Dow hits new record high

[-p.tiddy-]

http://money.cnn.com/2013/03/05/inve...html?hpt=hp_t1



good stuff


now I am sure many of you will come in here to let me know the country is still fcked and we are doomed, go right ahead...

[rufuspaul]

http://money.cnn.com/2013/03/05/inve...html?hpt=hp_t1



good stuff


now I am sure many of you will come in here to let me know the country is still fcked and we are doomed, go right ahead...

Back to 2007 levels! We only lost 6 years.

[netsfan549]

WHy is Dow going up so high? jw dont know much about this

[DCL]

now watch them trash the market.

redo another round of QE.

market rallies hard.

repeat.

[KevinNYC]

WHy is Dow going up so high? jw dont know much about this

Corporate profits are up. Way up compared to Salaries. Employers can fill jobs without raising salaries. Productivity is up even without raising salaries.

http://www.nytimes.com/2013/03/04/bu...business&_r=1&

With the Dow Jones industrial average flirting with a record high, the split between American workers and the companies that employ them is widening and could worsen in the next few months as federal budget cuts take hold.

That gulf helps explain why stock markets are thriving even as the economy is barely growing and unemployment remains stubbornly high.

With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.

“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”

The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.

These factors, along with the Federal Reserve’s efforts to keep interest rates ultralow and encourage investors to put more money into riskier assets, prompted traders to send the Dow past 14,000 to within 75 points of a record high last week

[JohnnySic]

Good to see.

[-p.tiddy-]

it's still good news though Kevin

these are publicly traded companies that are gaining value...meaning the ones profiting off this are the American public, not just the big wigs

most of the US workforce does have some form of retirement fund that is composed of stocks...

[KevinNYC]

If you look at the the graph corporate profits as a share of national income are at levels from the 1950's and 60's when we had nearly two decades of economic expansion and where you support a family on a single income.

This is what people are talking about when they talk about wealth in equality. Income is not going to salaries it's going to be people who own companies/lots of stock. I'm not talking about your 401K or a small business, I'm talking the highest levels of income. The income growth of the top .1% of earners is way higher than even the other rich folks who make up the top 1%.

http://bangordailynews.com/2012/03/2...nt-study-says/

In 2010, according to a study published this month by University of California economist Emmanuel Saez, 93 percent of income growth went to the wealthiest 1 percent of American households, while everyone else divvied up the 7 percent that was left over. Put another way: The most fundamental characteristic of the U.S. economy today is the divide between the 1 percent and the 99 percent.

This income inequality is exacerbated by preferential tax rates for investment income over wage income. This is how Mitt Romney who has an income who many, many times my income actually paid a lower tax rate than I did. Because he has almost no wage income. (He also used loopholes to convert what should be wage income into investment income, so he could get the lower tax rate.) For guys like Romney, this isn't money they have a risk, they a guaranteed income that is taxed lower than wages.

So the rich are getting richer and ever since the Bush Tax cuts get to keep more of their wealth as well.

[Droid101]

it's still good news though Kevin

these are publicly traded companies that are gaining value...meaning the ones profiting off this are the American public, not just the big wigs

Err, Big Wigs are the ones with million dollar stock accounts. Not regular Americans.

Most of these profits is going to rich people. Same old same old.

[KevinNYC]

Jobs being done offshore, automation and leveraging of massive computer power is also increasing productivity per worker which is increasing profits.

[KevinNYC]

it's still good news though Kevin

these are publicly traded companies that are gaining value...meaning the ones profiting off this are the American public, not just the big wigs

most of the US workforce does have some form of retirement fund that is composed of stocks...

Yes, it's good news, and I'm glad it's happening.

But implicit in netsfans' question was why is this happening if we are in a weak recovery (the economy even contracted last quarter). My answer was to point out that there's a reason why this is going on when the full economy is slumping along. If it feels like it's disconnected from the full economy, it's because it is. This disconnect is something we are going to have to deal with as a country.

American public doesn't really = stock owners

[-p.tiddy-]

Err, Big Wigs are the ones with million dollar stock accounts. Not regular Americans.

Most of these profits is going to rich people. Same old same old.

most of it is, yes...however the American public is STILL profiting as well

it's still good news

[-p.tiddy-]

American public doesn't really = stock owners

I think the American workforce...aka those with salaries...are mostly stock holders

I am part of that...when the Dow goes up, so does my 401k

I know I am not the only one in this country with a 401k

just because the "big wigs" own most of the stock doesn't mean the rest of us aren't making out too...

[KevinNYC]

I think the American workforce...aka those with salaries...are mostly stock holders

Yes, I know that lots of Americans have 401Ks, but I still think you are confusing the subset with the whole

Again the American workforce does not equal those with salaries.

Those with salaries does not equal stock holders.

Also investors in the American Stock Market does not equal American investors. Something like 20% of the stock market is owned by non-Americans

[GOBB]

"The middle class was always synonymous with economic security and stability," Draut said. "Now it's synonymous with economic anxiety."

......