Joe Doakes from Como Park emails:<\/p>\n
A buddy wonders why, if the economy is as bad as Republicans claim, the stock market is roaring?\u00a0 Doesn\u2019t that prove Republicans are lying?<\/p>\n
I\u2019m no expert but even I have noticed the S&P 500 and NASDAQ have hit highs while the Dow Industrials and Dow Transport have not.\u00a0 What\u2019s the difference?\u00a0 The high-flying stock exchanges buy and sell stocks in companies that are NOT industrial or transport.\u00a0 So what are they?\u00a0 The NASDAQ-100, the top performing companies, is composed of banking, insurance, mortgage and brokerage companies\u00a0 . . . in other words, companies that own a lot of paper but nothing else. \u00a0They are dependent on the federal government continuing to dump $60 Billion per Month into the economy to prop up lending and housing.\u00a0 When that gravy train stops, those companies will collapse.<\/p>\n
\nIndustrial and transport \u2013 companies that own a lot of heavy iron \u2013 have been wrung dry for a decade and thus are far less dependent on stimulus but also far less profitable right now.\u00a0 Major contractors don’t order billions of heavy machinery for a short term burst of government work; instead, they do the jobs with what they have, defer maintenance, scrape by.\u00a0 The\u00a0real orders for machinery, jumbo jets, etc. go to\u00a0companies\u00a0that are seeing real growth.<\/p>\n
The true measure of the economy is not reflected in paper companies that shuffle stimulus money back and forth, skimming a percentage off the top each time.\u00a0 The true measure of the economy is iron companies that make things that do stuff.\u00a0 And that economy is not robust at all.<\/p>\n
Joe Doakes<\/p>\n<\/div>\n<\/blockquote>\n
\nTo take the absurd extreme, if I had a Dow Jones company, and I laid off all the employees and sold all the inventory and buildings and land, and took all that cash and the bailout payment besides and stuck it in a Swiss bank account, my stock value would be…<\/p>\n
…well, probably 0, and I’d probably be in jail for something or another.<\/p>\n
But leave out the “selling the plants and land” bit, and don’t lay off\u00a0quite\u00a0<\/em>as many people, and my stock value would soar, because\u00a0I’d be in a freaking awesome cash position<\/em>. \u00a0No matter that I’m producing less, employing fewer, shedding payroll, and just waiting for things to get better. \u00a0My shareholders are happy.<\/p>\n
Isn’t that the sort of thinking – thinking for profits? – that liberals claim to criticize in business?<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Joe Doakes from Como Park emails: A buddy wonders why, if the economy is as bad as Republicans claim, the stock market is roaring?\u00a0 Doesn\u2019t that prove Republicans are lying? I\u2019m no expert but even I have noticed the S&P 500 and NASDAQ have hit highs while the Dow Industrials and Dow Transport have not.\u00a0 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[],"class_list":["post-42201","post","type-post","status-publish","format-standard","hentry","category-economy-and-the-market"],"_links":{"self":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/42201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42201"}],"version-history":[{"count":1,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/42201\/revisions"}],"predecessor-version":[{"id":42202,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/42201\/revisions\/42202"}],"wp:attachment":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42201"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}