'Least Surprising News Story of the Year'

Wally October 15, 2011 at 04:33 am

MBA is apparently DOA on his exonomics. I take my $500,000 a year bonus, which I get because I wake up each day, hump it into NYC at 530am work until 7pm only to have to sit on a train until I get home at 9, maybe soon enough to tuck my kids in at night. I do this so they can live in a nice neighborhood with parks and good schools, save for their college and hopefully have enough money to someday retire before I drop dead of a heart attack. I spend my bonus on my mortgage (employing the agent who sold my house and the mortgage broker, not to mention the bankers and insurers underwriting my good risk loan. Food for my family, employing the thousands of people who produce, distribute and market those goods. Clothes....ditto. And dummy, the money I invest (or put in the bank as you so eloquently put it) doesn't go in the bank, I invest it into stocks, bonds and other various investment strategies, each employing, traders, analysts, administrators, salesman, ect. The money that does get put into a normal bank doesn't sit ther collecting dust, it gets loaned out to businesses for expansions, new ventures and meeting payrolls. Take that money away and the growth caused by these one time stimuli is unsustainable. But I'm the a hole ruining this country because I: got good grades in a high school, worked my way through college, got a job that paid for my masters and bust my but each and every day working hard to provide for my family. You want me to die young for free?

CTPati October 15, 2011 at 04:34 am

MBA (which obviously does not mean you have one) scrap the failed KEYNESIAN notions and wake up to the "reality" that poor Americans today not only have washing machines, but cell phones and cable service!
Even a high school economics class (unless taught by a Socialist) would teach that there is no "zero sum game" as far as potential wealth. Also, the FED and Bernanke have proved your "there is only one pie of money" notion ridiculous. Or did you not know that they have been printing $$$ out the wazoo, monetizing the DEBT, and DEFLATING the value of our $$$, savings, INVESTMENTS and PURCHASING POWER!! Ever hear of QE2, QE3, etc?? You need to become better informed, mba. By the way, "rich" people don't keep $400,000 in a checking account, but use it as *investment capital* which creates new companies and JOBS!!

MBA October 15, 2011 at 03:08 pm

What they didn't tel you in econ 101: Say you work at a hedge fund making a $500,000 bonus every year. You use the windfall to buy IBM stock. News flash, IBM gets exactly $0 from your trade. That ship sailed a long time ago. No factory is built. No factory jobs are created. Instead, a dentist in Hackensack gets the money and gives you his shares of IBM. There, now you own some pieces of paper. Woo woo! The dentist meanwhile uses the proceeds of the sale to buy Ford stock. Again, Ford gets nothing from the transaction. The Ford IPO ended 100 years ago. Instead. tightening the circle, your hedge fund sells its Ford shares to the dentist. Your hedge fund then gives the $500,000 to you as a bonus.
Now where in there was a factory funded and built? Where was a job created? This is Wall Street. 99% of the money is handed back and forth between the players. Nothing tangible comes of it. It's like a world where everyone is a doorman and we all live in doormen buildings. All employing each other to open the door for each other. All feeling uppity that we have a doorman. No hard products created. Nothing real. What would be the point of anything? It's an ersatz economy. This is the underlying message of the "Occupy" protesters. It's a giant Ponzi scheme of shuffling papers and it doesn't give the young people a chance to get a job, unless they want to become yet another doorman living in yet another doorman building.

CTPati October 15, 2011 at 05:08 pm

mba, you have been "educated" [??] by SOCIALISTS! "Ponzi scheme" perfectly describes what BIG government STATISTS have created!! Were your professors Krugman and Frances Fox Piven?
Your foolish, simplistic and *erroneous* analogy about "doormen" applies much more to the BIG GOVERNMENT, anti-FREE market, over-REGULATED system in which *government controls everything* (PBO is half-way there!) and confiscates and SQUANDERS 25 - 50% of what it *steals* from the PEOPLE and the FREE market! PBO has been a total JOB KILLER, except for the high paying *bureaucrat* jobs he has created in D.C. and the TEMPORARY "stimulus" jobs he has created or "saved" for his UNION and *corporate crony* and "venture SOCIALISM" friends who fund his campaigns!!

