Re:U.S. job openings post biggest drop in more than four years
by JediWing on Friday January 17, 2020 @12:39PM
(#22076995)
I think there's a bit of talking past one another here. Certainly the many Americans who have retirement plans benefit from stocks increasing, as do the very wealthy who own large shares of stocks in non-retirement earnings.
However, the context of the discussion is over what term.
The markets are subject to boom and bust cycles. Over the 40 or so year term of retirement plans, there's not a whole lot that a 20 or 30-something can do to benefit from a clearly bull market.
I know that day-to-day, I'm not wealthier or better off because the stock market is doing well. My paycheck doesn't change. I can't sell any stocks to cash in.
And that is the context of the discussion: not that over the long term stocks go up and when you retire you reap the benefits, but rather that over the short term, 90% of the people don't suddenly get enhanced quality of life because the stock market is doing well.
Re:U.S. job openings post biggest drop in more than four years
by tathougies on Friday January 17, 2020 @12:49PM
(#22077129)
I mean a good stock market makes it easier for companies to raise funds and thus to expand and employ more people. The purpose of the stock market is ultimately not to provide and asset class so much as it is to ease raising large amounts of money companies need to grow.
Re:U.S. job openings post biggest drop in more than four years
by asdff on Friday January 17, 2020 @02:02PM
(#22077948)
When companies raise funds, are they generally expanding and hiring these days or buying back their own stocks? Workforce have been shrinking for probably 100 years. Trickle down is fantasy.
Re:U.S. job openings post biggest drop in more than four years
by uerobert on Friday January 17, 2020 @04:00PM
(#22079263)
Why the hell would companies sell their stock to raise money to buy their own stock again? That doesn't make sense. If they want to do stock buybacks they just borrow money to do it, but only if interest rates are low enough. In most cases when companies raise money by selling stock you can bet its to expand, by making capital investment, raising headcount, acquisitions, etc. Either at that moment or the near future.
Re:U.S. job openings post biggest drop in more than four years
by 12xo on Friday January 17, 2020 @12:57PM
(#22077238)
One thing to consider is that the price of the markets are based on holders NOT selling. Its fundamentally impossible for the majority of holders to actually hold the wealth if the majority of holders sold their stock. Kind of a conundrum if you ask me... Market price is only real money if you sell, and if the majority (or even a sizable portion) of holders sell, the value of the shares will decline thus put the majority of holders underwater...
> People are finally starting to notice and point out.
Incorrectly.
Every person in America with a pension or a retirement account has significant exposure to the stock market. Universities and their endowments, which make institutionally awarded need based financial aid possible directly benefit from the stock market. Casualty (and other) insurance companies directly benefit from the stock market which affects their profitability and thus their ability to write policies at reasonable rates; it also affects the reinsurance market which can mean the difference between a large housing development being built or not, or a new industrial plant opening or not.
This “only benefits the top 10%” talking point is so ridiculous as to not be worthy of comment, but since it keeps popping up from people who have a political interest in talking down the economy, it should be addressed before more people actually start to believe that tripe.
The origin of that “10%” number was from a CNBC report that said “the richest 10% own 85% of individually traded stocks.” However that statistic conveniently excludes mutual funds — which generally consist of a basket of individually traded stocks packaged together. So if I own $1 million in a Fidelity mutual fund, I am not considered as owning “individually traded stocks.” So, to use that “only benefits the top 10%” number, then that would say that the stock market doesn’t benefit me because I only own shares in a mutual fund. Which is complete baloney.
When Trump calls out fake news, this is exactly the kind of thing he’s referring to: a statement that a rising market only benefits the top 10% because they own 85% of individually traded stocks — while that is completely false because everyone that owns shares of a mutual fund (the majority of American families in fact,) doesn’t benefit.
And your statement “the vast majority” don’t own stocks, that’s also a lie, according to Gallup: https://news.gallup.com/poll/266807/percentage-americans-own...
Even if Gallup was off by 10%, which would be a huge margin or error, that’s still nowhere close to a “vast” majority. Now to be fair, you did stick in a qualifier there “little” but that is meaningless. How much is “little?” And how do you know how prevalent “little” vs. “none” is? It’s just a meaningless distraction to protect against the fact that the majority of Americans own stock and even those that don’t own stock benefit from a good economy. Very low unemployment means tighter labor market which means wage competition.
It would seem that the economy could be absolutely perfect but those of different political stripes would be wishing its downfall just to win an election. Didn’t Bill Maher or one of those hosts actually wish for a recession so it would make it easier to beat Trump? Some sick people that would wish for people to lose their jobs and homes in order to beat Republicans.
We can have honest policy debates. But let’s not trade in misrepresentations to win political points.