Article: Billionaires Dumping Stocks bc of looming economic meltdown

[AnabolicDoc]

http://www.moneynews.com/MKTNews/bil...source=taboola

Definitt worth the 5 min read. Also note importantly, watch the video at the end.

[BG]

I pray they are wrong.

[Armykid93]

I pray they are wrong.

X1000

Very very frightening times we live in.

[Honkey_Kong]

Unfortunately, I don't think they're wrong. Despite it being illegal, these billionaires are getting insider info before the public will get it. They can save their shirts while we all fry. They know the shit is about to hit the fan and that's probably going to start a panic.

[dan991]

Unfortunately, I don't think they're wrong. Despite it being illegal, these billionaires are getting insider info before the public will get it. They can save their shirts while we all fry. They know the shit is about to hit the fan and that's probably going to start a panic.

+1 A lot of things are going to become real; really quick.

[oatmeal69]

Looks a lot more like an advertisement to me... Not that I believe we're in a strong sustainable economy by any means.

[Armykid93]

Unfortunately, I don't think they're wrong. Despite it being illegal, these billionaires are getting insider info before the public will get it. They can save their shirts while we all fry. They know the shit is about to hit the fan and that's probably going to start a panic.

Info from who? The govt?

[Honkey_Kong]

Info from who? The govt?

It's illegal, but if you got millions if not billions invested in something, you're going to have access to information about the company that the regular Joe investor with a 401k isn't going to have access too. Of course I'm just speculating, but it makes sense to use every advantage you can get.

[warmouth]

And look at what they are investing in.......... Precious metals. That makes things even scarier!

[Armykid93]

It's illegal, but if you got millions if not billions invested in something, you're going to have access to information about the company that the regular Joe investor with a 401k isn't going to have access too. Of course I'm just speculating, but it makes sense to use every advantage you can get.

I'm new to this so if I seem stupid....well I am lol but how is that illegal? If the company decided to tell them dump your stocks or what ever, seems like that would be up to the company.

[Honkey_Kong]

I'm new to this so if I seem stupid....well I am lol but how is that illegal? If the company decided to tell them dump your stocks or what ever, seems like that would be up to the company.

If they get information about a company that affects their decision as to whether or not they should buy/sell the company's stock and that information isn't public (meaning they company hasn't publically disclosed it), it's called insider trading and you CAN go to prison for it. Martha Stewart went to prison for it. But it's rather difficult to prove and so the government has to make a solid case in order to actually catch somebody.

What happens is they're getting advanced notice to whether or not they should sell their stocks while the price is still high and before anybody else knows there is a problem. They end up making a profit while everyone else loses. Their sale of stocks cause there to be a huge supply in the availability of stocks, so then the value of those stocks drops. Pretty much anyone without insider information is then in a spot where the company's going to tank and they can't unload their stocks without losing money.

Angelo Mozillo did this with Countrywide and didn't do one day in prison for it. Meanwhile a lot of people including lower level employees, who were heavily invested in them, lost their life savings, while he got out before the shit hit the fan with the credit crisis.

[ElectraMaddox]

Um I actually have the book aftershock...Just an FYI look to see where half of the worlds billionaires have their money (what asset manager they use) and two it's inevitable what will happen to the housing market and the bond market especially during and expansionary period... Personally I don't see this happening all at the same time look at past market trends...

The most likely scenario of what I think will pan out will be as follows:

1. The housing market collapse... Why bc rising interest rates, less first time homebuyers and many people walking away from their homes because they won't sell and the value has diminished. Plus bernake plans on slowly stopping QE3 over the next few years but as for now it's still in process when that stops interest rates will rise causing the rest to happen

2. When interest rates rise... Bond prices tank and the fixed income market is going to be a volitale place. For the retired investor who always believed bonds were a so called safe avenue are going to have a reality check. Now they will be stuck holding on to the bonds for the long term hoping to recoop value.

