So the stock market's gotten hammered this week.

[Wingtips1]

My point, and what Sachin pointed out (thank you), is that fewer people are benefitting from this so called hot (strong?) economy. Real middle class wage regression is not good for the country, and it most certainly isn't something we should just roll with and accept. Change is one thing. But when it harms the overall majority of Americans, that's a entirely different situation.

I'm not in any way trying to make a political statement. I believe that the more disposable income the majority of us have, the better we all do, the better for the country as a whole. But as Sachin pointed out with the article, the higher costs of goods are starting to take their toll. I can tell you from personal experience that cost cutting has been the only way I've stayed ahead. It sure as hell isn't through merit raises at work (I know that's specific to me), but I've encountered one person that is indeed better off financially in the last year. Everyone else I speak with has taken pay cuts, gotten no or very low wage increases (not enough to cover increased costs), had their bonuses eliminated, or have flat out lost their job only to get another that pays considerably less. Hell, I work with three people that have peaked their earnings. That means that can't even get a raise anymore because the company won't give them one. They apparently make too much. There's some incentive to work harder.


But aren't you for the revaluation of the yuan? How would that help the American middle class? Alot of the reason for the troubles most Americans are facing is the fact that our personal debt is at or near record highs. When somebody making $60k/yr has a $2300/mortgage, $1500/car&insurance, $1100 in credit card payments every month, it is tough to keep spending. Personal responsibility is a huge part of the Ownership Society that Bush is promoting, and of which I am a fan, but the people of this country want somebody else to worry about their problems. And this is where Americans, for the most part, have failed.
But in terms of wages, this levelling will occur during the rise of the service sector as the face of the middle class. For too long, the manufacturers of this country paid too much to their workers. And now the backlash is coming from their employers in the form of outsourcing, giving way to the rise of the new service sector. And unless the unions accept that change is inevitable, they will go the way of the steam boat.

[Pathogen]

But aren't you for the revaluation of the yuan? How would that help the American middle class? Alot of the reason for the troubles most Americans are facing is the fact that our personal debt is at or near record highs. When somebody making $60k/yr has a $2300/mortgage, $1500/car&insurance, $1100 in credit card payments every month, it is tough to keep spending. Personal responsibility is a huge part of the Ownership Society that Bush is promoting, and of which I am a fan, but the people of this country want somebody else to worry about their problems. And this is where Americans, for the most part, have failed.

Nice red herring. Care to actually address what I wrote?

Additionally, I'm not one of those people. $60,000/year is a really good salary, much higher than the national median. Not a good example on your part. I get ahead through spending control, not because my employer has felt compelled to give me merit raises (which it hasn't, which is why I'm trying to move). How does it benefit society to have 50 - 60 million Pathogens spending less every month because they can't get ahead?

But in terms of wages, this levelling will occur during the rise of the service sector as the face of the middle class. For too long, the manufacturers of this country paid too much to their workers. And now the backlash is coming from their employers in the form of outsourcing, giving way to the rise of the new service sector. And unless the unions accept that change is inevitable, they will go the way of the steam boat.

What's wrong with a decent wage (liveable) for a days work? You say that manufacturers paid too much? How is that the fault of the unions? And as I said earlier, the stronger the middle class is, the better America is. If you eliminate all of the good wages, manufacturing or otherwise, you're left with a society that has no choice but to scrape by.

Yes, I am aware that the U.S. is moving towards an almost all service sector economy. We have been for the past twenty years. If I remember correctly, we're already at about 90% - 95% there already. This is not something that should be championed in my opinion.

Also, as we move more towards this service sector economy, there seems to be a race to the bottom as far as wages are concerned. Companies like Walmart swing such a heavy hammer, their very nature of how they run their business dictates that competitors eliminate higher wages just to compete. They're helping to create a poorer society that has no choice but to shop at their stores because it's the only place they can afford. And it's no mistake that they have created a unit within their company that is specifically designed to break unions. (don't take this as my soul basis for my opinion).

[dj43]

One thing to keep in mind when looking at stock market values is that we are increasingly looking at a more dynamic market with new companies springing up and others fading away. Technology gains are a part of this but only a part. Worldwide competition is also playing a role as countries like China and India are winning the battle for manufacturing business. All of this affects the US job market and stock values.

How does that effect investments? IMO, "diversification" and "long-term" are my two buzz words. Unless you have insider info, picking individual stocks will be an increasingly difficult, and dangerous, task. On the other hand, the broad market will be the best bet. Look at the Wilshire 5000 over the past 15 years for an example.

Looking at the stock market reports for an individual day, or week, is just an exercise for TV to fill time, IMO. They mean nothing. I don't even listen most of the time.

[dj43]

want to rethink that Dow #?

but as an aside:
-We still have record corporate earnings. I believe out of the S&P 500 that had reported two weeks ago, 70% beat estimates, 15% met est. and only 15% were below.
-Inflation is still low.
-Gas prices are starting to loose some of their bullish tendencies. As are the other commodities.
-We are starting to see small signs of life out of the EU countries realizing their economies are failing and changes are necessary.
-Jobs continue to grow.



You make some good points here. Though they are not glitzy enough to make headlines, they do show that there is still a good floor for the US economy.

The big issue is for the country to realize how quickly the world market is forcing the US to change. As has been stated elsewhere, our previously industrial/manufacturing economy is becoming a technology/service economy. Whether that is good or bad is irrelevant, it is happening.

One of the changes that is affecting the US economy is the way the political winds blow and how they are reported. Political decisions DO drive the market, and jobs, in a more significant way than ever before. One needs only look at what has happened in California in the past 18 months to see how that works. For example, California's bond rating was about to go to junk bond status before Arnold forced a refinancing of short-term debt. That alone resulted in a RAISING of bond status which is saving the state an estimated $7 MILLION/day in interest versus the junk bond rate we would have been paying. This was a POLITICAL decision as the opposition wanted to raise taxes to finance the debt instead of spreading out the liability. Now we have an increase in tax revenue as businesses begin to realize there is some hope due to the change in environment here. The bottom line is that where there was a 4-5 year estimate to retire $17 BILLION in debt, that number is now reduced to $4 BILLION that is estimated to be paid by the end of '06.

These numbers will help the California picture, and the overall US picture, a good bit as companies choose to stay in The Golden State with the standard of living available here versus looking elsewhere such as Mexico and Asia. And while that may be short-term, it will allow more time for people to adjust their jobs and investment portfolio.

Just my thoughts...

[bostonsoccermdl]

....and that was one of the big complaints when it came crashing down. CNBC basically was just cheerleading the whole thing.

There was actually a study done on the effects of Maria BArtiromo mentioned a stock and it s immiedaite price fluctuation.

Stocks would spike anytime she touted/mentioned a stock on her report. It became a strategy for those traders who had quick order entry systems.