Fear of 'Catastrophic' Crash Rising Despite Bull M

[lifewasgood]

VL, I agree this is not a cyclical event and we have not learned the lessons yet. Increasing fuel prices will throw a wet blanket on the stock fire. That is not to say it won't recover as the markets have shown they have friends in high places (Fed Res) that can pump into the system at will to keep it from total collapse. But at what cost to the long term financial health of our country?

[decoy409]

Well I will buy into a small tad of that. But this is FAR,FAR and BEYOND of any CONVENTIONAL thinking. You can bet your boots on that.
Nothing at all is going to change for anything better into the future, only the illusion of such and those that want to continue to be washed in thinking it will be, good luck with that.

[comokate]

An interesting article about the flow of wealth to the top 1%:

"Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.[1]"









www.cbpp.org/cms/index.cfm?fa=view&id=2908

Income Gains at Top Have Outpaced All Other Groups Since 1979

The gap in income between the wealthiest Americans and all others has grown strikingly in recent decades, the CBO data show. In 1979, when the data begin, the average after-tax incomes of the top 1 percent of households were 7.9 times higher than those of the middle fifth of households. By 2007, top incomes were 23.9 times higher than those of the middle fifth — a more than tripling of the income gap.

"The gap between the top 1 percent and the poorest fifth of Americans widened even more sharply. In 1979, the incomes of the top 1 percent were 22.7 times higher than those of the bottom fifth. By 2007, top incomes were 74.6 times higher than those at the bottom — more than tripling the rich-poor gap in 28 years."





www.cbpp.org/cms/index.cfm?fa=view&id=3220

[tyfighter3]

Feb 21, 2011 18:29:25 GMT -5 decoy409 said:

Well I will buy into a small tad of that. But this is FAR,FAR and BEYOND of any CONVENTIONAL thinking. You can bet your boots on that.
Nothing at all is going to change for anything better into the future, only the illusion of such and those that want to continue to be washed in thinking it will be, good luck with that.

So decoy, this is your Conventional Thinking?

[tyfighter3]

Comakate, why don't you show the chart through 2010?

[dumdeedoe]

Yep her chart just shows big gains through the tech bubble(95-99) and burst then through the housing bubble (2003-2007) (but not the burst)..

Since the upper 1% get 99% of their income from investments. when we had huge bubbles they were making a killing, not so much when those bubbles collapsed.....
Steve jobs,Warren Buffet,T-Boone Pickens and others lost as much as 20-25% of their net worth in one year when oil/housing burst.

[comokate]

Feb 21, 2011 23:57:09 GMT -5 tyfighter3 said:

Comakate, why don't you show the chart through 2010?

Why don't you actually read the article linked to and find out?

Yep her chart just shows big gains through the tech bubble(95-99) and burst then through the housing bubble (2003-2007) (but not the burst)..

Because 2007 is the last year the IRS tracked the available data. If you ,*COUGH*, actually read the article linked to , the explanation for the data is given.


"The gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007 (the period for which these data are available), according to data the Congressional Budget Office (CBO) issued last week. Taken together with prior research, the new data suggest greater income concentration at the top of the income scale than at any time since 1928.
-July 2010
www.cbpp.org/cms/index.cfm?fa=view&id=3220

[tyfighter3]

I read this part of it.

(The CBO data do not show the effect of the recession that began in December 2007. The recession is likely to lower incomes for all income groups, but if the previous recession is any guide,

incomes may fall most sharply for the wealthiest households, due in large part to the severe drop in the stock market.

In the recession of 2001, the bursting of the dot-com bubble reduced inequality sharply. Real after-tax incomes fell by 30 percent among the top 1 percent of households between 2000 and 2002, while remaining close to flat for the middle and bottom fifths of the population, according to CBO. As a result, while in 2000 the top 1 percent had incomes 20.6 times higher than households in the middle, by 2002 their incomes were “just” 14.3 times higher. Subsequently, however, as the economy recovered, this narrowing of the income gap evaporated. By 2007, the income of the top 1 percent was 24 times higher than those of households in the middle fifth (see Figure 2).

Not all recessions reduce inequality even temporarily, however. Inequality continued rising throughout the back-to-back recessions of the early 1980s, the CBO data show. The short- and long-term effects of the most recent recession will depend on the course of the stock market, trends in the labor market (including decisions about executive compensation packages, bonuses, and wages) and in the economy more broadly, and public policy choices.)

[Aman A.K.A. Ahamburger]

It's interesting, if you combine what dee and Ty are saying it roots into the tread title and Kate's graphs. The crash of the 80's with the combination of fear keeping people from gaining in the market, while the richest people didn't. Led to uneven income gains from the 80's until now.