3. As bond prices tank as a result of interest rates rising, companies have already positioned themselves to expand long before this happened. They leverage themselves in low interest rate envoirments and hire employees at a fraction of the salary they would when the economy is at a climax. New man power, low interest rate debt and they've expanded... What happens as a result they start turning profits... Take a look at the s and p last year and so far this year if you don't get my drift the equity markets is a nice place to be for many.

4. Now we have political issues which can greatly impact the avg consumer. New tax law.... Medical tax as well as increases in many areas like earned income and capital gains tax plus less write offs.... What happens we start to close the debt gap the govt has but who gets impacted us the avg joe.... The job market becomes more competitive more people go back to school to advance their Career and take on more debt... The debt they can't afford and what happens they thought they'd get a better job as a result but they don't now they make the same money but inflation has impacted them, rising taxes means less take home in their paycheck, the bond market losing value so those retiring need new plans, insurance carriers are paying out more than market returns are doing on annuities so insurance premiums go up and now more people are walking away from their homes to down size because it has just got to the point of being too costly. Go back to point number one and watch the domino effect pan out....


by no means is this a recommendation, this is a personal opinion so don't use this to allocate your finances... Speak to a professional regarding your money.... Now is a good time to do that.

[ElectraMaddox]

I'm new to this so if I seem stupid....well I am lol but how is that illegal? If the company decided to tell them dump your stocks or what ever, seems like that would be up to the company.

Insider trading is not allowed... You're not suppose to have advantage over others I the market place as it could effect the outcomes as to what the price of the security becomes... Watch the men who made America... And awesome documentary and you'll learn where a lot of regulations including employment regulations came from

[Honkey_Kong]

Honestly, if people are smart, they'd invest in precious metals right now as barring an artificial increase in said metal's supply, it will be the most stable form of money you can possess. This will become increasingly important as inflation occurs in the economic meltdown.

[ElectraMaddox]

Honestly, if people are smart, they'd invest in precious metals right now as barring an artificial increase in said metal's supply, it will be the most stable form of money you can possess. This will become increasingly important as inflation occurs in the economic meltdown.

If you know how precious metals work you wouldn't say that... They are counter cyclical as are utility companies... You would start increasing your position in them as the equity market was at its climax.... Not while its expanding.... Precious metals would be compressing at that time... Timing is eveverything besides the avg joe doesn't have money to invest like that most middle class people all they have investment wise is retirement accounts and you can't directly invest in precious metals only companies that mine or a security based on precious metals but you can't directly hold it in a retirement account so you can, can that idea..... But nice try a for effort.....

Again, this is not a recommendation or solicition for any securities. Speak to your financial rep regarding concerns

[Honkey_Kong]

If you know how precious metals work you wouldn't say that... They are counter cyclical as are utility companies... You would start increasing your position in them as the equity market was at its climax.... Not while its expanding.... Precious metals would be compressing at that time... Timing is eveverything besides the avg joe doesn't have money to invest like that most middle class people all they have investment wise is retirement accounts and you can't directly invest in precious metals only companies that mine or a security based on precious metals but you can't directly hold it in a retirement account so you can, can that idea..... But nice try a for effort.....

Again, this is not a recommendation or solicition for any securities. Speak to your financial rep regarding concerns

Well of course it's going to go down hill from here. But at the same time, an ounce of gold is going to hold it's value while a dollar is going to drop. I'm also not suggesting that people invest in companies than handle the securities either. I'm saying that as the fiat currency gets devalued, it'll be worth it to own gold, silver, etc. You can always use it for barter or convert it in to back in to currency.

[ElectraMaddox]

Well of course it's going to go down hill from here. But at the same time, an ounce of gold is going to hold it's value while a dollar is going to drop. I'm also not suggesting that people invest in companies than handle the securities either. I'm saying that as the fiat currency gets devalued, it'll be worth it to own gold, silver, etc. You can always use it for barter or convert it in to back in to currency.

theres different asset classes people should never place all of their money in the same place.
no that makes no sense precious metals are bearish right now... Unless you do options trading I don't see why'd you'd invest in that....

read this
http://www.minyanville.com/sectors/m.../2013/id/48380


Not a recommendation or solicitation

[optionsdude]

You also have to take into account the run that these stocks have had in the last few years. They could just be taking gains,no one ever got hurt taking a profit.

