<< <i>Laggards Alcoa, BofA and HP are to be removed from the Dow while 3 other future winners are to be added. Have to keep the DOW party going. Welcome aboard NKE, V, and GS.
Brian, and others is the DJIA becoming less meaningful? Of course it's the top announcement on any radio station reporting the stock market but beyond that does it accurately reflect anything significant other than what it is?
IE is becoming more a notion of normalcy rather than a barometer of the stock market?
I guess think of a meteorologist say we are at 100% of normal precipitation...wtf is "normal"? rather than saying 100% of average, which still sounds funny but is accurate.
So are changes made to keep the market look balanced (normal) or changes made to balance (average) out the market. Sorry if this isn't lucid. I haven't had a , yet today. LOL >>
Stocks in the DJIA change because of technology. HP is almost obsolete, so is Alcoa. The stock market is supposed to be representative of our economy. Should Kodak still be a member of the DOW? Or US Leather?
If a US company is acquired by a foreign company, should that be included in the DOW? Would that be representative of the US economy?
Im not a big fan of change, but when change is due, it is due.
<< <i>Yellowkid, you are probably one of the first baby boomers--born before 1952. The bulk was born in 1956-1962, making them no more than 19 in 1975 at the end of Vietnam. The bulk (66%) of the deaths in Vietnam occurred in 1967-1969. Assuming those who died were no older than 18 (which of course many were), the latest they could have been born was 1949-1951 (the earliest boomers). There were 21.78 million boomers born between 1946-1951 and 56 million after 1951. The majority of boomers never saw Vietnam. I do have many relatives who did see Vietnam.
You are correct, I never had to suffer hardship other than poor job prospects, underpaid employment, financial setback, ect, like 80%+ of America. I never fought in a World War where millions died. I never suffered through plagues. I never suffered through a depression. Very few Americans alive today have suffered the way previous generations have.
$8000 a month for nursing care? Why do we as Americans put up with this? Why do we allow ourselves to be fleeced like this? We allow it in college education health insurance also. Someday we'll make a stand. boomers Or maybe we are all due to suffer? >>
No the majority of boomers never saw Vietnam, but the majority of serviceman who saw 'Nam were boomers. Marines began dying there in the spring of '65. I bring this up only to point out that everything can't be reduced to dispassionate numbers, graphs, or probability ratios, there is a very important human element always involved.
The changes, which will take effect with the close of trading on Sept. 20, "were prompted by the low stock price of the three companies slated for removal and the Index Committee's desire to diversify the sector and industry group representation of the index," S&P Dow Jones Indices LLC, the company that oversees the Dow, said in a statement.
Low stock price? Since when is that a determinant of the company's value or relevance to the US economy? Diversify? So GS for BoA is diversifying? Are there too many metal mfg/ producers in the DOW that Alcoa needs to come out? Or is it because commodities as a rule have been down the past 2-3 years? Why not take all the commodity players out of the DOW and insert more tech, retailers, and fast food? Alcoa was the only metal producer in the DOW. Now there are none. Considering how many aluminum products our economy uses, it seems pretty important to me. I didn't realize that Alcoa and Aluminum were obsolete. But, since we've shipped much of our manufacturing base overseas during the past 15 years maybe it does make sense to remove all manufacturers and replace them with C/C and apparel companies. Air travel has been a tough business for decades, I think Boeing should be dumped as well due to their close ties to that industry. Boeing was pretty much doggy up until the start of 2013. Good thing they hung on to it. Not sure how CAT survived the cut either. It's somewhat related to metals/miners/construction trades who aren't doing all that well.
While their performance has been mixed this year—H-P is up more than 50%, while Alcoa is down about 7%—all three departing stocks have underperformed the broader stock market in recent years.
HP is up more than 50% this year....sounds like the company is still relevant to someone in 2013. So underperformance is a reason to drop companies from the DOW. It's clearly stated right above. HP more than doubled since last fall. They got their mileage out of it...now time to cut it loose. I'm not up to speed on foreign acquistions. Which of HP, Alcoa, and BoA are now mostly foreign owned? Should we scale back on all companies that have spread themselves heavily into foreign markets as well since you aren't in control of those nations (ie McD's, CocaCola, Walmart, etc.). What happened to the one world economy model being pushed on us over the past 2 decades?
Despite the popularity of the Dow Jones Industrial Average in the press, it's a lot less significant than an add to the Russell 2000 or an add to the S&P 500, because it's just not an index that institutions benchmark to," said Phil Mackintosh, global head of trading strategy at Credit Suisse Group
The DOW may be less significant to professional traders and investors but it certainly is not to the majority of Americans who probably use the DOW as their primary, feel good/financial benchmark. Having the DOW at a high number regardless of how it gets there is a public relations coup. J6P equates health of the USEconomy to health of the DOW. So keep that index high. I can appreciate the need to update the index periodically, just don't snowball us with a bunch of bogus reasons. GS for BoA? Come on! Having JPM and GS in the DOW means that pair of 2Big2Fail banks are going to survive. MS, BoA, Citi? Well, those guys are on their own when the derivative's bubble bursts.
"Until the money was almost gone we spent over $8000 a month for several years keeping my 96 year old mother in law in a nursing facility. where she still resides, the state takes her SS and pension every month, and makes up the difference "keeping her alive.""
