The high price of a 10,000-point Dow
Celebratory caps were the rage on the Street.
As an economic indicator, the Dow Jones industrial average always is problematic, but never more so than last Wednesday, when it closed above what analysts call the “psychologically important” 10,000-point mark for the first time since Oct. 3 of last year. Wall Street was jubilant.
But we wonder how jubilant folks were in the unemployment lines. We wonder how psychologically important the 10,000 mark was to the thousands of Americans who lost their homes last week.
The economic recovery, such as it is, continues to be a jobless one. Indeed, one of the key factors in the 10,000 Dow was that many companies are being rewarded for laying people off. Hooray.
The Labor Department reported last week that 514,000 Americans filed first-time unemployment claims in the week ending Oct. 10 — 10,000 fewer than in the previous week. But here in Missouri, 1,441 more people filed for unemployment. The state’s unemployment rate may be closing in on the national rate of 9.8 percent.
Also lost amid the jubilation was a report from RealtyTrac, which markets foreclosed properties, that said home foreclosures in the third quarter reached an all-time high of 937,940. Nearly 10,200 American families per day stand to lose their homes.
But Wall Street, fueled by corporate cost cuts and trillions of dollars in federal support, is bouncing back — led by Goldman Sachs, which last week reported third-quarter profits of $3.19 billion. The giant investment bank has set aside $16.7 billion so far this year to pay year-end bonuses, which could mean 10-figure paydays for some of its executives.
And, as if Goldman didn’t already have Washington wired, the Securities and Exchange Commission’s enforcement division announced Friday that a 29-year-old Goldman whiz kid named Adam Storch will become its chief operating officer. As Daniel Indiviglio of The Atlantic’s business channel put it, “All of [Bernie] Madoff’s former employees must have already been busy.”
There was some bad news: Bank of America reported it had lost $2 billion in the third quarter and had set aside $11 billion to cover bad loans. This is what it gets for being a commercial bank and lending money to regular folks who default on loans and credit cards instead of a well-wired investment bank.
To top it off, President Barack Obama and Vice President Joe Biden went on a spin tour — Mr. Biden was in St. Louis on Thursday — touting the job-creating effects of the stimulus program. Things would have been a whole lot worse without it, they said.
No doubt that’s true. But unless you’re on Wall Street, things still look awfully bleak. Better Mr. Obama and Mr. Biden should stay home and drop the hammer on the mortgage industry. Better they should light a fire under their regulators.
A lot of Americans don’t have time to wait for the benefits to trickle down to them. When middle America figures out how much they paid so the Dow could return to 10,000, they’re going to be very angry.
Rarely in the anals of American journalism has there ever been a more worthless screed taking up ciber-space than this. If anyone wonders why so many Americans are so clueless about how our economy actally works, just read this drivel. I have plans this evening but will likley return sometime soon to comment further. In the meantime, if you don’t read this worthless editorial, you won’t be missing ANYTHING!
Hope & Change
http://tipstrategies.com/archive/geography-of-jobs/
Goldmen Sachs - Hope & Change
http://www.youtube.com/watch?v=e2GvuOVcCB8
Leave it to the Post-Dispatch to highlight the dark clouds and ignore the silver lining … unless, of course, it is election time, and Democrats are in control. At that point, I’m sure, nary a word will be spoken about the dark clouds, however deluged we might be with the storms they produce.
As far as dropping the hammer on the mortgage industry … well, most of us have been very well served by the mortgage industry. Yes, there are people who bought homes they couldn’t afford, and others who signed papers they didn’t understand, and who are now losing their homes. But even in this time of crisis, they are a small minority. As with healthcare, the Post-Dispatch is attacking an industry which has satisfied the vast majority of its customers, in order to bring benefits to the few who were ill served.
And while we’re talking about stock prices, let’s compare two stocks of personal interest to me: JP Morgan Chase, who holds my mortgage, and Lee Enterprises, which owns the Post-Dispatch. In late summer of 2006, Lee traded for $43 a share, and JP Morgan traded in the upper 40s. Today, after rebounding from the penny stock range, Lee trades at nearly $4 a share. JP Morgan Chase, on the other hand, bottomed out at about $23 a share, and now trades at $46. If that means anything - and most people would agree that it does - then it looks like Obama and Biden should “drop the hammer” on newspaper companies, and leave the bankers alone.
I try to never miss an opportunity to send kudos to the PD when they do the right thing. It’s nice to see that they finally removed their heads from you know where. I just send the business page the news about Adam Storch because it was not reported in the front page. I guess they needed more room for pictures of families buying their Halloween costumes. http://www.washingtontimes.com/news/2009/oct/17/goldman-exec-storch-named-first-coo-sec-enforcemen/
This is another joke. What the PD failed to mention, is that this administration intentinoally went straight to cap and trade and then healthcare reform because they don’t want to go after their friends on Wallstreet. Sadly, this is the one common issue that all sides can get behind. But instead they wanted to cause the dirision that has occurred to take our eyes off the ball.
Fortunately, the tea partiers have finally woken up from a long 8-year sleep. But seeing as how libs didn’t bother to comment on this topic, I guess they are still in their Jello stupers and still refuse to admit that they are being taken for fools. When will you people wake up?
Another hedge fund CEO, Raj Rajaratnam has been indicted and this too was not reported in the front page and that his only political contribution was to the Hillary ‘08 campaign. Why is it that these guys are always Democrats? Is that just an odd coincidence? You tell me.
The Dow is quickly becoming irrelevant. In recent national elections the voters have accelerated the “Great Society” trend of replacing capitalist plutocracy with government bureaucracy. By the time they realize the costs in freedom and productivity, commerce and industry will have found new homes abroad.
Most readers seem to agree with my original post about how pathetically rambling and vacuous this screed is because it has not even reached the second page of postings. Maybe your paper should stick to something it does well, like smearing conservative talk show hosts with comments they never made.
In all seriousness, it’s really hard to take you seriously. Any novice could have told you the financial stocks lead the economy on the way up and down. Furthermore, unemployment is a lagging indicator so is keeps going down long after the bottom has been reached. Finally, rising stock prices forecast rising profits which leads to future employment gains. I know that in your world profits are evil, so this fact must really gaul you.
In the end, I think this editorial is just another lame attempt to smear free markets in general and capitalism in particular. I hate to remind you that capitalism has relieved more poverty and misery than all the socialist gov’met programs in the history of the world combined.