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Author Topic: the next couple of weeks......  (Read 2705 times)

sneoh

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Re: the next couple of weeks......
« Reply #75 on: November 13, 2012, 08:02:37 PM »

Some numbers about income versus inflation rate over the past 40 years.
Inflation over that period has run about 4.4% yoy cumulatively which works out to (1.044)^40 = 560%.
This data is based on the CPI which Ward disputes and I agree is a "low ball" figure.
Over the same time period, median household income has risen from $8k/yr to $50k/yr according to census figures, or an increase of 625%. 
But say real inflation (beyond CPI numbers) is more like 5.5% yoy over the past 40 year.  This would mean inflation over the same 40-year period is more like 850%, significantly outpacing the rise in median household income.  I believe this is indeed what has happened and we have all felt it.  Couple that with the post 2009 low property prices, no wonder so many are in  dire straits and everyone feels poorer than their parents.  I know I do!
What a cheerful thought! :)
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frik

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Re: the next couple of weeks......
« Reply #76 on: November 14, 2012, 09:46:20 AM »

pretty sure OPEC doesn't sell oil. When you buy oil, its on the "open market" and you can pay in any valid currency. For convenience, the calculation of how much you pay is based on the value of the oil in US dollars and how much your currency is worth against the dollar.

In terms of the decrease in the buying power of the us dollar, don't confuse currency inflation with supply/demand.
Also i wouldn't put much stock in comparing 1913 and today... the Great depression, a couple world wars, sox traded Ruth... a lot has happened  in there.
 
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JBrochu

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Re: the next couple of weeks......
« Reply #77 on: November 14, 2012, 11:44:01 AM »

Some numbers about income versus inflation rate over the past 40 years.
Inflation over that period has run about 4.4% yoy cumulatively which works out to (1.044)^40 = 560%.
This data is based on the CPI which Ward disputes and I agree is a "low ball" figure.
Over the same time period, median household income has risen from $8k/yr to $50k/yr according to census figures, or an increase of 625%. 
But say real inflation (beyond CPI numbers) is more like 5.5% yoy over the past 40 year.  This would mean inflation over the same 40-year period is more like 850%, significantly outpacing the rise in median household income.  I believe this is indeed what has happened and we have all felt it.  Couple that with the post 2009 low property prices, no wonder so many are in  dire straits and everyone feels poorer than their parents.  I know I do!
What a cheerful thought! :)

This is for sure true. And it's bound to feel worse when we've been in recession mode for a few years. However, a large part of the problem is income distribution. There is still plenty of money being made, it's just been funneled straight to the top. And that in large part is why I voted for Obama over Romney despite having to hold my nose due to Obama's policy when it comes to drones, foreign entanglements, and the Patriot Act issues.

(Social issues and the environment are the other big reasons I have to vote for the Dems.)
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sneoh

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Re: the next couple of weeks......
« Reply #78 on: November 14, 2012, 12:16:38 PM »

In terms of the decrease in the buying power of the us dollar, don't confuse currency inflation with supply/demand.
Again, exactly right.  House prices were going through the roof about '95 to '07, at a rate much higher than inflation for those years.


There is still plenty of money being made, it's just been funneled straight to the top.
I delibrately avouided bringing up this angle but it is plain for all to see in the census data.  The "Top 2%" has done very well for themselves the past two decades or so.
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Re: the next couple of weeks......
« Reply #79 on: November 14, 2012, 03:03:05 PM »

just look at how well the stock market has done since Obama was elected?
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sneoh

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Re: the next couple of weeks......
« Reply #80 on: November 14, 2012, 03:40:27 PM »

I had to look it up; S&P500 hovered at around 900 the first week of Nov back in 2008.  Last week, it was around 1380 or sligthly more than 50% higher than 900.  I know my investments have not appreciated anything near that much in value over the past four years!  Woe be me!!
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M_Sprague

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Re: the next couple of weeks......
« Reply #81 on: November 14, 2012, 04:29:56 PM »

You should have just bought Apple in 2009 when its 100 dma moved over the 200. (I didn't either). I was looking at the chart back to 2001 and if I had just put the money I had back then in AAPL I would have over 10 million, lol. I just need a time machine.
I'm short the market now. It is looking pretty ugly atm. Bennie has distorted the market so much, though that things are tricky to read for trading.
« Last Edit: November 14, 2012, 04:40:00 PM by M_Sprague »
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strandman

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Re: the next couple of weeks......
« Reply #82 on: November 14, 2012, 06:13:43 PM »

HA HA-- I bought Microsoft in '87 :P

Silver in 2005 and real estate in 2007
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Flotsam

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Re: the next couple of weeks......
« Reply #83 on: November 14, 2012, 06:54:51 PM »

Looked at the Swiss Franc lately?  Or the SIN Dollar?   But there is not enough of either to be a viable reserve currency for the world.

