we do not own many of the world's natural resources and must import them.
However, manufacturing is a different story altogether. Our manufacturing jobs have been outsourced and this is coming back to haunt us in a very serious way. Until we properly tax or penalize the outsourcing of US jobs, we will continue the slide towards third world status.
It will be difficult and dangerous to regain control of our country from the international elite, but this must be done. They think they can just bleed us dry then move on to the next victim. They think we can be easily controlled while they take everything and attempt to control every living thing on the planet. They underestimate us.
and the wealthy who own and invest in them....
and it was successful....
They get real capital for themselves, the rest of us get debt.
End of story.
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