Why Does The Stockmarket Keep Going Up ? - AnabolicMinds.com - Page 2

Why Does The Stockmarket Keep Going Up ?

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  1. Senior Member
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    Quote Originally Posted by spunkles182 View Post
    absolutely not. it leads to lower prices for higher valued goods.


    More efficent companies have lower production costs. Lower production costs lead to a decreased price for the consumer in a competitive market. That frees up more of the consumer’s income to purchase other goods and services. its win-win.
    Way back in the old days, pre-global market economies, a nation's economy could control inflation by manipulating their import / export ratios.

    Todays global multinational corporations are immune to this factor so when these companies introduce cheap goods into a national economy the result is more income directed toward the retail market and more money in the system, which you know causes inflation and devalues the money system.

    When products were produced domestically by domestic workers and purchased by the same pool of domestic workers inflation was held in check.

    Domestic products were less profitable for the owners, but the workers got more for their money specifically when not buying in the manufacturing sector.

    The had more money to buy property and other non disposable goods.

    They had more savings and less debt

    Now all of this is easily dismissed if you just forget about the USA as a sovereign economy and think in terms of the domestic US worker as part of a worldwide labor pool !

    Which is what the multinational corporations want to accomplish.

    The whole Global economic movement is in reality a socialization of the world politic and will completely eliminate competition from the market,....which any good "free trader" will tell you is not a good thing !!!

    You can ponder the futures market or you can ponder the reality of a one world corporate dictatorship

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    [QUOTE=anabolicrhino;907763]
    Way back in the old days, pre-global market economies, a nation's economy could control inflation by manipulating their import / export ratios.

    Todays global multinational corporations are immune to this factor so when these companies introduce cheap goods into a national economy the result is more income directed toward the retail market and more money in the system, which you know causes inflation and devalues the money system.

    When products were produced domestically by domestic workers and purchased by the same pool of domestic workers inflation was held in check.

    Domestic products were less profitable for the owners, but the workers got more for their money specifically when not buying in the manufacturing sector.

    The had more money to buy property and other non disposable goods.

    They had more savings and less debt
    absolutely not. when the united states outsources its an outflow of american cash which decreases the total supply in the us and helps keep inflation down. you couldnt be more wrong.



    The whole Global economic movement is in reality a socialization of the world politic and will completely eliminate competition from the market,....which any good "free trader" will tell you is not a good thing !!!

    You can ponder the futures market or you can ponder the reality of a one world corporate dictatorship
    again you could not be more wrong. its common sence. when you open up to other markets you open up to other sellers, ie competition.
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    [QUOTE=spunkles182;907829]
    Quote Originally Posted by anabolicrhino View Post

    absolutely not. when the united states outsources its an outflow of american cash which decreases the total supply in the us and helps keep inflation down. you couldnt be more wrong.





    again you could not be more wrong. its common sence. when you open up to other markets you open up to other sellers, ie competition.
    I bet that I could be more wrong if I just had the chance !

    The point I was trying to express is that it is not the United States who is outsourcing the labor costs, but it is in fact the multinational corporations who are outsourcing the labor costs!

    These corporations interact with each other on a global market but do not deffer to the US national economic cycles.

    These corporation will trade dollars just to clip our domestic markets, so while there may be a competitive advantage to outsourcing labor for the multinationals, that competition does not help the American worker / consumer.

    Capitalism and free trade are two different things!

    The global market is anything but free or open !
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  4. CDB
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    Quote Originally Posted by spunkles182 View Post
    but expected inflation is built in to their earnings estimates. there is nothing unexpected when the gov says that it will increase the money supply. from the latest reports the current "upswing" in the market is just from companies becoming more efficient by some restructuring.
    The problem with that is that it is demonstrably false. If people were able to factor government meddling into prices there would never be shortages or surpluses due to price controls or other types of meddling which affect prices. It's even harder to predict in terms of inflation because the control is not direct or uniform.

    In theory knowledge should flow. In practice the price is the embodiment of all the available knowledge. Messing with it, while it doesn't destroy the availability of information and make everyone's decisions incorrect, it does seriously hinder the flow of information and basically amplifies what would be normal market 'noise' or minor errors into a wave of errors. Those errors occur, as with everything else, on the margins.

