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Thread: The 1% will own more than the 99% by 2016, report says

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    Re: The 1% will own more than the 99% by 2016, report says

    To me the problem seems obvious, while the answers are obscure. World wide I believe we are seeing the attrition of the middle class as a natural by product of businesses out sourcing. Every first world employee is competing against every third world employee.
    While demand for outsourced labor increases, at the cost of middle class jobs at home, the standard of living in those third world nations will also increase while first world nations suffer from stagnant or declining economies. In theory this trend would continue until there is a equalization of economies; a leveling of the playing field, but I find it more likely that businesses will find another source of cheap labor before this occurs.

    Remember that publicly held companies have a fiduciary responsibility to maximize profits for stock holders. You are likely that stock holder if you have a retirement account. This also explains why CEOs, CFOs and the stock market are doing so well as the middle class diminishes.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by mattmcd View Post
    To me the problem seems obvious, while the answers are obscure. World wide I believe we are seeing the attrition of the middle class as a natural by product of businesses out sourcing. Every first world employee is competing against every third world employee.
    While demand for outsourced labor increases, at the cost of middle class jobs at home, the standard of living in those third world nations will also increase while first world nations suffer from stagnant or declining economies. In theory this trend would continue until there is a equalization of economies; a leveling of the playing field, but I find it more likely that businesses will find another source of cheap labor before this occurs.

    Remember that publicly held companies have a fiduciary responsibility to maximize profits for stock holders. You are likely that stock holder if you have a retirement account. This also explains why CEOs, CFOs and the stock market are doing so well as the middle class diminishes.
    Robots - not being sarcastic.

    It's a real (potential) problem, especially how to maintain social stability in a world where the bottom 80% or so of the intelligence/skills scale can be replaced by machines, and those that can't command even greater shares of income.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by mac View Post
    There's no arguing that the richer you are, the more you can affect. However, the line being played here is about how much the rich have, or more importantly how little everyone else has. The reality is that "most" of the rest have enough, but the stats are used to say something different. Personally, I don't give a crap how much money Gates, Romney or anyone else has....so long as I have enough to take care of my family properly.
    Exactly true.

    I really don't comprehend those who have to cry about disproportion, as if it affects them. I just cannot stoop so low as to understand such mentalities. The rich aren't keeping the people at the bottom from achieving, and as long as they blame others rather than themselves, they are doomed to stay at the bottom.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Papa bull View Post
    I think you're wrong about that because the losses from the mortgage-backed securities WERE the losses from the mortgages. The reason the securities lost their value was because they were backed by mortgages with no value that were backed by homes with no value. Literally, all the bad debt flowed from the mortgage defaults.

    Here is an excellent and EXPERT non-partisan explanation: Credit Crisis: What Caused The Crisis? | Investopedia
    Right, but the credit default swaps were where the money was at. One mortgage-backed security = unlimited income because you could bet on it as many times as you wanted. This guy, knowing he could place bets that were easily hedged with a huge payout, made 3.7 billion dollars when the market tanked. And his loss was capped - the cost of the security. If the mortgage-backed securities don't fail, the credit-default swaps are worthless, and you've just lost the premium. You can hedge that with anything, or nothing, since it's got low-loss potential. And there was a lot of money involved:

    According to the Journal of Economic Perspectives, the total notional amount of the credit default swap market $6 trillion in 2004, $57 trillion by June 2008, and $41 trillion by the end of 2008.

    $57 trillion. From your source, there was about $640 billion to be lost via sub-prime mortgages.

    Moreover, because leverage was involved, this set the stage for a spike in volatility, which is exactly what happened as soon as investors realized the true, lesser quality of subprime CDOs.

    Because hedge funds use a significant amount of leverage, losses were amplified and many hedge funds shut down operations as they ran out of money in the face of margin calls. (For more on this, see Massive Hedge Fund Failures and Losing The Amaranth Gamble.)
    I personally think Investopedia is underselling this aspect. The leveraging was everything. It's what made a crisis become a catastrophe. It turned a rogue wave into a full tsunami. Then, when you consider these things were sold OTC, weren't regulated, and basically impossible to track... Jesus. And it essentially still works this way!

    As I showed earlier, there was about 700 billion to be lost via sub-prime mortgages. AIG was short $441 billion worth of swaps on corporate bonds, and worse, mortgage-backed securities.

