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(CNN)   Perhaps it is time to consider the possibilty that not only is Wall St. NOT the economy, but that Wall St. is in fact a parasite on the economy?   (cnn.com) divider line
    More: Murica, Economics, American jobs, Thursday's jobs report, buoyant rally, unemployment rate, Bureau of Labor Statistics, Unemployment, United States  
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765 clicks; posted to Business » on 01 Jul 2020 at 11:46 PM (5 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



30 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2020-07-01 8:06:58 PM  
Been saying it for years.
Wall St creates perverse incentives that drove manufacturing and a lot of engineering jobs overseas.
Great for a while, but eventually you realize just-above-survival-wage workers can't afford new cars, or new much of anything.
 
2020-07-01 8:27:52 PM  

dionysusaur: Been saying it for years.
Wall St creates perverse incentives that drove manufacturing and a lot of engineering jobs overseas.
Great for a while, but eventually you realize just-above-survival-wage workers can't afford new cars, or new much of anything.


Whoa. Are you a wizard?
 
2020-07-01 8:32:12 PM  

Urmuf Hamer: dionysusaur: Been saying it for years.
Wall St creates perverse incentives that drove manufacturing and a lot of engineering jobs overseas.
Great for a while, but eventually you realize just-above-survival-wage workers can't afford new cars, or new much of anything.

Whoa. Are you a wizard?


No.  A recently-disemployed (again) engineer.
 
2020-07-01 9:47:47 PM  
It is
 
2020-07-01 10:51:15 PM  

dionysusaur: Urmuf Hamer: dionysusaur: Been saying it for years.
Wall St creates perverse incentives that drove manufacturing and a lot of engineering jobs overseas.
Great for a while, but eventually you realize just-above-survival-wage workers can't afford new cars, or new much of anything.

Whoa. Are you a wizard?

No.  A recently-disemployed (again) engineer.


My condolences. Best of luck.
 
2020-07-01 11:02:40 PM  
Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.
 
2020-07-02 12:00:57 AM  

PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.


Where else you gonna put your money?
 
2020-07-02 12:07:14 AM  

dionysusaur: Been saying it for years.
Wall St creates perverse incentives that drove manufacturing and a lot of engineering jobs overseas.
Great for a while, but eventually you realize just-above-survival-wage workers can't afford new cars, or new much of anything.


Fark user imageView Full Size
 
2020-07-02 12:09:27 AM  

mcreadyblue: PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.

Where else you gonna put your money?


In a shoebox so I can use it for kindling, like any sane person.
 
2020-07-02 12:18:14 AM  

PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.


Came to say this. It's a casino that sometimes will allow the average person to wager a dollar. Just like a Vegas casino, the House is going to reap the rewards, and the average person might get lucky and leave with a few more pennies than they started with.
 
2020-07-02 12:25:37 AM  

PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.


Yeah, but, if I put my chips down on black, I don't get to complain during a shareholder's meeting and twist the Board's arm because the wheel keeps coming up red.

And that's what makes Wall St a disease. It's magnitudes of order more sinister, and more evil, than playing a game of chance.
 
2020-07-02 12:27:10 AM  

PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.


On a certain level, it makes sense. Finance makes sense. Give businesses the chance to take on debt in order to expand their enterprise, then pay back that debt. Part of this can involve selling shares in themselves to investors, who show faith in their products and services. A lot of good businesses would not be able to operate without these mechanisms.

In theory this is all okay, although it leads to speculation and is prone to wild animalistic energies. Over time, we set up stops and regulations to prevent such things from happening and, well, eventually the egg was cracked back open and the whole system was slowly geared to become what it is today. We've gone from a stakeholders to a shareholders economy, paid fealty to the altar of the MBA, the short-term profit, and so on. These are particular American diseases.
 
2020-07-02 12:47:46 AM  
If there is no wealth creation by these activities, then what is the rate of wealth extraction?

Obviously lower than the rate of money entering the system, but at what point do people notice there isn't any money?

What portion of holders all need to run for the exit at the same time to make the market seize up?

I think it is basic fleecing and FOMO, but how long can it last?

Is there an endless stream of rubes and money?  If that is the case, then I better get in quick before I miss out.
 
kab
2020-07-02 1:09:45 AM  
Oh gosh, no.   Inconceivable.
 
