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TechnoratiUnemployment Up Dramatically! Stocks Rise! Huh?
Ordinary, average, struggling Americans might be scratching their heads over the news today, as the Labor Department reports that unemployment is up by four-tenths of a percent for the month to a record 10.2%, fully three-tenths of a percent higher than economists had been forecasting, and stocks do what? Rise by a quarter of a percent!
What's going on here?
Well, the tube analysts are quick to say, unemployment figures are a "lagging" indicator. That is, employment generally lags the overall economy, with layoffs coming after a recession kicks in, and hiring waiting until a recovery is well underway.
But that isn't true with a deep recession like this one, because at some point-and we're well past that point-high and pro-longed unemployment leads to reduced demand for goods and services, and to a psychology of fear and consumer withdrawal. Once people feel that they aren't going to find a new job soon, and once those who still have jobs feel that their employment is not secure, they no longer buy things except what they absolutely need. And in an economy where fully 72% of economic activity is consumer spending, that is no longer a "lagging indicator." High, prolonged unemployment becomes a causal factor in the economic downturn.
If people aren't buying stuff, then companies won't make it, which means that they stop hiring, and even lay more people off, and so unemployment becomes a downward spiral of cause and effect.
But what about the stock market rise? Why would investors think that a worse-than-expected jobs report is a good thing?
There are several explanations for this ugly phenomenon. First of all, rising unemployment-particularly sharply rising unemployment-means that the Federal Reserve will definitely not, for the foreseeable future, raise interest rates. A rise in interest rates would hit companies hard, and always batters the stock market, and the government and the Fed don't want to do either of those things. So investors almost always jump into the market and push stocks up when they get some signal that the Fed is going to lower, or at least hold the line on interest rates. With rates effectively set at 0, the Fed can't lower them, but it is saying, no doubt with the bad news about unemployment in mind, that it won't be raising them anytime soon.
But there is another reason high unemployment may excite investors. Current layoffs are likely, for many workers, to be permanent. A recent report that productivity-work output per worker-was up at a 9.55 annual rate in the Third Quarter, is an indication that those companies that haven't shut down operations are making or doing more with fewer workers. That kind of thing happens in recessions, because as joblessness gets worse, those workers who still have jobs become more docile and are willing to be worked harder by management. Of course, you get more on-the-job injuries, more stress-related illness, etc. along with that kind of speed-up, but over the shorter term, it looks good on the books if you're cranking out more product with a lower payroll.
Of course, longer term, this is all a disaster, not just for laid-off and afraid-to-be-laid-off workers, but for the country as a whole. You can't rebuild an economy with more than one-in-ten workers unemployed. And remember, that's just the people who are our of a job and still looking for one; it doesn't count those who have been out of work for so long, or who work in professions that are so gone (like construction or maybe manufacturing Saturns) that they've just given up looking, or those who have taken part-time jobs in ice-cream parlors or selling apples to survive but who want to be fully employed again. If you add those people into the mix (which is the way the US used to count unemployment until the 1980s), you get an unemployment rate closer to 20%, or one in five! And you sure can't rebuild an economy with one in five workers unemployed.
That's what makes all the happy talk in the news and in Washington about the recession being over because last quarter showed a 3.5% annualized jump in the so-called Gross Domestic Product so ridiculous.
Most of that rise was the result of government subsidies to car-buyers and first-time house buyers. It was a one-shot stimulus that pushed forward spending, but it was no indication of a recovering economy, just a spasm of spending using taxpayer money. Furthermore, an excellent article in Businessweek by Michael Mandel noted that fully one-percent of that GDP gain was the result of a failure by government economists to account for a collapse in corporate spending on research and development and on training and retaining intellectual assets (a complicated way of saying that engineers, scientists and technology workers were being laid off at a higher rate than other workers, and much R&D work was being shipped overseas for good), So really the "growth" of GDP in the third Quarter should have been at a 2.5% rate, and even that was largely government pump priming, not recovered economic activity.
The truth is, we're falling deeper into recession, and apparently, according to the October unemployment figures, at an accelerating rate. And there is no indication that the Obama Administration or the Democratic Congress are planning any significant jobs-creation program. They seem to be happy with this.
So quick, run out and buy some stock! It's the American thing to do. Probably not a bad idea either, since those dollars you are using will keep sinking in value as long as the Fed is constrained from jacking up interest rates.
