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Where does the money come from?

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September 23, 2012 – Comments (12)

Well, looking at the markets and how they respond continues to be interesting.  I think evidence is in over my belief of declining wages and households being squeezed.  I was just looking at an article that gives figures that household incomes are down about 9% since 2007.

Curious how the market has continues as it has...  It seemed logical to me that if households were squeezed, it would hurt the market.  This just doesn't seem logical.

12 Comments – Post Your Own

#1) On September 23, 2012 at 10:37 PM, awallejr (83.95) wrote:

Well in the end it really is all about profits.  Companies have cut costs hard since the Great Recession.  The Fed has done its darndest to throw liquidity out there.  While average household income has declined, people still need to buy neccessities at least.

This is really my favorite link since it is pretty spot on:

 http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10

The market is where it is because of a lack of alternatives in light of a low interest rate environment. As long as Uncle Ben is on guard expect the market to rise.  Don't listen to the naysayers.  Listening to them these last 3 1/2 years cost people tremendous opportunities.

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#2) On September 23, 2012 at 11:19 PM, portefeuille (99.60) wrote:

Don't listen to the naysayers.  Listening to them these last 3 1/2 years cost people tremendous opportunities.

at least make some new "caps" game calls ;)

http://twitter.com/portefeuillefun.

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#3) On September 24, 2012 at 12:06 AM, awallejr (83.95) wrote:

Hope you mean dwot and not me porte since I just made a pick off of one of your suggestions NAVB;p

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#4) On September 24, 2012 at 12:18 AM, portefeuille (99.60) wrote:

#3 Yes, I encourage our resident Canadian teacher every now and then to make some calls. Maybe she will even invest some money in equities again. In a few years the rally might stall ;)

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#5) On September 24, 2012 at 1:18 AM, valuemoney (99.99) wrote:

Where does the money come from?

To over simplify it a bit. QE1 QE2 QE3. The money is coming from just about every government and central bank out there now. Take a look at world money supply. The U.S. started it in 2008. Now Europe is taking a page out of our book. Same goes for most of the other countries and central banks out there right now. Throw a bunch of money at the situation and see if it helps. Instead of the QE's the government could have just sent a check to everyone in the U.S. basically the same thing. The dollar ends up being worth less but if everyone in the world prints at the same time it just kinda stays even just that there is more money out there for STUFF. This in turn makes everyone feel a little better since they think they have more money but really they don't. It is just inflation. Everyone feels a little better then keeps on producing then eventually we get real growth. Good or bad I really can't tell you for sure but we have an easier way of life then we did 100 years ago so all in all I think the system is good.

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#6) On September 24, 2012 at 1:24 AM, valuemoney (99.99) wrote:

Corp. Buybacks also.... I think they are at record highs........new people getting in the market. People love seeing the market go up. I like seeing it go down.....just so I can get better buy. People that got out of the market a while back because they were scared.

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#7) On September 24, 2012 at 12:39 PM, Dean47 (< 20) wrote:

Logic went out the window a long time ago.

 

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#8) On September 24, 2012 at 1:15 PM, ETFsRule (99.94) wrote:

"I was just looking at an article that gives figures that household incomes are down about 9% since 2007."

The article points out that median, not mean, incomes are down 9%.

Total personal income for the US is significantly higher than its 2007 level; roughly correlating with the stock market's gains.

And it looks like mean incomes are higher: Link

Wealth inequality has been on the rise again recently, so I think the "top 1%" must be doing quite well.

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#9) On September 24, 2012 at 1:39 PM, edwjm (99.87) wrote:

For most ppl "median" is more meaningful than "mean" income.

The term "mean" is statistics speak for "arithmetic mean" which most people would call "average," a term which includes and is heavily influenced by the richest people in the country.

No one has mentioned the "mode," which would be even more meaningful to  a very large number of people.

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#10) On September 24, 2012 at 4:56 PM, chk999 (99.97) wrote:

One thing to keep in mind is that the retail investor is pretty small potatoes these days compared to the holdings of the big pension funds. So even if retail investors feel strapped, there is a lot of money already in the pension funds and more coming in every day via the 401(k) and other plans.

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#11) On September 24, 2012 at 11:02 PM, dwot (66.68) wrote:

portefeuille, I moved some money back into a trading account about a year and half ago and just never got around to really looking at the market. 

I wasn't fully employed when I was in the market before.

Well, I am off to Vancouver tomorrow.  My friend didn't make it...

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#12) On October 03, 2012 at 2:41 PM, portefeuille (99.60) wrote:

#11 My biopharma suggestions are here -> https://twitter.com/portefeuillefun.

Those I follow on twitter make quite a few suggestions as well ...

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