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Thread: Stocks pile on losses amid worries on economy

  1. #101
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by 1Perry View Post
    Explain to me how it's created jobs. I've explained how it costs jobs and you've agreed.



    "People" have not benefitted from QE. Wall Street has and those who have supported QE have only bitched and moaned that those profiting are sitting on the money as opposed to helping the economy. No?
    Ok I will make this quite simple


    Lets say I provide you with $100 000 with the only caveat that it has to be spent. The money is counterfiet, but perfect and would never be detected. You spend that money, increasing the demand for goods and services, and in such a short time production capacity can not be increased, causing a spike in inflation. So while other people have decrease spending you are increasing yours ( and those that you purchase goods from can also increase their spending as well. The $100 000 even though it increased inflation has kept demand for goods and services higher keeping people employed. It would of course run its course once the initial $100 000 has been spent.

    More complex

    The US is engaging in a period of deleveraging (except for federal government) deleveraging means that money is being taken out of the economic system. Reducing demand for goods and services, this is outside of any effects of inflation or deflation (although it is deflationary normally). Now if all sectors are engaging in deleveraging, the reduction in demand is extremely drastic. Overall imagine if 10% of all economic activity in the US ended tommorow, how many people would be laid off, what would happen to asset prices etc.

    In the economic environment the US is in right now, government sourced demand is maintaining economic activity in the US. Keeping employment above the rate in which it would be otherwise.

    So while inflation is costing jobs, the number of jobs it is costing in todays economic environment is lower then what would occur if the government (and fed) was not encouraging inflation through QE and additioinal government debt. The issue is that by taking the stance that they are, they are improving economic conditions today at the expense of economic conditions in the future. The economy in the future will not be as strong as it would be, but todays economy is stronger then it should be
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by AdamT View Post
    QE has kept interest rates low.
    Good point. The millions of seniors that expected to live off the interest that came from their savings had to go back and get a job just to stay above water. I'll venture a guess though that these jobs would have otherwise been filled by teens who didn't get a job.

    Lower interest rates allow businesses to borrow on the cheap and they are about the only thing motivating the moribund housing/construction industry. They have also allowed the dead-in-the-water banking system to stay in business. All of these things contribute to the overall health of the economy and therefore the employment situation.
    Yes it would allow businesses to borrow and invest in new jobs but that hasn't actually happened. One would think in theory this would be a great point. Too bad in reality nobody wants to go further in debt.

    One would think with incredibly low interest and housing prices, housing would be booming. People have no faith in taking on more current debt.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by 1Perry View Post
    For the billions upon billions we have spent, surely we would get a little of something in the way of jobs. Any imbecile with billions of dollars at his disposal can create some jobs.

    What's happening? We are broke. We no longer have billions to create a handful of jobs.
    Jobs aren't being created, IMHO, because:

    1) the fed didn't hold CEO's who received bailout money accountable. Instead of insisting that they start hiring immediately after "passing" bank stress tests, the fed let them off the hook. Moreover, Congress under the Bush Administration didn't add language in TARP that would not allow these CEOs to pay out bonuses using taxpayer money. Both omissions were huge mistakes that are still costing our economy dearly.

    2) even after receiving Stimulus funds, (GOP) states have yet to put those funds into full effect. All you have to do is go to Recovery.gov then look at your state's website (or any state for that matter) where stimulus funds are outlined and see exactly where they're spending the money.

    Example:

    Alabama
    $3.6 billion in Stimulus funds awarded
    $2.3 billion in Stimulus funds received
    9,398 jobs created

    Texas
    $16.7 billiion in Stimulus funds awarded
    $11.4 billion in Stimulus funds received
    45,340 jobs created

    I've said it over and over that it's not all Obama's fault. I'm not sure how your accusations make you any different than those you complain about.
    Atleast I put the blame squarely where it should be instead of trying to deflect blame onto others. In the case of recent loses in the stock market, the fault can be traced directly to when debt talks fell apart. And that, my friend, was when Boehner walked out on negotiations and the GOP dug in on their position.

