Our financial system is crumbling this week.

[IMADreamer]

http://www.pbs.org/wgbh/pages/frontline ... Individual programs? We spent almost half a billion dollars and bought a plane called the G222 that couldn’t fly, couldn’t be used by the Afghans. We bought 20-something planes and ultimately we had to scrap them. We had to turn them into penny- and nickel-sized pieces of scrap. That is what the U.S. taxpayer got out of that. Over half a billion dollars totally wasted, and nobody’s been held accountable.

[/quote]

Yeah but think of how successful of a jobs program that was for the Senator whose home state the factory was in.

[pioneer98]

But I was told the government never creates jobs. The private sector creates 100% of all jobs, right?

[pioneer98]

Reuters did a big article on stock buybacks.

As stock buybacks reach historic levels, signs that corporate America is undermining itself

Almost 60 percent of the 3,297 publicly traded non-financial U.S. companies Reuters examined have bought back their shares since 2010. In fiscal 2014, spending on buybacks and dividends surpassed the companies’ combined net income for the first time outside of a recessionary period, and continued to climb for the 613 companies that have already reported for fiscal 2015.

In the most recent reporting year, share purchases reached a record $520 billion. Throw in the most recent year’s $365 billion in dividends, and the total amount returned to shareholders reaches $885 billion, more than the companies’ combined net income of $847 billion.

In the election thread I mentioned how we don't always know the legacy of a president until many, many years later:

Until 1982, companies were largely prohibited from buying their own shares. That year, as part of President Ronald Reagan’s broad moves to deregulate financial markets, the SEC eased its rules to allow companies to buy their own shares on the open market.

[pioneer98]

Also interesting:

Share repurchases have helped the stock market climb to records from the depths of the financial crisis. As a result, shareholders and corporate executives whose pay is linked to share prices are feeling a lot wealthier.

That wealth, some economists argue, has come at the expense of workers by cutting into the capital spending that supports long-term growth – and jobs. Further, because most most U.S. stock is held by the wealthiest Americans, workers haven’t benefited equally from rising share prices.

[GeddyWrox]

Also interesting:

Share repurchases have helped the stock market climb to records from the depths of the financial crisis. As a result, shareholders and corporate executives whose pay is linked to share prices are feeling a lot wealthier.

That wealth, some economists argue, has come at the expense of workers by cutting into the capital spending that supports long-term growth – and jobs. Further, because most most U.S. stock is held by the wealthiest Americans, workers haven’t benefited equally from rising share prices.

BUT BUT... If corporations have more money they'll [expletive] jobs everywhere and we'll all live happily ever after!!!

[pioneer98]

Interesting read. Paul Krugman reviews Robert Reich's new book, where he argues the #1 cause of inequality is excess market power, or monopoly power.
http://www.nybooks.com/articles/archive ... oligarchy/

Market power has a precise definition: it’s what happens whenever individual economic actors are able to affect the prices they receive or pay, as opposed to facing prices determined anonymously by the invisible hand. Monopolists get to set the price of their product; monopsonists—sole purchasers in a market—get to set the price of things they buy. Oligopoly, where there are a few sellers, is more complicated than monopoly, but also involves substantial market power. And here’s the thing: it’s obvious to the naked eye that our economy consists much more of monopolies and oligopolists than it does of the atomistic, price-taking competitors economists often envision.

[AWvsCBsteeeerike3]

There are stocks that suck, and deserve to be shorted. There are stocks that do not suck, and do not deserve to be shorted but get attacked. Here is an article on how the later scenario plays out.

http://counterfeitingstock.com/CS2.0/Co ... Stock.html

there's a lot of amazing stuff in there, but this is quite possibly the most damning piece of evidence as to how manipulative the practice can be:

Global Links Corporation is an example of how wholesale counterfeiting of shares will decimate a company's stock price. Global Links is a company that provides computer services to the real estate industry. By early 2005, their stock price had dropped to a fraction of a cent. At that point, an investor, Robert Simpson, purchased 100%+ of Global Links' 1,158,064 issued and outstanding shares. He immediately took delivery of his shares and filed the appropriate forms with the SEC, disclosing he owned all of the company's stock. His total investment was $5205. The share price was $.00434. The day after he acquired all of the company's shares, the volume on the over–the–counter market was 37 million shares. The following day saw 22 million shares change hands — all without Simpson trading a single share. It is possible that the SEC has been conducting a secret investigation, but that would be difficult without the company's involvement. It is more likely the SEC has not done anything about this fraud.

In short, a guy owned 100% of a company's shares (1,158,064 of them). Yet, in two days, 50 million shares changed hands without him selling/buying any of them. Which is a nifty trick when you consider 0 shares should have been available to sell/buy.

[IMADreamer]

Dow fell a bunch of point today. Should I set all my possessions on fire now or just wait until tomorrow?
http://www.cnbc.com/2016/01/04/us-markets.html

Ok in seriousness though, I feel like our economy is perceived as better than it is. Why am I wrong about that?

[doe_boy]

Dow fell a bunch of point today. Should I set all my possessions on fire now or just wait until tomorrow?
http://www.cnbc.com/2016/01/04/us-markets.html

Ok in seriousness though, I feel like our economy is perceived as better than it is. Why am I wrong about that?

I feel that the economy is like Tinker Bell. If everyone believes, it's ok. If enough stop believing, things go south.

[Freed Roger]

Dow fell a bunch of point today. Should I set all my possessions on fire now or just wait until tomorrow?
http://www.cnbc.com/2016/01/04/us-markets.html

Ok in seriousness though, I feel like our economy is perceived as better than it is. Why am I wrong about that?

I feel that the economy is like Tinker Bell. If everyone believes, it's ok. If enough stop believing, things go south.

The news mumbled something about China affecting US markets. I think it has more to do with the way this new year starts - crazy asshats in US politics for the foreseeable future. Saudi Arabia getting involved in the Sunni Shiite fight. etc etc