Some Questions on Income Disparity

[Sukerkin]

What makes this a bit different, Bill, is that this time we had a 'failure' of the banking and credit systems upon which economic activity has been based since we came off the Gold Standard.

To prop that system up, we, the economically active, have been robbed of our earnings (I think it's about £5000 per household over here in the UK) and all that influx of unearned money to the financial sector has still not fixed the fundamentally broken machine. Too much wealth has been syphoned off and turned into unproductive money and the wheels are seizing up.

The system needs an overhaul but no-one knows how or dares attempt it but the unpalatable truth is that what has been in operation for eighty or so years is a protracted period of spending future money today and there is a limit to how long that can go on before, as in the USA, the debt becomes greater than the amount that the nation can earn.

It's not a natural part of the seven year cycle that global economics follows, it is something different and far worse than a common-or-garden bust after a boom. Whether it's a difference that will matter in the longer term is open to debate of course.

 

[Bill Mattocks]

What makes this a bit different, Bill, is that this time we had a 'failure' of the banking and credit systems upon which economic activity has been based since we came off the Gold Standard.

To prop that system up, we, the economically active, have been robbed of our earnings (I think it's about £5000 per household over here in the UK) and all that influx of unearned money to the financial sector has still not fixed the fundamentally broken machine. Too much wealth has been syphoned off and turned into unproductive money and the wheels are seizing up.

The system needs an overhaul but no-one knows how or dares attempt it but the unpalatable truth is that what has been in operation for eighty or so years is a protracted period of spending future money today and there is a limit to how long that can go on before, as in the USA, the debt becomes greater than the amount that the nation can earn.

It's not a natural part of the seven year cycle that global economics follows, it is something different and far worse than a common-or-garden bust after a boom. Whether it's a difference that will matter in the longer term is open to debate of course.

Still doesn't persuade me. I am old enough now to have personally experienced some of the ups and downs. And old enough to recall the pundits saying and attempting to explain through a variety of means why this time was different.

Maybe it is different this time. I can't argue against that possibility. I just have to believe that "it's really really different this time" is less compelling than what has come before, over and over.

 

[elder999]

Still doesn't persuade me. I am old enough now to have personally experienced some of the ups and downs. And old enough to recall the pundits saying and attempting to explain through a variety of means why this time was different.

Maybe it is different this time. I can't argue against that possibility. I just have to believe that "it's really really different this time" is less compelling than what has come before, over and over.

To understand that "it's really really different this time," one only has to look at the Dow, which closed today at 11,808.79, up 267.01 pts. from yesterday's close.

When, in all those times the economy was down, was the market at 10,000 pts. in our lifetime, Bill? The market currently indicates a healthy economy-it's about back to where it was when the "recession" started, and there's massive profit being made. Mind you, the market's a little psycho, subject to the whims and fears of traders, and intersting phenomena that result from computerized trading, but it's still all you need to look at to know that "it's really, really, really different this time."

 

[Bill Mattocks]

To understand that "it's really really different this time," one only has to look at the Dow, which closed today at 11,808.79, up 267.01 pts. from yesterday's close.

When, in all those times the economy was down, was the market at 10,000 pts. in our lifetime, Bill? The market currently indicates a healthy economy-it's about back to where it was when the "recession" started, and there's massive profit being made. Mind you, the market's a little psycho, subject to the whims and fears of traders, and intersting phenomena that result from computerized trading, but it's still all you need to look at to know that "it's really, really, really different this time."

I don't know what it means. I'm not an economist and I don't pretend to be one. Nor am I essentially an optimist about our current situation. What I am is a believer in inertia.

And frankly, if we're now on terra incognita, what's the point in extrapolating what will happen next? In a chaotic system, there's not much to do but try to ride the wave.

 

[elder999]

Sorry, the mess started with Jimmy Carter, with the final push by Bill Clinton, aided by Barak "the organizer" obama, and protected by the likes of Barney Frank and his boyfriend as well as Chris Dodd. Bush did try to bring some control back over fannie and freddie, but the dems, and some republicans, stopped any attempt to fix the situation.

Once again, we see what partisan rhetoric and propaganda can do to spin the story. This crisis was a direct product of deregulation-deregulation that the corporations who caused it insisted on for years, and had Democrats and Republicans pushing for. Ultimately, it led to commercial banks doing business as savings and loans, and vice versa. It led to those risky motgages being traded heavily as instruments, as derivatives or futures-it was all motivated by greed, and directly marketed to the poor and minority communities. How can you say that institutions were browbeated into risky lending, when they engaged in robocalls to the ghettos, offering mortgages to people who often couldn't afford to pay rent? At no money down? All that money that resulted from the overvaluation of real estate, and the creation of debt where there was none before-it went into someone's pocket at some point, dude, and those people were concerned with "Red" states, or "Blue" states, the only color they cared about was green......

I don't know what it means.

It means that the rich get richer, the poor get poorer, and more and more people join their ranks every day, squeezed out of the middle class by the vacuuming of wealth into the uppermost reaches of the economy.

It means some of us are really and truly well ****ed.

I'm not an economist and I don't pretend to be one. Nor am I essentially an optimist about our current situation. What I am is a believer in inertia.

