Dow just broke 15,000

[Pliny]

An historical moment as the Dow just broke 15,000 for the first time in it's existence.

We can predict it will go to 16,000 faster with all the money being printed.

Looks like the economy is really doing well, doesn't it!

[bush_cheney2004]

Doing well compared to what ? For which nations ? What is the alternative to current Central Bank's policies ?

[Pliny]

Doing well compared to what ?

I was being sarcastic.

For which nations ?

None that I am aware of.

What is the alternative to current Central Bank's policies ?

There isn't one. No one wants to take the blame for economic collapse we will just have to wait until it collapses under it's own weight. Then Obama will have achieved his purpose of leveling the playing field for all nations.

[bush_cheney2004]

I was being sarcastic.None that I am aware of.There isn't one. No one wants to take the blame for economic collapse we will just have to wait until it collapses under it's own weight. Then Obama will have achieved his purpose of leveling the playing field for all nations.

The central bankers have already made the decision that not "collapsing" is better than collapsing, irrespective of what President Obama may or may not want. The 1970's were far more painful with inflation, high interest rates, and higher unemployment.

Edited May 4, 2013 by bush_cheney2004

[Moonlight Graham]

That's crazy. I don't really follow the Dow, but I think I remember when it was sub-10,000 a few years ago.

[GostHacked]

All smoke and mirrors.

[Argus]

It took 72 years to reach 1000. Then just 5 to reach 2000. Took 4 years to add another 1000. In the next five years it doubled. It moves in ebbs and flows. Sometimes it shoots ahead, then sinks back, then moves ahead, but the progress is inexorably higher. It was at 13,000 in 2007. by 2009 it was in the 6,000s briefly, then rocketed up to 10,000 before the end of the year. Now THAT would have been a good time to invest. Then again, climbing almost 2,000 points in four months as it's done this year, isn't too bad either. When will it pull back strongly, and who will be left without a chair when the music stops? Doomsayers have been predicting a big one for a long while now. I gave some thought to pulling out of the market when the doomsaying was so strong in late November, with the 'fiscal cliff' upcoming. I resisted, thankfully, and made a lot of money as a result. Will I lose it again? Who knows? But you can't win if you don't play.

Edited May 4, 2013 by Argus

[kimmy]

The the rich continue to do very, very well.

The idea that Obama hates business and hates the rich is so hilariously wrong.

-k

[Pliny]

The the rich continue to do very, very well.

The idea that Obama hates business and hates the rich is so hilariously wrong.

-k

As long as he can pull the strings he is happy. Does he know what he is doing? Yes. Is it good for the country? No.

His objective is equality and social justice. Since business is about competition, winners and losers, profits and losses he doesn't understand it.

He capriciously seeks the support of business and some businessmen agree with his policies. As long as they serve a useful purpose to his agenda he likes them.

A business or corporation usually has a founder that is sort of dictator, making the rules, regulations, designing the

entire corporate structure. Some of them, when they achieve success, believe that society should be run similarly, a la Ted Turner.

Why would Obama hate Ted Turner or George Soros? A blanket statement that it is hilarious that Obama hates business is rather obfuscating. He just doesn't like some business, like the Koch Bros. The others he doesn't mind catering to and he loves the closeness of the celebrity community, hardly what you would call rubbing shoulders with the poor.

Edited May 7, 2013 by Pliny

[Pliny]

So, as the market soars, in my estimation it will for awhile Argus, the dollar drops against other currencies. Does that make sense? The troubled Euro puzzlingly maintains itself!

[Pliny]

The central bankers have already made the decision that not "collapsing" is better than collapsing, irrespective of what President Obama may or may not want. The 1970's were far more painful with inflation, high interest rates, and higher unemployment.

Right. They are propping it up.

The seventies were more painful but the high interest rates were what made the suffering short lived and brought down the infaltion and unemployment. I believe that current central bank policies if applied at that time would have seen the eighties as a recessionary period similar to today's dragged out experience.

[Pliny]

Yesterday the DJIA rose about 200 points and many positive economic indicators were cited as the influence. This morning it is down about 150. What happened to the positive economic indicators? Did they change overnight?

Are financial analysts in the media full of BS? Do they really know what's happening?

I think there is some high financial manipulation going on.

[bush_cheney2004]

Yesterday the DJIA rose about 200 points and many positive economic indicators were cited as the influence. This morning it is down about 150. What happened to the positive economic indicators? Did they change overnight?

Profit taking....perfectly normal.

[Pliny]

Profit taking....perfectly normal.

Mmmm...I would think that a bigger profit would be realized if one watched the economic indicators. Obviously, they are not an influence.

All this profit taking is not about creating real wealth it is about collecting "credits" you can exchange for tokens.

[bush_cheney2004]

All this profit taking is not about creating real wealth it is about collecting "credits" you can exchange for tokens.

Lots of individuals, pension funds, mutual funds, and others love to do just that. I know I sure do.

[Pliny]

Lots of individuals, pension funds, mutual funds, and others love to do just that. I know I sure do.

Enjoy it while you can. It is the be-all and end-all for pension funds and mutual funds. They exist in the stock market for that purpose and they will perish because of it - hopefully I am wrong.

[Pliny]

Another highest ever reached yesterday. Any bets on how soon it hits 16,000?

[kimmy]

This seems vaguely related, so I'll post it here:

If your local Sears is anything like mine, it sucks. The Sears here in Kim City looks as if it was damaged during flooding and nobody bothered to clean it afterwards. Water-damaged ceiling tiles, carpets that have worn through, counters and tables that look like they haven't been updated since the 1980s. Looks a lot like Zellers looked a month before Zellers closed their doors for good. I haven't bought anything in Sears for about 2 years, but I walk through it to get in to the mall.