In all sincerity, I do not get the keeping her alive part. I think of that as someone in an ICU on machines. In a nursing home it is custodial care that one is paying for instead of having the person at home with his/her daily needs attended to by family members. I know it is a tough situation but they are not keeping her alive like machines would.
As for the seperate "why do we as Americans put up with this"...what is the alternative? Bring the loved one home and take care for him/her yourself I guess. No one is forced to do any of this really. I know....we have to work, we can't be full time custodians for our loved ones. Well, then you have to pay someone else. JMH thoughts. No disrespect in any way intended. Tough situations for sure.
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Deleted. My intention with the post was to demonstrate the push to collect hidden taxes and not to blame a particular political party for it. They are both guilty. Let's not turn any discussion of taxes into partisan political issue.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Here's another reason why you will have less money to spend on your coins and PMs: Buried deep in the Affordable Care Act is a new 2.3% sales tax now in affect (Chapt. 5, IRS Pub. 510). This is a new "medical excess" tax paid by manufacturers that is passed on to the consumer at time of purchase on the following items:
Sport fishing equipment; Fishing rods and fishing poles; Electric outboard motors; Fishing tackle boxes; Bows, quivers, broadheads, and points; Arrow shafts; Coal; Taxable tires; Gas guzzler automobiles; and Vaccines
Congatulations to Cabela's, a popular sporting goods chain for choosing to show this tax to the consumer on it's printed receipt:
>>
NumbersUsa, FairUs, Alipac, CapsWeb, and TeamAmericaPac
<< <i>Stocks in the DJIA change because of technology. HP is almost obsolete, so is Alcoa. The stock market is supposed to be representative of our economy. Should Kodak still be a member of the DOW? Or US Leather? If a US company is acquired by a foreign company, should that be included in the DOW? Would that be representative of the US economy? Im not a big fan of change, but when change is due, it is due. >>
A snap shot (average) of any US industry should include ALL companies within that industry that are listed on the exchange. Modern technology makes this possible with little effort. You add companies to the average as they get listed on the exchange and you remove them from the average as they get delisted. If you want an accurate average of anything you include all the data in the formula, the high numbers as well as the low numbers - honorable statisticians don't practice "selective" averaging. That's like choosing to leave out a batter's "bad hair day" when computing his batting average.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Stocks in the DJIA change because of technology. HP is almost obsolete, so is Alcoa. The stock market is supposed to be representative of our economy. Should Kodak still be a member of the DOW? Or US Leather? If a US company is acquired by a foreign company, should that be included in the DOW? Would that be representative of the US economy? Im not a big fan of change, but when change is due, it is due. >>
A snap shot (average) of any US industry should include ALL companies within that industry that are listed on the exchange. Modern technology makes this possible with little effort. You add companies to the average as they get listed on the exchange and you remove them from the average as they get delisted. If you want an accurate average of anything you include all the data in the formula, the high numbers as well as the low numbers - honorable statisticians don't practice "selective" averaging. That's like choosing to leave out a batter's "bad hair day" when computing his batting average. >>
Agreed. Thats why MOST people follow the SP-500 (the 500 largest companies in the USA) or the Wilshire 5000 (5000 largest companies). The DOW is for the media. Regardless, the performance of all 3 indices is similar.
Thats why MOST people follow the SP-500 (the 500 largest companies in the USA) or the Wilshire 5000 (5000 largest companies). The DOW is for the media. Regardless, the performance of all 3 indices is similar.
Also the Russell 2000, as well as various growth and value sub-indexes
The next week is critical to gold price as the FED meets to possibly announce some form of tapering and a new FED chairman selection is expected to be announced by the WH. Result of both could send gold either direction. Current prices already reflect a majority of the market's expectations. If they are proven wrong gold could make a nice rebound. I'm seeing 25% up price, 75% down price odds.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The next week is critical to gold price as the FED meets to possibly announce some form of tapering and a new FED chairman selection is expected to be announced by the WH. Result of both could send gold either direction. Current prices already reflect a majority of the market's expectations. If they are proven wrong gold could make a nice rebound. I'm seeing 25% up price, 75% down price odds. >>
I honestly don't see how any minisxule amount of tapering announcement could have much of an effect. Folks holding after the past 2 years still aren't going to go sell into the short paper play based on an announcement full of hot air. If you need a capital loss sure, but why take it anytime soon with what's going on unless you're in a pinch play to your advantage to eat the loss. How much of the market could possibly be in that scenario?
To add: I'll appreciate a buying dip for physical.
Dr., don't forget the speculators they helped drive it up based on QE and they can surely help drive it down. I'm hoping most of their fear is already priced in.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Dr., don't forget the speculators they helped drive it up based on QE and they can surely help drive it down. I'm hoping most of their fear is already priced in. >>
Oh I know, just saying that it shouldn't be in play as much as folks will yammer on and allow it in order to keep the dow propped.
<< <i>Changing the components of the DJ IA is nothing new. By keeping "good" companies in the mix you ensure "good" results. >>
That's kinda what I thought and it's a barometer more for Joe lunchbox, even though the "Joe's" are fewer and fewer.
I'm old enough to remember when the DJ IA was pushing 1K. At the time it seemed like the USA (cuz the USA was THE global economic force ?) was waiting in a hospital delivery room for the DOW to break this magical number.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Last line foreshadows our current situation: "We cannot allow the Investment Banking culture to dominate the Commercial Banking field. This MUST be severed or the next crisis will be twice as bad and the last one."
