WHY is the DJIA crashing?

[Toro]

The stock market isn't crashing because Obama isn't leading. That's pretty silly.

True. It's crashing because Reid and Pelosi did the leading. They lead us into higher debt and more regulation. If Obama had actually done something it might have been even worse.

It's not that either.

It's crashing because of the problems in Europe. Widening Eurodollar swap spreads have nothing to do with American politics.

 

[Trajan]

The markets are plunging for the following reasons.

1. European banking worries.
2. Slowing economy.

fucker!!! we want red meat toro!!!!!

I know. I'm sorry.

sorry my a$$, you're a tool of the man!

 

[Trajan]

Because the SS Trust fund may not have been able to redeem its securities at the treasury if the ceiling wasn't raised.

That's part of what default would entail.

LOL...you're kidding...right?

That's entirely correct.

actually, no.

By law the Treasury is bound to redeem any bonds presented to it by the Social Security Administration. And when the Treasury does, total government debt subject to the debt limit falls by the amount of the redemption—thus freeing up the Treasury's ability to issue new bonds equal in amount to the redeemed Trust Fund bonds.

Therefore, meeting Social Security obligations in August, September and all future months in this fashion would add nothing to the gross government debt subject to the debt limit. Not, at least, until the $2.4 trillion Trust Fund is exhausted in 2038.

Thomas Saving: Obama's Debt-Ceiling Scare Tactics - WSJ.com

 

[Sallow]

LOL...you're kidding...right?

That's entirely correct.

actually, no.

By law the Treasury is bound to redeem any bonds presented to it by the Social Security Administration. And when the Treasury does, total government debt subject to the debt limit falls by the amount of the redemption—thus freeing up the Treasury's ability to issue new bonds equal in amount to the redeemed Trust Fund bonds.

Therefore, meeting Social Security obligations in August, September and all future months in this fashion would add nothing to the gross government debt subject to the debt limit. Not, at least, until the $2.4 trillion Trust Fund is exhausted in 2038.

Thomas Saving: Obama's Debt-Ceiling Scare Tactics - WSJ.com

If there's no money to pay out..and no people to ensure it gets out..I'm reasonably sure that there might or could be a delay.

But reality is basically not your strong suit..or it seems at this point..the Journal. Which use to be a reasonably good paper.

 

[Sallow]

The stock market isn't crashing because Obama isn't leading. That's pretty silly.

True. It's crashing because Reid and Pelosi did the leading. They lead us into higher debt and more regulation. If Obama had actually done something it might have been even worse.

It's not that either.

It's crashing because of the problems in Europe. Widening Eurodollar swap spreads have nothing to do with American politics.

Well add in withdrawing a trillion dollars from the economy and you have a perfect storm.

 

[Trajan]

That's entirely correct.

actually, no.

By law the Treasury is bound to redeem any bonds presented to it by the Social Security Administration. And when the Treasury does, total government debt subject to the debt limit falls by the amount of the redemption—thus freeing up the Treasury's ability to issue new bonds equal in amount to the redeemed Trust Fund bonds.

Therefore, meeting Social Security obligations in August, September and all future months in this fashion would add nothing to the gross government debt subject to the debt limit. Not, at least, until the $2.4 trillion Trust Fund is exhausted in 2038.

Thomas Saving: Obama's Debt-Ceiling Scare Tactics - WSJ.com

If there's no money to pay out..and no people to ensure it gets out..I'm reasonably sure that there might or could be a delay.

But reality is basically not your strong suit..or it seems at this point..the Journal. Which use to be a reasonably good paper.

dude, this isn't personal, stop making it that way..........


ask toro to explain it to you or he will direct you to his thread on the matter, if you don't believe the link or in fact the SS actuary who basically said same during a hearing and was posted here as well what can I say.....

 

[freedombecki]

When good news is bad: Unemployment Rate Drops as Workers Bolt Labor Force.

The White House is boasting a 154,000 newly created jobs and claiming a 9.1% unemployment rate.

