"Housing, education, healthcare, childcare" can't "become more expensive", they are (along with food and transportation, that don't get "more expensive" any slower) essentials that must be used to calculate the value of the currency (with CPI and such). If it looks like they are more expensive, it means that currency is devalued, not the other way around.
As a type of product, clothing made of mass-produced fabric has greater utility than hand-woven one -- it's easy to replace, so people do not have to wear and maintain worn out clothing. Lower price is in this case sufficiently lower to become a feature of the product, however in all other ways the products are somewhat equivalent, and are used by all people in a similar manner, so comparison is valid.
What are you wittering on about? I consider a reasonable position of a NYSE stock to be about $2k. When I started, it was $500. If you can't save $500, you've got major problems with your lifestyle.
"Investments" at this level have absolutely no effect on your life, so you still did not benefit from them. Very likely buying a $500 in furniture would increase your productivity to produce an increase in your income over the same time that would exceed those $2000.
The tragedy of the commons if a myth. In the case of investing, profit comes from created wealth which comes from increased efficiency which comes from investment.
Investment's only purpose is to provide resources that are necessary for activity that results in making a product that can be sold for more than the cost of those resources, thus providing return on investment. If this is done by making everyone else poor by the total amount greater than increase of the value of investment, you have tragedy of the commons -- not only some wealth was transferred to smaller number of people from greater one for no good reason, the total value lost is greater than total value being gained.
Freedom of speech is somewhat restricted in most European countries.
And what are you going to accomplish with your freedom of speech if you don't own a media empire? Censorship is never directed against disseminating information (this is what secrecy is for), it's used against editorials and placing information in "trustworthy" sources.
IPO itself would not accomplish much if no one buys the new stock. And certainly the employee stockholders, who will be only be able to sell their stock much later, rely on others' willingness to pay for their stock then.
Because a major reason why Windows-only products are still in use is a "long tail" of features that are of marginal use overall but every user believes that at least one of such features is absolutely critical for his purposes. Reproducing those features to placate everyone is a massive pain in the neck, and objectively most of them are worthless, but they are effective at keeping users on an inferior, obsolete platform because software developed for it has some continuity in implementing those things.
Bullshit. The additional product was what the company sold, which increased its profits, which increased its valuation.
What additional product? Companies whose stock he had bought, or used as a collateral didn't get a single cent from it. The only way anything ended up doing any additional production is if someone else who sold him stocks through some chain of trades ended up buying actually new investment somewhere else. But those money, as I have explained before, are ones injected into the system with a loan. A direct loan to the company that got "real" investment out of this would be far more efficient, so the rest of money just dissipated between investors, brokerages and banks.
No, I benefit by out performing the market significantly. This year I'm up 8.5% (market is roughly flat, going by the S&P 500). Last year I did 48%, the market did 13%. I've outperformed by more than 5% for the past 5 years (when I took control over my own stocks), although outperforming in 2008 was done by just getting my money the hell out.
Or he saved up money. I'm a small investor, and it's extremely rare for me to have any margin loans. Most of the time I'm 12-25% cash, so I can buy on dips. How did I get the money? I saved, spending only a fraction of what I make every year. Even if I was borrowing on margin it wouldn't be safe to borrow more than an additional 10-15%, otherwise I'd risk losing everything on a margin call.
Then you didn't benefit from your (somewhat) direct participation in stock market at all. Unless you derive enjoyment from the process of trading, you would be better off stuffing your money into an index fund and never touching them again. Not that it would fundamentally change the nature of what those money would be doing, as funds employ same tactics, but it would be much less trouble and no brokerage fees personally for you, and same outcome for everyone else.
It's not a zero sum game, because your premise that same job's salary buys the same things is completely untrue.
It is for all products that continued to exist over the whole time or were replaced with comparable equivalents.
Nobody had a job that could pay for a computer with a gigaflop of performance 60 years ago. Today, virtually all jobs can pay for that.