Allowing it to be twice as bad, which will happen, can make us stronger. Replenishment of the forest often requires a disastrous burn.
The first burn only took out one bank....Lehman. The rest of the banks got pumped with trillions in cash. How did that teach anyone a lesson other than J6P who ended up paying for it?
Last line foreshadows our current situation: "We cannot allow the Investment Banking culture to dominate the Commercial Banking field. This MUST be severed or the next crisis will be twice as bad and the last one."
Allowing it to be twice as bad, which will happen, can make us stronger. Replenishment of the forest often requires a disastrous burn. >>
Our brightest minds at one time got out of school and built and designed wonderful things, now they figure out ways to massage and finesse the system. A while back one of the old time bankers said "banking shouldn't be sexy, you loan your money to good risks at a rate that allows both of you to survive and prosper" If those clowns want to take risks, let them take it with their own money. I'm not generally in favor of more regulation, but this is something that sorely needs to be addressed, just the old laws would go a long way towards solving the problem
best thing for the big banks is to quit regulating them and let them blow up much sooner.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Okay but if the top five "banks" have ~ 50% of the holdings, wouldn't it become a conflagration wiping out the whole forest? Then what?
>>
Fresh start, there are thousands of small banks that know how to properly run a bank
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It won't be the taxpayers paying for the bank's mistakes, most likely depositors money will be seized like in Cyprus. $19 Trillion in retirement savings is ripe for the picking by the Fed Gov't. It will keep the government running for about 9 more years. $1.5 trillion deficits X 9 =$19 Trillion. Extraordinary times requires extraordinary measures. Of course the seizure itself could make that $19 Trillion drop to maybe half with all the panic that would ensue, much like all that wealth that disappeared in 2008. Confiscation
<< <i>$19 Trillion in retirement savings is ripe for the picking by the Fed Gov't. >>
I'm one of the fortunate few old enough to withdraw retirement funds and since I converted 401ks into IRAs in self managed brokerage accounts I can liquidate and transfer funds to my bank quickly with the push of a couple of buttons. Nope, I don't have to wait for a broker to return my call. That's not a position anyone should be in. When you need him most, the less likely you are to hear from him. All investments should made with as little counterparty risk as possible. You can't always remove it but you should make effort to minimize it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>It won't be the taxpayers paying for the bank's mistakes, most likely depositors money will be seized like in Cyprus. $19 Trillion in retirement savings is ripe for the picking by the Fed Gov't. It will keep the government running for about 9 more years. $1.5 trillion deficits X 9 =$19 Trillion. Extraordinary times requires extraordinary measures. Of course the seizure itself could make that $19 Trillion drop to maybe half with all the panic that would ensue, much like all that wealth that disappeared in 2008. Confiscation >>
Most of those depositors are taxpayers. A lot of J6P's have checking/savings/brokerage/mutual funds/IRA's/pension plans with BoA, Citi, JPM and their affiliates. Taxpayers as a group will directly foot the bill for all the junk the FED has piled onto its balance sheet over the past 5 years as well as Fannie, Freddie, and other GSE's.
Our brightest minds at one time got out of school and built and designed wonderful things, now they figure out ways to massage and finesse the system
Really?
What sort of wonderful things did they build? And what sort of wonderful things are they building today. I understand you are saying but you really think there are not wondrous things being build/created today? Unfortunately, one of the most wondrous things being created today are contributing mightily to the dire future financial distress of the global economy----life extending drugs. Sorry Baley.
The entire sequester was for a one time $85 BBBBillion in spending cuts, the equivalent of one month of QEi. The bloggers and special interest groups have been howling daily at the horrific effects of cutting off just one month of QEi. Even the gov uses the sequester as the reason for their ills yet the sequester is a pittance of total QEi pumped into the balance sheets since the great bail out. This begs the question "What the hell are they doing?". Certainly this approach is not sustainable for much longer.
We have been pumping $85 BBBBillion of QE into the balance sheets on a monthly basis with no net positive effect for the worker bees. The only problem with QEi is that it is pure debt with no underlying value and no way to pay the creditors short of some kind of rabbit in the hat trick. The only guy on the hook for all this happiness is the worker bees and their little nest eggs...bye bye cute little nest eggs, hope you got yours in a safe place. This ain't your father's Oldsmobile.
Please return to your regularly scheduled programming.
We have been pumping $85 BBBBillion of QE into the balance sheets on a monthly basis with no net positive effect for the worker bees
Some folks think this liquidity increase in the system has prevented a huge net negative effect for the worker bees, who are still working instead of being laid off..
It would certainly be an interesting philosophical turn if status quo was considered as a positive net effect. Status quo is not an even an option for many of the worker bees that have lost their position and jobs because of the lack of economic growth. Even with enhanced technical skills and improved experience levels of the regular worker bee hoard, many are quietly slipping below the water. The worker bees are certainly not winning this battle but if status quo is the same as a net positive effect then there are many grateful worker bees. Kind of like saying, "At least I didn't get hit by a truck.".
<< <i>We have been pumping $85 BBBBillion of QE into the balance sheets on a monthly basis with no net positive effect for the worker bees
Some folks think this liquidity increase in the system has prevented a huge net negative effect for the worker bees, who are still working instead of being laid off.. >>
The added liquidity is not going to the worker bees, it's supporting the non-worker bees. The worker bees are getting a trickle down affect when the monthly federal checks get cashed and spent and when the EBT cards get swiped. This trickle down money is being funded with treasuries being bought by the FED.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>And what kind of event will change 45 years of history? A good event?