MBA October 15, 2011 at 10:40 pm

CTPatti,
Is you caps lock key broken? You should hire someone to fix it. Share the wealth. That's a lot of name dropping and cliched buzz words in your message. In general I find that when people resort to cliches and name calling, especially name calling, it's because they have nothing of substance to add. Camouflage. You and Wally both suggested that investing in stocks helps build factories and create real jobs. I showed it doesn't. You are trading slips of paper back and forth with each other. The companies have nothing to do with it anymore after the IPO. Can you address that point without resorting to cliches?

CTPati October 15, 2011 at 11:30 pm

What "wealth"? Our retirement savings and other investments, plus the purchasing power of our $$$ have been severely eroded because of Washington's wrongheaded interference in the free market, and stupid policies like the CRA, trying to enforce the *un-Constitutional* notion of "social justice."
Add humongous DEBT loaded onto the backs of citizens yet unborn, by corrupt and incompetent legislators and PBO--all these things have driven our economy into the sewer and unemployment through the roof! Obama deserves the title "JOB KILLER," as 20 % of able-bodied men of working age in the USA don't have jobs now--the highest rate of unemployment since the Great Depression! Krugman is a "socialist," and Frances Fox Piven is more than that, an anarchist and acolyte of Saul Alinsky! She and Lerner, SEIU, George Soros, Van Jones et al are *using* the "FLEA party" (aka OWS) to fulfill their dream of "collapsing the system"! Are you on board with that, mba? I did not formally study "econ" in school, but am a believer in the logical and proven successful Austrian Economics and Milton Friedman schools. What is your educational and career background, if you don't mind? And NO, I didn't refer to "investing in stocks" earlier, but rather to "investment capital," which IS necessary for the startup of new companies and businesses, or expansion, thus creating JOBS!

J Bauer October 15, 2011 at 11:40 pm

You know MBA, funny thing is that you make some good points earlier on. There is a growing wealth divide in this country that needs to be addressed. I do not disagree there. However, raising taxes on a very small portion of people in this country will not do it. We need to enact policies that bring back manufacturing to this country. We need policies that increase research and development - the type that allowed the US to start the information technology revolution 30+ years ago. Your economic arguments above are very incomplete, if not entirely misguided... not every dollar invested or spent is equal from an economic impact. Some have a multiplier effect in the economy (most investments for example) and some are lost dollars (a substantial portion of collected tax dollars). So much of whatever tax revenue collected goes into a black hole. Realistically, much of the tax dollars that actually get spent productively probably could have had a more impactful use if left in private hands. Is it any coincidence that GDP zooms higher whenever we have materially cut federal income taxes? If higher taxes are a good thing, or EVEN if they just had a neutral impact economically, wouldn't GDP not be impacted?? I only state facts here. if you want proof, just look at Reagan's cuts '81, Clintons cuts '96/'97, and Bush's cuts in 2001. And, just for good measure, if you want to see the damage that tax hikes cause, pay attention to HW Bush's increases and the following recession

J Bauer October 15, 2011 at 11:47 pm

Not that I want to get too involved here, but lets say guys like Wally buy IBM stock ("trading paper") as you like to say. Well, a few things happen here. 1. IBM stock goes up, creating a wealth effect that multiplies throughout the economy. Everyone that already owned IBM stock just got a little wealthier. 2. The stock often goes into a custoday account and is used as collateral for borrowing or in a repo transaction. Those dollars are usually lent to someone or some organization to go out and make some other type of investment furthering the wealth efffect and carrying on the multiplier effect 3. when ABC computer/internet company goes to the market for their IPO, the investment community uses IBM as a comparable and because of IBM's increased stock price, ABC company gets more capital at better prices, allowing it to build its factory or whatever it is that they need to do to grow. There are a bunch of additional multiplier effects that I did not address, but figured the big three should answer your question sufficiently.