    I have to admit I have not looked at the current trends and, to be blunt, I don't want to. What I can say is everyone should have a massive mistrust of macro economic indicators and stats. They are subjective in the extreme and can be cast in a majorly different light given who is doing the analysis.
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    Quote Originally Posted by CDB View Post
    The problem with that is that it is demonstrably false. If people were able to factor government meddling into prices there would never be shortages or surpluses due to price controls or other types of meddling which affect prices. It's even harder to predict in terms of inflation because the control is not direct or uniform.

    In theory knowledge should flow. In practice the price is the embodiment of all the available knowledge. Messing with it, while it doesn't destroy the availability of information and make everyone's decisions incorrect, it does seriously hinder the flow of information and basically amplifies what would be normal market 'noise' or minor errors into a wave of errors. Those errors occur, as with everything else, on the margins.

    I have to admit I have not looked at the current trends and, to be blunt, I don't want to. What I can say is everyone should have a massive mistrust of macro economic indicators and stats. They are subjective in the extreme and can be cast in a majorly different light given who is doing the analysis.
    well to answer the question on why the market is going up you would kind of have to look at the market to see whats going on.

    and as far stock prices going up in inflation is wrong. its just the opposite. as inflation goes up, stock prices go down. people leave the stock market in anticipation of the fed rasing interest rates. If inflation is a growing problem, investment analysts become suspicious of high economic growth or good job reports. they fear that it reflects an inflationary boom, an artificial recovery created primarily by "easy credit" by the government, due to high federal deficits and an expanding money supply. Under inflationary conditions, analysts do not think strong job creation and economic growth are sustainable, and the stock market falls in price because they think that the Fed will need to tighten in the future.
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    Quote Originally Posted by spunkles182 View Post
    well to answer the question on why the market is going up you would kind of have to look at the market to see whats going on.

    and as far stock prices going up in inflation is wrong. its just the opposite. as inflation goes up, stock prices go down. people leave the stock market in anticipation of the fed rasing interest rates. If inflation is a growing problem, investment analysts become suspicious of high economic growth or good job reports. they fear that it reflects an inflationary boom, an artificial recovery created primarily by "easy credit" by the government, due to high federal deficits and an expanding money supply. Under inflationary conditions, analysts do not think strong job creation and economic growth are sustainable, and the stock market falls in price because they think that the Fed will need to tighten in the future.
    The stock market is traditionally a hedge against inflation. When trading on speculation the market is technically unaffected by real price inflation, but once a stock price is realized as a dollar value( liquidated ) the inflation factor attaches itself to the realized value.

    So, ultimately while the market is technically unaffected by inflation, the market price for stocks is based upon trade speculation, which would include some inflation factor.

    The inflation factor would be specific to the estimated longevity
    the trader anticipates holding the stock versus selling it for cash value, which kicks in the inflation.
  7. CDB
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    Quote Originally Posted by spunkles182 View Post
    well to answer the question on why the market is going up you would kind of have to look at the market to see whats going on.
    Indeed, but you don't need an in depth knowledge of current events when you've seen past cycles.

    and as far stock prices going up in inflation is wrong. its just the opposite.
    Only if you make the mistake of defining inflation as a general rise in prices as opposed to the increase in money/credit which often but doesn't always necessarily lead to a general rise in prices. In actuality new money/credit flows into the market mainly as bank loans to business which causes an over investment in capital goods as opposed to consumer goods. Since stocks and real estate are basically just titles to capital goods the first effect of inflation is a stock and real estate price boom, with consumer prices not necessarily showing any trend at first. Last I'd checked capital goods prices were trending upward, slightly in the US and heavily in China.

    as inflation goes up, stock prices go down. people leave the stock market in anticipation of the fed rasing interest rates. If inflation is a growing problem, investment analysts become suspicious of high economic growth or good job reports. they fear that it reflects an inflationary boom, an artificial recovery created primarily by "easy credit" by the government, due to high federal deficits and an expanding money supply. Under inflationary conditions, analysts do not think strong job creation and economic growth are sustainable, and the stock market falls in price because they think that the Fed will need to tighten in the future.
    See above. Technically inflation has not stopped for over a hundred years, and most noticably so since the end of any gold standard. There is no incentive for the government to price money/credit at or above market, only to raise it occasionally to avoid hyperinflation.
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    Quote Originally Posted by CDB View Post
    Indeed, but you don't need an in depth knowledge of current events when you've seen past cycles.