The death of the baby boomers will be the change. Good depends on whether you are a baby boomer or not.
Without changes in government spending, the trends will continue until the system fails.
This will be the changes in Govt spending. >>
Death of baby boomers = reduction in tax revenues = increase in government borrowing to compensate for the loss of income. As a greater burden of taxes shifts to a growing number that are dependent on tax funded entitlements and not paying taxes government debt will soar. Those who see a coming reduction in taxes or in government spending should spend their free time on the comic book forum. >>
Dang, that's harsh. There are plenty of financial wizards who happen to peruse the comic book forum on a regular basis. Then again, there are more than a few insufferably dimwitted types there too.
Finally found a chart that I can understand. Let's hope Yellen can keep up the good work:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Partly to revive the thread, and partly to see the responses. Is there anyone here who still thinks hyperinflation won't happen in the US? Counter the argument made in the first video (about 5m): David Buckner Explains Hyperinflation
Maybe this is a planned collapse. Congress' inaction is the only way to speed things up for a total default on the Federal Debt. Collapse and then rebuild. The question you have to ask: do you (feds) control the collapse or do you let the collapse control you. The fema camps are already set up for something.
I thought this article was interesting, and it explained some finer points that I hadn't thought about or known about. Found on Kitco, and linked from Sinclair's site.
I don't know what's supposed to happen while the banks are piling up all of these "excess reserves". There's still two sides to the ledger. No matter how much bigger they decide to make the balance sheet, the debt is still getting bigger faster than it can be paid off. To me, that spells "devaluation" or "default" or "inflation". It's all the same thing.
Q: Are You Printing Money? Bernanke: Not Literally
Hyperinflation in Weimar----Economy completely destroyed by war.
Hyperinflation in Zimbabwe---Economy completely destroyed by war and severe political turmoil.
Hyperinflation in Bolivia--Economy and political processes controlled by the military.
If the US economy is destroyed by war or there is a military coup, then there will be hyperinflation. Absent these events, there will be no hyperinflation. People often put the cart before the horse and say that printing money results in hyperinflation, when in fact the printing of money is a result of the hyperinflation. Increased prices creates more demand for money which demands the Central banks must print. The US dollars being printed today are just going to fill the massive hole created by debt destruction, hence there is no monetary velocity. There is a chance that the printing could continue past the debt destruction and this could cause some inflation, but will not be hyper.
If we want inflation then put more money into the workers hands. This will increase velocity and prices will rise. The end result willl be that very few minimum wage workers will be better off after the increase in wages than before.
Even then, there STILL won't be hyperinflation in the basics, because people will tend to "shop around", buy used, do without, etc.
It's best to be careful measuring inflation using "brand names" and premium-quality products, because a lot of that "inflation" is due to excess "demand" because of marketing by Retailers
<< <i>If the US economy is destroyed by war or there is a military coup, then there will be hyperinflation. >>
you've got it backwards. Was does not lead to hyperinflation - war has been shown to be one result of hyperinflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>We're dang close to a couple of those situations here... Not war, but economy almost destroyed & dysfunctional government. >>
PC, You need to travel outside the country a bit more. You're beginning to sound like derryb.
Govt by definition is dysfunctional, and while im sure the Founding Fathers may not be completely happy with some of the liberties being taken against the Constitution, I bet they are extremely happy with the discourse, form and manner, and overall performance. Our G is far, far from dysfunctional, especially when compared to Russia, China, India, Brazil---the so-called bricks of the Earth.
And while the economy may not be what we have been accustomed to over the last 30 years, (impossible to repeat this growth without a population bulge), it is very sound. Are you not selling houses in Phoenix? Are prices not rising? Do you not see ANY new construction? While I do see lots of vacant commercial property in my area, I also see lots of new construction--both residential and commercial throughout my travels.
<< <i>Even then, there STILL won't be hyperinflation in the basics, because people will tend to "shop around", buy used, do without, etc.
It's best to be careful measuring inflation using "brand names" and premium-quality products, because a lot of that "inflation" is due to excess "demand" because of marketing by Retailers >>
Walmart generics have been on steady rise.
Americans are making choices every day to eat or pay bills.
Proud Americans that work hard pay they own way not welfare leaches.
printing of money is a result of the hyperinflation. Increased prices creates more demand for money which demands the Central banks must print.
Hyperinflation is massive printing of money caused by loss of confidence in the currency due to high inflation, and rapid speedup in the velocity of spending before the money devalues further.
The US dollars being printed today are just going to fill the massive hole created by debt destruction, hence there is no monetary velocity. There is a chance that the printing could continue past the debt destruction and this could cause some inflation, but will not be hyper.
You still haven't documented this debt destruction. The debt is still there and is being transferred from the public sector to the private sector, a process which is inherently corrupt and needs to be rectified. I have yet to see ANY banks or landlords writing off the debts owed to them. There is no money velocity due to the reasons listed in the article I linked above. You ought to read it.
Jimmy Rodgers says that there's going to be a worldwide food shortage and a shortage of farmers. If our government keeps impeding the productivity of businesses & individuals and keeps disincentivizing the private sector, including farming - we may have a sharp increase in food prices that touches off a hyperinflation event. Hyperinflation = loss of confidence, panic to spend money as fast as possible due to rising prices.
