OT - Dow plunges 1,175 - worst point decline in history

[Tony T]

Originally Posted by Big Dan

Trickle down is a basic Republican idea.

I was curious as to whether Reagan was the first to use the term (it was when I first heard it). Interesting that it goes back to the 1896:

In 1896, Democratic presidential candidate William Jennings Bryan described the concept using the metaphor of a "leak" in his famous Cross of Gold speech:

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it

[cnighbor1]

Merriman and their market timing system
It has worked thru all market crashes and saved me a lot of money

http://www.merriman.com/

[joosttx]

Originally Posted by seanile

vanguard high yield dividend fund / vym

specific stock examples that i pay attention to personally:
amgn 2.6%
bud 5%
codi 8.2%
csco 2.9%
gild 3%
ibm 4.3%
jnj 2.6%
jpm 2.9%
mrk 2.7%
pg 3.5%
vz 4.5%
xom 4%

Ill throw in (you can see where I am going)

NGG 5.67%
PPL 5.31%

[MattTuck]

Originally Posted by ColonelJLloyd

I'm not suggesting that Netflix will not need to produce content and at some point rely on a static catalog.

You seem to be asserting that they are pursuing a business model that perpetually calls for costs that exceed revenues based on the results of some recent period. What I'm saying is it's possible. . just maybe that that is not the case. I'm not investing in Netflix (that I'm aware of), but I'm not going to assume they don't have a clearly defined path to profitability that is achievable.

More broadly, my point was that I don't think it's apt to lump Netflix in with social media companies.

Ok, that's fair. I'm not sure that I'm asserting that they are doomed to never make money. I'm asserting that thus far, the market has accepted the Netflix narrative and rewarded them with a high valuation. Whether that narrative is reasonable, I don't know. I just shared some numbers that raise some red flags, not red alert. Definitely something to keep an eye on.

Originally Posted by Tony T

I was curious as to whether Reagan was the first to use the term (it was when I first heard it). Interesting that it goes back to the 1896:

In 1896, Democratic presidential candidate William Jennings Bryan described the concept using the metaphor of a "leak" in his famous Cross of Gold speech:

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it

Ray Dalio did a very interesting interview a few weeks ago (on Bloomberg, I think) on a pretty good idea, IMO. Rather than focus on GDP, change the focus to a broader measure of how the bottom X% are doing. He didn't give details in the interview, but I could imagine something like, looking at the 40th income percentile, and figuring out stuff related to that particular group's income trends, social mobility, discretionary income, access to education and opportunity, etc. The idea (based on the "Manage what you measure" concept) is that policy makers would then be more explicitly judged on how well they do at improving people's lives. It's an interesting idea.

[Big Dan]

Originally Posted by Tony T

I was curious as to whether Reagan was the first to use the term (it was when I first heard it). Interesting that it goes back to the 1896:

In 1896, Democratic presidential candidate William Jennings Bryan described the concept using the metaphor of a "leak" in his famous Cross of Gold speech:

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it

Anyways, let me know when the masses are getting a piece.

[oldpotatoe]

Originally Posted by Big Dan

Anyways, let me know when the masses are getting a piece.

I'd say Jan 2021...

[echappist]

Originally Posted by oldpotatoe

I'd say Jan 2021...

you are way more optimistic than I...

probably need increased union participation before that will happen

[cfox]

Originally Posted by MattTuck

Ok, that's fair. I'm not sure that I'm asserting that they are doomed to never make money. I'm asserting that thus far, the market has accepted the Netflix narrative and rewarded them with a high valuation. Whether that narrative is reasonable, I don't know. I just shared some numbers that raise some red flags, not red alert. Definitely something to keep an eye on.




Ray Dalio did a very interesting interview a few weeks ago (on Bloomberg, I think) on a pretty good idea, IMO. Rather than focus on GDP, change the focus to a broader measure of how the bottom X% are doing. He didn't give details in the interview, but I could imagine something like, looking at the 40th income percentile, and figuring out stuff related to that particular group's income trends, social mobility, discretionary income, access to education and opportunity, etc. The idea (based on the "Manage what you measure" concept) is that policy makers would then be more explicitly judged on how well they do at improving people's lives. It's an interesting idea.

Well, I'm sure Dalio will take credit for coming up with that idea, but a lot of economists already do that in a simpler way. You can look at household consumption as a much more reliable indicator of "how well" members of a society are doing rather than raw income statistics. And consumption of the median household has gone up A LOT in the last 30 or 40 years. Income numbers are unreliable due to a number of factors, not the least of which is they ignore the tax credits paid back to those that fall in the lower income distribution.

[echappist]

Originally Posted by cfox

Well, I'm sure Dalio will take credit for coming up with that idea, but a lot of economists already do that in a simpler way. You can look at household consumption as a much more reliable indicator of "how well" members of a society are doing rather than raw income statistics. And consumption of the median household has gone up A LOT in the last 30 or 40 years. Income numbers are unreliable due to a number of factors, not the least of which is they ignore the tax credits paid back to those that fall in the lower income distribution.

consumption per se is meaningless, as consumption can be financed in the short term by debt, and often at loan-shark rates

what you really want is the 40th %tile's portion of the pie relative to society as a whole

[cfox]

Originally Posted by echappist

consumption per se is meaningless, as consumption can be financed in the short term by debt, and often at loan-shark rates

what you really want is the 40th %tile's portion of the pie relative to society as a whole

Household debt-to-income is the lowest it's been since 2002. The unemployment rate is at multi-decade lows. Of course the wealth gap is growing, it always will as long as it's legal to earn interest, but to assert that a rising stock market and growing economy don't in any way benefit "the masses", is absurd. It is a talking point for politicians, not actual analysis. I'm not saying you have asserted that, but others here have.

