From the article: "In other words, in the six days of Thursday, Friday, Saturday, Sunday, Monday, Tuesday, the national debt increased $56.381 billion---or almost $9.4 billion per day."
Lovely. Let's print more money, so we can spend more, so we can print more money....
I don't think this financial abyss we've created can be bridged by band-aid fixes, do you? Our politicians are not intelligent enough to construct long term fixes, and if they did, they'd be booted out of office by greedy bastards decrying their loss of free Obama-bucks.
Wall Street is broken. The market reactions are so wacky that I have no idea what's driving them. Why in the world is the stock market trading at over 12, climbing to 13? Oil is up, precious metals are through the roof, war and unrest are marching across the globe, food prices are soaring, unemployment is plateaued at over 9% with "benefits" expiring in many states, we've been downgraded to negative, battle lines are being drawn across the country as civil war looms...but hey, buy stocks. (GE is lookin' good with the infusion of your tax dollars - profits are up 77%. *wink wink*)
Why in the world is the stock market trading at over 12, climbing to 13?
Your question is a good one, lady red, and I've been meaning to answer it for a while - I think I've figured out a simple explanation.
Now, to be sure, anyone who professes to understand the exact cause(s) of any particular stock market movement is either lying, or deluded.
But that much understood, it is reasonable (I believe) to ask why might the market be behaving the way it is?
Now, if you ask the question like this: why would stocks go up when the dollar loses value?, it's a mystery.
But what are stocks? They are just ownership interests in an earnings stream.
And for the large cap American companies which dominate the stock market indexes, a big chunk (like at least a third) of those earnings come from foreign sales, and so are denominated in foreign currency.
So substitute: why would ownership interest in earnings streams with significant chunks earned in foreign currency go up when the dollar loses value?
The answer should be more apparent this way.
Again, I'm not suggesting that this is why the market is moving up - just that it could be a cause. And specifically, the fact that the market is moving up does not necessarily entail that Wall St is "broken".
From the article: "In other words, in the six days of Thursday, Friday, Saturday, Sunday, Monday, Tuesday, the national debt increased $56.381 billion---or almost $9.4 billion per day."
ReplyDeleteLovely. Let's print more money, so we can spend more, so we can print more money....
I don't think this financial abyss we've created can be bridged by band-aid fixes, do you? Our politicians are not intelligent enough to construct long term fixes, and if they did, they'd be booted out of office by greedy bastards decrying their loss of free Obama-bucks.
Wall Street is broken. The market reactions are so wacky that I have no idea what's driving them. Why in the world is the stock market trading at over 12, climbing to 13? Oil is up, precious metals are through the roof, war and unrest are marching across the globe, food prices are soaring, unemployment is plateaued at over 9% with "benefits" expiring in many states, we've been downgraded to negative, battle lines are being drawn across the country as civil war looms...but hey, buy stocks. (GE is lookin' good with the infusion of your tax dollars - profits are up 77%. *wink wink*)
We're down the rabbit hole.
All I had to do is read the title of the article and I felt immediately depressed.
ReplyDeleteWTH are we going to do? Are we getting beyond the point of no return?
Why in the world is the stock market trading at over 12, climbing to 13?
ReplyDeleteYour question is a good one, lady red, and I've been meaning to answer it for a while - I think I've figured out a simple explanation.
Now, to be sure, anyone who professes to understand the exact cause(s) of any particular stock market movement is either lying, or deluded.
But that much understood, it is reasonable (I believe) to ask why might the market be behaving the way it is?
Now, if you ask the question like this: why would stocks go up when the dollar loses value?, it's a mystery.
But what are stocks? They are just ownership interests in an earnings stream.
And for the large cap American companies which dominate the stock market indexes, a big chunk (like at least a third) of those earnings come from foreign sales, and so are denominated in foreign currency.
So substitute: why would ownership interest in earnings streams with significant chunks earned in foreign currency go up when the dollar loses value?
The answer should be more apparent this way.
Again, I'm not suggesting that this is why the market is moving up - just that it could be a cause. And specifically, the fact that the market is moving up does not necessarily entail that Wall St is "broken".
The horror is, it could be working just fine.