Weimar's politicians finally stopped hyperinflation by agreeing to stop printing money and by agreeing to back the new currency with government lands, convertible on demand. It was a temporary fix that worked, but it didn't put people back to work. The poverty and discontent remained. That fix only lasted as long as it took for Hindenburg to get too old to resist Hitler's rise to power, about 5 years.
We have a problem with people out of work, drawing benefits. There will be unrest when that slows down or stops - probably not to the extent that it happened in Weimar but I doubt that it'll be much fun either.
Q: Are You Printing Money? Bernanke: Not Literally
Comments
<< <i>
<< <i>Laggards Alcoa, BofA and HP are to be removed from the Dow while 3 other future winners are to be added. Have to keep the DOW party going. Welcome aboard NKE, V, and GS.
linky >>
Brian, and others
IE is becoming more a notion of normalcy rather than a barometer of the stock market?
I guess think of a meteorologist say we are at 100% of normal precipitation...wtf is "normal"? rather than saying 100% of average, which still sounds funny but is accurate.
So are changes made to keep the market look balanced (normal) or changes made to balance (average) out the market. Sorry if this isn't lucid. I haven't had a
Stocks in the DJIA change because of technology. HP is almost obsolete, so is Alcoa. The stock market is supposed to be representative of our economy. Should Kodak still be a member of the DOW? Or US Leather?
If a US company is acquired by a foreign company, should that be included in the DOW? Would that be representative of the US economy?
Im not a big fan of change, but when change is due, it is due.
Knowledge is the enemy of fear
<< <i>Yellowkid, you are probably one of the first baby boomers--born before 1952. The bulk was born in 1956-1962, making them no more than 19 in 1975 at the end of Vietnam. The bulk (66%) of the deaths in Vietnam occurred in 1967-1969. Assuming those who died were no older than 18 (which of course many were), the latest they could have been born was 1949-1951 (the earliest boomers). There were 21.78 million boomers born between 1946-1951 and 56 million after 1951. The majority of boomers never saw Vietnam. I do have many relatives who did see Vietnam.
You are correct, I never had to suffer hardship other than poor job prospects, underpaid employment, financial setback, ect, like 80%+ of America. I never fought in a World War where millions died. I never suffered through plagues. I never suffered through a depression. Very few Americans alive today have suffered the way previous generations have.
$8000 a month for nursing care? Why do we as Americans put up with this? Why do we allow ourselves to be fleeced like this? We allow it in college education health insurance also. Someday we'll make a stand.
boomers
Or maybe we are all due to suffer? >>
No the majority of boomers never saw Vietnam, but the majority of serviceman who saw 'Nam were boomers. Marines began dying there in the spring of '65. I bring this up only to point out that everything can't be reduced to dispassionate numbers, graphs, or probability ratios, there is a very important human element always involved.
I never said otherwise. I hope my introduction of additional facts clarified my comments.
Knowledge is the enemy of fear
The changes, which will take effect with the close of trading on Sept. 20, "were prompted by the low stock price of the three companies slated for removal and the Index Committee's desire to diversify the sector and industry group representation of the index," S&P Dow Jones Indices LLC, the company that oversees the Dow, said in a statement.
Low stock price? Since when is that a determinant of the company's value or relevance to the US economy? Diversify? So GS for BoA is diversifying? Are there too many metal mfg/
producers in the DOW that Alcoa needs to come out? Or is it because commodities as a rule have been down the past 2-3 years? Why not take all the commodity players out of the DOW and insert more tech, retailers, and fast food? Alcoa was the only metal producer in the DOW. Now there are none. Considering how many aluminum products our economy uses, it
seems pretty important to me. I didn't realize that Alcoa and Aluminum were obsolete. But, since we've shipped much of our manufacturing base overseas during the past 15 years
maybe it does make sense to remove all manufacturers and replace them with C/C and apparel companies. Air travel has been a tough business for decades, I think Boeing should be
dumped as well due to their close ties to that industry. Boeing was pretty much doggy up until the start of 2013. Good thing they hung on to it. Not sure how CAT survived the cut
either. It's somewhat related to metals/miners/construction trades who aren't doing all that well.
While their performance has been mixed this year—H-P is up more than 50%, while Alcoa is down about 7%—all three departing stocks have underperformed the broader stock market in recent years.
HP is up more than 50% this year....sounds like the company is still relevant to someone in 2013. So underperformance is a reason to drop companies from the DOW. It's clearly stated
right above. HP more than doubled since last fall. They got their mileage out of it...now time to cut it loose. I'm not up to speed on foreign acquistions. Which of HP, Alcoa, and BoA
are now mostly foreign owned? Should we scale back on all companies that have spread themselves heavily into foreign markets as well since you aren't in control of those nations (ie
McD's, CocaCola, Walmart, etc.). What happened to the one world economy model being pushed on us over the past 2 decades?
Despite the popularity of the Dow Jones Industrial Average in the press, it's a lot less significant than an add to the Russell 2000 or an add to the S&P 500, because it's just not an index that institutions benchmark to," said Phil Mackintosh, global head of trading strategy at Credit Suisse Group
The DOW may be less significant to professional traders and investors but it certainly is not to the majority of Americans who probably use the DOW as their primary, feel good/financial
benchmark. Having the DOW at a high number regardless of how it gets there is a public relations coup. J6P equates health of the USEconomy to health of the DOW. So keep that
index high. I can appreciate the need to update the index periodically, just don't snowball us with a bunch of bogus reasons. GS for BoA? Come on! Having JPM and GS in the DOW
means that pair of 2Big2Fail banks are going to survive. MS, BoA, Citi? Well, those guys are on their own when the derivative's bubble bursts.