2020-07-02 1:53:42 AM  
If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!
 
2020-07-02 2:04:41 AM  

Not_Todd: If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!


The perfect authoritarian tool, perfectly happy with a few crumbs as long as there's someone else they can feel superior to.
 
2020-07-02 2:12:36 AM  

Not_Todd: If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!


The Todd I know IRL is a douche too.
 
2020-07-02 3:32:16 AM  

Brosephus: PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.

Came to say this. It's a casino that sometimes will allow the average person to wager a dollar. Just like a Vegas casino, the House is going to reap the rewards, and the average person might get lucky and leave with a few more pennies than they started with.


Demonstrably false, Investing X Time = 7-10% returns, just because you spent your money on coke and whores doesn't mean everyone else lost out, but enjoy that social security check.
 
2020-07-02 4:16:27 AM  

Scorpitron is reduced to a thin red paste: PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.

On a certain level, it makes sense. Finance makes sense. Give businesses the chance to take on debt in order to expand their enterprise, then pay back that debt. Part of this can involve selling shares in themselves to investors, who show faith in their products and services. A lot of good businesses would not be able to operate without these mechanisms.

In theory this is all okay, although it leads to speculation and is prone to wild animalistic energies. Over time, we set up stops and regulations to prevent such things from happening and, well, eventually the egg was cracked back open and the whole system was slowly geared to become what it is today. We've gone from a stakeholders to a shareholders economy, paid fealty to the altar of the MBA, the short-term profit, and so on. These are particular American diseases.


Yup. The idea of the stock market in and off itself isn't a bad thing. It's the mentality that short term gains are more important than long term growth that has damned the whole thing.  I have a 401k - it's not doing that great despite performing well in the past... maybe it will bounce back but at this point we'll see. On the other hand the company I work for is doing extremely well... I would kill for a farking pension but those seem to be an endangered species nowadays thanks to decades of anti-union propaganda.
 
2020-07-02 4:29:06 AM  

abiigdog: Brosephus: PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.

Came to say this. It's a casino that sometimes will allow the average person to wager a dollar. Just like a Vegas casino, the House is going to reap the rewards, and the average person might get lucky and leave with a few more pennies than they started with.

Demonstrably false, Investing X Time = 7-10% returns, just because you spent your money on coke and whores doesn't mean everyone else lost out, but enjoy that social security check.


More projection than a 24 screen IMAX multiplex, but I bet you had fun with those whores, didn't ya?

Here's an excerpt from an interview with John Bogle for PBS Frontline. He explains why your stock market investment is more like a casino gamble than anything else. Depending on how long you invest, you lose far more of your gains than you get to spend.

So if I do your average, what percentage of my net growth is going to fees in a 401(k) plan?

Well, it's awesome. Let me give you a little longer-term example. The example I use in my book is an individual who is 20 years old today starting to accumulate for retirement. That person has about 45 years to go before retirement -- 20 to 65 -- and then, if you believe the actuarial tables, another 20 years to go before death mercifully brings his or her life to a close. So that's 65 years of investing. If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow in that 65-year period to around $140,000.

Now, the financial system -- the mutual fund system in this case -- will take about two and a half percentage points out of that return, so you will have a gross return of 8 percent, a net return of 5.5 percent, and your $1,000 will grow to approximately $30,000. One hundred ten thousand dollars goes to the financial system and $30,000 to you, the investor. Think about that. That means the financial system put up zero percent of the capital and took zero percent of the risk and got almost 80 percent of the return, and you, the investor in this long time period, an investment lifetime, put up 100 percent of the capital, took 100 percent of the risk, and got only a little bit over 20 percent of the return. That is a financial system that is failing investors because of those costs of financial advice and brokerage, some hidden, some out in plain sight, that investors face today. So the system has to be fixed.

I've got to unscramble what you just said. You said that in the case of the $1,000 invested for 65 years, the financial system is taking 80 percent of the money. But most of us aren't doing that. In the first place, at 20 we're out spending it; we're not putting it away. But set that aside. We're really talking about people who are probably saving from 35 or 40 or 45 at best for retirement at 55, 60 or 65. and they are plunking the money away into 401(k)s. I'm just asking you, in that system, roughly what chunk of it are people getting back themselves out of their gains, and what chunk of that is going to go to the financial system for managing their money?

