American jobs

[hookup]

Don't take offense, but even if I could afford stock market investing I consider it representative of the worst of human nature, the desire for gain at the expense of others without contributing anything of value. Personally, I prefer useful "investments", like supplies for my bizness.

No offense taken. Been in the market since the late 70's/early 80's. My thoughts have always been that the market is a better investment than banks are giving and I'd rather invest in the commerce of America.

Don't take offense to this - but your comments about investors show me that you have no idea about what the market really is about.

Let's take an example. Back in the seventies I was working on an IBM 8086. No speed at all and no internal memory. When IBM came out with an 8087 chip, the calculation speed grew exponentially. Shortly afterwards, IBM added a 10 megabits hard drive - so instead of storing everything on floppies, you could not store internally on the computer. Let's say you saw an investment possibility in IBM and threw $1,000 at the company and let it sit until today. You wouldn't have to worry about social security because if you lived within a modest means, then that one stock would have given you financial security.

How can that be epresentative of the worst of human nature?

 

[Bucho]

Thanks Hookup, my new boat is getting ready and fishing isn`t half that bad, sorry to hear you have weather extremes!

HJ you have to distinguish between long term investment and speculation. Nothing wrong with holding shares of a profitable company other than your own! A well chosen company will yield 5-10% profit which ideally, in the long run, will for a large part equal shareholder value. Stocks will usually outperform bonds and the like.

Problem is that most people focus on the time of investment rather than the value. 70% of decisions -both of pros and newbees - are wrong in this regard, simply because it is human nature to buy after gains and sell after losses. That being said, at a certain age one should not start buying stocks because of their fluctuation. They might be worth least when you need your money most.

 

[Hawnjigs]

Hookup, no offense taken, you are correct that I have zero experiential knowledge of the stock market.

I'm guessing tho that unless one buys an IPO, invested funds are only a free ride contributing nothing to the original issuer, except their "paper" value. Profit depends on a continuing chain of investor purchases, kinda reminds me of a Ponzi scheme.

Further, I'm speculating that most Americans cannot afford to invest in the stock market. 25%, or 1 in 4 household's incomes are less than $30,000, likely requiring assistance to just survive. 50%, or half of all household's incomes are less than $60,000 - able to MAYBE keep up with expenses let alone afford disposable income for investment.

So, the stock market remains a playground for the affluent, particularly those with sufficient assets to CONTROL prices by manipulating prices down to buy, then back up to sell. And some genius figured short selling.

And when the market crashes like in 2008 who suffers the most?

 

[Bucho]

And when the market crashes like in 2008 who suffers the most?

It was not the stock marked that caused the subprime crisis. It was house "owners" taking too many mortgages from banks that believed house prices would rise indefinetely as long as they grant enough mortgages to fuel the request.

Then theses foul mortgages were bundled and sold- to Europe, too. The German taxpayer alone bleed an estimated 70 billion € in bank bailouts.That is two years worth of military expenses in our economy. It does not include other, expendable private and corporate write-offs. In other words: We payed for  stuff that you bought but could`nd afford.

At the moment, Germany is providing a high foreign trade surplus of goods to its neighbours. It is by a large part paid for with the savings of our aging baby-boomer`s private pensions, given to them as credit. The foundation for this boom is the believe that our neighbours will one day return the favor, pay back their dept and deliver a trade surplus on their part that will provide us a comfortable retirement. Personly, although considering myself a good european and democratic person, I rather leave the bonds and pensions to my former customers and prefer to buy stocks in order to profit on the booming economy itself! 

As long as I am investet in real assets that cannot simple be "cut" and written of and have enough time to live through a bear marked, I cannot be stripped of my savings like my grandpa was twice (1924 and 1948)

 

[Hawnjigs]

Indeed the fraudulent peddling of derivatives by Wall St colluding with fake credit ratings services + unsustainable investment insurance was the root cause of the stock market crash.  Those living paycheck to paycheck lost jobs, homes, and health in the collateral disaster that affected the economies of the entire world.