The utility of a computer for a modern user is nowhere close to the utility of having such a device 60 years ago (when most of the benefit would come from the fact that no one else has it). For practical purposes, computer provides the same amount of improvement in a life of a modern person, a piece of furniture or home appliance would 60 years ago, so if for comparison purposes a computer was replaced with, say, a couch of comparable value, you would find that situation with couches was not any different 60 years ago.
Likewise, many jobs today pay off a home that could not have before (ignoring slight dip recently due to housing bubble/global financial meltdown).
This is actually the opposite to situation with computers. A quality of modern house (and of a suburb where it is located, and cost of maintaining it, and expected lifetime before it has to be torn down) is so ridiculously low, and so much undermines its utility, everyone is worse off because higher quality housing is no longer affordable to rent or buy. Smart people buy houses because even if the house can not outlive the loan, total loan payments are less than rent. Stupid people buy houses because they see it as "investment" despite the fact that such a house is nothing but an oversize, overpriced consumer product. Neither end up in a situation superior to anything that happened before this ridiculous housing boom in the second half of 20th century.
I'm an individual retail investor, and I've done quite well in the market, thanks. In fact, it's lifted my middle class family well into the "one percent" (net worth).
If you are indeed an individual retail investor, you most certainly had to use margin loans to buy stocks -- otherwise you would never be able to afford them. And while from your personal point of view Fed did not give you "free money", as your collateral stocks were tied up, from the market's point of view there was a situation when someone had a cake (stocks are still on the market, part of company's market cap) and ate it, too (you bought more stocks without selling other ones).
If you later sold some stock and paid back the loan, you still ended up with the difference (because stock price grew, dividends were paid, and dollar was devalued), so overall effect was money being injected into economy without any additional product being produced (neither company with "old" nor "new" stock, did anything different as a result of those manipulations). This dilutes the currency (for everyone) while enriching someone (you, your brokerage and your brokerage's bank). In a typical tragedy of the commons fashion, the benefits gained individually are far less than harm taken collectively.
The reason why people are suspicious of trickle down economics is that when you're being trickled upon, the only thing you see above you is cunts and assholes.
Correction: average income for most of the population. Crazy things happening on top, stay on top, and don't even go far enough to affect domestic production -- it's import, IP, defense and other bullshit.
Where do you think, those money come from? They are created by Federal Reserve for the purpose of being given to "investors" (in the form of margin loans on other stocks, plus whatever is scraped off them by intermediate financial companies), thus being injected into economy with no product backing them. This causes inflation, and unless everyone else's salary is immediately changed to compensate, money indeed end up being stolen from everyone in the long term.
Average income does not rise for a very, very long time -- there is slow and somewhat uneven inflation, but same job's salary buys same things, so it's just inflation, and therefore US economy is a zero-sum game.
It also can be seen by the importance of advertising in modern US economy -- when products are already known to the consumers, spending on advertising is the closest thing a company can do to biting a chunk out of a competitor.
0.1% of US population is 300,000 people. Even if those were "only" millionaries (that are actually about 5% of US population), that would require 300 billion dollars, or almost the whole Apple market cap (Google wouldn't suffice).
The result is, inflation in otherwise perfectly functioning economy (all prices, be it raw materials, products or labor, can adjust instantly), only affects money accumulation and loans, both of no direct importance for the overwhelming majority of the population. Arguably it can be even a positive development, as all properly working investments would be preserved because returns from them will reflect new prices thus compensating for inflation, while non-working "mattress money", consumer loans, bogus investments, etc. will lose value.
In reality, of course, inflation is more harmful because price adjustment is neither instant nor balanced. Salaries adjust the slowest and prices the fastest, so most of the population is usually impoverished despite having little or no savings, however this is a secondary effect, it can not possibly produce "10 hamburgers per month" prices even if inflation itself will multiply prices by millions.
Slashdot Mirror
(That was an actual advice).
The Federal reserve doesn't buy IPOs.
No, it just issues loans to people who do (and a chain of banks and brokerages along the way).
"Housing, education, healthcare, childcare" can't "become more expensive", they are (along with food and transportation, that don't get "more expensive" any slower) essentials that must be used to calculate the value of the currency (with CPI and such). If it looks like they are more expensive, it means that currency is devalued, not the other way around.
