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Stocks pile on losses amid worries on economy

1Perry said:
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?
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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
 
AdamT said:
QE has kept interest rates low.
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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.
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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.
 
1Perry said:
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.
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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.
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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?
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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?
 
1Perry said:
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.
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You think people were living of the 1.5% interest their savings accounts were paying? :lol:
 
AdamT said:
You think people were living of the 1.5% interest their savings accounts were paying? :lol:
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They were getting far higher than this when they had those expectations.
 
1Perry said:
You need to answer my question first.
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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
 
1Perry said:
They were getting far higher than this when they had those expectations.
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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.
 
Objective Voice said:
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.
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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.
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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.
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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?
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Whose fault is it that they aren't and why aren't they?
 
AdamT said:
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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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
 
1Perry said:
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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Look, you really don't want to argue that high interest rates are good for the economy. It's just nonsensical.

You don't have to be any kind of genius to find a safe investment that pays 5% interest these days.
 
AdamT said:
Look, you really don't want to argue that high interest rates are good for the economy. It's just nonsensical.

You don't have to be any kind of genius to find a safe investment that pays 5% interest these days.
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Keeping the interest rates artificially low for so long was a contributor to our problems. No, we are doing no one a favor by making it so cheap to run up commodities.
 
I read where 401Ks lost on average $4,300 during the week of the GOP deficit ceiling sideshow alone!
 
1Perry said:
Keeping the interest rates artificially low for so long was a contributor to our problems. No, we are doing no one a favor by making it so cheap to run up commodities.
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A loose money supply is a problem when the economy is doing well. It's desireable when the economy is not doing well.
 
American said:
Gold didn't soar, it went down. I looked at it today, and it was reported so.
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Who the hell cares what a shiny rock is going for????
 
Catawba said:
I read where 401Ks lost on average $4,300 during the week of the GOP deficit ceiling sideshow alone!
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Amazing that is the same number I saw during the week of the Obama/Reid deficit circus! It is a shame that the biggest losers are the average Americans that have retirement money losing value thus making them less likely to retire anytime soon, of course the public sector employees are still retirement insured by the tax payers that must now work longer and harder to enjoy those same golden years... maybe...
 
Gill said:
Social security and medicare weren't affected by the stock market drop, 401ks were.
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That's why I moved my money.
 
Lord Tammerlain said:
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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because the government uses magic money, and when you print, you don't lower the value of the dollar.
 
AdamT said:
A loose money supply is a problem when the economy is doing well. It's desireable when the economy is not doing well.
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The problem is, the theories are not working. The reason they are not working is because the underlying foundation is screwed up. Despite these low rates people are not taking advantage of them. Many that would have otherwise refinanced have done that long ago or they are in a situation where they can't.

The Fed has screwed the pooch with their actions over the, well I'll say 15 years.

Yes, I would say that the psychological effect of higher rates would help the economy right now. Seniors would have more money and hopefully could drop back out of the job market freeing up jobs. Less money would be going into commodities making things more affordable, freeing up money for other things. The dollar would improve which has a psychological positive effect on people.

Yes, we should quit giving money away.

It would initially be bad for Wall Street which is why we don't do it.
 
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1Perry said:
The problem is, the theories are not working. The reason they are not working is because the underlying foundation is screwed up. Despite these low rates people are not taking advantage of them. Many that would have otherwise refinanced have done that long ago or they are in a situation where they can't.

The Fed has screwed the pooch with their actions over the, well I'll say 15 years.

Yes, I would say that the psychological effect of higher rates would help the economy right now. Seniors would have more money and hopefully could drop back out of the job market freeing up jobs. Less money would be going into commodities making things more affordable, freeing up money for other things. The dollar would improve which has a psychological positive effect on people.

Yes, we should quit giving money away.

It would initially be bad for Wall Street which is why we don't do it.
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You always seem to assume that things could not be worse. Unemployment is high, so the stimulus didn't do anything. Well, it did. Unemployment would be higher without it. Economic activity is low, so QE has not worked. Well, it has. If interest rates were high businesses would be in that much more trouble, and the real estate industry would be in even worse shape.

Unfortunately the government only has so many cards it can play -- particularly when reserves have been frittered away during good times. Here the government has done enough to lift us out of recession, but not enough to give the private sector momentum to keep growing without government stimulus.
 
The USA is toast and here is why:

Massive debt
Foreign wars
Wages are WAY too high compared to the rest of the world
Lazy, dumb generation of kids
Corrupt moronic political system

No way out.. no way out.
 
1Perry said:
Inflation is extremely low based upon current standards. Based upon historical standards it was far higher. I'll have to find the link later but I believe the numbers at it's peak recently inflation measured the same way we measured it in 1978 was around 10%.

On top of that one has to take into consideration the depressed housing market has had on the inflation numbers.
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These types of posts always frustrate me. Not because the thinking employed makes any sort of economic sense, but because people try to make points based on a limited (at best) understanding of inflation.

Consumer preferences change from time to time; the % of expenditures allocated towards gasoline has decreased since 1978. Which means your reference to 1978 is meaningless.
 
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