Luckily under President Obama's watch the USA maintained a steady path to recovery altho it was a huge disappointment that he FAILED to honor his promise of holding Wall St accountable and ZERO upper management was prosecuted.  Of course, legislatures, FBI, Justice Dept, and other oversight were also complicit in giving Wall St a pass, a situation which exists to this day.  As Hookup mentioned, "Wall St owns us".

I don't fault honest working people making honest well intentioned investments in the stock market,  but the system allows high rollers and management to endlessly exploit manipulation schemes and control lawmakers and laws to their benefit.  It is this system I decline to participate in.

The system is so rigged that the single shining light protecting Americans from financial fraud, the Consumer Financial Protection Bureau, is now run by Pay to Play Mick Mulvaney, and certain lawmakers and pundits are even proposing the CFPB be disbanded as unconstitutional.
Quote Mr. Mulvaney:  "If you are a lobbyist who never gave us money, I did not talk to you. If you are a lobbyist who gave us money, I might talk to you."

On the CFPB issue, I find it remarkable that utter nonsense can be paraded and accepted as truth.

 

[Hawnjigs]

Bucho, being affected by the financial crisis of '08 do Germans despise Wall St. and by association the USA ? If this is a sensitive issue PM me.

 

[Bucho]

No worries, most people here don´t think that far, they simply don`t get it. They blame the financial sector in general and show compassion for american families who have lost their homes and have ot work two jobs at minimal wage to make ends meet. Common perception is that Americans have less social security and are therefor hit much harder by such crisis. No hard feelings.

They show little understanding for private households`careless depts, though.

Edit:

To be honest, Germans have a different attitude towards dept. They wouldn`t buy a house unless they can expect to be dept-free before they retire. Americans may look upon interest rates like rent, but Germans feel the need to fully own the place at some point in their life. Hence, the idea of getting another mortgage for private consumption simply because risen house prizes allow for it is perceived as recklessly irresponsible. Frankly, many Germans believe American housholds brought that crisis on themselves.

 

[hookup]

It was house "owners" taking too many mortgages from banks that believed house prices would rise indefinetely as long as they grant enough mortgages to fuel the request.

Yep, I concur. Seen it in my neighborhood. Adjustable rate mortgages that started cheap and then went up to double digit rates. Allot walked away from their home. And the banks got left holding the paper which rippled through the economy.

And when the market crashes like in 2008 who suffers the most?

Allot of times the market crashed. Most memorable to me is after 2000. I pulled out, payed the gov't and sat, then slowly started buying "deals". When the market makes big drops it's usually emotional and will come up again. Case in point - Nike

HJ you have to distinguish between long term investment and speculation.

I've done both. Day traded at my job in the late 90's. Got some solid companies I trust for years. Win some loose some, but the strategy is to win more than you loose. Secret is do your homework before investing. And the moment you feel like you're going be rich, pull out and rest.

I'm speculating that most Americans cannot afford to invest in the stock market. 25%, or 1 in 4 household's incomes are less than $30,000,

I was making mid 20's with a stay at home Mom when I made my first "real" investment. The secret is don't invest with money you can not afford to loose. I've seen people taking mortgages out on their homes and investing them - mistake!

With all this though, the older I get the less risk I'm taking in the market

 

[Bucho]

It was house "owners" taking too many mortgages from banks that believed house prices would rise indefinetely as long as they grant enough mortgages to fuel the request.

Yep, I concur.  Seen it in my neighborhood.  Adjustable rate mortgages that started cheap and then went up to double digit rates.  Allot walked away from their home.  And the banks got left holding the paper which rippled through the economy.

Seriously? Adjustable rate mortgages?

The life insurance company my last employer bank cooperated with offered mortgages that granted a fixed rate over the entire duration of up to 30 years until complete pay off. The customer was free to terminate or re-negotiate after 10 years but for the company it was binding. They costed only a little more than the 10 year fixed contract and sold like hot cakes. Both bank clerks and customers loved it! Anything under 10 years would have been considered indecent unless there were individual reasons s.a. other cash flow to be expected etc.