As a type of product, clothing made of mass-produced fabric has greater utility than hand-woven one -- it's easy to replace, so people do not have to wear and maintain worn out clothing. Lower price is in this case sufficiently lower to become a feature of the product, however in all other ways the products are somewhat equivalent, and are used by all people in a similar manner, so comparison is valid.
What are you wittering on about? I consider a reasonable position of a NYSE stock to be about $2k. When I started, it was $500. If you can't save $500, you've got major problems with your lifestyle.
"Investments" at this level have absolutely no effect on your life, so you still did not benefit from them. Very likely buying a $500 in furniture would increase your productivity to produce an increase in your income over the same time that would exceed those $2000.
The tragedy of the commons if a myth. In the case of investing, profit comes from created wealth which comes from increased efficiency which comes from investment.
Investment's only purpose is to provide resources that are necessary for activity that results in making a product that can be sold for more than the cost of those resources, thus providing return on investment. If this is done by making everyone else poor by the total amount greater than increase of the value of investment, you have tragedy of the commons -- not only some wealth was transferred to smaller number of people from greater one for no good reason, the total value lost is greater than total value being gained.
And this is why freedom of speech is worthless without access to mass media.
Freedom of speech is somewhat restricted in most European countries.
And what are you going to accomplish with your freedom of speech if you don't own a media empire? Censorship is never directed against disseminating information (this is what secrecy is for), it's used against editorials and placing information in "trustworthy" sources.
Don't forget to pay for the whole time Westerners used Arab technology "al-Jabr" (you know it under a very similar sounding name).
IPO itself would not accomplish much if no one buys the new stock. And certainly the employee stockholders, who will be only be able to sell their stock much later, rely on others' willingness to pay for their stock then.
Because a major reason why Windows-only products are still in use is a "long tail" of features that are of marginal use overall but every user believes that at least one of such features is absolutely critical for his purposes. Reproducing those features to placate everyone is a massive pain in the neck, and objectively most of them are worthless, but they are effective at keeping users on an inferior, obsolete platform because software developed for it has some continuity in implementing those things.
Bullshit. The additional product was what the company sold, which increased its profits, which increased its valuation.
What additional product? Companies whose stock he had bought, or used as a collateral didn't get a single cent from it. The only way anything ended up doing any additional production is if someone else who sold him stocks through some chain of trades ended up buying actually new investment somewhere else. But those money, as I have explained before, are ones injected into the system with a loan. A direct loan to the company that got "real" investment out of this would be far more efficient, so the rest of money just dissipated between investors, brokerages and banks.
No, I benefit by out performing the market significantly. This year I'm up 8.5% (market is roughly flat, going by the S&P 500). Last year I did 48%, the market did 13%. I've outperformed by more than 5% for the past 5 years (when I took control over my own stocks), although outperforming in 2008 was done by just getting my money the hell out.
O RLY
Please do that!
I dreamed of Microsoft destroying its own market for years, and now it's within reach.
Or he saved up money. I'm a small investor, and it's extremely rare for me to have any margin loans. Most of the time I'm 12-25% cash, so I can buy on dips. How did I get the money? I saved, spending only a fraction of what I make every year. Even if I was borrowing on margin it wouldn't be safe to borrow more than an additional 10-15%, otherwise I'd risk losing everything on a margin call.
Then you didn't benefit from your (somewhat) direct participation in stock market at all. Unless you derive enjoyment from the process of trading, you would be better off stuffing your money into an index fund and never touching them again. Not that it would fundamentally change the nature of what those money would be doing, as funds employ same tactics, but it would be much less trouble and no brokerage fees personally for you, and same outcome for everyone else.
It's not a zero sum game, because your premise that same job's salary buys the same things is completely untrue.
It is for all products that continued to exist over the whole time or were replaced with comparable equivalents.
Nobody had a job that could pay for a computer with a gigaflop of performance 60 years ago. Today, virtually all jobs can pay for that.