[ElectraMaddox]

You also have to take into account the run that these stocks have had in the last few years. They could just be taking gains,no one ever got hurt taking a profit.

Thats my thoughts on it... I'm not complaining my portfolio is doing exactly what I want it to

[MuscleInk]

Insider trading is not allowed... You're not suppose to have advantage over others I the market place as it could effect the outcomes as to what the price of the security becomes... Watch the men who made America... And awesome documentary and you'll learn where a lot of regulations including employment regulations came from

Correct, but it does happen a far bit. Even in the pharmaceuticals industry, many stocks are affected by phase 2 clinical trials of new compounds - called "pivitol trials" - because the strength of phase 2 data all but sets the course for approval or denial of a new drug. A lot of the data in phase 2 research is known internally before its publically announced and if you follow pharam trends closely, many times you'll see market "rections" to phase 2 data about 24 hours before it's publically reported.

[MuscleInk]

http://www.moneynews.com/MKTNews/bil...source=taboola

Definitt worth the 5 min read. Also note importantly, watch the video at the end.

Interesting read Doc. A 90% correction would have far reaching implications for the economy and any recovery pundits would have us believe is coming. I'm not totally surprised by this report and from an investment strategy, it makes sense. The biggest factor for recovery in my mind is employment. Sure, we may have hit a stablization period, but a stabilization is not what we need to turn around the economy. There's no such thing as job security and people are finally realizing this. The middle and low class strata largely live from pay check to paycheck with no investment strategies and simply no liquidity to reinvest. They are over levereged, over drawn and there really hasn't been much of a light at the end of the tunnel for many. People talk about a recovery, but until employment numbers rise and consumer confidence rebounds, people will hold onto their cash, spend less, and try to avoid insolvencies.

[MuscleInk]

Um I actually have the book aftershock...Just an FYI look to see where half of the worlds billionaires have their money (what asset manager they use) and two it's inevitable what will happen to the housing market and the bond market especially during and expansionary period... Personally I don't see this happening all at the same time look at past market trends...

The most likely scenario of what I think will pan out will be as follows:

1. The housing market collapse... Why bc rising interest rates, less first time homebuyers and many people walking away from their homes because they won't sell and the value has diminished. Plus bernake plans on slowly stopping QE3 over the next few years but as for now it's still in process when that stops interest rates will rise causing the rest to happen

2. When interest rates rise... Bond prices tank and the fixed income market is going to be a volitale place. For the retired investor who always believed bonds were a so called safe avenue are going to have a reality check. Now they will be stuck holding on to the bonds for the long term hoping to recoop value.

3. As bond prices tank as a result of interest rates rising, companies have already positioned themselves to expand long before this happened. They leverage themselves in low interest rate envoirments and hire employees at a fraction of the salary they would when the economy is at a climax. New man power, low interest rate debt and they've expanded... What happens as a result they start turning profits... Take a look at the s and p last year and so far this year if you don't get my drift the equity markets is a nice place to be for many.

4. Now we have political issues which can greatly impact the avg consumer. New tax law.... Medical tax as well as increases in many areas like earned income and capital gains tax plus less write offs.... What happens we start to close the debt gap the govt has but who gets impacted us the avg joe.... The job market becomes more competitive more people go back to school to advance their Career and take on more debt... The debt they can't afford and what happens they thought they'd get a better job as a result but they don't now they make the same money but inflation has impacted them, rising taxes means less take home in their paycheck, the bond market losing value so those retiring need new plans, insurance carriers are paying out more than market returns are doing on annuities so insurance premiums go up and now more people are walking away from their homes to down size because it has just got to the point of being too costly. Go back to point number one and watch the domino effect pan out....


by no means is this a recommendation, this is a personal opinion so don't use this to allocate your finances... Speak to a professional regarding your money.... Now is a good time to do that.