Know your currencies... The Swiss franc is highly manipulated by their bank to keep the value down.  Considering they are a touron destination or exporter a high value wrecks their echonomy.  Currently it is pinned at a max of 1.2 SFranc to 1 euro. Singapore Dollar, that it's backed / value by a few hundred billion in US dollar reserves.
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dpen

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Re: the next couple of weeks......
« Reply #84 on: November 14, 2012, 07:05:16 PM »

The bottom 80% have taken a beating...but it hasn't ALL gone to the top 1%, but some to next 19% too...couldn't find income amount break point for the 19%....

Total Net Worth
Top 1 percent   Next 19 percent   Bottom 80 percent
1983   33.8%   47.5%   18.7%
1989   37.4%   46.2%   16.5%
1992   37.2%   46.6%   16.2%
1995   38.5%   45.4%   16.1%
1998   38.1%   45.3%   16.6%
2001   33.4%   51.0%   15.6%
2004   34.3%   50.3%   15.3%
2007   34.6%   50.5%   15.0%
2010   35.4%   53.5%   11.1%
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sneoh

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Re: the next couple of weeks......
« Reply #85 on: November 14, 2012, 11:33:05 PM »

The Swiss franc is highly manipulated by their bank to keep the value down.  Considering they are a touron destination or exporter a high value wrecks their economy.  Currently it is pinned at a max of 1.2 SFranc to 1 euro.
Yes, I spent a week in Switzerland this past winter working with what we call a "small high tech" business and they were really hurt by the strength of the Franc, even after it was pegged to the Euro (which I gather is to curb massive asset flight from individuals living within the Euro Zone).  Imagine if the peg was not put in place? 

As for strength of SGD, I believe it has a lot to do with the economy, their central bank's intervention, and how a LOT of people in Asia consider SIN as a safe haven for their wealth.  By the way, the SGD has appreciated substantially against the USD over the past 2 years.

In any case, absent any seismic change, the USD (not Euro or RMB) will remain the world's reserve currency for at least a little longer still.

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dpen

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Re: the next couple of weeks......
« Reply #86 on: November 15, 2012, 10:48:54 AM »

Here's another quote and reference I found interesting:

 But it is also important to realize that the lower half of that top 1% has far less than those in the top half; in fact, both wealth and income are super-concentrated in the top 0.1%, which is just one in a thousand. (To get an idea of the differences, take a look at an insider account by a long-time investment manager (http://www2.ucsc.edu/whorulesamerica/power/investment_manager.html)who works for the well-to-do and very rich. It nicely explains what the different levels have -- and how they got it. Also, David Cay Johnston (2011) has written a column about the differences among the top 1%, based on 2009 IRS information.)

Maybe not that surprising, and the 99-99.5% are still a lot better off than everyone else, but ultra wealth, is concentrated in about 0.1%...Many among these are the folks that brought you mortgage backed secrurities, derivatives, and credit default swaps --
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fresh

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Re: the next couple of weeks......
« Reply #87 on: November 15, 2012, 03:45:46 PM »

just look at how well the stock market has done since Obama was elected?
this really surprised me, because obama had a much higher chance of winning, and a democratic expansion in congress was also expected. it appears traders don't pay attention to statistical forecasts--a scary thought. otherwise, more people would have been short selling, correcting the market.
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JBrochu

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Re: the next couple of weeks......
« Reply #88 on: November 15, 2012, 09:44:12 PM »

just look at how well the stock market has done since Obama was elected?
this really surprised me, because obama had a much higher chance of winning, and a democratic expansion in congress was also expected. it appears traders don't pay attention to statistical forecasts--a scary thought. otherwise, more people would have been short selling, correcting the market.

i think Al meant since Obama was first elected 4 years ago?

But anyway I believe the recent sell off has little to do with the election results and a lot more to do with the economic news coming out of Europe.
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Have a quiche, now, or maybe a tort.  You deserve it!
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I like to keep things simple, even if it's faaaken painful and miserable.
-Stoney Middleton

This is grain, which any fool can eat, but for which the Lord intended a more divine means of consumption.
-Friar Tuck

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Re: the next couple of weeks......
« Reply #89 on: November 15, 2012, 11:05:31 PM »

i think Al meant since Obama was first elected 4 years ago?

But anyway I believe the recent sell off has little to do with the election results and a lot more to do with the economic news coming out of Europe.

yes and yes
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