Breaking: Dow Jones Industrial Average hits 18,000 for the first time - @WSJ

[Hissyspit]

Source: Wall Street Journal / Reuters

@BreakingNews: RT @breakingmoney: Dow Jones Industrial Average hits 18,000 for the first time - @WSJbreakingnews http://t.co/rqzhT09NUJ/s/HpLq

Dow breaks through 18,000 after GDP report

Tue Dec 23, 2014 9:46am EST

NEW YORK (Reuters) - U.S. stocks opened higher on Tuesday, with both the Dow and S&P 500 setting new intraday records after an unexpectedly strong report on economic growth.

The Dow Jones industrial average (.DJI) rose 54.55 points, or 0.3 percent, to 18,013.99, the S&P 500 (.SPX) gained 6.51 points, or 0.31 percent, to 2,085.05 and the Nasdaq Composite (.IXIC) added 10.58 points, or 0.22 percent, to 4,792.00.

Read more: http://mobile.reuters.com/article/idUSKBN0K10YW20141223

[Fred Sanders]

1. Enough of the media propaganda of "but regular folk are not feeling it". Who the fuck is spending

all that consumer cash and buying those houses and cars, etc. as the unemployment rate drops to near half of what it was, labor force expands, wages rise, etc. fucking etc....WTF, media, try blaming Obama for any of that...had not enough of stirring racial strife yet so you can use it to ignore the economy?

And no more fucking individual stories of woe, when was the economy so good there were not individual basket cases?

Blame Obama, make my day, fuckers.

[Historic NY]

5. I agree my mutual funds are now rocking...

and I've been able to use the equity twice in my home to make repairs and improve energy efficiency. I am glad I listened to my inner voice and the financial planner when we made changes in the fund over 2 yrs ago.

[GOLGO 13]

2. My stocks are rising!!!

My 401k has a generous swelling of pride!!

[GliderGuider]

3. And crude oil is trading at $60...

I sense a fundamental disconnect...

[FBaggins]

4. Why?

There certainly isn't an historical correlation between oil prices and the stock market. They're more likely to move in opposite directions (correcting for underlying inflation) than in the same one.

[GliderGuider]

6. A variety of reasons

Lower capex by extraction companies, leading to world-wide job losses and economic slowdowns in producing nations, for one.

More fundamentally, I think the gyrations of the oil market are a signal that things are badly amiss in the physical foundations of the world economy. IMO the stock market has been designed not to pass these fundamental signals through to investors, displaying instead the artificial signals sent by the financial system. One possible result is that reality could steamroll the world's stock markets over the next few years.

Other risks are described here:

http://www.theautomaticearth.com/broken-energy-markets-and-the-downside-of-hubberts-peak/

The response of the oil price to scarcity in the period 2002 to 2008 was for it to shoot up. And the response of the energy industries to scarcity and high price was to develop high cost sources of energy – shale oil and gas and renewables. The longevity and permanence of these new initiatives has always been dependent upon our ability and willingness to pay. Of course, most of us who have cars continued to use them but have perhaps subliminally modified our behaviour through driving less or buying more fuel efficient vehicles. OECD oil consumption has at any rate been in decline and robust economic growth has been elusive. Is this due to the peak oil story unfolding?

The global finance and energy system is unfortunately rather more complex than that. The creation and expansion of debt is of course central to creating demand for oil and other energy sources. Without QE the global economy may have died in 2009 and demand for oil with it. Gail Tverberg produced an interesting chart that may illustrate this point (Figure 3). However, back in 2008 / 09 OPEC trimmed 4 Mbpd from their production and this equally explains why the price rebounded so strongly then. The end of QE3 may have contributed to the recent fall in demand, but the price has fallen so precipitously because OPEC has not compensated by reducing production.

... But the world has run out of these super giant deposits to exploit and we are finding it increasingly difficult to find large enough numbers of their smaller cousins to keep the wheels of the global economy well oiled.

The focus has thus turned to low grade resource plays. The resource plays offer near infinite amounts of energy but require large amounts of effort to gather that energy. The ERoEI is lower than what went before, perhaps much lower, but for so long as the energy return is positive, we have indeed learned that Man’s inventiveness and commitment can exploit these resources. One of the main questions I want to pose here is, is it possible for these resource plays to participate in the global economic system as it has existed for many decades that has become known to us as capitalism?

Oils supply and money supply are tightly interwoven. Problems in those domains couple into feedback loops...

[Psephos]

7. excellent post n/t

[FBaggins]

8. None of which appear to make sense... sorry.

Lower capex by extraction companies

More than offset by higher capex from the far larger portion of the world economy that profits from lower energy prices.

Oil extraction (as opposed to transport, refining, and retailing... all of which remain profitable) simply isn't that large a portion of global capex. Particularly when compared to the massive numbers of companies who only interact with oil prices by paying them at several points of their production chain. Every one of those points becomes more profitable without any other changes made by the company... just as my transportation costs go down (to the direct benefit to my bottom line) when gasoline prices fall.

leading to world-wide job losses and economic slowdowns in producing nations, for one.