sebastian dangerfield October 16, 2011 at 07:10 am

MBA
You forgot --last week you were telling everyone you were one of the 1% and you proclaimed that you wanted your taxes raised. But, then, you started talking about rich people as 'them." Right there were you caught. Then you went on to tell us 2 completely b.s. stories about how rich people are really jerks. One involved dwarf tossing. But the famous dwarf story, was not at a birthday party , it was at a bachelor party, and you werent there. ( i offered you a lot of money on a bet that you couldnt name your pal or the company that your pal hired.) Now you are here, proclaiming why stock investments do nothing for the country. Really? Thats strange --for a stock guy (thats what you said you are) why dont you know that publicly traded companies issue stock as a way to sell shares in their company? That, in turn --investors who believe that the company is a good investment share in the company's fortune-and the original owners , now diltued in their ownership-- have money in their treasury to continue to expand or to cash in? You think companies just give away stock? If you start a company of actors (pretenders) and then someone , for some strange reason wants to invest in your great idea--then you get investor money-and you can hire more pretenders--and grow your company (and employ people) or you can buy stuff (employ people) etc. You really should understand what markets actually are there for. In the mean time--just keep pretending.

sebastian dangerfield October 16, 2011 at 07:24 am

Your fallacy, MBA, is that people who earn a lot of money dont actually earn it.
IF they dont, then why dont more people go out and get those easy jobs? Its a free market. The only non-free market exists in government. If you are talented enough--then you get a job paying a lot. MBA if you give me 1 mio dollars to invest. And i turn that into 1.5 mio dollars--how much money should you pay me? remember if you dont pay me-you are greedy-and if you do--then i make money.

MBA October 16, 2011 at 03:26 pm

Luca,
I don't respond to the things you say because I view you as a prolific serial poster looking to stir the pot on most every issue by distorting the facts. For example, I witnessed dwarf tossing at a 40th birthday party. You tell me I'm lying, that it was at a bachelor party? What? Where do you get these things? Your rewrites make no sense to me. Why not speak in a reasonable tone and try to have valid discussions with people? If your goal is to have people notice and interact with you, I think you'll get more response if you change your approach.

sebastian dangerfield October 16, 2011 at 05:30 pm

I asked you to verify your dwarf tossing story. I provided money as an incentive.
(if you notice-you just replied to me--so you are capable of responding. --Just not in setting the record straight.) What makes your tone more reasonable? I understand that you are not telling the truth. You tell everyone you are a rich guy, then keep talking about how 'the rich' are categorically not nice people. You make up stories that sound bad-but have no truth. You dont like rich people--because you are not rich. You talk to us about the pretentiousness of the rich, then call yourself "mba". Look--if you want to make cogent points about too big of a divide with respect the haves and have-nots--that is valid. If you want to talk about the long term negative consequences of such a gap--be my guest. If you think that villifying those that are well paid --and making up stories about how callous and insensitive they are--I will object. Just like all 'poor people' are not drug riddled mothers who expose their babies to drugs in the womb-and whose father's necessarily leave (jerks)---rich people are , from my experience -courteous, generous-aware of their good fortune, and want to give back. I know a few very wealthy people in this town, as well as in this country---and its pretty rare when they are not involved in charities and looking to give back . If your aim is to say that making money-makes you bad- it isnt going to fly.

sebastian dangerfield October 16, 2011 at 05:35 pm

MBA_
feel free to give your thoughts. But do you think you can do it without lying? If you cant--then you should think that maybe your point isnt really that valid? Most times-solid points --are solid points. they dont require lies to make them good points.

MBA October 16, 2011 at 06:43 pm

JBauer,
Going with your example that all shareholders get wealthier when someone buys IBM .... think of what it means. IBM can be trading at 190 all week. A dentist wants to buy 100 shares of IBM at the close on Friday. He is in a rush to meet his hygienist in a motel for illicit sex (she’s very hot), so he leaves a market order. He gets filled at 191. The market closes and IBM gets marked to market at 191, up +1 for the week. Look what just happened. A dentist bought $19,100 worth of shares. He overpaid by $100. And the market cap of IBM went up over $1 billion. Did IBM suddenly sell more computers? Did future profit expectations rise? No. Over $1 billion in “wealth” was suddenly created out of thin air. And it was based on nothingness. This isn’t good because it is not real. It is unsustainable. $1 billion in new wealth was created because a guy was cheating on his wife. (I mean the hygienist is hot, but she’s not $1 billion hot.) Then you say the IPO price for ABC is based on this fake IBM price? Meaning a bunch of new shareholders just overpaid. Scary. So much of Wall Street is flawed in this way. A stock price is calculated down to the penny. It is the summation of 1,000 different factors, but so many of those components are random numbers generated by people who know nothing. continued...