50 Comments so far
Show AllRising stocks does not mean confidence in recovery. It means confidence in the stocks.
Now, let's think this through:
Who got bailed?
"Who got bailed?"
Not the entire broad market.
Help Wanted:
Real Unemployment Number: 17.5%
New figures in Friday's jobs report from the Labor Department indicate that the broadest measure of unemployment—including those unemployed who have looked for work in the last four weeks, discouraged workers, and the "underemployed" (part-time workers looking for full-time work)—has hit its highest recorded rate. More than one in six, or 17.5 percent of workers, are unemployed or underemployed, and in some hard-hit states like California, Arizona, and Michigan, the figure can get as high as 20 percent. The current figure is almost a half-percent higher than the previously recorded high of 17.1 percent in December 1982, even though the official jobless rate remains lower than its peak in the 1980s. Though this measurement isn't available for the Great Depression, it likely would have been higher than 30 percent. During this recession, there were fewer layoffs than expected—around the same number as occurred during the relatively light recession of 2001—but the hiring rate has plummeted, meaning that finding new work is extremely difficult. Most economists believe that the joblessness rate will fall next year, thanks to the work of White House and the Fed.
http://www.thedailybeast.com/cheat-sheet/item/the-real-unemployment-number-175/help-wanted/?cid=bsa:ch...
When the Stimulus package was debated there were questions about how much should go to creating and preserving jobs which had a far greater multiplier effect and how much should go to tax cuts which could circulate faster but which had less of one. Of course the Republicans were for tax cuts and bigger cuts for the weathier although the facts clearly showed that taxes on capital gains and dividends (for the wealthier) had less of a multiplier effect than tax relief for those who are wage earners. No one disputes these facts but to gain three Republican votes Democrats once again sold out their principles and set up the cripling criticism of their opponents. The stimulus package has not had the kick it should have and the lack of success makes the public even more skeptical that another shot of stimulus would work. Good work Obama administration-- you are well on the way to assuring a one term presidency. Does this mean the country will veer rightward? Well, that's usually what happens before a government collapses. After the Right fails but before the collapse there may one final opportunity to move left again. Maybe around 2016. I doubt that I will live to see it.
giving money and tax breaks to the wealthy shrinks the economy,
they just stash or buy stocks to positioin themselves better
the multiplier only occurs if dollars find their way into regular peoples pockets (most of us, not including the superrich)
cause we definitely spend it
The current situation is TOTALLY UNACCEPTABLE!!! It's way past time to SHOW our government, the robber baron insurance companies, and the plundering Corporatocracy who really OWNS this country - we the people.
It's time for a National Stand Down from Work Day - to show them that without us, they are doomed! If one day doesn't do it, perhaps a week or two, or a month!!! We don't need to wait til the next election to TAKE ACTION.
This is the only WEAPON we have left to us! They certainly aren't listening to us - they treat us as NOTHING!
Dave Lindorff,
Thank you for giving it to them with both barrels.
By the way, your song about the Afghan war is great!
The DOW and the NASDAQ have nothing to do with the economic security and quality of life of American citizens (at least not the bottom 90%).
All it means when there is a rise in stock values is that publicly traded corporations are making more money. They do this by artificially inflating the value of their stocks, through hiding liabilities from their accountants (Enron). But most importantly, corporate stocks rise when they get to pay fewer people less money for working longer, harder, and for producing more real wealth. And we mustn't forget outsourcing.
Screw Wall St. It has no bearing on the quality of your or my life, other than the havoc they wreak on our economy through their speculation, and their criminal manipulation of our political and judicial systems.
It is not possible to distinguish economics from politics. They are different aspects of the same concept.
"...the distinctions between liberals and conservatives, swirls around a single question: "how much freedom versus how much order?" ... conservatives favor freedom in economics and order in civil liberties, while liberals opt for the opposite: order in economics and freedom in the sphere of rights." Dan F. Hahn
If we allow corporations complete freedom to seek out and obtain the lowest cost for a good or service then globalization, out-sourcing, unrestricted immigration, etc. are the rational consequences.
Since WWII American society has benefited economically from its military superiority and its untouched industrial capacity. This situation has gradually, eventually changed.
Increased unemployment in America is offset by increasing standards of living in other countries. What's bad for the American worker is good for the Chinese, Indian, Brazilian or Russian worker. Transnational corporations (mostly, American based) are allowed to continue to make and sell products and produce profit - thus increasing their stock price.
