Good News Is Bad News On Wall Street and At the DNC

Discussion in 'Economy' started by Annie, Feb 11, 2006.

  1. Annie
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    Annie Diamond Member

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    Maybe not for the DNC, they can scream, "It's not enough..."

    http://news.yahoo.com/s/ap/20060211...iGGZgBv24cA;_ylu=X3oDMTA3MXN1bHE0BHNlYwN0bWE-

     
  2. Toro
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    Toro Diamond Member

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    Income is at its lowest percentage of GDP ever, I believe.

    Since the 1960s, net margins have averaged between 3 and 6%. Today they are above 6%. (They spiked up to 12% in the mid-60s before falling back down again).

    Earnings of the S&P 500 have grown at about 15% the past three years, 2.5x the average rate for the past 100 years.

    Wages and the non-farm payrolls have been growing slower than in virtually any other recovery.

    Wage growth has lagged productivity growth the past five years.

    The consumer has buttressed his spending by extracting equity from his home. The consumer is 70% of the economy.

    Prices are being kept down by China.

    Rising wages is fine for the economy. About time, I say. So what if margins come down? Corporate America is sitting on $600 billion in cash and has the lowest debt to assets ratio in at least 30 years. They can goose earnings by increasing their leverage.

    Excess monetary creation has funnelled into the asset markets, not into the prices of goods and services.

    Bernanke is a dove, not a hawk. He won't, nor should he, jack up interest rates if wages start to rise.
     

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