What we have now is a way for the lower earners to gain.. Housing will gain 400% in some areas over the next 30 years. Young people that buy a house at these depressed levels. Live within their means. Use something like the Barbell system and of course enjoy the wages increase that are coming from inflation. We will be able to revers the trend, and we will see something like the time period from 30'-70'. The interesting thing about that. Some people think it's the 1930's all over again...

[vl]

It's not the 1930s all over again because we're better than half-way through that segment of economic transition. Following Hitler's rise, Europe was systematically absorbed into the Nazi movement by conquer or surrender.
Today's "Nazi" movement is the GOP's refusal to enter the 21st Century and the allowance of alternatives to replace long-overdue reliances on unsustainable fuels, means AND housing. A step backward will tell you that homes will NOT appreciate as they had in the past. Likely the housing sector as it had flourished in the 20th Century (sprawl) is done-for. Once gasoline hits $5/gallon, more people will quit jobs (because job-related costs are all rising now) and people will seek housing with sustainability factors like- location to a potential mass-transit route or a tract with southern exposure or energy-providing factors.
In 20 years, major cities may be more like villages of old with build-up only along the main road with farms and grazing lands beyond and fringe settlements on the outskirts. Beyond that will be wild country (dysfunctional former tract housing). The last estimates put retro-fitting the City of Detroit's sewer and water lines at $6 BILLION and they control the Water Department! In places like Milwaukee, the sewer and water lines were updated but the city has little going for it. Picture the future of ANY city in Texas and you quickly realize that homeownership there is a guaranteed loss.
The future requires the first generation boomer to stop trying to top their parents' retirement and put their money where their kids need it. It also requires a complete reconstruction of the uses of land in the United States. There absolutely will be 50,000 wind turbines across the land, but will there be wind as fossil fuel exhaust continues to heat up the atmosphere? Will we wake up and re-use gray water or just succumb to 100% of drinking water be laced with what people are flushing down their toilets?

Congress has yet another sex scandal to take it off-line from primary issues. John Boehner- the most accusatory man in Washington is at the center. We have made ZERO progress in getting our collective act together as acts are being FORCED together worldwide. YOU keep voting for these turds. We have a credit crisis and no lenders in Congress. Healthcare arguments but no doctors or industry veterans. We have housing and transportation issues but no one from the industries with issues-- in CONGRESS. We have a LOT of lawyers. We STINK with lawyers. We are NOT going to progress with LAWYERS holding us in digress.

[vl]

What Kate's graphs REALLY tell us is-- old money that used to actually MOVE the markets for us to progress, have taken big hits while creepy Wall Street banksters are gaining. The more Wall Street gains, the less cash flows through the rest of the market. There are now "apps" to do just about anything financial. Translated, that means future generations won't be able to do ANYTHING financial, except pay to have it done for them.
The relative relationship to Rome is-- it fell when the haves controlled 99% and forgot how to maintain what the ancestor had leveraged to make himself a "have". We either continue along that path as USAONE seems fine with-- and become the new old Europe, or, wake up and get to work on self-sustenance founding the economy. The latter ensures the USA will be number ONE for centuries ahead. The prior throws us into the fire.

[usaone]

V_L We had the Industrial Revolution...now we are in the Technology Revolution.

How did we ever make it when everyone forgot how to grow their own food. They paid to have it grown for them.

Efficiency and technology.

We could just all become farmers again. Mule with a little plow.

[vl]

Why not? I'd rather ensure that I have food on a regular basis than to wake one day and-- not. Get your nose up from that little screen and check out what's on and no longer on your grocery shelf. The news said that 30% of our product choices have already disappeared. Numerous articles discuss the growing lack of supply. We had international crop failures over the past quarter in tomatoes, oranges, eggs (tainting), and more. Do you have ANY idea how many products are based on tomatoes? Are you aware that traditional tomato growing states in the USA no longer are because of the imbalanced trade in the global economy?

I'd rather use my computer as a component of my work than to exist reliant on it. There is no such thing as a Technology revolution. Almost 100% of the equipment requires rare Earth minerals that are in finite supply. We're about 70% through known supplies (I have holdings in those) and a significant amount is being hedged much the same way oil is. Sorry, but I'm also not in battery-powered vehicles for the same reason. Now... if we were shifting to renewable alternatives like we should be, without the gimmickry hoodwinking your generation into thinking itself capable when it can't feed itself... we'd be "cooking".