Are you telling me American houseowners who got a second or third mortgage for a new boat or a bigger house - or stocks, for that matter - chose adjustable rates so they could afford a little more? I don`t want to rub it in in hindsight, I`m really having a hard time to imagine what they were thinking.

 

[hookup]

Seriously? Adjustable rate mortgages?

Yep - big reason for the collapse of 2008.  One day your mortgage payment is $800/month, couple years later, $2,000/month - Crazy to bet on interest rates (and the greed of banks) to remain stable

Those living paycheck to paycheck  ....

... have poor financial management skills.  I learned my lesson in my late teens/early 20's and my parents had to bail me out.  Never again.  

Best financial management advice I learned with the book "Richest Man in Babylon".  Simple, basic, and you don't have to make Dave Ramsey richer (don't get me started on Ramsey ... )

Luckily under President Obama's

I wouldn't go so far to say Obama solved the crisis.  He had help.  Obama did choose good people.  Read the book "Stess Test: Reflections on Financial Crises" by Timothy F. Geithner.  Obama appointed him Secretary of the Treasury from 2009 to 2013.  He was the President of the Federal Reserve Bank of New York from 2003 to 2009, following service in the Clinton administration, which made him qualified to be SecTres and he was a Republican who turned Democrat to take the Treasury job and pull us out of the 2008 problems the banks created for us (well, people run the banks if you catch my drift)

A stress test, in financial terminology, is an analysis or simulation designed to determine the ability of a given financial instrument or financial institution to deal with an economic crisis.  Banks and financial institutions that didn't pass the stress test dropped like flies.

edit.  Hawn - here's where I think you're confusing the stock market with financial institutions.   The top brass of all those financial institutions that failed walked away with millions - sometimes 10's of millions.  And here is where I agree with you that should have been some form of accountability (ie a jail cell with Bubba).

 

[Bucho]

Those living paycheck to paycheck  ....

... have poor financial management skills.  I learned my lesson in my late teens/early 20's and my parents had to bail me out.  Never again. 

It´s not that simple. On the one hand, yes, there is a minimum one needs for food and housing that does not allow for savings. On the other hand, everybody who worked in a bank will tell you that some people feel the need to keep 1-3 paychecks on their account, some keep it balanced and some will always max out any given limit regardless the consequences and that the size of their paycheck has little to nothing to do with that. There are folks who win 20.000 in the lottery and develop a livestyle that ends them up with 50.000 dept two years later. I`ve seen this many a time and it annoys me when some particularly smart person from the left points out how unfairly enequal wealth is "distributed" in society.  

For real stock marked investment, one needs to have enough funds to diversify at reasonable costs and enough time to do ones`s homework - qualities that are usualy not atributed to a single mum working for minimal wage. That being said, there are many financial products that allow access to the stock market through reasonable payments. 

In my experience, most people fail because they do not acknowledge human behaviour, not to say weakness. Example: Cost average effect realy works, but only if you let it. When we had do prematurely "butcher" a person`s stock based life insurance, the performance was almost always surprisingly good in spite of that products high commissons. That was because the customer didn`t care about the short term performance, it was "for later", and stuck with it come hell or high water. If the same customer bought a regular share-savings plan however, he checked the performance twice a day. At the first bump in the road, rather than continuing to buy shares at lower prices, he gets nervous and sees his banker who feels with him and recommends that new guarantee product....

I could go on for a looong time with stuff like that. Thruth is, many people do not have financial discipline, and even more people simply don`t have the stomach to handle either stocks and their banker. Low income is only one factor.

 

[hookup]

Bucho - we pretty much agree and this is the truth:

Thruth is, many people do not have financial discipline

When I screwed up I made a small income. After that I had to learn how to live without all the "wants" that I had.

Sure, I'd like to have more, but have disciplined myself to live within my means

 

[Bucho]

Politcians on both side of the atlantic are very good at triggering this kind of poverty-at- your-own -fault discussion which is usually not going anywhere. The thread is about wether or not there will be good jobs in America that provide quality of living. Speaking of stocks, I`m not sure if Europe will manage to stay on top of things with the changes to come, but I wouldn`t put my money on the U.S.A.