The calculus of globalism is not so simple, I'm afraid. If it were, perhaps we could take some satisfaction in the notion that our own economic comeupance after years of self-indulgence, was helping others more needy than ourselves. In fact, however, the global trading system leads to increased exploitation often in countries like China, Indonesia, Sri Lanka and Thailand, where much of our consumer goods are made.
Visit Dave Lindorff's website at www.thiscantbehappening.net
Granted, it's not so simple, many more factors. A discussion board may not be the best place to enumerate them.
However, I stand by my point... that globalization has raised the living standard in China.
Further, exploitation is not just happening in the countries you mentioned but also to Americans.
You can say that again!
Visit Dave Lindorff's website at www.thiscantbehappening.net
Financial wizards recognize thet the US stimulus program is built around pumping out BILLIONS of paper dollars. This causes each paper dollar in Circulation to be worth less.
Investors trying to find a place to park their money are not going to stay in Cash as it loses value. Stocks are seen as a much better place to be as by converting Cash into stocks you at least OWN something tangible.
(Ie why would a Warren Buffet sit on 36 billion in Bonds , treasuries and Cash over BUYING a railroad which has REAL tangible assets)
Now there is little their friends in Governmnet can do to boost the value of Cash Holdings. The only real way to do this is to stop the printing presses and raise interest rates .
They can lean on Government to protect the value of STOCKS via Governmnet bailouts, low interest rate policies, slashing Corporate taxes and using their "plunge Protection Team".
I would point out that as the value of the US dollar drops this leads to "Inflation" in the Stock market as well. Oodles of cash out there seeking a finite number of stocks WILL create another bubble in Stocks.
Cicero: "Freedom is participation in power."
Well- I been t'Meat City to see for myself,
Well- I been Meat City to see for myself,
Been t'Meat City, been Meat City,
Just got to give me some rock 'n roll.
(quee-queg, quee-queg)
People were dancing like there's no tomorrow,
Meat City,
Fingerlickin chickinpickin Meat City shookdown USA.
Pig Meat City.
Well I been t'the mountain to see for myself,
Yes been the mountain to see for myself,
Been the mountain, been the mountain,
Just got to give me some rock 'n roll.
Snake doctors shakin' like there's no tomorrow,
Freak City
Chickinsuckin mothertruckin Meat City shookdown USA.
Pig Meat City.
Well I'm goin' t'China to see for myself,
Well I'm goin' t'China to see for myself,
Goin'a China goin'a China,
Just got to give me some rock 'n roll.
(guitar noise, git down, uggh!)
Well the people were jumping like there's no tomorrow,
Meat City,
Fingerlickin chickinpickin Meat City shookdown USA.
Well I'm goin' t'China,
Yes, Well I'm goin'a China,
Well I'm goin'a China,
Yes Well I'm goin'a China...
(Meat City by John Lennon)
Ahh yes, China where soooo many jobs went and sooo many green jobs are going.
Lack of vision here in Pig Meat USA = PEOPLE ARE JUMPIN' LIKE THERE'S NO TOMORROW
The largest wind farm is in Texas. The fan blades, the generators, the technology to install them, and the labor to erect them all came from China.
All this when our unemployment rate is near 20% and our government seems far more interested in fighting over the last few drops of oil than investing in sustainable energy.
In the movie "Apocalypse Now" Captain Willard went ashore at the last US outpost before entering Cambodia. The personnel were stoned, insane, terrified, and the whole place had an atmosphere of mixed fear, despair, denial, and confusion, not unlike the mood in this country now.
When he returned to the boat someone asked 'Did you find the CO?'
"There is no CO here."
Pretty sad. Denmark has the world's largest wind farm yet they made their equipment locally. It is incredibly tragic to think that shipping large and heavy products half way around the globe is still cheaper than making it locally. Thanks to the rigged neo-liberal economic globalized system.
In a similar vein, in the on-going consruction of the new span in the Oakland -SF Bay Bridge, the steel and crane were shipped from China. Pathetic
It appears to be a bit more complicated than just the Chinese being "cheaper". The Chinese government is also helping with the financing of the project, while US private banks are still refusing to lend money for large projects like this, even after the US government gave them hundreds of billions of dollars.
Moral of the story the Chinese government invests in things that makes jobs for the many, while the US invests in banks that make bonuses for the few.
So baby the U.S. is still number 1 because our bankers make more money than their bankers do. Yup we rock!