[vl]

Industrial Revolution-- the fax machine was invented in the mid-1800s. The hydrolysis motor was invented before Henry Ford created the assembly line. We had mass transit, but Durant burned the rail cars in order to sell cars. A century of creating things that made life comfortable obscured-- necessities. The coming "revolution" is rediscovering them, not pressing buttons on little boxes and evaporating language for apps.

[Aman A.K.A. Ahamburger]

V_L, I never said that It was the 1930's.. Just that when you look at what everyone is saying it all adds up in an interesting way. I would go on, however, with a man that has a world view so jaded as to say.

In 20 years, major cities may be more like villages of old with build-up only along the main road with farms and grazing lands beyond and fringe settlements on the outskirts. Beyond that will be wild country (dysfunctional former tract housing). The last estimates put retro-fitting the City of Detroit's sewer and water lines at $6 BILLION and they control the Water Department! In places like Milwaukee, the sewer and water lines were updated but the city has little going for it. Picture the future of ANY city in Texas and you quickly realize that homeownership there is a guaranteed loss.

What is the point? They didn't beileve that things could com back from the derpression, and you don't want to hear that things can come back now.. You are happy thinking that you know that the USA Empire is falling. Even thought the worlds second biggest economy is on the brink of civil war. You have been wrong about twitter and what it has the power to do. You have been wrong about the markets falling apart over the last two years. I want to know what your doing to solve this situation? Do you think you have the ability to produce enough food to provide for the entire winter? Do you have any idea the amount of people that died of starvation before our modern infrastructure was put in place?

This is what us loser young kids with our fingers on the button have in store next...

Can Social Media Be Used to Foment Corporate Revolutions?:
www.dailyfinance.com/rtn/press/can-social-media-be-used-to-foment-corporate-revolutions/rfid417188921/?channel=pf

[cheapgenes]

The market has gone up. The real test is to cash out at the proper time. Anyone who is all in - its like counting your chickens before they hatch. These market numbers can drop 1000 points in seconds, without a reasonable answer. How can you know that you will cash out in time to see your profit? Look at all of the promises. Look at all the lies. Countries are in revolution because their people are hungry! Who will be hungry next? Peace will prevail until people are hungry.
The math doesn't lie. The interest on the national debt is going hyperbolic. Don't forget to invest in a bag of beans and rice.

[Aman A.K.A. Ahamburger]

How can you know that you will cash out in time to see your profit?

Don't get greedy. No one said you have to be greedy. Dividends from companies like these are also a nice way to ensure profits. Buying more of them in the bad times helps increase those profits. Notice how these companies go back to before the 1900's.

America's 10 Most Durable Brands -- and Their Logos:
www.dailyfinance.com/rtn/press/america-s-10-most-durable-brands-and-their-logos/rfid417106464/?channel=pf

[kman]

Aman the Sledgeham

[Aman A.K.A. Ahamburger]

Bringin' the full force of the Rat pack attack!

[vl]

Not, A. You continue to ignore the obvious.

Adversely... I regularly enjoy your posts, Patstab! Common Sense will prevail even when it is "vogue" to not have it. I don't have your acreage but I've improvised with cubic output.

I can't tell you what- specifically- I do, but it falls into the realm of- reconstitution. That is, I take discard, useful waste and over-supply and reconstitute it for-profit. NOT like a thrift store. Like... a hell of a lot more than what these fake markets are supporting. Traditional business models revel in what is in inventory, turn speeds and what platforms can import, side-stepping labor and storage. In all of these, the consumers Ability to Buy is never considered, just as it was not considered when banks made ridiculous credit decisions that fell through the floor and then begged for more (capital).

Have no doubt that the "correction" sends us back through the bottleneck- burrs out this time. That will HURT unless you are Pat and the effects won't vary much. Self-sustenance is the key, not button pressing. There is no "app" for curbing the inevitable, just for blinding your vision of it.

[lifewasgood]

VL,

I spoiled my Children and now my grand children are even worse. They do not understand the value of getting hands dirty working the garden and orchard. If it isn't on facebook or coming from a wii or xbox it just isn't important to them. The bright side is my oldest daughter is starting to come around and see the light. She is in her mid-thirties, so there is hope.

[Aman A.K.A. Ahamburger]

Not, A. You continue to ignore the obvious.

Not really, you are obviously a walking contradiction. You are on the Internet, and run a store based on service economy. Enough said.

Life, glad to hear that your entitled family is learning what work is. I remember tending to my grandfathers 5 acre garden when I was younger. That was before I was helping him farm. My young kids, 6 and 3 already do yard work. They have things, but they are forced to work.. So many things are becoming clear.

[tyfighter3]

Pat, some K for you.