Well, in the long run, it's 80 percent to the financial system, 20 percent to you. In a given year, it's about 80 percent to you and 20 percent to the financial system, so if you look at 10 years or 15 years, you're probably talking about 60 percent to you and 40 percent to the financial system maybe over 20 years, something like that. But the longer the period, the greater the impact of that tyranny of compounding costs is.


And, just so that you can visualize what those losses look like, here's a chart along with an explanation for you.

This table breaks down Bogle's example of the impact of compounding -- and compounding costs -- over the long term. On the left it shows the growth on $1,000 invested by an individual at age 20 until his/her death at age 85, assuming 8 percent annual growth. On the right, it shows what happens to that same $1,000 over the same period assuming a 2.5 percent annual cost, such as a mutual fund management fee. Over the 65 years, these annual fees eat up a staggering 79 percent of what the investor would have earned with no management costs.

Fark user imageView Full Size


I'm lucky enough to have a government TSP which has the lowest fees out of almost all investment vehicles.

https://www.tsp.gov/InvestmentFunds/F​u​ndsOverview/expenses.html
 
2020-07-02 4:55:15 AM  

dionysusaur: Urmuf Hamer: dionysusaur: Been saying it for years.
Wall St creates perverse incentives that drove manufacturing and a lot of engineering jobs overseas.
Great for a while, but eventually you realize just-above-survival-wage workers can't afford new cars, or new much of anything.

Whoa. Are you a wizard?

No.  A recently-disemployed (again) engineer.


But not jaded in any way.
 
2020-07-02 4:56:59 AM  

common sense is an oxymoron: Not_Todd: If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!

The perfect authoritarian tool, perfectly happy with a few crumbs as long as there's someone else they can feel superior to.


You sound poor.
 
2020-07-02 5:15:15 AM  

Brosephus: abiigdog: Brosephus: PaulRB: Wall Street is just legal gambling on businesses by rich guys.  It serves almost zero purpose (legal or otherwise) except to make rich guys richer.

Came to say this. It's a casino that sometimes will allow the average person to wager a dollar. Just like a Vegas casino, the House is going to reap the rewards, and the average person might get lucky and leave with a few more pennies than they started with.

Demonstrably false, Investing X Time = 7-10% returns, just because you spent your money on coke and whores doesn't mean everyone else lost out, but enjoy that social security check.

More projection than a 24 screen IMAX multiplex, but I bet you had fun with those whores, didn't ya?

Here's an excerpt from an interview with John Bogle for PBS Frontline. He explains why your stock market investment is more like a casino gamble than anything else. Depending on how long you invest, you lose far more of your gains than you get to spend.

So if I do your average, what percentage of my net growth is going to fees in a 401(k) plan?

Well, it's awesome. Let me give you a little longer-term example. The example I use in my book is an individual who is 20 years old today starting to accumulate for retirement. That person has about 45 years to go before retirement -- 20 to 65 -- and then, if you believe the actuarial tables, another 20 years to go before death mercifully brings his or her life to a close. So that's 65 years of investing. If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow in that 65-year period to around $140,000.

Now, the financial system -- the mutual fund system in this case -- will take about two and a half percentage points out of that return, so you will have a gross return of 8 percent, a net return of 5.5 percent, and your $1,000 will grow to approximately $30,000. One hundred ten thousand dollars goes to the financial system and $30,000 to you, the investor. Think about that. That ...


2.5%?  Nowhere near that much unless you either have a crappy 401K admin that isn't looking out for the employees or you make bad choices on your own.  For example, the Vanguard 500 index fund (VFIAX) is .04%, roughly 62x less than the above example.
 
2020-07-02 5:27:26 AM  

Farkage: 2.5%? Nowhere near that much unless you either have a crappy 401K admin that isn't looking out for the employees or you make bad choices on your own. For example, the Vanguard 500 index fund (VFIAX) is .04%, roughly 62x less than the above example.


That figure came from John Bogle, not me.  Here's a different article that breaks down fees, and it has an even broader range where 2.5% is right in the middle.

A recent study by the Center for American Progress (CAP) found that the typical American worker who earns a median salary starting at age 25 will pay about $138,336 in 401(k) fees over their lifetime. The cost is even greater for high-income earners. These figures are reflective of average 401(k) fees, which CAP estimates to be approximately 1% of total plan assets. Another study found that 401(k) participants pay an average all-in fee of 2.22% of their assets, but that there is a wide range between 0.2% and 5%.