I hear you, the Chinese can externalize costs to much higher degree (pollution, safety costs, labor costs, health care costs etc.) as well as enjoy subsidies from their govt. Free market my arse
Many jobs are going away as the companies move offshore. These jobs are never coming back. In the end America will be remembered as the Argentina of the 21st century, a once thriving prosperous country gone broke and sold out by it's own business class.
I'm sure that over the years, Philly resident Lindorff has tuned in to KYW Newsradio as often as I have.
I'm about as far away as one can get from "business-oriented"; I glaze over at numbers, on every level from macroeconomics to personal finances.
But I always noticed that KYW, which even for an all-news station has a conservative feel, takes a very simplistic perspective on the stock market.
OK, I guess that business news is really pitched to anxious, not to say greedy, investors in the first place. But it's pretty much a matter of market "up" = good; market "down" = bad. This simplistic perspective can be discerned merely from the language and tone of the reports.
It's as if "the market" is a patient in intensive care, and the stock market indexes are like vital signs.
I also noticed by sheer osmosis that the KYW business reporters sounded "happy", even though the "up" market was generally correlated with bad news and economic pain in ordinary human terms, e.g. layoffs, downsizing, etc.
And I've wondered why the public complacently seems to buy in to the premise that a thriving stock market is generally a good thing-- even comments board wingnut trolls, who doubtless are getting as badly screwed as any non-privileged Amerikan, cite a booming stock market as proof of overall economic health and prosperity.
It's not personal, but when I hear the satisfaction or relief in KYW business reporters when reporting market "rallies" and such, I think of that infamous dweeb David Stockman slashing social services budgets during Morning in Amerika, although reluctantly and antiseptically admitting that such cuts would cause "pain".
The fact that the stock market is an expression of a zero-sum parasitic capitalism, and that financiers' successes and profits are built on the backs, blood, sweat, and pain of unprivileged workers seems to be a well-kept secret, or easily forgotten-- especially when the market soars like a re-built "Hindenburg" and the crowd cheers wildly.
· Yr Obd't Servant
It's not just KYW, which treats the stock market like a baseball contest. NPR's Money program plays different music during its stock market report, depending on the direction of the market that day. An up-market gets "Happy Days are Here Again," I think, a down market gets "Stormy Weather," and there is another song, which escapes me, for a sideways market day. Again, the assumption is that an up market should make us all happy, though it usually means a falling dollar, higher oil prices, and more job losses.
Dave LIndorff
Visit Dave Lindorff's website at www.thiscantbehappening.net
Reaganomics (de-regulation), MBAs and outsourcing are what got us into this mess.
"NPR's Money program plays different music during its stock market report, depending on the direction of the market that day. An up-market gets "Happy Days are Here Again," I think, a down market gets "Stormy Weather," and there is another song, which escapes me, for a sideways market day."
The musical cues are:
up maket--"We're in the money"
down market--"Stormy Weather"
mixed results--"It Don't Mean A Thing" (If It Ain't Got That Swing)
Poet
And who can forget the cluelessness of NPR Money when it came to predicting this "recession?" Chris: "Oh, I think we'll avoid a recession next year...blah, blah, blah..." Easy to see where that bit of wisdom went. Why do pundits like these get air time when people who got it right are still ignored?
The economy looks totally ponzi
we should get our money back.
Okay it's like this:
When unemployment goes up, there are more people competing for avaiable jobs and that drives wages needing to be paid down or keeps them from increasing.
When unemployment goes up those who remain employed are less secure in their jobs and are easy prey for demands to produce more goods and services at the same or reduced wages as an alternative to becoming unemployed themselves.
If you can maintain your production of goods or services with fewer people and no wage increases your profits go up and thus so do the dividends you pay share holders and also the price you can charge for a share of stock.
So why shouldn't stock holders rejoice when unemployment increases? Two keys to stopping this nonsense are:
1. Taxing all stock transactions and corporate income.
2. Imposing stiff tariffs and duties on all imported goods in order to stop the flight of jobs to slave labor overseas.
Poet
Exactly. Revert to the pre-WW2 tax policies, when government was paid for by a mix of tariffs and the income tax (which latter was, until FDR's crony Morganthau shifted it down onto backs of the working class during WW2, paid only by the very wealthiest - the duPonts, Rockefellers, and similar). Tax the hell out of what Lincoln called "unproductive labour": the needless import/export of goods that should be produced/grown locally.