I'm not an economist either, Bill. What I am is a guy with a perspective well beyond that of "in my lifetime." I have the benefit of more than a century of investments. I'm also a believer in inertia, but that law applies to bodies in motion as well, especially if we liken them to a rock rolling down a hill, or a handbasket sliding into hell......:lfao:

And frankly, if we're now on terra incognita, what's the point in extrapolating what will happen next? In a chaotic system, there's not much to do but try to ride the wave.

(BUY LAND)...or a boat, or both.

 

[Bill Mattocks]

It means that the rich get richer, the poor get poorer, and more and more people join their ranks every day, squeezed out of the middle class by the vacuuming of wealth into the uppermost reaches of the economy.

I think we've established that. What we have not established is whether or not that is a bad thing.

It means some of us are really and truly well ****ed.

In the long term, we're all dead. As someone else said, but I agree with it.

I'm not an economist either, Bill. What I am is a guy with a perspective well beyond that of "in my lifetime." I have the benefit of more than a century of investments. I'm also a believer in inertia, but that law applies to bodies in motion as well, especially if we liken them to a rock rolling down a hill, or a handbasket sliding into hell......:lfao:

Science says that this laptop could fall through my desk onto the floor. But in reality, it's not very likely to do so. My point is that systems are more likely to do what they have always done than they are to do something radically different, proven by history. I will defer to the most-likely path in the absence of compelling information that they system has stopped being one.

(BUY LAND)...or a boat, or both.

I am legally prohibited from doing either one at this time. I am permitted to continue administering my own 401(k) plan, and I have a 4.7% return for YTD and 4.6% over the last two years. I'm no financial wizard but I bought Ford stock at $2, know what I mean? People talk about 'buy low and sell high' but they can't do it. They are risk-averse, easily-frightened, and move with a herd mentality. Times of turmoil are also times of opportunity. As the scroll in our dojo says, the time to stike is when the opportunity presents itself.

 

[elder999]

I think we've established that. What we have not established is whether or not that is a bad thing.

It is a bad thing, Bill. The end of the middle class means the end of democracy as we think we've known it. We're seeing the beginning of overt, outright corporate rule. That's a bad thing. It's in corporation's interest to diminish the middle class, lower the number of educated people, lower the number of self-sufficient people (as though there were so many of us as it is) lower the number of property owners,control the media and all information that people can receive(tell you what to think) control food and water sources(tell you what to eat), and increase the membership of a weak workforce that has to expend all its energy just scraping by on the pennies tossed down from on high(tell you what to do).

It's a very bad thing, Bill.

Science says that this laptop could fall through my desk onto the floor. But in reality, it's not very likely to do so. My point is that systems are more likely to do what they have always done than they are to do something radically different, proven by history. I will defer to the most-likely path in the absence of compelling information that they system has stopped being one.

THis is where you're wrong. The system has experienced radical changes in the past. You're limiting your view to what's occurred in your lifetime-see my post about the Robber Baron Era: it already is radically different, and your not seeing-or refusing to see it-isn't going to change that.

You wanna ride that wave? You need to acknowledge that it's the biggest ****ing one you've ever seen, or are ever gonna see, and it's just starting to swell, about two sets back.....:lfao:

I am legally prohibited from doing either one at this time. I am permitted to continue administering my own 401(k) plan, and I have a 4.7% return for YTD and 4.6% over the last two years. I'm no financial wizard but I bought Ford stock at $2, know what I mean? People talk about 'buy low and sell high' but they can't do it. They are risk-averse, easily-frightened, and move with a herd mentality. Times of turmoil are also times of opportunity. As the scroll in our dojo says, the time to stike is when the opportunity presents itself.

Yeah-I bought Ford @ between $1.65 and $1.90, and sold all but the 5,000 shares that represented my initial investment when it was between $12.70 and $16. Made a boatload of money....[seriously...... I bought another boat :lfao:....Times of turmoil are times of opportunity, but you should take that "sell high" money and buy land, seriously, and not much more than $10,000 in gold-for bartering purposes.

There's nothing prohibiting you from buying real estate outright if you have the cash, is there? That's what I've been doing, and telling a lot of people to do: get your 401K out of the market as much as you can, too, or resolve to work until you're dead, like I'm gonna, but not because you want to, like I do, but because you'll have to.

 

[Bill Mattocks]

There's nothing prohibiting you from buying real estate outright if you have the cash, is there? That's what I've been doing, and telling a lot of people to do: get your 401K out of the market as much as you can, too, or resolve to work until you're dead, like I'm gonna, but not because you want to, like I do, but because you'll have to.

I can technically buy real estate if I have cash, yes, but there's a catch; I can't have that much cash. It's all very complicated, which I am just learning. The short answer - no, I can't buy Real Estate legally at this time.

As to the 401(k) mix, as of today:
52.15% Long Term Bonds: up 9.4 percent YTD
38.89% Short Term Bonds: up 1.8 percent YTD
5.20% Small / Mid Cap Equity Index: down 15.5 percent YTD
3.77% Small / Mid Cap Equity: down 14 percent YTD

100% of new contributions are split 50/50 between Equity Index stocks and Equity stocks; I'm buying into a falling market.

 

[elder999]

Here are the people the "99%" are protesting against.