The more I read your posts, the more I like you!!!! lol

Thanks for the book reference. I just downloaded it to my audio books on my phone. I do a lot of traveling and spend the time learning on the road as much as possible.

[diabolicsoul]

Last year when I was working as an electrician, we were doing a job for a really rich family. I'm not too sure how much their worth, but I'm guessing probably in the hundred of millions. He was a big time investor. He would talk about gaining 10-20 million in a day or losing 50 million in a day.

Anyways, on his private island, he started buying these wooden boxes, and started buying a shit ton of canned food, that won't expiry for decades, etc. And he starts burying them on the island. I don't know. weirdest thing.

I can guarantee that the rich probably talk and know things that a lot of people don't.

[ElectraMaddox]

Correct, but it does happen a far bit. Even in the pharmaceuticals industry, many stocks are affected by phase 2 clinical trials of new compounds - called "pivitol trials" - because the strength of phase 2 data all but sets the course for approval or denial of a new drug. A lot of the data in phase 2 research is known internally before its publically announced and if you follow pharam trends closely, many times you'll see market "rections" to phase 2 data about 24 hours before it's publically reported.

Thats how I bought my place.... A pharmacuticals stock I had got FDA approved the stock shot up I cashed out at a good time ironically and now the thing is worthless

[ElectraMaddox]

The more I read your posts, the more I like you!!!! lol

Thanks for the book reference. I just downloaded it to my audio books on my phone. I do a lot of traveling and spend the time learning on the road as much as possible.

Thanks if its one topic I know about its finance hands down....

ps it's a great book lots of insight I don't agree with everything but its informative and it's gives you a different perspective on things...

[ElectraMaddox]

Last year when I was working as an electrician, we were doing a job for a really rich family. I'm not too sure how much their worth, but I'm guessing probably in the hundred of millions. He was a big time investor. He would talk about gaining 10-20 million in a day or losing 50 million in a day.

Anyways, on his private island, he started buying these wooden boxes, and started buying a shit ton of canned food, that won't expiry for decades, etc. And he starts burying them on the island. I don't know. weirdest thing.

I can guarantee that the rich probably talk and know things that a lot of people don't.

No affluent people have teams of experienced financial reps handling their money to create strategies plus portfolio managers at major investment firms... Those people pay lots of money to make money... I see this happen everyday... They don't just make money out of no where

[MuscleInk]

Thanks if its one topic I know about its finance hands down....

ps it's a great book lots of insight I don't agree with everything but its informative and it's gives you a different perspective on things...

After med school I did an MBA. I'm a numbers guy. Taught stats in University for 8 years and loved it! My favorite class in biz school was financial statement analysis. It's amazing what companies will try to do with their creative accounting practices!!!! Lol

[ElectraMaddox]

After med school I did an MBA. I'm a numbers guy. Taught stats in University for 8 years and loved it! My favorite class in biz school was financial statement analysis. It's amazing what companies will try to do with their creative accounting practices!!!! Lol

It's amazing half of the things companies do... I'm a numbers person too but it's weird because I think of numbers in an abstract way... Which actually works out in my benefit when I make financial plans... Sometimes I come up with things that surprise me... I think if I dealt more with the technical side like algorithms and ratios more of the portfolio management I'd hate it

[Armykid93]

You guys hurt my brain lol i'm just glad I know how to budget and I get a steady paycheck. I'm gonna start a savings very soon for retirement. Something that collects interest, not sure what to do though.