The utility of a computer for a modern user is nowhere close to the utility of having such a device 60 years ago (when most of the benefit would come from the fact that no one else has it). For practical purposes, computer provides the same amount of improvement in a life of a modern person, a piece of furniture or home appliance would 60 years ago, so if for comparison purposes a computer was replaced with, say, a couch of comparable value, you would find that situation with couches was not any different 60 years ago.
Likewise, many jobs today pay off a home that could not have before (ignoring slight dip recently due to housing bubble/global financial meltdown).
This is actually the opposite to situation with computers. A quality of modern house (and of a suburb where it is located, and cost of maintaining it, and expected lifetime before it has to be torn down) is so ridiculously low, and so much undermines its utility, everyone is worse off because higher quality housing is no longer affordable to rent or buy. Smart people buy houses because even if the house can not outlive the loan, total loan payments are less than rent. Stupid people buy houses because they see it as "investment" despite the fact that such a house is nothing but an oversize, overpriced consumer product. Neither end up in a situation superior to anything that happened before this ridiculous housing boom in the second half of 20th century.
I'm an individual retail investor, and I've done quite well in the market, thanks. In fact, it's lifted my middle class family well into the "one percent" (net worth).
If you are indeed an individual retail investor, you most certainly had to use margin loans to buy stocks -- otherwise you would never be able to afford them. And while from your personal point of view Fed did not give you "free money", as your collateral stocks were tied up, from the market's point of view there was a situation when someone had a cake (stocks are still on the market, part of company's market cap) and ate it, too (you bought more stocks without selling other ones).
If you later sold some stock and paid back the loan, you still ended up with the difference (because stock price grew, dividends were paid, and dollar was devalued), so overall effect was money being injected into economy without any additional product being produced (neither company with "old" nor "new" stock, did anything different as a result of those manipulations). This dilutes the currency (for everyone) while enriching someone (you, your brokerage and your brokerage's bank). In a typical tragedy of the commons fashion, the benefits gained individually are far less than harm taken collectively.
The reason why people are suspicious of trickle down economics is that when you're being trickled upon, the only thing you see above you is cunts and assholes.
Not dicks?
Correction: average income for most of the population. Crazy things happening on top, stay on top, and don't even go far enough to affect domestic production -- it's import, IP, defense and other bullshit.
More important question is, wouldn't the fact that Facebook is not all that valuable make the price plummet?
Where do you think, those money come from? They are created by Federal Reserve for the purpose of being given to "investors" (in the form of margin loans on other stocks, plus whatever is scraped off them by intermediate financial companies), thus being injected into economy with no product backing them. This causes inflation, and unless everyone else's salary is immediately changed to compensate, money indeed end up being stolen from everyone in the long term.
Average income does not rise for a very, very long time -- there is slow and somewhat uneven inflation, but same job's salary buys same things, so it's just inflation, and therefore US economy is a zero-sum game.
It also can be seen by the importance of advertising in modern US economy -- when products are already known to the consumers, spending on advertising is the closest thing a company can do to biting a chunk out of a competitor.
Sarcasm is truly lost on anything related to stock market, or US economy in general.
So maybe the 1% will become the 1.1%?
0.1% of US population is 300,000 people. Even if those were "only" millionaries (that are actually about 5% of US population), that would require 300 billion dollars, or almost the whole Apple market cap (Google wouldn't suffice).
This is exactly what everyone needs, a bunch of people believing they are going to be rich soon.
The result is, inflation in otherwise perfectly functioning economy (all prices, be it raw materials, products or labor, can adjust instantly), only affects money accumulation and loans, both of no direct importance for the overwhelming majority of the population. Arguably it can be even a positive development, as all properly working investments would be preserved because returns from them will reflect new prices thus compensating for inflation, while non-working "mattress money", consumer loans, bogus investments, etc. will lose value.
In reality, of course, inflation is more harmful because price adjustment is neither instant nor balanced. Salaries adjust the slowest and prices the fastest, so most of the population is usually impoverished despite having little or no savings, however this is a secondary effect, it can not possibly produce "10 hamburgers per month" prices even if inflation itself will multiply prices by millions.