MBA October 16, 2011 at 06:48 pm

CTPati lost money in the markets. She shouldn't be surprised. And she shouldn't blame Obama. She chose to play with a house of cards.
This is America today. Countries like China and Japan make tangible products... cars, clothing and so on. We don’t anymore. Our biggest product is stock certificates, pieces of paper that we sell for extraordinary sums of money. Paper that only has value if everyone drinks the Kool-Aid. Me, I’m old school. I like the idea that when you plant a turnip seed, you get a turnip. Then it can be sold at a profit. But now we let other countries sow the turnips. We don’t want to get our hands dirty or something. Instead, we are pimping paper while pretending it represents great wealth. Let Obama tax the rich. Let Obama take some of that $500,000 before it buys more stock certificates. Let Obama take $100,000 of that money. He would be doing the rich people a favor. Because instead of CT Pati losing her $500,000 -- instead of the 40 year old dwarf tossers shoving $100,000 of coke up their noses -- some of that money would be used to buy a few washing machines. Tangible products, tangible profits, tangible wealth. It would create a real economy. Do this before Wall Street topples this nation. Although sadly, it might already be too late.

sebastian dangerfield October 16, 2011 at 07:26 pm

mba
Once again--You demonstrate that you know nothing about the market. If IBM is worth 190--then it's worth 190. If someone paid 191, then some news must have occured to make it go up by 1 dollar. If it wasnt worth 190 or 191--then there would be plenty of sellers . You show your ignorance, by comparing the stock market to a flea market. A market that has thousands of participants and where the market cap is in the billions -does not rise by 1 dollar on a 100 share order. Sorry---but you should stop. Making exeragerated examples like this , only proves how little you know. If you want to talk about a penny stock -where market cap is in under 10 mio--100 shares wouldnt make a difference. IBM? Companies grow by either taking on debt, or issuing equity. They go to the capital markets to issue that equity-. The fact that there is a highly efficient functioning market -allows investors to invest-because they understand the liquidity and efficiency that the market offers and as a result --they provide the capital necessary for IBM to do more research, hire more people and help the economy. Once the equity is issued, --the company itself does not benefit or suffer with stock fluctuations--but the fact that the market exists -and continues to exist, is the reason why the company in the first place can raise money.

sebastian dangerfield October 16, 2011 at 07:34 pm

By the way mba--
YOu respond to ct pati who posts as often as I do. The reason you dont answer my question--actually wager --my 5k agt your 2500 to offer up the name of the company who offered the dwarf tosser (ill call them and verify that there was a b-day party and you can have an easy 5k which you can donate to the poor) -is because you are full of it. you have no problem defending your postion on what is right in the world--but you cant make an easy 5k out of principle that I post too often? I mean- you dont really think people are that stupid do you? Maybe you do--and thats why you lie so often. But in any event--you dont fool too many people.

J Bauer October 17, 2011 at 12:53 am

Your response was so silly and lacking in any facts that I really have no need to respond because there is nothing to refute. You are obviously an intelligent person, but I am guessing you are a college kid or someone else like that who's heart is in the right place, but who has the facts all mixed up. Best of luck sorting it all out.