[MuscleInk]

It's amazing half of the things companies do... I'm a numbers person too but it's weird because I think of numbers in an abstract way... Which actually works out in my benefit when I make financial plans... Sometimes I come up with things that surprise me... I think if I dealt more with the technical side like algorithms and ratios more of the portfolio management I'd hate it

One of my favorite case studies was Cisco Systems. Their 2001 financials looked impressive with strong earnings on the balance sheet and income statement but when you drilled down into the statement of cash flow from operations, it reported 87% of cash flow came from investments in the market and NOT R&D for product development. As an investor, I'd be worried to see a company trading on the market with my money instead of developing products that they are known for.

The investments weren't capital expenditures or VC money because there was no new capital investments reported on the statement of investments.

So many ways for companies to misrepresent earnings!!!!

[ElectraMaddox]

One of my favorite case studies was Cisco Systems. Their 2001 financials looked impressive with strong earnings on the balance sheet and income statement but when you drilled down into the statement of cash flow from operations, it reported 87% of cash flow came from investments in the market and NOT R&D for product development. As an investor, I'd be worried to see a company trading on the market with my money instead of developing products that they are known for.

The investments weren't capital expenditures or VC money because there was no new capital investments reported on the statement of investments.

So many ways for companies to misrepresent earnings!!!!

I agree that's why so many new regulations have come out recently regarding how much financial companies can invest and in what particular investments... It's crazy some of the lengths certain companies go to... To get earnings I know why obviously

[AnabolicDoc]

Interesting read Doc. A 90% correction would have far reaching implications for the economy and any recovery pundits would have us believe is coming. I'm not totally surprised by this report and from an investment strategy, it makes sense. The biggest factor for recovery in my mind is employment. Sure, we may have hit a stablization period, but a stabilization is not what we need to turn around the economy. There's no such thing as job security and people are finally realizing this. The middle and low class strata largely live from pay check to paycheck with no investment strategies and simply no liquidity to reinvest. They are over levereged, over drawn and there really hasn't been much of a light at the end of the tunnel for many. People talk about a recovery, but until employment numbers rise and consumer confidence rebounds, people will hold onto their cash, spend less, and try to avoid insolvencies.

Well said. I completely agree with your assessment.

[lovbyts]

It's illegal, but if you got millions if not billions invested in something, you're going to have access to information about the company that the regular Joe investor with a 401k isn't going to have access too. Of course I'm just speculating, but it makes sense to use every advantage you can get.

Unless you are in congress, then it's perfectly legal...

Dont worry, I'm sure if/when we hit a 2nd (or is it 3rd) recession it will still be G.W. Bush's fault.
Ive never seen a pres before who put so much blame on EVERYONE else and never shouldered any of it himself. Obviously when he said The buck stops with YOU it was not a slip of the tongue and he meant it....

[Armykid93]

Unless you are in congress, then it's perfectly legal...

That's what i'm thinking, I don't see how it wouldn't be legal and there would be literally no way of regulating something like that I don't think

[t-dogg]

Not a big fan of stocks. I cant control it. I personally like the ideal of things you can control like real estate and such.

[ElectraMaddox]

Well said. I completely agree with your assessment.

I can not state that I fully agree... The public sector is pushing jobs into the private sector... Why because they can down size a restructure to save money yet not completely kill unemployment numbers... So certain companies are receiving grants/credits to take people on... This helps stabilize unemployment numbers. While this is taking place wage earners are not making much as companies are trying to expand they want to lay off the big wigs and hire people at lower costs.

My concern is okay these companies hire new employees, unemployment numbers are fairly stable... Well what happens when qe3 is no longer in play... I foreshadow hyper inflation occurring... Now if that happens, bond prices tank, interest rates rise rapidly, highly leveraged companies are impacted, this is going to cause people in the work field to look for advancement not because they want to... Because they have to at this point. Who excels in these environments? The innovators, the idealist and those that implement, the doers... The ones with the abstract thought process that can overcome these hardships that these companies will face whether it be developing a state of the art tablet or whether it be an eccentric approach to restructuring... These people whom make up less than 15 percent of the population will mostly excel in this environment, they are bred for it. Well what happens to the other 85 percent? The direct or linear thinkers? They become stuck in a lifestyle they can't afford and can't deal with ( this is where I agree) they have no money, no strategy to stand on one leg. They are going to rely on higher education as a linear thinker would for career advancement and most likely tack on more debt before giving up and walking away from it all and start looking for job opportunities in other countries... now imagine all of these major financial institutions who lent all of this money out...