"World-wide" is not even close to the same thing as "producing nations"... nor would there be such job losses except in the event that someone reduces production (and then only there).

More fundamentally, I think the gyrations of the oil market are a signal that things are badly amiss in the physical foundations of the world economy.

The problem with that notion is that the conclusion (that something is badly amiss in the physical foundations of the world economy) is not actually your conclusion... it's your fundamental assumption through which all other facts are viewed. You felt that something was badly amiss there when oil prices were largely stable for the last few years... and you felt that way when oil prices were skyrocketing a few years before that... and if oil prices jumped to $200/bbl next month, you'll still feel that it shows that something is badly amiss in the physical foundations of the world economy.

IOW... it's a religion that's immune to contravening facts.

Other risks are described here:

Actually... what's described there is one person's attempt to spin reality in the context of a "Hubbert's Peak" that the rest of the world now clearly sees has not occurred yet (and is not imminent).

Instead, it's far more likely that we're right back where we were in the early 80s, as energy prices fell in response to the non-OPEC nations expanding their production and OPEC returning to in-fighting and inability to restrain each other to prop up prices.

That was certainly not a time of falling stock market prices... because although oil producers didn't make as much money... the rest of the economy thrived.

[GliderGuider]

9. We'll see, won''t we? One way or the other. nt

[FBaggins]

12. I doubt it

Inherent in the "I'm not wrong... I'm early" defense is that we don't ever "see" until the final collapse occurs.

That could be next month, or it could be in the next century or beyond.

[StoneCarver]

34. If you had a lick of common sense

You'd listen to Glider Guider. He knows what he's talking about. He's saved me a fortune BEFORE it crashed in 2008. I'm grateful to him. I'm grateful that he still posts on this board with all of the knuckle heads on it lately. Shhh listen.

[FBaggins]

35. Did he really save you a fortune?

Because the market is much higher now than it was back then.

You didn't save a penny based on his advice unless you got out on a warning and then got back in before it passed the point where you got out... and there's no way that GG was giving positive market predictions at any point during that time. So you would have to give up that "lick of common sense" at some point for his advice to save you anything at all (over just leaving it alone)

Oh... and the market crash began in mid 2007. If you got out in 2008 than you've missed out on more than a 50% gain (since Jan 1) going by the S&P.

[upaloopa]

10. Every time I read the good news about

the stock market I ask myself how important is this to the majority of Americans.
To me it means the investor class is better off than yesterday but most Americans aren't effected one bit. Sure if you have a 401K you may have an extra percentage point to calculate your earnings but in the long run your monthly retirement amount isn't increased that much.

And I hear we should worry about the falling price of oil. We should not feel good about falling gas prices. Just think about those poor oil producers.

I think the income inequality percentage should be our measure of what direction we are going not the DJIA.

[FBaggins]

14. Largely with you... up until the last sentence.

I think the income inequality percentage should be our measure of what direction we are going not the DJIA.

During the most recent collapse, income inequality contracted substantially as the top 1% lost massive amounts in the market while those without significant investments (apart from the ones that lost their employment) fared somewhat better.

[upaloopa]

16. Well I guess that it depends on your point of view.

I remember a graph from economics class.
It measured income and savings. There was a base line of zero where income and spending was equal. Below that line is where spending was greater than income or dis-savings.
Anything above that line was savings. At some incomes savings was enormous but you could not dis-save enormously
So looking at that graph. If the investor class lost some portion of it's savings it was still better off than those whose incomes didn't cover their spending because even though their position didn't change it still sucked to be in their position.
In other words if your economic life sucks and the wealthy lose a portion of their wealth and you didn't lose anything they are still better off because your life still sucks.

[FBaggins]

17. We'll need some definitions there

Does "income" include "investment income" in that graph?

[upaloopa]

18. I don't remember it was in the 70's

[FBaggins]

21. Sorry... I didn't mean in class

I meant in your perspective.

If the answer is no... then we have this:

At some incomes savings was enormous but you could not dis-save enormously

Sure you can. It's called "retirement". I'm looking forward to that dis-savings.

If the answer is instead "yes" (as it should be in economics)... then:

So looking at that graph. If the investor class lost some portion of it's savings it was still better off than those whose incomes didn't cover their spending because even though their position didn't change it still sucked to be in their position.

If the investor class lots 20....30... 40% (or more) of their net worth, then their de-savings rate was many times that of their income - not just a small fraction of it (as for those who are going more and more into debt)

If your measure of how the economy is doing is measured by financial inequality, then you have to consider that when the guy with a $10 million dollar net worth loses $4 million dollars, inequality has declined substantially even though his remaining $6 million still makes him much better off than the guy with a $30k job who just took a paycut to $25k to stay employed.