MBA October 17, 2011 at 03:59 am

Guys, ignore me. Go ahead. I don’t care. It’s your money.
You do know that the average investor loses money in the markets. But I’m sure you’re all better than the average investor. Every investor is better than the average... By the way, how do you make money in the markets? You predict the future right? You buy something today because you know before everyone else that it will go up tomorrow. Funny isn’t it, we laugh at the idea that 1,000 years ago Merlin The Magician could predict the future. I mean, how silly right? He looked into a crystal ball and could tell what was going to happen? Merlin was a bozo! But today’s predictors of the future are so much better. They use moving averages or Bollier bands or even the Fibonacci sequence to tell that tomorrow IBM is going to “break out”. And when that doesn’t work, they switch to some system based on the Mayan calendar. Of course the Mayans predicted what IBM will do tomorrow. Merlin was silly. But today’s Wall Street Wizards, they are way smarter. Something I don’t get though. All you guys who predict the future, wouldn’t it be easier to go to Foxwoods and predict roulette? It would be faster than waiting for your stock predictions to come true, and you get comped free drinks from pretty waitresses in short skirts. Cool.

CTPati October 17, 2011 at 04:38 am

The heart of this discussion is the free market system, hard work, and personal responsibility, instead of the "entitlement" mentality of the hippies and other young rabble of this FLEA party movement! This discussion is not about investing in the stock market.
Luca, J Bauer and I and millions more Americans--about 70-80% of us in fact--believe in the above principles, which have been the engines of prosperity most of our nation's 220 + years! Those principles are tried and proven to be true. So are Austrian economics and Milton Friedman's economic principles! The demonstrators of OWS have the wrong target! They should be, rather, blaming for the economic pain in the U.S. a BIG government "ruling class" who "comp" their corporate CRONY and "venture SOCIALIST" buddies and UNION donors to their campaigns with hundreds of BILLIONS of $$$$ they have confiscated from taxpayers!! At the same time they are *starving*--through *deficit SPENDING*--the free market and the job creators of that needed capital which could be helping our nation get back on the road to prosperity. And, mba, (are you working on one--if so where, and WHY, since you seem to despise our modern free market business system?) I have never had any where near $500,000, and my husband and I drive cars which are over 10 years old.

sebastian dangerfield October 17, 2011 at 06:06 am

Its bollinger band to begin with. But being an mba you know that. (haha)
This is your fallacy. You think that because you dont understand how to make money in markets, then no one is smart enough to be able to. Thats your fault. If I see a movie, I can tell if I like it, or if i dont. I can also make a prediction if other people may like it. I may not always be right, but its not a roulette wheel of random events as you suggest. Im not sure what you do for a living--but obviously you think that if you dont do it--then its not worth doing. Its an arrogant attitude-and one that is entrenched in defending your own ignorance.(and arrogance ironically is something you detest-remember?) Investing is not betting. Taking a chance that the people will buy what you perceive valuable. Advertising; companies do lots of market research, and testing, before they send the ad to the media directors to air? Do they know it will work? No--but they invest money in the commercial in the hopes that it will reap rewards. Start a cupcake company. You invest your money in a location-and a product and hope that it catches on. The fact that you cant see that if your cupcake business becomes wildly popular, and you want to expand and need money--and you sell shares in your company in order to achieve that-well thats too bad you dont get it. But you dont. As far as oogling girls in short skirts--thats something you might want to characterize rich people as doing.

sebastian dangerfield October 17, 2011 at 06:17 am

mba is just a guy who feels cheated if he doesnt earn the same money as 'rich' people.
Instead of putting in more time at work, he chooses to villify those that have worked harder and , as a result , earn more. Its like herman cain said this week--(in reference to the race card)--people think that they need an excuse every time they dont succeed, and unfortunately, they tend to blame those with the things they dont have. Im sure MBA wishes he had "that girl"-but he is too big of a wimp to get her, so he chastises both her and the normal guy that she chooses. Its their fault, that he is not attractive. MBA only gets to check out chicks by going to casinos. And so he lives with his anger and it eats at him. Incapable of getting ahead--on the slipshod job he does , -he chooses to describe his bosses as tyranical and unfair---after all---why isnt he making more-and they making less. The answer that eludes him is--he is not as valuable as the people up top. and if he were more valuable-he would get paid more. Thats the way it works. Despite all the rhetoric by politicians and the media--in general the people who make the most money, do so because they deserve it. If you want everything to be equal--then I suggest you move to Cuba or Bulgaria --they apparently have it correct--and the US should aspire to be more like those countries. So--if thats utopia--its a plane ride away into that blissful existence.

sebastian dangerfield October 17, 2011 at 06:18 am

Or if you dont want that plane ride--you can hang in the US and watch as 2 % of the population pays 65% of the taxes. (and then of course say they dont pay their fair share--not because its true--but it sounds good to you.)