[Aman A.K.A. Ahamburger]

pat, sounds like he is already at his roots. That's what makes this world great, IMO. You don't have to farm to feed yourself, yet if you can find a way, you can choose that life if you want. There is nothing wrong with the work that your son does, at all!! I'm proud to say that people like your son come from our part of the world, and that is what makes us great. I also agree that you can save money for a retirement not just invest. My wife and I save 10% of everything we make.

[Aman A.K.A. Ahamburger]

I find that rather ironic when people say Americans can't compete.

Excellent point. I think it says a lot about how much people want to repair, over destroy. K4U

[vl]

Walking contradiction? Most incorporated cities reel from 35% or higher commercial vacancies. Most have a Wal-Mart somewhere in proximity (the primary cause of storefront failures). The fact that I operate online merely indicates where I have to go to compete. The fact that I'm on the internet merely indicates where I have to go to communicate. It doesn't have to be this way, we've been forced out of other venues and robbed of choices.

That's why Pat does what she does. Complete opposition to the steerage- by choice. Steadily, the cost of your world will overtake what it allots to you to live in it. Will you be able to pick-up and shift?

A 40+ cents per gallon hike in gas prices in 24 hours will play massive havoc on what's left of a wallowing American economy. Any more hikes will shut it down. Yesterday, my local Kroger was jam-packed. People buying core supplies. They will drive less. Buy less. Cut amenities, services and non-necessities because they have endured this long and intend to survive.

Be happy that I'm a walking contradiction. Sure beats living in a fog and not recognizing what's happening around you. I believe you are in the markets. What do you think will happen when a billionaire pulls out? Just sit on your convictions this week and next and we'll see. Me? I prefer to-- survive it, not trip on my convictions.

[Aman A.K.A. Ahamburger]

The fact that I'm on the internet merely indicates where I have to go to communicate.

You choose to come here and communicate. How much business have you generated from being here?

Sure beats living in a fog and not recognizing what's happening around you.

You mean like this??

Can social networking overthrow a government?
www.watoday.com.au/technology/technology-news/can-social-networking-overthrow-a-government-20110225-1b7u6.html?from=watoday_sb

I know you have been saying this for a while. This is what I'm missing, isn't it?

Iran's president: Mideast upheaval will reach US:
news.yahoo.com/s/ap/ml_iran

Iran's president said Wednesday he is certain the wave of unrest in the Middle East will spread to Europe and North America, bringing an end to governments he accused of oppressing and humiliating people.

[vl]

When the wave comes, it covers all. It does not discriminate for any reason. All things brace for it, but the integrity of anchors is only tested, rested or bested when the wave actually hits.

I'll take hilling potatoes over ordering french fries on an "app" every day including Sunday. BTW... when my customers aren't on the internet any longer, I'll transition to brick and mortar. The trick is knowing how to do that... being the button pushed rather than the button pusher.

[Aman A.K.A. Ahamburger]

Good for you V_L. Continue with your circular logic.

[neohguy]

Great thread. There will most certainly be another crash, probably more severe than the last one, and probably in the next few years, imo. Trying to time it is futile, also imo.
theautomaticearth.blogspot.com/
Ashvin Pandurangi: You know that information has officially entered the mainstream financial world when the Wall Street Journal writes about it. George Melloan recently wrote an article entitled The Federal Reserve is Causing Turmoil Abroad", in which he stated that the tsunami of debt-dollars unleashed via quantitative easing over the last year has caused food and energy prices to skyrocket in countries around the world. This price inflation has, in turn, chewed through the disposable incomes of those with the least income to spare, which is now a majority of the population in many countries, and has led to social and political unrest/revolution....
....This dynamic represents the tail end of one that has existed for several decades, where financial consumers in both developed and developing economies had artificially increased demand for dollar-denominated commodities such as crude oil, wheat and corn. While most of these consumers no longer have access to any credit and are struggling to pay off debts, the major banks have virtually unlimited access to free credit from central banks. This credit is used to speculate on stocks, bonds and commodities for short-term profits, just as it had been previously used to speculate on real estate. In this sense, the Fed is not "exporting inflation" as the WSJ article argues, it is exporting speculative debt.....
...While it is impossible to predict exactly when such an event will occur, it is almost a near certainty that it will. Dr. Steve Keen, a notable Australian economist, has even gone so far as to dynamically model this financial process. His model demonstrates how speculative financial investment in a pure credit economy will inevitably lead to a severe recession/depression once the speculative debt levels overwhelm the productive capacity of the economy. Despite what they would like us to believe, central banks such as the Fed are not immune to this dynamic and there will soon come a time when quantitative easing is politically impossible and/or financially impotent.