[upaloopa]

22. Our economy needs the consumer to spend.

We need to decrease dis-savings at the lower end so that lower income people can both spend and save.
We can do with millionaires losing money because at some point they save rather than spend. We need to close the wealth gap to have a better economy.

[FBaggins]

23. Nothing wrong with that perspective...

... but it does contradict your prior position that a declining income inequality was the measuring stick of an economy moving in the right direction.

That is... unless you think the 2007/8 collapse represented good economic times.

[upaloopa]

25. The wealth gap is caused by tax policy and social economic

trends such as the attacks on labor organization.
We need to see wealth being redistributed downward after all the years of wealth accumulating at the higher income levels. That is what I mean by seeing the wealth gap percentage decreasing.

[SoapBox]

11. Damn that Obama!

Can't Americans just focus?

BENGHAZI!!!

Sheesh.

[Cryptoad]

13. Seems that the Rich swapping money back adn forth between them,,,,,

is doing really good. Too bad for the majority of Americans it dont mean squat. Maybe a little will "trickle down" over time!

[Fred Sanders]

15. Have you not seen the unemployment rate, wage growth and consumer spending lately? Etc., etc.

Doom and gloom and misdirection, go away, come back another fucking day.

[Cryptoad]

20. the subject is the DowJones

not UE, wages, etc,, etc,,,,, plus Your Personal attacks are uncalled for.

[FBaggins]

24. I think you missed Fred's point

Which was clearly that the movement in the markets is clearly far more than just the rich swapping money back and forth. It's caused by just what it should be... a clearly improving economy.

Your Personal attacks are uncalled for.

Did he do that on some other thread? Because I see no attacks (personal or otherwise) in that post.

[Fred Sanders]

27. Some folks get upset when their gloom and doom outlook is challenged...sometimes there is a good

reason...life is tough, but taking things personally on the Internet is a puzzle to me, sarcasm is the only response I know of to it...sorry about that.

[Cryptoad]

29. ummm

my reply was not to Fred's original post rather his reply to OP's post ,,, i understood exactly what he was saying and agreed with most of what he said,, if I had wanted to reply to Fred's original post I would have at the top. geeez.

"The Man hears what he want to hear, and disregards the rest"

[FBaggins]

30. Did DU mess up the posting order?

My #24 replied to your #20... which in turn replies to Fred's #15

There were no personal attacks in #15 (nor anywhere else on the thread that I can see)... nor did "the subject is the Dow" make sense if it's taken as an attempted refutation (and I can't read it any other way) of the claim that the movement on the Dow is created by actual funamental economic strength more than just "rich people swapping money back and forth".

[Cryptoad]

31. yes

I replied to Fred's # 15 which was a post to my #13 which was a reply to #1 which was about the DOW Jones not about UE rate and the like of such which you and Fred interjected, What part of this are you not understanding?

[FBaggins]

32. That part I'm "not understanding"

is how you appear to fail to see that #1 was about the Dow Jones movement which is better described by Fred's post than by yours. Your post implies that it's just a bunch of rich people pushing piles of money around and not fundamental realities of the economy... Fred's post implies just the opposite.

He was right... you were wrong.

Of course... we could also point out that his reply was also to your "Too bad for the majority of Americans it dont mean squat"... since those fundamental economic realities very much "mean squat" to the majority of Americans.

[Cryptoad]

33. Oh Please spare us the self rightousness of the Rich,

Dow is only a reflection of the Super Rich's economy
Sorry but all the data shows that the top 10% own all but 20% of the stocks and mutual funds. The annual median income of Wage earners is barely above the poverty wages. Do you really believe that the bottom 40% have a positive wealth? If the past 6 years have shown anything it is that Wall Street economy and main street economy are not correlated.

[SpankMe]

19. I blame Obama. n/t

[diabeticman]

26. Of course Wall Street is celebrating the gift Congress gave to them.

[pampango]

28. Obama still comes in #3 after FDR and Clinton in stock gains in his first 2,000 days.

?uuid=550f6618-0938-11e4-95c2-00212803fad6

As of right now, Obama ranks third behind top finisher Bill Clinton and runner-up Franklin Roosevelt in terms of stock gains, according to our calculations. After Obama, in order, it’s Ronald Reagan, Dwight Eisenhower, Harry Truman, George W. Bush and Richard Nixon. (Yes, Nixon barely made it into the club; he resigned 2,027 days into his presidency amid the Watergate scandal.)

Another surprise, also sure to rankle the right, is that the average stock-market gain under four post-Depression Democrats through each one’s 2,000th day in office has outpaced the average gain of the four Republicans in the era by a factor of nearly 4 to 1. Democratic gains have averaged 133%, while Republican market advances have had a mean of 33%.

http://www.marketwatch.com/story/2000-days-of-obama-how-have-stocks-done-2014-07-11

[MisterP]

36. of course if you bring up the middle class's return to 1928 in these stories you neatly

are made to look like a "party pooper"

http://tvtropes.org/pmwiki/pmwiki.php/Main/TheComplainerIsAlwaysWrong