    If we ony had unlimited money for the government to spend all would be rosy. When are you going to start demanding that Obama collect the billions that GOldman Sachs owes us?
    The man just agreed to $2.5 trillion in spending cuts over 10 years. Get off the "endless greenback printing press" kick already. As for Goldman Sachs and other corporate big wings, I've been insisting that Corporate America at-large be held accountable for their screw-ups since October 2008! Where the **** have you been?

  4. #104
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by 1Perry View Post
    Good point. The millions of seniors that expected to live off the interest that came from their savings had to go back and get a job just to stay above water.
    You think people were living of the 1.5% interest their savings accounts were paying?

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by Lord Tammerlain View Post
    Ok I will make this quite simple
    You need to answer my question first.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by AdamT View Post
    You think people were living of the 1.5% interest their savings accounts were paying?
    They were getting far higher than this when they had those expectations.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by 1Perry View Post
    You need to answer my question first.
    I did, QE and governmnent demand (created through debt) has kept the number job loss's to a lower level then otherwise would have occured
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  8. #108
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by 1Perry View Post
    They were getting far higher than this when they had those expectations.
    No, they weren't. No one relies on savings account interest for income. If they were invested in stock and bond funds, they've done far better under Obama than they did during the whole of Bush's eight years -- even after the 10% drop of the last week.

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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by Objective Voice View Post
    Jobs aren't being created, IMHO, because:

    1) the fed didn't hold CEO's who received bailout money accountable. Instead of insisting that they start hiring immediately after "passing" bank stress tests, the fed let them off the hook. Moreover, Congress under the Bush Administration didn't add language in TARP that would not allow these CEOs to pay out bonuses using taxpayer money. Both omissions were huge mistakes that are still costing our economy dearly.
    I've already complained about the government not holding Wall Street responsible for anything, but nobody is going to hire before the need arises. Just a note, Obama was a part of that Congress under Bush.

    2) even after receiving Stimulus funds, (GOP) states have yet to put those funds into full effect. All you have to do is go to Recovery.gov then look at your state's website (or any state for that matter) where stimulus funds are outlined and see exactly where they're spending the money.
    Much like the rest of the country, some realize that with the current state of affairs you better put some money away. The jobs "created" numbers have been shown over and over to have been inflated and bogus.

    Atleast I put the blame squarely where it should be instead of trying to deflect blame onto others. In the case of recent loses in the stock market, the fault can be traced directly to when debt talks fell apart. And that, my friend, was when Boehner walked out on negotiations and the GOP dug in on their position.
    God, what trash.

    The man just agreed to $2.5 trillion in spending cuts over 10 years. Get off the "endless greenback printing press" kick already. As for Goldman Sachs and other corporate big wings, I've been insisting that Corporate America at-large be held accountable for their screw-ups since October 2008! Where the **** have you been?
    Whose fault is it that they aren't and why aren't they?

  10. #110
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    Re: Stocks pile on losses amid worries on economy

    Quote Originally Posted by AdamT View Post
    No, they weren't. No one relies on savings account interest for income. If they were invested in stock and bond funds, they've done far better under Obama than they did during the whole of Bush's eight years -- even after the 10% drop of the last week.
    Two points in this article. As I note, despite the low rates, people are not borrowing.

    For that, you can thank the Fed's longstanding low interest rate policy, which has brought banks' quarterly cost of funds to a 26-year low but hasn't resulted in a boom in lending.

    To the discussion at hand.

    As a result, savers have been put in a bind. Whereas three years ago it made sense for retirees to live off annual interest from a standard certificate of deposit, that's now nearly impossible. The highest rates these days, the NYT notes, are around 1.5 percent, yielding only $7,500 a year on a $500,000 deposit, compared to rates above five percent in 2007.

    How The Fed's Low Interest Rate Policy Is Hurting Savers, Retirees

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