[Ozz]

Originally Posted by echappist

...what you really want is the 40th %tile's portion of the pie relative to society as a whole

I agree with this....

I always that that the employment numbers that touted the number of new jobs created were meaningless without know what the total payroll/compensation that resulted from those new jobs.

Creating 1000 jobs that pay $30,000 per year don't offset losing 500 jobs that pay $100,000 per year.

[MattTuck]

Originally Posted by cfox

Household debt-to-income is the lowest it's been since 2002. The unemployment rate is at multi-decade lows. Of course the wealth gap is growing, it always will as long as it's legal to earn interest, but to assert that a rising stock market and growing economy don't in any way benefit "the masses", is absurd. It is a talking point for politicians, not actual analysis. I'm not saying you have asserted that, but others here have.

Charles, I find your opinions almost always insightful and useful, however, on this one, I think you are wrong on the facts.

The median person in the US doesn't own any stocks, so 50% of the country does not benefit from price appreciation in the stock market. Also, from this chart, you can see that the median person's REAL wages have only increased 6% since the early 80's. Because this measures real wages, it doesn't look at things like unearned income that would be influenced by interest or capital gains.

PS. You can read the whole study on Real Wage Trends here: https://fas.org/sgp/crs/misc/R45090.pdf

[Mzilliox]

Originally Posted by cfox

Household debt-to-income is the lowest it's been since 2002. The unemployment rate is at multi-decade lows. Of course the wealth gap is growing, it always will as long as it's legal to earn interest, but to assert that a rising stock market and growing economy don't in any way benefit "the masses", is absurd. It is a talking point for politicians, not actual analysis. I'm not saying you have asserted that, but others here have.

but is the employment rate truely that low? is the gig economy skewing that? are people who have simply decided to opt out being counted? less than half the capable men here in S. Oregon are employed. Most by choice, not circumstance. It has been decided that until a job that pays low skill workers as much as logging used to eons ago, nobody here is willing to work. Weed has pulled some back into the employment pile, but you think those cats are documented? i simply dont trust the numbers being generated. how many people do you personally know reducing their debt? I can't think of a one in my circle other than my wife and i. we state this fact plainly when folks ask how we invest. I tell them we are currently paying down home and school debt and i find not owing money to be better than owing money. i know one day that take will pay off.

anyway, you really think debt ratios have lowered significantly and employment numbers have gone up in any real way? I simply dont see it on the ground in real world life. i see the same folks jumping around retail job to retail job (which wont even exist in 10 years time). retail jobs are always hiring, food service too, turnover is the nature of the beast.
.
meanwhile robots are literally taking these jobs, its only a matter of time. then what does that stupid unemployment number mean? nothing at all

So yeah, im not into this economy, its a silly one being artificially pushed to squeeze out every last bit of possible momentum. when all the tricks are played, whats left? a new system is what's left. soon Capitalism will no longer favor humanity, it will favor machines, and capitalism doesn't care about humans at all, it only cares about profits. and our leaders are not preparing us for this at all.

this was a rant, often nonsensical, not always on topic.

[Mzilliox]

Originally Posted by Ozz

I agree with this....

I always that that the employment numbers that touted the number of new jobs created were meaningless without know what the total payroll/compensation that resulted from those new jobs.

Creating 1000 jobs that pay $30,000 per year don't offset losing 500 jobs that pay $100,000 per year.

exactly, people losing a real job and joining Uber with no healthcare and no guarantee of work is not a meaningful or good trade. Folks w/ college degrees working in coffee shops is not a sign of healthy economic prospects. and lastly, having less opportunity than every generation before you, while having a statistically shorter life span, yeah, winning.

oh, and lets not even mention stress level and suicide rates here. sure, this economy is "Healthy"

[Ozz]

Originally Posted by Mzilliox

..less than half the capable men here in S. Oregon are employed. Most by choice, not circumstance. It has been decided that until a job that pays low skill workers as much as logging used to eons ago, nobody here is willing to work. ...this was a rant, often nonsensical, not always on topic.

I hear you...same thing happened up here in Washington....I had friends in elementary school and high school whose parents were in the logging/lumber/paper industry. The '70's and '80's were tough...

But I am having a hard time generating sympathy....the writing was on the wall for those jobs 40 yrs ago...not to have prepared yourself or your kids for that change is absurd.

The economy was changing....it was pretty clear what skills were going to be needed....they even made a movie about it (Revenge of the Nerds)!

Had the seen this and got some skills coding they would have pretty decent jobs now. Maybe not what daddy or grandpa did, and maybe not as macho, but they would be employed. Change is hard.

BTW - it was a good rant.