you have mass amounts of people walking away from their mortgages, lines of credit, loans, auto loans, helocs, you name it... It's a downward spiral... Now these companies not only have less cash on their balance sheets but have to incur other fees in order to settle out this debt. Less cash on the balance sheets the less likely the shareholders are getting dive ds and the less attractive the equity position becomes... It begins to lose value at a rapid rate... This is the point you'd see stocks start to tank and why because the companies that lend to the major companies can't afford to lend at the same rate they once lent money because of the cost they've incurred and now it will cost more for companies in other sectors to borrow money so they look for new funding sources such as issuing bonds however if the interest rate environment is up it is still going to be costly to borrow so this will slow any expansionary period.

the whole problem with these so called solutions... Which are all just temporary is the thinking is backwards. The govt is relying on big businesses to create a plan... Which they could in fact do but it would make much more sense to require companies to pay wages to employees that keep up with inflation. I don't care if joe blow is working for Micky ds at 7.75 an hour or bob smith the local bus driver at 40k a year. To sustain their lifestyles and keep purchasing goods and services as well as having money to invest they need to keep up with inflation but if you're not doing that... This becomes a never ending circle and all you're doing is creating a band aid to a wound that's getting worse. In the us the rich get richer and the poor poorer... This system is capitalist... It's designed for those who can compete ... Dog eat dog... We do not live in a socialist country. It's like you have a bunch of entry level employees trying to become CEO and you have an EXEC who worked for the CEO the last ten years... You know who is getting the job hands down... The rest can not compete. By at least keeping wages at a pace where it correlates with inflation, employees won't feel the need to have to compete or advance and they will feel secure in a life style that they already have so they will continue purchasing goods and services and stimulating the economy and more likely to put money away for retirement and not as many people would take social security at 67. They would be able to hold off for the 8 percent annual bump up and take at 70. This benefits the govt as well as the people because they will be saving tons of money.

Gearing an economic plan that relieves the middle class of all the financial pressures and keeps them with more cash at hand will be a sure way to actually help the economy recover. This would be a great starting point... However this is a socialist approach and this is not something we have seen presidents other than Wilson do in the past... It did heal the depression though... Food for thought.

The tax revisions that were made were adjusted for inflation but wages aren't? That makes no sense to me... I truly believe that inflation risk is the root of majority of the issues... What's the downside to hedging inflation with wage increases... Less earnings for the big wigs (shareholders) many of whom are in congress... And smaller dividend yields... However the consumers will be able to continue purchasing goods and services so these companies can still grow and have earnings...

Sorry for my tangent

[ElectraMaddox]

Not a big fan of stocks. I cant control it. I personally like the ideal of things you can control like real estate and such.

That was a dumb response... You need to read the book aftershock and google qe3 (Japanese style quantitive easing) and what's happening in the real estate market.

[t-dogg]

That was a dumb response... You need to read the book aftershock and google qe3 (Japanese style quantitive easing) and what's happening in the real estate market.

LOL dumb?


Hardly. Stocks, bonds unless you control the vest means you have no control. Real Estate wheather the market goes up and/or down is still yours. Its hardly dumb having multi rentals....


I have a stack of books on this also. Ive went to multi sems as well.


BUT, Im open to you explaining otherwise.

[ElectraMaddox]

LOL dumb?

Yes... I said it... Go look up what I said and you'll def understand why.... Oh and go look up REITs (real estate investment trusts)

[MuscleInk]

I can not state that I fully agree... The public sector is pushing jobs into the private sector... Why because they can down size a restructure to save money yet not completely kill unemployment numbers... So certain companies are receiving grants/credits to take people on... This helps stabilize unemployment numbers. While this is taking place wage earners are not making much as companies are trying to expand they want to lay off the big wigs and hire people at lower costs.