    That says it all, in my opinion.
    Last edited by whysoserious; 01-23-15 at 12:33 PM.
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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by JANFU View Post
    What do you think? The middle class is disappearing. At one time increases in productivity equated to wage increases.
    https://fortune.com/2015/01/19/the-1...6-report-says/
    The richest 1% of the population will own more than half of the world’s wealth by next year as inequality continues its relentless rise across the globe, a new report out Monday says.

    The report, by the U.K.-based charity Oxfam, shows that the top 1% have grown their share of global wealth constantly since 2010. After dipping at 44% in the wake of the 2008 financial crisis, it rose to 48% by the end of last year and is poised to top 50% by the end of next year.
    Can you please elaborate on the comment that I enlarged? Thank you.
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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Lord of Planar View Post
    Exactly true.

    I really don't comprehend those who have to cry about disproportion, as if it affects them. I just cannot stoop so low as to understand such mentalities. The rich aren't keeping the people at the bottom from achieving, and as long as they blame others rather than themselves, they are doomed to stay at the bottom.
    Disproportion as you call is IS affecting others. Decades long stagnation of wages, declining living standards at the bottom, income and productivity gains all flowing to the top, the rising generation with living standards below that of their parents - those are real effects.

    It's perhaps unfair to say the 'rich' are "keeping the people at the bottom from achieving" but the results of policies supported by the political establishment funded by "the rich" and our most powerful corporate interests are devastating to millions of Americans, and no amount of "pull yourself up by your bootstraps" happy talk can change that.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by JasperL View Post
    Disproportion as you call is IS affecting others. Decades long stagnation of wages, declining living standards at the bottom, income and productivity gains all flowing to the top, the rising generation with living standards below that of their parents - those are real effects.

    It's perhaps unfair to say the 'rich' are "keeping the people at the bottom from achieving" but the results of policies supported by the political establishment funded by "the rich" and our most powerful corporate interests are devastating to millions of Americans, and no amount of "pull yourself up by your bootstraps" happy talk can change that.
    Stop electing the politicians that have enabled free trade. We have lost manufacturing jobs to foreigners, so don't blame such disproportion on the rich. Wages are a result of supply and demand, and an excess of cheap illegal immigrants. People buy made in China over made in USA because it's cheaper.

    Blame the cheapskates, and politicians. Not the rich.

    I buy USA when I can, even when it's more expensive. I own a Cheverolet and a Pontiac.

    I'll bet you own a Toyota, Subaru, etc.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Lord of Planar View Post
    Stop electing the politicians that have enabled free trade. We have lost manufacturing jobs to foreigners, so don't blame such disproportion on the rich. Wages are a result of supply and demand, and an excess of cheap illegal immigrants. People buy made in China over made in USA because it's cheaper.

    Blame the cheapskates, and politicians. Not the rich.

    I buy USA when I can, even when it's more expensive. I own a Cheverolet and a Pontiac.

    I'll bet you own a Toyota, Subaru, etc.
    While I agree with you in general, I've bought three Lexuseseses (is it Lexi?). Toyotas, Nissans, etc, are just vastly superior vehicles to American-made cars.

    Personally, I do drive an American made car, but not my wife and daughters because I don't want them stranded on the side of the road.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by Erod View Post
    While I agree with you in general, I've bought three Lexuseseses (is it Lexi?). Toyotas, Nissans, etc, are just vastly superior vehicles to American-made cars.

    Personally, I do drive an American made car, but not my wife and daughters because I don't want them stranded on the side of the road.
    If you are going to be part of the problem, then don't complain about the rich.

    It's hypocrisy.

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    Re: The 1% will own more than the 99% by 2016, report says

    Quote Originally Posted by JasperL View Post
    Disproportion as you call is IS affecting others. Decades long stagnation of wages, declining living standards at the bottom, income and productivity gains all flowing to the top, the rising generation with living standards below that of their parents - those are real effects.

    It's perhaps unfair to say the 'rich' are "keeping the people at the bottom from achieving" but the results of policies supported by the political establishment funded by "the rich" and our most powerful corporate interests are devastating to millions of Americans, and no amount of "pull yourself up by your bootstraps" happy talk can change that.
    I would be interested to know what you mean by "declining living standards at the bottom"? It doesn't mesh with reality based on my experience. The quality of life for a poor person is still better than the quality of life for a poor person 50 years ago, assuming of course that they are not going to sleep with a needle in their arm or something like that.

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