I thought maybe this was just here in Kim City we're a little out of the way. But apparently, this is a widespread thing. Lots of Sears stores apparently suck just as much as my local Sears. And there's a reason why: in 2005, Sears stopped spending money on capital improvements, as well as selling stores on valuable real-estate, to raise their profits. Profits increased! The stock price rose! For a while... then it started plunging because sales dropped and they ran out of real-estate to sell. In 2007, to prop up the stock price, they decided to put all the money it used to spend on maintaining its stores into buying its own stock. That worked for a little while too. Stock buy-backs halted the price plunge in 2007, and caused price jumps in 2008 and 2010. But now the stock price is lower than it was in 2005 when they embarked on this strategy, and they've got a bunch of dilapidated stores and sold off their most valuable real-estate.

http://finance.yahoo.com/news/why-sears-stores-suck-under-191203648.html

I would not be very surprised if the people who came up with this strategy sold large volumes of their own personal stock at times coinciding with the big stock buy-backs.

Anyway, this is an example of a company boosting its stock price by shooting itself in the foot. Once again a company causes itself long-term damage for short-sighted reasons.

-k

[Bonam]

Yep just another example of totally broken incentives.

[kimmy]

Some here... August, Tim, Pliny, have scoffed at the notion that CEOs and bankers would cause long-term harm to their businesses in their pursuit of short term gain.

And yet, that's exactly what happens.

There's a phrase that sums up their thinking: "I'll Be Gone, You'll Be Gone". I'll have my commissions, you'll have sold your shares, and neither of us needs to care about the long-term health of this company. "IBGYBG" isn't just a description of the behavior, it's an actual slogan... the Wall Street version of #YOLO (You Only Live Once... the slogan of teenagers about to do something stupid.)

So where are the indictments and convictions? Moreover, why did these people think they'd get away with it?

Both of those questions are answered within the motto the bankers were known to throw around: "I'll be gone, you'll be gone" (or IBGYBG, for those reading some of the E-Mails that are being leaked). They assumed that by the time anyone got wise to their scheme, the whole thing would have fallen down and they'd be long gone. They assumed that we'd be too busy putting out metaphorical fires and attempting to piece the economy back together that we'd be looking forward, toward possible solutions, instead of backward, trying to find the culprits.

And you know what sucks?

They were right.

http://finance.townhall.com/columnists/brettbogus/2013/06/26/ill-be-gone-youll-still-be-here-n1627772/page/full

In recent years, there was no legal liability for extreme recklessness. Take a healthy company, roll the dice and if it comes up snake eyes, all you lose are your unvested stock options. Most management does not have significant capital at risk.

The cost for pushing a healthy firm into insolvency by excessive risk-taking is some snickering at the golf course. In terms of lost monies, it is minimal.

You might be surprised to learn that it was not always this way. Before these firms went public in the 1970s and 1980s, bank management had full liability for their firms losses. During the era of Wall Street partnerships, if employees were so reckless as to lose billions of dollars, the partners were on the hook for the full amount. This meant that after the firm was liquidated to pay its debts, the partners personal assets were next on the auction block: Houses, cars, boats, even watches were sold to satisfy the debt.

Not surprisingly, partnership liability worked wonders in focusing attention on taking appropriate risks.

Once a bank or investment firm went public, this liability shifted from management to the companys stockholders and creditors (namely, the bond holders). Add to this the rise of stock-option compensation, and you have a recipe for extreme short-termism.

In his book The Accidental Investment Banker, Jonathan Knee described this mercenary attitude with the phrase IBGYBG. As bankers signed off on increasingly risky deals, IBGYBG meant Ill be gone, youll be gone by the time the really messy stuff hit the fan. Call it what you will smash and grab, take the money and run. Without partnership liability or clawback terms, IBGYBG was perfectly legal.

http://www.ritholtz.com/blog/2011/03/putting-an-end-to-wall-streets-ill-be-gone-youll-be-gone-bonuses/

-k

[dre]

As long as he can pull the strings he is happy. Does he know what he is doing? Yes. Is it good for the country? No.

His objective is equality and social justice.

Obama is hardly about equality. Just a corporate yes-boy that has continued the tradition of stealing from everyone and giving to banks, corporations, etc. If anything inequality has INCREASED with his policies.

Hes not much of a string puller either... the folks making real decisions about the economy are a bunch of ex executives at major private financial firms.

[GostHacked]

Obama is hardly about equality. Just a corporate yes-boy that has continued the tradition of stealing from everyone and giving to banks, corporations, etc. If anything inequality has INCREASED with his policies.

Hes not much of a string puller either... the folks making real decisions about the economy are a bunch of ex executives at major private financial firms.

The day the government starts hauling in the banksters, that will be the moment I gain some faith for the government to do the right thing.

[Bonam]

The day the government starts hauling in the banksters, that will be the moment I gain some faith for the government to do the right thing.

Well, we already know the government won't even go after banks (HSBC) that provide direct material support to terrorist groups that have killed Americans. If that doesn't get "banksters" hauled in, nothing will.

[sharkman]

Another highest ever reached yesterday. Any bets on how soon it hits 16,000?

So here we are several months later and the Dow is down 877 points for the year, one month into 2014. Are we due for another recession? With Bernanke cutting back on QE3 the economy is going to have to learn to do without some of that easy money.

[Shady]

The the rich continue to do very, very well.

The idea that Obama hates business and hates the rich is so hilariously wrong.

-k

He doesn't hate business. He's just an economic illiterate, with absolutely no idea as to create an environment for strong economic growth to take place. Regardless, quantiative easing, which is handled by the fed, is it's own entity and has nothing to do with Obama. QE1, 2, and 3 which have proped up the stock market is the biggest reason why "the rich" have done very well the last few years, and others have not.