I must commend the author for giving readers a strong hint that we are without doubt entering the next Great Depression. There is one thing he needs to include in his analysis. Most companies are used to slitting their own wrists to appease the stockholders even at the expense of laying off workers thanks to putting profits first and artificially propping up the company's value in the market rather than putting quality production first. The rise in long term unemployment rates will make this upcoming Great Depression virtually impossible to ignore.
Hi Jennifer!
It makes me cringe when I hear the phrase "The Great Recession." This is not nor has it ever been a recession. Recessions are a cyclical and normal (for captialism that is) for the economy. They are basically corrections to the market. What we have here is a depression. This is not cyclical and is (in spite of the so called green shoots) still getting worse. As the author points out, unemployment is continuing to rise which in turn suppresses other ecomomic activity (remember, our economy is based on 70% consmuer spending.) So far, everything that has been called a "recovery" is due to government spending with almost every penny of recovery equaling the money the government has injected into the ecomony. We, as a nation, produce virtually nothing of real value as compared to our large manufacturing base that existed during the 1930's. To make matters worse, we were able to fall back on our natural resources (which in turn allowed us to produce more tangible goods) which were plentiful during the Great Depression relative to now. There is nor has there ever been a "recovery" from this curent downturn. It is all government intervention coupled with MSM propaganda. Frankly, without true government intervention, that meaning creation of jobs that actually produce something of value (whatever happened to all of those "shovel ready" infrastructure jobs that Obamm-bamm was babbling about?) and the funds from that something trickling up, we will contiune to careen downhill.
Obama has done absolutely nothing that will help the ecomomy recover. In fact, IMHO the action he has taken thus far has been damaging. He has wasted trillions on wealthy people who will do nothing with those trillions but put them away in a safe place for future gluttony which means trillions of debt that has no real positve effect on the economy. Further, he has done nothing to prevent the re-occurrance of the meltdown seen last fall. He has stacked his financial staff with greedy self-serving Wall Street insiders, allowed "too big to fail corporations" to become even bigger thereby creating an even larger potential disaster, and established nothing in terms of re-regulating the financial markets. What alarms me is the combination of already having severe unemployment, having the same ponzi scheme in place that caused the first meltdown continuing, having already wasted the money that should have created a true recovery through job creation, and having firms that previously were "too big to fail" even bigger with certain failure in store for the not too distant future. Once these corporations DO fail, we have the perfect storm set up that will make the Great Depression look like boom times. One final note...during the Great Depression, most of the population was rural and therefore able to produce at least some of their own food. That is no longer the case and when this shitstorm hits, there are going to be a lot of hungry, angry people trying to stop the ache in their belly.
Many say that President Obama is an intelligent and compassionate man. He may in fact be one of those, but most certainly isn't both. As the late Jerry Reed would say "Happy Days!!! When you're hot, you're HOT!!!" (and I said "thanks a lot!")
Well said.
aussidawg, I don't know how long it will take for even the M$M to finally get it through that we are in a Great Depression but I guess the more the denial, the harder society will fall and the harder the lessons it will be forced to learn the lessons of the first Great Depression at the very least. I wonder how many of these pols bothered to take a basic course in accounting or finance and honestly say that this is no recovery but an illusion at best. I am already scared to find out how many more illusions it will take until no more illusions can cover up the glaring reality that we are in a Great Depression that I take nothing for granted. At the rate this keeps going, it won't even take a basic course in Accounting or Finance to figure this all out. Maybe that's just what society will have to accept, like it or not.
In theory, we could produce our own natural resources and restart our manufacturing base if solar, wind, hemp, algae, etc ... are any indicators. After what I learned about hemp in greater detail, I'm even angrier that Obama had the nerve to say that cannabis won't stimulate the economy ! Firing Van Jones was the biggest blow to environmentalists Obama could ever commit. Yesterday, I was responding to one of the guys, Lex Thomas, who was partly libertarian and partly progressive on why getting government out of the way isn't the answer. I couldn't blame him though for wanting a green job that he may or may not ever be able to get. It's nearly one year and Obama had plenty of time to prove his environmental and economic credentials to prove us wrong. It saddens me that he proved us skeptics more than right and even surprised us beyond the worst anticipations.
Whatever Obama's intelligence and boldness, he's showing it for the wrong side.