Remember both Swedish Ericson and Finnish Nokia could instantly switch from rubber boots to cell phones because they had an abundance of well educated work force to thrieve on. Corporate tax cuts, increases in military spending and protective tariffs for outdated industries will help few industries and sound good to the rust belt but will not be of much use in the long run.

Americ a has some leading industries like the big 4 Apple, Google, MS and Amazon which draw far more money out of Europe than that "unfair" trade deficit would suggest, but these profits are not being used in a way that would be of much help for the rest of your economy.

 

[hookup]

I'm sad to say although I'm not a fan of the mega-companies, I'm on a mac, luv my iPod, shop Amazon all the time, and support Googles health.

But I did buy some Nike stock when it dropped like a rock after they hired Kaspernike and the ad went viral. Up 35% now. Wish I got more

 

[Hawnjigs]

Here's a picture of US Representative (Ill-D) Jan Shakowsky being arrested outside McDonalds headquarters protesting for better wages and a union.

"Nearly 1,000 fast-food and other service workers along the community leaders and politicians blocked the entrance to McDonald's downtown headquarters Thursday afternoon. Dozens of workers and Schakowsky were taken into custody along with the Rev. Dr. William Barber II, co-chair of the Poor People's Campaign: A National Call for Moral Revival; Mary Kay Henry, president of the Service Employees International Union; Illinois state Assembly members Kelly Cassidy, Will Guzzardi; and Chicago Aldermen Susan Sadlowski Garza, Rick Munoz, Deb Mell, Carlos Rosa and John Arena.


"Uplifting the poor, demanding union rights and fighting for a living wage are key to the moral and political battle of the Poor People's Campaign," said the Rev. Dr. Barber II. "That's why we're taking to the streets today and ballot boxes in November. Non-violent civil disobedience in the name of what is just isn't a new tactic, rather, it is a tradition in how we've accomplished change in this nation.""

 

[Bucho]

I understand corporate tax cuts will pay for themselve as they stimulate investment. After all, companies know best how to spend their money if you leave more to them.  

What beats me though is the question why the very same people who argue this way usually take a very different approach to minimal wage and local demand.

I am relieved to learn my own government slowly turns to higher domestic spending rather than trusting on further growth through foreign trade surplus over neighbouring countries that may or may not pay back their depts and return the favor. Heck, we even hire substantially more cops and inland secret service, which of course has nothing to do with a seven figure uncontrolled migration from instable countries.

 

[Hawnjigs]

Bucho, are you being sarcastic? Its already noted here in the USA that coincidental to the corporate tax cut was massive stock buybacks. Does that qualify as "investment" and if so how does the average working citizen benefit?

I don't understand how "financial management skills" can help someone trying to survive on our Fed minimum wage of $7.25 / hour? After deductions $1,160 a month won't even cover decent shelter rent. The latest annual housing expense from the Dept. of Labor = urban $17,226 rural $12,115.

Like it or not our national economies depend on global cooperation. I just read that due to the tariff war China has suspended US source oil purchases and is sourcing soybeans from other countries, just to mention 2 affected commodities. And guess who's paying for farm subsidies and increased prices on imports?

 

[Bucho]

Bucho, are you being sarcastic?

In a way.

 

[Bucho]

I went to the post office yesterday and they made me pay 16€ for a small package to Switzerland (non-eu). EU would be 9€. The "max-letter" format that used to offer me a 3,75€ "steal" to Europe and 7,90€ for 3lbs of slabs to the U.S. is from now on reserved for actual letters containing nothing but documents but no merchandise. Such "letter" formats have widely been abused for freight subsidies. International postal treaties used to force leading national post agencies to forward them at practically no costs- until Trump threatened to exit them.

Although I hate the consequences for my own business, I have to admit it looks like the Trump administration got that one right.

 

[hookup]

Postal rates have sky rocketed in the US too

I'm on furlough now and going back a couple pages of this post made me realize how lucky I am to have a buffer of cash in reserve