Components of the DOW
In all sincerity, I do not get the keeping her alive part. I think of that as someone in an ICU on machines. In a nursing home it is custodial care that one is paying for instead of having the person at home with his/her daily needs attended to by family members. I know it is a tough situation but they are not keeping her alive like machines would.
As for the seperate "why do we as Americans put up with this"...what is the alternative? Bring the loved one home and take care for him/her yourself I guess.
No one is forced to do any of this really. I know....we have to work, we can't be full time custodians for our loved ones. Well, then you have to pay someone else.
JMH thoughts. No disrespect in any way intended. Tough situations for sure.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Here's another reason why you will have less money to spend on your coins and PMs:
Buried deep in the Affordable Care Act is a new 2.3% sales tax now in affect (Chapt. 5, IRS Pub. 510). This is a new "medical excess" tax paid by manufacturers that is passed on to the consumer at time of purchase on the following items:
Sport fishing equipment;
Fishing rods and fishing poles;
Electric outboard motors;
Fishing tackle boxes;
Bows, quivers, broadheads, and points;
Arrow shafts;
Coal;
Taxable tires;
Gas guzzler automobiles; and
Vaccines
Congatulations to Cabela's, a popular sporting goods chain for choosing to show this tax to the consumer on it's printed receipt:
<< <i>Stocks in the DJIA change because of technology. HP is almost obsolete, so is Alcoa. The stock market is supposed to be representative of our economy. Should Kodak still be a member of the DOW? Or US Leather? If a US company is acquired by a foreign company, should that be included in the DOW? Would that be representative of the US economy? Im not a big fan of change, but when change is due, it is due. >>
A snap shot (average) of any US industry should include ALL companies within that industry that are listed on the exchange. Modern technology makes this possible with little effort. You add companies to the average as they get listed on the exchange and you remove them from the average as they get delisted. If you want an accurate average of anything you include all the data in the formula, the high numbers as well as the low numbers - honorable statisticians don't practice "selective" averaging. That's like choosing to leave out a batter's "bad hair day" when computing his batting average.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>Stocks in the DJIA change because of technology. HP is almost obsolete, so is Alcoa. The stock market is supposed to be representative of our economy. Should Kodak still be a member of the DOW? Or US Leather? If a US company is acquired by a foreign company, should that be included in the DOW? Would that be representative of the US economy? Im not a big fan of change, but when change is due, it is due. >>
A snap shot (average) of any US industry should include ALL companies within that industry that are listed on the exchange. Modern technology makes this possible with little effort. You add companies to the average as they get listed on the exchange and you remove them from the average as they get delisted. If you want an accurate average of anything you include all the data in the formula, the high numbers as well as the low numbers - honorable statisticians don't practice "selective" averaging. That's like choosing to leave out a batter's "bad hair day" when computing his batting average. >>
Agreed. Thats why MOST people follow the SP-500 (the 500 largest companies in the USA) or the Wilshire 5000 (5000 largest companies). The DOW is for the media. Regardless, the performance of all 3 indices is similar.
Knowledge is the enemy of fear
Thats why MOST people follow the SP-500 (the 500 largest companies in the USA) or the Wilshire 5000 (5000 largest companies). The DOW is for the media. Regardless, the performance of all 3 indices is similar.
Also the Russell 2000, as well as various growth and value sub-indexes
Remarkably similar 2-year performance (and a popular stock for comparison)
(inquiring minds can enter "compare" function in the above link for their bet(s)of choice, including GLD, SLV, AGQ, USLV, GDXJ, etc)
Liberty: Parent of Science & Industry
It must be true, here's the link.
<< <i>GSachs says 1000 gold possible.
It must be true, here's the link. >>
The next week is critical to gold price as the FED meets to possibly announce some form of tapering and a new FED chairman selection is expected to be announced by the WH. Result of both could send gold either direction. Current prices already reflect a majority of the market's expectations. If they are proven wrong gold could make a nice rebound. I'm seeing 25% up price, 75% down price odds.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>GSachs says 1000 gold possible.
It must be true, here's the link. >>
The next week is critical to gold price as the FED meets to possibly announce some form of tapering and a new FED chairman selection is expected to be announced by the WH. Result of both could send gold either direction. Current prices already reflect a majority of the market's expectations. If they are proven wrong gold could make a nice rebound. I'm seeing 25% up price, 75% down price odds. >>
I honestly don't see how any minisxule amount of tapering announcement could have much of an effect. Folks holding after the past 2 years still aren't going to go sell into the short paper play based on an announcement full of hot air. If you need a capital loss sure, but why take it anytime soon with what's going on unless you're in a pinch play to your advantage to eat the loss. How much of the market could possibly be in that scenario?
To add: I'll appreciate a buying dip for physical.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Dr., don't forget the speculators they helped drive it up based on QE and they can surely help drive it down. I'm hoping most of their fear is already priced in. >>
Oh I know, just saying that it shouldn't be in play as much as folks will yammer on and allow it in order to keep the dow propped.