Bob October 17, 2011 at 11:20 am

I see they got you nervous. It's a sin to worry. God loves you, have a blessed day

MBA October 17, 2011 at 04:20 pm

CTPati, The reason the conversation touched on the unpretty reality of the stock market is because some people make the claim that Obama taxing the rich and putting that money into our infrastructure (which would then trickle down and create more washing machine sales), is a worse option than the Wall Street trader's $500,000 bonus being invested in the stock market. The crux of some people's misunderstanding is that they believe the money they put into the stock market is used to build factories and hire people. This is 99% incorrect.
Don't get me wrong here. I believe in the free market. I believe in a hard days pay for a hard days work. But the stock market goes counter to this idea. It's a black hole which keeps 99% of the money stuck in limbo. It keeps money away from the people. It prevents the sale of washing machines. In short, it is the opposite of what free market thinkers are trying to achieve.

J Bauer October 17, 2011 at 04:38 pm

"it keeps money away from the people" - are you sure you really believe in the free market? Super uber sure? Come now, say what you really support, because it is certainly not the free market, judging by any and all of your comments. And, btw, there are some very nice people who are avowed communists and socialists. They are just misguided, but perfectly nice people. You ever hear of a guy named Stalin? He was a peach.

Eric Cameron October 17, 2011 at 05:35 pm

MBA – You talk about taxing the rich because you have a better option for how to spend “the Wall Street Trader’s $500,000 bonus”. However, the bonus is THEIR money, and is private property. I don’t care if they wanted to burn it. It still does not justify confiscating that wealth. This mob mentality that decides that the needs of the many outweigh the property rights of the individual is pretty scary. Thankfully we live in a Republic which (is supposed to at least) protects the individual against mob rule.

CTPati October 17, 2011 at 07:21 pm

"It means zero to be against greed. Greed is a basic part of animal nature. Being against it is like being against breathing or eating. It means nothing.
"And, what does it mean to be against corporations? Corporate ownership is by far the most efficient, responsible way of organizing industrial production there has ever been. It is a billion times more democratic that the Marxist forms of organization some of your speakers are advocating. Marxism is so much uglier than capitalism it's not even in the same universe. Marxism is just systemized envy, violence, and repression. "Besides, your parents and grandparents are the owners of those corporations through their retirement investments. Do you want to impoverish your own parents and grandparents? Do you want to impoverish yourselves?"... mba, this "Letter to the Lazy" is to you and the mindless and *selfish* lazy drones and leftists in the OWS FLEA party, from Ben Stein. http://spectator.org/archives/2011/10/13/a-letter-to-the-lazy

sf October 17, 2011 at 07:54 pm

luca has this guys number.
He is a fraud. Doesnt even know what a bollinger band is, but says he has an mba? The stock market now apparently is the cause of the economic turndown? What a ridiculous assertion. Why was there 4% unemployment when all that money was in the market in 2005? Here is the age old reality. If I have 8 friends from college--and we all hang out , and all make about 85k a year, and suddenly one of the guys makes a windfall on a stock gain --say he makes 2 mio dollars--why does that guy's gain--make me worse off? Why does the fact that I continue to pay my 23k in taxes and now he has to pay 450k make him not paying his fair share? Last year he paid 23k, this year he pays 450k and I am upset with him, because he isnt paying more? Im angry and wanting to protest this guy-because he made money on a good investment? Its simple jealousies that are occuring. Not rational thought. If all the millionaires left out town, our state or are country, things would not be better. Protest the government that wastes this guys 450k on bombs and paving roads that dont need paving. He is contributing more than his fair share. I had nothing to do with his gain-yet I am benefitting from it. Enough with the nonsense. Get real.

Michael Dinan (Editor) October 17, 2011 at 07:58 pm

Thank you for your comments. This thread is now closed.