Unfortunately, the labor force dropped by 193,000 people and the number of people seeking employment dipped by 156,000.

Seems politicians use unrealistic statistics these days to lull us into a false sense of security, when actually, truly bad things are going down that require a lot more action than demands for pencil-pushers to come up with anything that seems good.

When will we have a President again who encourages business with incentives instead of destroying and replacing businesses with government competitive entities subsidized by voters who had no idea they'd be charged for a business staying in business on the strength of contributing to a political campaign.

That's really gotta go. Subsidizing businesses that can't make it in the free market on account of bad decisions at the CEO level is the worst kind of business to invest in. Yet, that's what has been going on behind closed doors where transparency was promised.

The above article notes that employment-to-population ratio hit 58.1 percent, lowest since 1983.

 

[HenryBHough]

Hell, I'd just be satisfied to have a president again. Any president.

 

[freedombecki]

Hell, I'd just be satisfied to have a president again. Any president.

Well, Henry, our dear friends on the left thought they were doing everybody a favor getting a far left extremist in. Instead we got a flavor--KoolAde, I fear.

"Hate rich people" is a truly poor platform, but it's all they got. I prefer a president who coaches excellence in market performance. It creates a passel of jobs with decent salaries when that happens.

 

[eagleseven]

Becki, it's not so much workers fleeing the labor force, as it is long-term-unemployed increasingly not counted in the labor force.

For that matter, recent college and highschool graduates who cannot find work (and there are a lot of them) have never been counted in the labor force or unemployment numbers, yet they're suffering too.

I've come to realize, through my study of economics at university, that you simply cannot trust the numbers any of the major government agencies put out anymore. If the accounting games the government plays were attempted by a private corporation, it'd be a bigger scandal than Enron.

 

[saveliberty]

If you thought Thursday was a hoot on Wall Street, wait until Monday and the Standard and Poors downgrade sinks in. Wear Black and call your broker early.

 

[waltky]

The other shoe gonna fall Monday...

Wall Street Plunge Comes Amid Fears of Second Recession
Friday, August 05, 2011 : WASHINGTON (AP) - The two-week plunge in stock prices is signaling economic anxiety, but it's also compounding the problem: Lower stock prices are shrinking Americans' wealth, rattling their confidence and making them less inclined to spend.

And employers may become even slower to hire. The Dow Jones industrial average plummeted 513 points, or 4 percent, Thursday on fears about the U.S. economy and the debt crisis in Europe. The major stock indexes have sunk more than 10 percent from their previous highs. Economists say sustained drops in stock prices tend to suppress consumer spending as people see their wealth shrink. And consumer spending accounts for about 70 percent of economic activity.

The drop in stock prices could especially slow spending by upper-income Americans. Eighty percent of stocks belong to the richest 10 percent of Americans. And the richest 20 percent of Americans account for about 40 percent of consumer spending, says Michael Niemira, chief economist at the International Council of Shopping Centers. The drop in stocks "will have repercussions back on the economy," says Barry Bosworth, an economist at the Brookings Institution who has studied the link between stock market performance and consumer spending.

All this comes just as fears of another recession are rising. Many consumers, their wages devoured by high gasoline and food prices, are pinching pennies: In June, they reduced spending for the first time in 20 months, the government said this week. Cato Corp., which sells budget-priced women's clothing, said Thursday that revenue at stores open at least a year fell 3 percent in July. CEO John Cato said the results "reflect the difficult economic conditions and uncertainty affecting our customers."

Luxury retailers like Tiffany & Co. and Saks Fifth Avenue have remained a bastion of strength. They benefited from a stock rally that started a year ago and made wealthy households even wealthier and willing to spend. MasterCard Advisors SpendingPulse says its index of luxury sales at restaurants, food boutiques, department stores and clothiers, surged 12 percent last month. But the Dow's plunge could now threaten upscale retailers. The economy, Niemira notes, is "more dependent on spending at the high end so (a drop in luxury sales) could have a bigger effect.