<< <i>Changing the components of the DJ IA is nothing new. By keeping "good" companies in the mix you ensure "good" results. >>
That's kinda what I thought and it's a barometer more for Joe lunchbox, even though the "Joe's" are fewer and fewer.
I'm old enough to remember when the DJ IA was pushing 1K. At the time it seemed like the USA (cuz the USA was THE global economic force ?) was waiting in a hospital delivery room for the DOW to break this magical number.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Summers exits
I give away money. I collect money.
I don’t love money . I do love the Lord God.
MA seems to think so
<< <i>Is 21st Century Glass-Steagall act (Warren/Cain, et al) a good thing?
MA seems to think so >>
Last line foreshadows our current situation: "We cannot allow the Investment Banking culture to dominate the Commercial Banking field. This MUST be severed or the next crisis will be twice as bad and the last one."
Allowing it to be twice as bad, which will happen, can make us stronger. Replenishment of the forest often requires a disastrous burn.
<< <i>
<< <i>Is 21st Century Glass-Steagall act (Warren/Cain, et al) a good thing?
MA seems to think so >>
Last line foreshadows our current situation: "We cannot allow the Investment Banking culture to dominate the Commercial Banking field. This MUST be severed or the next crisis will be twice as bad and the last one."
Allowing it to be twice as bad, which will happen, can make us stronger. Replenishment of the forest often requires a disastrous burn. >>
Our brightest minds at one time got out of school and built and designed wonderful things, now they figure out ways to massage and finesse the system. A while back one of the old time bankers said "banking shouldn't be sexy, you loan your money to good risks at a rate that allows both of you to survive and prosper"
If those clowns want to take risks, let them take it with their own money.
I'm not generally in favor of more regulation, but this is something that sorely needs to be addressed, just the old laws would go a long way towards solving the problem
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>best thing for the big banks is to quit regulating them and let them blow up much sooner.
Agreed.
Knowledge is the enemy of fear
<< <i>Okay but if the top five "banks" have ~ 50% of the holdings, wouldn't it become a conflagration wiping out the whole forest? Then what?
Fresh start, there are thousands of small banks that know how to properly run a bank
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Box of 20
<< <i>$19 Trillion in retirement savings is ripe for the picking by the Fed Gov't. >>
I'm one of the fortunate few old enough to withdraw retirement funds and since I converted 401ks into IRAs in self managed brokerage accounts I can liquidate and transfer funds to my bank quickly with the push of a couple of buttons. Nope, I don't have to wait for a broker to return my call. That's not a position anyone should be in. When you need him most, the less likely you are to hear from him. All investments should made with as little counterparty risk as possible. You can't always remove it but you should make effort to minimize it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>It won't be the taxpayers paying for the bank's mistakes, most likely depositors money will be seized like in Cyprus. $19 Trillion in retirement savings is ripe for the picking by the Fed Gov't. It will keep the government running for about 9 more years. $1.5 trillion deficits X 9 =$19 Trillion. Extraordinary times requires extraordinary measures. Of course the seizure itself could make that $19 Trillion drop to maybe half with all the panic that would ensue, much like all that wealth that disappeared in 2008. Confiscation >>
Most of those depositors are taxpayers. A lot of J6P's have checking/savings/brokerage/mutual funds/IRA's/pension plans with BoA, Citi, JPM and their affiliates. Taxpayers as a group
will directly foot the bill for all the junk the FED has piled onto its balance sheet over the past 5 years as well as Fannie, Freddie, and other GSE's.
Really?
What sort of wonderful things did they build? And what sort of wonderful things are they building today. I understand you are saying but you really think there are not wondrous things being build/created today? Unfortunately, one of the most wondrous things being created today are contributing mightily to the dire future financial distress of the global economy----life extending drugs. Sorry Baley.
Knowledge is the enemy of fear
We have been pumping $85 BBBBillion of QE into the balance sheets on a monthly basis with no net positive effect for the worker bees. The only problem with QEi is that it is pure debt with no underlying value and no way to pay the creditors short of some kind of rabbit in the hat trick. The only guy on the hook for all this happiness is the worker bees and their little nest eggs...bye bye cute little nest eggs, hope you got yours in a safe place. This ain't your father's Oldsmobile.
Please return to your regularly scheduled programming.
Some folks think this liquidity increase in the system has prevented a huge net negative effect for the worker bees, who are still working instead of being laid off..
Liberty: Parent of Science & Industry
<< <i>We have been pumping $85 BBBBillion of QE into the balance sheets on a monthly basis with no net positive effect for the worker bees
Some folks think this liquidity increase in the system has prevented a huge net negative effect for the worker bees, who are still working instead of being laid off.. >>
The added liquidity is not going to the worker bees, it's supporting the non-worker bees. The worker bees are getting a trickle down affect when the monthly federal checks get cashed and spent and when the EBT cards get swiped. This trickle down money is being funded with treasuries being bought by the FED.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>And what kind of event will change 45 years of history? A good event?
The death of the baby boomers will be the change. Good depends on whether you are a baby boomer or not.
Without changes in government spending, the trends will continue until the system fails.