    Only if you make the mistake of defining inflation as a general rise in prices as opposed to the increase in money/credit which often but doesn't always necessarily lead to a general rise in prices. In actuality new money/credit flows into the market mainly as bank loans to business which causes an over investment in capital goods as opposed to consumer goods. Since stocks and real estate are basically just titles to capital goods the first effect of inflation is a stock and real estate price boom, with consumer prices not necessarily showing any trend at first. Last I'd checked capital goods prices were trending upward, slightly in the US and heavily in China.



    See above. Technically inflation has not stopped for over a hundred years, and most noticably so since the end of any gold standard. There is no incentive for the government to price money/credit at or above market, only to raise it occasionally to avoid hyperinflation.
    im lost. I was talking more about how investors value their required rate of return in the capital asset pricing model. As the Fed adjusts interest rates, the risk-free rate will change. If the Fed raises rates, the risk-free rate will rise also. the stock’s target price should drop because the required return is higher.
    If key rates fall, then the stock’s target price should rise because the required return has dropped.
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    Quote Originally Posted by spunkles182 View Post
    im lost. I was talking more about how investors value their required rate of return in the capital asset pricing model. As the Fed adjusts interest rates, the risk-free rate will change. If the Fed raises rates, the risk-free rate will rise also. the stock’s target price should drop because the required return is higher.
    If key rates fall, then the stock’s target price should rise because the required return has dropped.
    We're talking about seperate things. You're talking investing strategy, I'm talking economics. My point generally would be that what most people think of as inflation really isn't, because over the years they've confused symptoms with cause.

    Maybe this will help. And I say maybe because I just skimmed it, and my memory of CAPM is hazy to say the least. I checked the wiki and it may as well be in French at this point. But I notice you're not averse to citing from mises.org yourself, so it might be in terms that join the two approaches, art and science, nicely for you.

    And me too. I need a refresher.
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    And imagine how good it would be if instead of working for their wallet, people worked for the advancement of humanity itself.
  11. CDB
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    Quote Originally Posted by spatch View Post
    And imagine how good it would be if instead of working for their wallet, people worked for the advancement of humanity itself.
    They do. By working for their wallet. Implicit cooperation for mutual gain is what the market is.
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    Quote Originally Posted by CDB View Post
    We're talking about seperate things. You're talking investing strategy, I'm talking economics. My point generally would be that what most people think of as inflation really isn't, because over the years they've confused symptoms with cause.

    Maybe this will help. And I say maybe because I just skimmed it, and my memory of CAPM is hazy to say the least. I checked the wiki and it may as well be in French at this point. But I notice you're not averse to citing from mises.org yourself, so it might be in terms that join the two approaches, art and science, nicely for you.

    And me too. I need a refresher.
    thanks for the info. no, it looks very informative to me. itll take some time to read the 21 pages so ill have to get back to you.
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    Quote Originally Posted by spunkles182 View Post
    thanks for the info. no, it looks very informative to me. itll take some time to read the 21 pages so ill have to get back to you.
    I know. I thought I was ****ing wordy, I forgot what professors were like.
  14. Ron Paul... phuck yeah!
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    Liquidity. LBO firms [Private Equity] are receiving unprecedented financing terms. The pensions are throwing billions at Blackstone, Cerberus... and we're seeing huge deals each week. Alcoa bids for Alcan, and then an over the top bid comes in from a white knight, lifting the entire sector on the reval.

    The subprime/CDS fiasco is worse than reported, but we'll go higher until the flow of cash dries up. or every ticker gets taken private!
    Last edited by riskarb; 07-19-2007 at 11:28 AM.
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    Quote Originally Posted by riskarb View Post
    Liquidity. LBO firms [Private Equity] are receiving unprecedented financing terms. The pensions are throwing billions at Blackstone, Cerberus... and we're seeing huge deals each week. Alcoa bids for Alcan, and then an over the top bid comes in from a white knight, lifting the entire sector on the reval.

    The subprime/CDS fiasco is worse than reported, but we'll go higher until the flow of cash dries up. or every ticker gets taken private!
    The older players in the market are just sucking in more "new investor" cash, which they will use to leverage themselves during the massive sell off that is eminent.

    same old game.
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    Quote Originally Posted by anabolicrhino View Post
    Dow climbs over 280 points to end at record high in N.Y.+

    Does it bother anyone else that the stockmarket keeps going up without any economic factor that might justify trader confidence???

    The only factor i see is that the US national debit was cut in half
    since 2004 but...
    FOREIGN INVESTMENT..... ITS INFLATING THE MARKET...
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