There's a breakdown of the different fees which are, I assume, being combined to come up with the total fee percentage.  These are not numbers I'm making up.
 
2020-07-02 8:48:18 AM  

Brosephus: Farkage: 2.5%? Nowhere near that much unless you either have a crappy 401K admin that isn't looking out for the employees or you make bad choices on your own. For example, the Vanguard 500 index fund (VFIAX) is .04%, roughly 62x less than the above example.

That figure came from John Bogle, not me.  Here's a different article that breaks down fees, and it has an even broader range where 2.5% is right in the middle.

A recent study by the Center for American Progress (CAP) found that the typical American worker who earns a median salary starting at age 25 will pay about $138,336 in 401(k) fees over their lifetime. The cost is even greater for high-income earners. These figures are reflective of average 401(k) fees, which CAP estimates to be approximately 1% of total plan assets. Another study found that 401(k) participants pay an average all-in fee of 2.22% of their assets, but that there is a wide range between 0.2% and 5%.

There's a breakdown of the different fees which are, I assume, being combined to come up with the total fee percentage.  These are not numbers I'm making up.


Most people have shiat 401ks, then.

Mine goes through Vanguard. Can confirm that I'm paying <0.1%. I can't imagine how corrupt the ones charging 10x or more than that are or the kickbacks companies that use them took.
 
2020-07-02 9:21:29 AM  

thurstonxhowell: Brosephus: Farkage: 2.5%? Nowhere near that much unless you either have a crappy 401K admin that isn't looking out for the employees or you make bad choices on your own. For example, the Vanguard 500 index fund (VFIAX) is .04%, roughly 62x less than the above example.

That figure came from John Bogle, not me.  Here's a different article that breaks down fees, and it has an even broader range where 2.5% is right in the middle.

A recent study by the Center for American Progress (CAP) found that the typical American worker who earns a median salary starting at age 25 will pay about $138,336 in 401(k) fees over their lifetime. The cost is even greater for high-income earners. These figures are reflective of average 401(k) fees, which CAP estimates to be approximately 1% of total plan assets. Another study found that 401(k) participants pay an average all-in fee of 2.22% of their assets, but that there is a wide range between 0.2% and 5%.

There's a breakdown of the different fees which are, I assume, being combined to come up with the total fee percentage.  These are not numbers I'm making up.

Most people have shiat 401ks, then.

Mine goes through Vanguard. Can confirm that I'm paying <0.1%. I can't imagine how corrupt the ones charging 10x or more than that are or the kickbacks companies that use them took.


My guess is that big companies are able to get good deals and the financial companies make up for lost income with small businesses and individual investors. Wall Street is not going to leave money on the table. Their business model is to keep as much money for themselves as they can.
 
2020-07-02 10:11:44 AM  

bfh0417: common sense is an oxymoron: Not_Todd: If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!

The perfect authoritarian tool, perfectly happy with a few crumbs as long as there's someone else they can feel superior to.

You sound poor.


hmmm, you say that like it's an insult.  Is being poor an insult?
 
2020-07-02 10:18:58 AM  

bfh0417: You sound poor.


oh...never mind, you are a f*cking troll

Created account: 2020-03-29 18:56:47 (13 weeks ago)
 
2020-07-02 12:28:13 PM  

bfh0417: common sense is an oxymoron: Not_Todd: If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!

The perfect authoritarian tool, perfectly happy with a few crumbs as long as there's someone else they can feel superior to.

You sound poor.


Feeling superior, tool?
 
2020-07-02 1:02:16 PM  

bfh0417: common sense is an oxymoron: Not_Todd: If it weren't for Wall Street, I'd have less than half as much socked away for retirement as I do. I'm "rich" only compared to the average mask-wearing molotov thrower living in their parents basement who want to burn everything down rather than admit that Capitalism is better than whatever form of Bane-in-The-Dark-Knight-Rises kleptocracy they have in mind.

/let the wild rumpus of commenters who know no more about economics than Karl Marx begin
/maybe I should charge admission
/profit!!!

The perfect authoritarian tool, perfectly happy with a few crumbs as long as there's someone else they can feel superior to.

You sound poor.


99.9% of us are.
 
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