MORE

 

[expat_panama]

The stock market isn't crashing because Obama isn't leading...

...It's crashing because of the problems in Europe. Widening Eurodollar swap spreads have nothing to do with American politics.

There is no 'it', there's only people like you and I. I sold my companies last week because there's no way they can earn anything to feed my family with a federal government fighting them every step of the way. I'll buy back in the minute the Whitehouse and the Senate quit their business-bashing.

Are you saying you'd personally buy shares in a US company if you saw a change in "Eurodollar swap spreads", or are you just fantasizing?

 

[IndependntLogic]

I sold my companies last week because there's no way they can earn anything to feed my family with a federal government fighting them every step of the way. I'll buy back in the minute the Whitehouse and the Senate quit their business-bashing.

Are you saying you'd personally buy shares in a US company if you saw a change in "Eurodollar swap spreads", or are you just fantasizing?

LOL! Now there's some uh "business widsom" you don't see every day. I'm holding onto my company. We just got over a dozen of the biggest contracts in our history and guess what? I didn't even check to see what was going on in the WH or Congress when I accepted the money! Imagine that!

To think this is the fault of DC, is well, "bliss", so to speak.

 

[expat_panama]

...crashing because of the problems in Europe. Widening Eurodollar swap spreads have nothing to do with American politics.

There is no 'it', there's only people like you and I. I sold my companies last week...

LOL! Now there's some uh "business widsom" you don't see every day. I'm holding onto my company. We just got over a dozen of the biggest contracts in our history...

That's exactly what I'm saying, there is no 'stock market' that's crashing or not, what exists is different people with different goals. Toro says that "IT" is crashing because of "Widening Eurodollar swap spreads" --not that narrow ones would make him buy US companies. I sold several companies because of public policies, and your company's making profits that make daily valuation irrelevant.

Free markets, what's not to like?

 

[saveliberty]

Going to be a lot of selling on Monday. I know of several people already who are ready to make the move.

 

[jgarden]

WHY is the DJIA crashing?

America has endured 8-10 years of federal "tax cuts" using borrowed money - it hasn't worked. Where are the jobs and economic prosperity that these "tax cuts" were supposed to generate?

The "reducing the size of government" mantra can be traced back to Reagan Administration, but the irony is that most of the current federal debt was generated under these so-called "smaller government" proponents - Reagan, GHW Bush and GW Bush.

The only way America is going to come to terms with the looming debt is reintroduce the graduated tax system - unfortunately Obama didn't do it when he had the chance!

 

[BoycottTheday]

Anyone saying taxing more is going to help the economy is freaking nuts.

Cut the Fed limo fleet first, why does it cost 4 mil a year to run each limo?

You people are sick in the head imho.

 

[Toro]

The stock market isn't crashing because Obama isn't leading...

...It's crashing because of the problems in Europe. Widening Eurodollar swap spreads have nothing to do with American politics.

There is no 'it', there's only people like you and I. I sold my companies last week because there's no way they can earn anything to feed my family with a federal government fighting them every step of the way. I'll buy back in the minute the Whitehouse and the Senate quit their business-bashing.

Are you saying you'd personally buy shares in a US company if you saw a change in "Eurodollar swap spreads", or are you just fantasizing?

If there is a change in Eurodollar swap spreads, it means that the market is changing it's perception of risk. Widening swap spreads are occurring because of stresses in the European banking system, which is a mess, far worse than ours. If you want to step in front of that, be my guest. I will avoid the falling knives, unless I find stocks to be Stupid Cheap, which they aren't now.

 

[expat_panama]

...8-10 years of federal "tax cuts" using borrowed money...

What we got here is that tax cuts have to 'use' additional borrowing, the idea being that you had to borrow money when taxes were cut because you wanted more money to continue your life style. In the first place, us taxpayers are no longer available to continue supporting you. In the second place, you had no business squandering public funds.