P.S.: If Tuesday's election results were any indication, the electorate still seems bent on picking between D and R. I can't believe NJ didn't elect Daggett of all races.
Legalizing hemp would be a huge leap. This plant by itself could revolutionize our manufacturing base. It is literally a goldmine that reproduces. It blows my mind that this extremely valuable plant is still banned. We could use hemp to produce approximately 139 different products (I used to have a link to a flow chart showing all of the uses of hemp but apparently deleted it... www.drugwarrant.com has a lot of good info. on industrial hemp though.), many of which are currently petroleum based, that range from high quality paper and fabric to automoblie fuel and food. Further, the cultivation of hemp actually improves the quality of the land on which it is grown and does not require the use of any pesticldes as do cotton and soybeans.
I don't know if you are familiar of the history behind "marihuana" prohibition, but the late motherfu&ker Federal Bureau of Narcotics Chief Harry Anslinger and William Randolph Hearst were related by marriage. Of course, Hearst had a huge financial interest in pulpwood. Hemp produces both a cheaper and higher quality paper than does pulp in addition to it (hemp) being a semi-annual crop. Pulpwood on the other hand, has at least an 8 year rotation here in the south. Also, it had been discovered that gasoline, a peteroleum refining waste product at the time, could run automobile which had been designed to run on ethanol produced from hemp. By prohibiting hemp, both Hearst and Rockefellar would become enriched so the lies begin from Anslinger. The result is well known. Today, idiot people still easily persuaded to vote against their own interests by keeping the demon weed (of which it would take about 400 lbs. of industrial grade hemp to catch a buzz) illegal.
Alas, I fear the combination of a stupid and gullible population combined with greedy "leaders" will result in the needless death of what could be a flourishing country.
Yes, I have studied everything behind the prohibition. Some dismiss it as a "conspiracy theory" but there is more than enough proof that it isn't. The Constitution of all things was written on hemp-based paper. There is a current bill set up by Ron Paul to again try to push for legalizing growing and cultivating hemp for industrial use. I was tickled to find some of its backers include even the staunchest conservative Republicans. The bill is HR 1866 but it probably has the same chances of passing as does HR 676 and then there's the bashing of Ron Paul as "oh, he's just a rightwinger" ! :(
I own stocks in several companies and I can assure you that the interests of the stockholders is not the number one (or even the number two) priority of the corporate management. Many publicly traded companies do not even pay a dividend. Many companies which have paid a dividend have reduced or even eliminated the dividend in the past year. Did the eighty billion dollars given in bonuses by Goldman Sachs please the stockholders? Goldman Sachs currently pays a dividend which amounts to 0.8% per year! That corporate executives cater to the needs of the stockholders is in most cases a myth.
I'm sorry but when I took Finance 101, the lessons were stated that stockholders are given a higher priority over employees. This same mantra is echoed on the corporate media and by Wall $treet. So many times, Wall $treet has tried to pressure Costco into union busting and revving up the sales to be "competitive" for whom and what? Yes, corporate execs are the worst above stockholders but if it weren't for stockholders getting a high priority compared to employees and quality production, we would not be seeing rising unemployment and stocks rising. It's just plain obscene.
It's not a question just of just higher and lower priorities, but also of primary or secondary value.
That is, business is not run to benefit workers at all. Generally, management wants to take care of workers a bit the way farmers want to take care of sheep: workers and sheep have value as resources.
But feeding and caretaking and shearing and butchering all do or do not take place according to what benefits farmers, not according to what benefits sheep.
So business may move to help workers, but only insofar as helping workers helps management. And business will move to damage workers insofar as that helps management.
Some individual deviation exists because sheep are cute. But not much.
Interesting analogy but I'm still not quite sure that the same can be said of farmers who don't specialize in meat production or for that matter shedding fur off an animal. Still, you do remind me of those corporate-tied farmers who work for Big Agri and shamelessly allowed animal cruelty in the name of profits to come first such as force feeding animals with GMO processed corn instead of allowing them to freely roam and chew off grass or worms at their own will all in the name of pumping those profits. On your fourth paragraph, that explains all the outsourcing and relying on endless supplies of near slave labor. If one worker dies of sweat shop, it's just a matter of seducing another in his or her place. It all explains why the "whole sale volume sale good, quality production not important and not good for the economy" mantra never dies.
Hey Jennifer - several good comments from you here.