This will be the changes in Govt spending. >>
Death of baby boomers = reduction in tax revenues = increase in government borrowing to compensate for the loss of income. As a greater burden of taxes shifts to a growing number that are dependent on tax funded entitlements and not paying taxes government debt will soar. Those who see a coming reduction in taxes or in government spending should spend their free time on the comic book forum. >>
Dang, that's harsh. There are plenty of financial wizards who happen to peruse the comic book forum on a regular basis. Then again, there are more than a few insufferably dimwitted types there too.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Analysis on the Dow makeup change - I'm not the only one that thinks it's a steriod injection >>
The 30 stocks in the DOW are also in the SP500 and Wilshire 5000. If there is something nefarious then why do all 3 indices have similar performance?
Knowledge is the enemy of fear
Is there anyone here who still thinks hyperinflation won't happen in the US? Counter the argument made in the first video (about 5m):
David Buckner Explains Hyperinflation
Maybe this is a planned collapse. Congress' inaction is the only way to speed things up for a total default on the Federal Debt. Collapse and then rebuild. The question you have to ask: do you (feds) control the collapse or do you let the collapse control you. The fema camps are already set up for something.
fema
Of course this all speculation, but throwing it out there anyway.
Box of 20
Another Nail in the Coffin for the Deflation Case
I don't know what's supposed to happen while the banks are piling up all of these "excess reserves". There's still two sides to the ledger. No matter how much bigger they decide to make the balance sheet, the debt is still getting bigger faster than it can be paid off. To me, that spells "devaluation" or "default" or "inflation". It's all the same thing.
I knew it would happen.
Hyperinflation in Zimbabwe---Economy completely destroyed by war and severe political turmoil.
Hyperinflation in Bolivia--Economy and political processes controlled by the military.
If the US economy is destroyed by war or there is a military coup, then there will be hyperinflation. Absent these events, there will be no hyperinflation. People often put the cart before the horse and say that printing money results in hyperinflation, when in fact the printing of money is a result of the hyperinflation. Increased prices creates more demand for money which demands the Central banks must print. The US dollars being printed today are just going to fill the massive hole created by debt destruction, hence there is no monetary velocity. There is a chance that the printing could continue past the debt destruction and this could cause some inflation, but will not be hyper.
The greatest threat we face right now on the inflation front is here....
http://www.reuters.com/article/2013/09/25/us-usa-california-minimumwage-idUSBRE98O0U920130925
If we want inflation then put more money into the workers hands. This will increase velocity and prices will rise. The end result willl be that very few minimum wage workers will be better off after the increase in wages than before.
Knowledge is the enemy of fear
It's best to be careful measuring inflation using "brand names" and premium-quality products, because a lot of that "inflation" is due to excess "demand" because of marketing by Retailers
Liberty: Parent of Science & Industry
<< <i>If the US economy is destroyed by war or there is a military coup, then there will be hyperinflation. >>
you've got it backwards. Was does not lead to hyperinflation - war has been shown to be one result of hyperinflation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>We're dang close to a couple of those situations here... Not war, but economy almost destroyed & dysfunctional government. >>
PC, You need to travel outside the country a bit more. You're beginning to sound like derryb.
Govt by definition is dysfunctional, and while im sure the Founding Fathers may not be completely happy with some of the liberties being taken against the Constitution, I bet they are extremely happy with the discourse, form and manner, and overall performance. Our G is far, far from dysfunctional, especially when compared to Russia, China, India, Brazil---the so-called bricks of the Earth.
And while the economy may not be what we have been accustomed to over the last 30 years, (impossible to repeat this growth without a population bulge), it is very sound. Are you not selling houses in Phoenix? Are prices not rising? Do you not see ANY new construction? While I do see lots of vacant commercial property in my area, I also see lots of new construction--both residential and commercial throughout my travels.
Knowledge is the enemy of fear
<< <i>Even then, there STILL won't be hyperinflation in the basics, because people will tend to "shop around", buy used, do without, etc.
It's best to be careful measuring inflation using "brand names" and premium-quality products, because a lot of that "inflation" is due to excess "demand" because of marketing by Retailers
Walmart generics have been on steady rise.
Americans are making choices every day to eat or pay bills.
Proud Americans that work hard pay they own way not welfare leaches.
Hyperinflation is massive printing of money caused by loss of confidence in the currency due to high inflation, and rapid speedup in the velocity of spending before the money devalues further.
The US dollars being printed today are just going to fill the massive hole created by debt destruction, hence there is no monetary velocity. There is a chance that the printing could continue past the debt destruction and this could cause some inflation, but will not be hyper.
You still haven't documented this debt destruction. The debt is still there and is being transferred from the public sector to the private sector, a process which is inherently corrupt and needs to be rectified. I have yet to see ANY banks or landlords writing off the debts owed to them. There is no money velocity due to the reasons listed in the article I linked above. You ought to read it.
Jimmy Rodgers says that there's going to be a worldwide food shortage and a shortage of farmers. If our government keeps impeding the productivity of businesses & individuals and keeps disincentivizing the private sector, including farming - we may have a sharp increase in food prices that touches off a hyperinflation event. Hyperinflation = loss of confidence, panic to spend money as fast as possible due to rising prices.
Weimar's politicians finally stopped hyperinflation by agreeing to stop printing money and by agreeing to back the new currency with government lands, convertible on demand. It was a temporary fix that worked, but it didn't put people back to work. The poverty and discontent remained. That fix only lasted as long as it took for Hindenburg to get too old to resist Hitler's rise to power, about 5 years.
We have a problem with people out of work, drawing benefits. There will be unrest when that slows down or stops - probably not to the extent that it happened in Weimar but I doubt that it'll be much fun either.
I knew it would happen.