That really helps the lower economic echelons, doesn’t it!
I was addressing something else.
The market does nothing for lower economic echelons but neither did the tax cuts…. So 
Gaius
345
We could do that if no one objects.
Right now I am watching six companies but the household names I am watching are
- Ford…P/E=3,32
- GM…P/E=5.67
- Goodyear Tire…P/E=4.75
Historic P/E of about 15 indicate Ford will rise 5X and the latter two 3X.
Basically, the market (which currently trades at a P/E over 20) seriously disrespects all three companies. Peter Lynch and Warren Buffet and a few other guru investors all recommend finding disrespected companies.
I have not bought them yet, (sometimes the market is right to disrespect a company.)
Gaius
346
Oh, Smith and Wesson is publicly traded. It’s current P/E is 2.84, so it’s getting even less respect than any of those. It’s not really on my watchlist though because I cannot predict lawsuits and legislation.
Are you sure?
Because the only one that’s lower is the Nasdaq…
Both Dow Jones and S&P are higher
Gaius
349
Facebook T-Mobile and Qualcomm all report earning today, right?
They could decide today’s market direction.
Gaius
350
Higher stock market markets A-B-S-O-L-U-T-E-L-Y create a surge in consumer and business spending, especially in luxury categories like impulse shopping, travel and dining out.
If by “the lower economic echelons” you include waitress moms, Walmart workers, burger flippers, hotel workers and theme park employees then what you have said is absolutely wrong. A rising stock market absolutely creates benefit for them.
The “wealth effect” is not econ 101 but it is probably econ 102.
The wealth effect is the economic phenomenon in which individuals spend more when stock prices increase and, as a result, equity portfolios are increasing in value. They do so because their sense of the reliability of their wealth is increasing. Thus, increases in consumer spending are directly correlated to increases in the value of stock portfolios.
What percentage of population are in the market?
You are describing consumer trickle down. While of course having more money And therefore spending money is an actual thing, i am not sure what the causative relationship is with a. Rising market. I am sure a correlative one can be established.
Otherwise i am not arguing.
I am not an economist lol. This is very much layman territory for me
Gaius
352
This is not trickle down.
“Trickle down” is a term first coined by Will Rogers to refer to Hoover-Roosevelt era bank bailouts. They were justified because they would benefit “the little man.”
What we discussing here (I thought) is whether stock market levels (determined by such things as war in the Ukraine, congressional spending and Fed policy) affect “the lower echelons.”
The fact is that waitress moms in Akron, i and hotel maids in Las Vegas are very much affected by such things. Even hard core liberals like John Maynard Keynes agreed on that. So do all his modern day adherents.
The single largest stockholder in the US is the California State employees retirement system. Even if we exempted that, stock market money overwhelmingly is retirement funds belonging to cops and plumbers and truckers and teachers etc… The amount of spending the middle class does when their retirement portfolios rise is a HUGE portion of the spending at places that employ unskilled workers.
If that is not “the lower echelon” who did you mean? The homeless?
Gaius
355
How so?
(Not saying you are wrong, but the day-to-day market dips and peaks are often reactions to very little news. The longer term market direction tends to make sense anyway.)
The numbers disagree but sure!
No i got that. You are describing consumer spending. I get that. I am confused by how a growing market affects consumer spending. I really don’t know that’s why i mentioned causative correlative effects you can tell me about 
Gaius
358
Well you were not completely wrong. The working poor do not have much/any money on the stock market.
A rising stockmarket indicates people with IRAs and 401ks have (already) made more money (past tense.) The effect of a rising stock market is that they become confident consumers. They spend more money but they tend to spend it in ways that are almost laser-focused benefitting the underemployed and working poor.
2 Likes
WuWei
361
I’m down $10k since that dumbass took office.
That sucks. Truly But i didn’t know we were discussing personal finances.