There are stockholders and there are stockholders. Most stocks are held indirectly in various ways. I am not an expert, just an observer who has had fortuitous opportunity to see some of the inner workings of banks and brokerages.
There are the stock holdings from your pension plan or your mutual fund. They are in a vulnerable position and can be allowed to tank without harming the execs at the top. I mean who goes to stockholders' meetings to protect the investments in their 401K? Who even knows what is in there?
And then there are the secret and segregated "Partners' Accounts" at banks and brokerages. Based on the traditional insider knowledge accessible to the elite circles of finance, the Partner Accounts are constructed of solid stocks whose prospects have been assured by interactions with politicians. These accounts have an entirely different composition from your 401K and deliver the cream to the fat cats on top.
And don't get me started on bonds.
Joe
I can't tell you how much the concepts of finance can glare back at us when we see their results. Every now and then I go back to my textbook and notes and more pieces fit the jigsaw puzzle. I am no expert either. That is why I can count on you and jakenewton on getting more into the nitty gritties of finance and logically connecting the dots so that all of us can learn and possibly find ways to change the crooked learning. Everyone who has worked inside each and everyone of these crooked institutions and types from banking to insurance to military etc ... needs to speak out and let the details be known and confirmed. This is why I love this site. Thank you.
P.S.: I hear you on the bonds and the greedy basics are enough to make anyone puke.
Well said.
Thank you. :)
You just mention dividends, which to most people are of little importance because they are not looking at holding these stocks for the very long term. Most, like the CEOs are looking to have the stocks rise in value as fast and as high as possible then to sell them and take the profit.
That's one of the reasons for the financial problems we have now, CEOs taking big risks to drive up stock prices quickly so they can make lots of money on their stocks fast.
NC-Tom, correct. There were some companies such as the Big Oil corporations who desperately went into buying back their own shares before the crude oil prices collapsed. This just goes to show how many venues the greedy CEOs will pursue to suck up every drop of cash. :(
Self-deception and lying to the citizenry are alive and well in the Obama administration no less than in the previous one.
Years ago, when I read William Greider's book "Secrets of the Temple," I learned that stocks go up when jobs are lost. Prior to reading the book, I could NOT figure out how Wall Street could celebrate when jobs were lost, but they do celebrate, don't they? It's, of course, all about profits, and they care not a whit about any of us, We the People.
Then, I was able to live that life as the music industry caved in on itself, and mergers and acquisitions ate companies to the point that thousands and thousands of employees -- smart, educated, hard-working, loyal -- lost their jobs here in NYC. Nothing has ever replaced those lost jobs, and that was quite a number of years ago. I, myself, was pushed into freelance work in 1999 -- about ten years ago.
As for Obama -- well, I didn't vote for him in 2008, and I made the correct decision. It's as if he is attempting to manage us, rather than to use the audacity he spoke of so often, to lead us out of this mess we are in today.
As Dave Lindorff wrote in the article, "The truth is, we're falling deeper into recession, and apparently, according to the October unemployment figures, at an accelerating rate. And there is no indication that the Obama Administration or the Democratic Congress are planning any significant jobs-creation program. They seem to be happy with this."
The references we often hear about the so-called "best and the brightest" can only indicate a complete mirage. What did they really learn in school? Definitely, though, they believe their own hype, which makes them very dangerous people in our society.
Kay, thanks for reminding us of that book. I ordered it yesterday and look forward to reading it. I hope I can share some ideas to convince others to reverse the madness of companies slitting their own wrists by putting stockholders first over employees and customers.
P.S.: I cannot imagine living in NYC as the cost of living must be way too high. I don't know if government can create jobs other than federal ones but they can stop rewarding companies that engage in bad behavior such as laying off good employees, outsourcing to cheap labor, and financially and economically persecuting small and local businesses. That alone should reverse the trend.
Hi Jennifer! William Greider's book opened my eyes, and I certainly understood a lot more about how the systems, financial and political as well, don't really work for "we the people." He's an excellent writer, too.
Obama, and his administration, are o-bysmal! A so-called "jobless recovery" is NOT a recovery!
Take two teaspoons, and lie down! Oh, right -- that's pepto-bismol.
Key, I love that last line. I'd take two big spoons of raw honey over pepto-bismol anyday. :)
They keep saying that layoffs are going down signally the bottom of the recession. Hah, the only reason they are going down is there are less people that can be laid off. I suppose that when there are no jobs, thus no layoffs, they will say we are in good times!