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November 6, 2008

And the stock market continues its fall into nothingness

Anyone who thinks that the Market's fall is due to anything outside of Obama's election, really needs to look at reality.

And, as an aside, I'm curious as to what defines a 'rich person' for you all?

Posted by Beth at November 6, 2008 3:20 PM

Comments

Anyone who thinks that the Market's fall is due to anything outside of Obama's election, really needs to look at reality.

Your ignorance on economic issues continues to astound me. How about the spending reports that have come out? Or jobless data? Honestly, if you're going to blame Obama for a fall in stock prices, are you going to give him credit for falling oil prices, or OPEC's increased impotence? (Didn't think so). IS Obama responsible for falling interest rates in London, or an inflationary-spiral in the Japanese Yen?? The issues affecting the national and global markets is much larger than one person, let alone 100, and this has been in the works for the last 10-12 years. If you want to blame one man, blame Greenspan!

As for "rich", the word is so relative. To some, someone making 120K may be rich, but what if that person is an MD with 250K in debt, newly married with one+ child and living in Manhattan? I'd say that person is working class at best. But, a single person living in Oklahoma City, with no house or car payments (fully paid off), making 50K is probably living the high-life.

Overall, I would say that any individual making 100K+/year with no significant outstanding debts with expenses that full around 1/3 of their take-home is well-off and perhaps "rich". For a family of four, that number has to be expanded to 200-225K. So if both individuals make 100-150K, with no major debts, they're living well, even in Manhattan (again, assume they own their apartment or have reasonable rent).

Posted by: junks at November 6, 2008 4:59 PM

Actually, Junks, I am an economist by training and you are, IMHO, full of crap. Many, if not most, of the stock market fluctuations in the recent months are caused by consumer confidence (or in this case, fear).

Furthermore, please elaborate on your accusations of Alan Greenspan's culpability. The chaos of the recent mortgage crisis (and the ensuing bailout) have been caused by the actions and/or policies of prominent Democrats -- Bill Clinton's housing policies, Frank Raines' creative accounting and his resulting bonuses, etc.

PJ

Posted by: ProphetJoe at November 6, 2008 10:17 PM

By the way, I believe the new President Elect is now saying any family making $25K/yr is rich enough to be paying more taxes...

J/K

Posted by: ProphetJoe at November 6, 2008 10:19 PM

Many, if not most, of the stock market fluctuations in the recent months are caused by consumer confidence (or in this case, fear).

As someone with a PhD in Economics, that's only truly for individual investors in a market like this. However, most of this activity is due to institutional investors, who act on market data. Typically, I might agree with you about the fluctuations, but this case has nothing to do with Obama.

As for Greenspan, the original poster is partially correct; you should go watch Greenspan's recent interviews on the Hill, in which he actually admits quite a bit of fault in terms of assuming that companies would work in their best interests for self-preservation, but he admits that assumption was false.

Posted by: Wizzle Teets at November 7, 2008 8:24 AM

Well, as a normal, everyday American citizen; who did what was considered the "responsible" thing with their money, only to lose 6 figures within the past few months, I say "FTS, I'm pulling what we have left and putting it into CD's and money market accounts".

Why am I saying that? Because also as a self-employed individual BO's economic plans scare the shit out of me. Yes, I've read them. We'll most likely be letting employees go and making other cuts. Which will affect individuals on down the line. Our biggest contractor this morning, requested we cut our price for them. They know that they have US by the balls and we need them, even with a decrease in profit.

Dark days are ahead. Especially when BO puts Rahm in as Chief of Staff. You know? the same Rahm who was partially responsible for the Freddie Mac scandal?

Posted by: Stacy at November 7, 2008 10:26 AM

I fully believe if McCain had won the markets would have gone into northern territory. But a socialist? The dip was expected.

Rich... is relative, but in this country I'd say rich is at least a mil.

Posted by: pam at November 7, 2008 10:42 AM

Obama gives his first official speech as President-Elect, and the stock market surges upward despite the worst jobless stats in 15 years.

Quick! How can you guys spin into something negative for Obama?? Or at least change the subject?

Uhh... Rev. Wright, Ayers, uhh...

We're all waiting.

R.I.P. Neo-cons

Posted by: Junks at November 7, 2008 2:19 PM

"Rich" is s very relative term. As some pointed out above, it might depend on where you live, the cost of living there, dependents, etc.

For me, "Rich" is anyone who has dividend-paying investments which generate enough income to buy that person everything he/she wants, without having to dip into the principal. Anything less, and you're still a wage slave.

BTW, for all you Economics Professors, HISTORY shows us that the fastest way to impoverish a nation is to institute confiscatory taxes on the middle class (claiming that they are rich, usually). The middle class is the one which not only produces, but comes up with most of the new ideas needed to advance technologies. If you put them in a position of having no discretionary income to spend, but resign them to 48 weeks of cubicle life and maybe one cheapo two-week vacation per year, you get a nation of plodders, like many of the European nations have become.

A nation must have a good number of folks with "imagination for sale" if it is to thrive in the global economy. Socialist-style taxation dumbs down and dampens down any form of imagination which might have value to the economy.

Posted by: Rivrdog at November 7, 2008 7:35 PM

I would just note that most of the small business people I've talked to have all said the same thing: Obama's plans means "I'm cutting people to lean up until I figure out how much he's going to make me pay to have an employee, then I'm going to price and hire accordingly."

And since President-elect Obama's plans have been made public... people are losing their jobs.

Certainly, much of that is occuring in the imploding industrial sector which is taking losses and having cash flow issues from tighter credit.

But ya gotta wonder how much is from people with firms like Stacy's.

Posted by: John of Argghhh! at November 7, 2008 10:01 PM

Anyone who thinks that the Market's fall is due to anything outside of Obama's election, really needs to look at reality.

Thought I would stick my head in the door here, but there seems to be nothing of value, at least from the blog author...

Posted by: will at November 10, 2008 8:31 PM

SWWBO, I think you're wrong. Markets move on many factors. To claim Obama is the sole one is incorrect.

Rich is a relative term, just like poor or smart or stupid. To most people rich is someone earning considerably more than they are.

I think of rich as based on money flow not assets. To me rich is a bit like our income tax assessment. You have to take out the tax add in the increase in investments/loans etc. I think a sum of $AU100,000/year is rich. (about $US 67,000).

To be filthy rich you have to be doing minimal work at the same time. To be securely rich you have to be able to earn that consistently.

Posted by: Argent at November 10, 2008 11:36 PM