My concern is okay these companies hire new employees, unemployment numbers are fairly stable... Well what happens when qe3 is no longer in play... I foreshadow hyper inflation occurring... Now if that happens, bond prices tank, interest rates rise rapidly, highly leveraged companies are impacted, this is going to cause people in the work field to look for advancement not because they want to... Because they have to at this point. Who excels in these environments? The innovators, the idealist and those that implement, the doers... The ones with the abstract thought process that can overcome these hardships that these companies will face whether it be developing a state of the art tablet or whether it be an eccentric approach to restructuring... These people whom make up less than 15 percent of the population will mostly excel in this environment, they are bred for it. Well what happens to the other 85 percent? The direct or linear thinkers? They become stuck in a lifestyle they can't afford and can't deal with ( this is where I agree) they have no money, no strategy to stand on one leg. They are going to rely on higher education as a linear thinker would for career advancement and most likely tack on more debt before giving up and walking away from it all and start looking for job opportunities in other countries... now imagine all of these major financial institutions who lent all of this money out...

you have mass amounts of people walking away from their mortgages, lines of credit, loans, auto loans, helocs, you name it... It's a downward spiral... Now these companies not only have less cash on their balance sheets but have to incur other fees in order to settle out this debt. Less cash on the balance sheets the less likely the shareholders are getting dive ds and the less attractive the equity position becomes... It begins to lose value at a rapid rate... This is the point you'd see stocks start to tank and why because the companies that lend to the major companies can't afford to lend at the same rate they once lent money because of the cost they've incurred and now it will cost more for companies in other sectors to borrow money so they look for new funding sources such as issuing bonds however if the interest rate environment is up it is still going to be costly to borrow so this will slow any expansionary period.

the whole problem with these so called solutions... Which are all just temporary is the thinking is backwards. The govt is relying on big businesses to create a plan... Which they could in fact do but it would make much more sense to require companies to pay wages to employees that keep up with inflation. I don't care if joe blow is working for Micky ds at 7.75 an hour or bob smith the local bus driver at 40k a year. To sustain their lifestyles and keep purchasing goods and services as well as having money to invest they need to keep up with inflation but if you're not doing that... This becomes a never ending circle and all you're doing is creating a band aid to a wound that's getting worse. In the us the rich get richer and the poor poorer... This system is capitalist... It's designed for those who can compete ... Dog eat dog... We do not live in a socialist country. It's like you have a bunch of entry level employees trying to become CEO and you have an EXEC who worked for the CEO the last ten years... You know who is getting the job hands down... The rest can not compete. By at least keeping wages at a pace where it correlates with inflation, employees won't feel the need to have to compete or advance and they will feel secure in a life style that they already have so they will continue purchasing goods and services and stimulating the economy and more likely to put money away for retirement and not as many people would take social security at 67. They would be able to hold off for the 8 percent annual bump up and take at 70. This benefits the govt as well as the people because they will be saving tons of money.

Gearing an economic plan that relieves the middle class of all the financial pressures and keeps them with more cash at hand will be a sure way to actually help the economy recover. This would be a great starting point... However this is a socialist approach and this is not something we have seen presidents other than Wilson do in the past... It did heal the depression though... Food for thought.

The tax revisions that were made were adjusted for inflation but wages aren't? That makes no sense to me... I truly believe that inflation risk is the root of majority of the issues... What's the downside to hedging inflation with wage increases... Less earnings for the big wigs (shareholders) many of whom are in congress... And smaller dividend yields... However the consumers will be able to continue purchasing goods and services so these companies can still grow and have earnings...

Sorry for my tangent

Wow, great rebuttal!!! It almost hurt my brain reading it! Lol

I'm still digesting it. I don't think you and I are far apart on this. This conversation could get very interesting!