stocks go higher admidst job loss data

[evaness]

I don't thing Wall Street sees job loss as a bad thing. But no one's going to admit it. The proof is in the pudding: when companies anounce massive layoffs, the market almost always responds positively. This is only a variation of that.

From the NY Times (http://www.nytimes.com/aponline/business/AP-Wall-Street.html?_r=1&hp&oref=slogin):

Stocks moved modestly higher and Treasurys rallied Friday following news that the economy gave up 80,000 jobs last month, the biggest loss in five years.

Although the job losses are a significant sign of economic weakness, the weak report was widely expected, and some investors were relieved the total was not higher. Thomson/IFR had projected 15,000 jobs were lost in March, but some economists expected 150,000 job cuts.

Payrolls for January and February were revised lower by a total of 67,000 and the unemployment rate shot up to 5.1 percent, the highest since September 2005. The economy has given up jobs the first three months of this year, and the latest report adds fuel to the belief of many economists that the U.S. is already in recession.

''The economic data is negative, but I think what the market's telling us is we've priced in a lot of the bad news already,'' said Arthur Hogan, chief market strategist at Jefferies & Co. ''You could make the argument that we've thrown a lot of difficult news at this market and it's reacted very well.''

In early afternoon trading, the Dow Jones industrial average rose 34.68, or 0.27 percent, to 12,660.71 after falling in morning trading.

Broader stock indicators also gained. The Standard & Poor's 500 index added 7.65, or 0.56 percent, to 1,376.96, and the Nasdaq composite index advanced 20.44, or 0.86 percent, to 2,383.74.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 617 million shares.

Treasurys rose after the jobs report, as investors often seek the safety of government-backed bonds amid uncertainty about the economy. The yield on the benchmark 10-year note, which moves opposite its price, fell to 3.48 percent from 3.59 percent late Thursday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose $1.65 to $105.48 per barrel on the New York Mercantile Exchange, following news that retail gas prices surged to a new record above $3.30 a gallon, and appear ready to rise further as supplies tighten ahead of the summer driving season.

Friday's moderate moves followed a modest rise Thursday in response to Federal Reserve Chairman Ben Bernanke's remarks that the Fed expects to recover most, if not all, the $29 billion worth of loans it made to keep struggling Bear Stearns Cos. from collapse. Bernanke's comments to the Senate Banking Committee, in which he defended the central bank's decision to aid JPMorgan Chase & Co.'s takeover of Bear Stearns, were calming to investors hoping that demand is returning to the tight credit markets.

Other central bankers and business leaders appearing before the committee indicated they were able to avert a financial catastrophe with Bear Stearns sinking quickly toward bankruptcy.

Remarks by Bernanke earlier in the week left the door open to another interest rate cutfrom the Federal Reserve.

''This (jobs) number still supports the notion that there's likely going to be more monetary policy easing by the Fed,'' said Michael Strauss, chief economist at Commonfund, noting that investors appear to be realizing that the central bank's moves take time to filter into the economy.

Figures like employment numbers also lag, noted Hogan. ''The unemployment rate will go higher before the recession is over,'' he said. ''I think the market is trying to tell us we understand that, we've seen this before''

''I think there are market participants who are looking through the valley and saying they're seeing the other side,'' he added.

In corporate news, shares of General Motors fell 3.5 percent after a private equity group said Friday it terminated its agreement to invest $2.55 billion in its largest auto parts supplier, Delphi Corp., which has been trying to emerge from bankruptcy protection. GM shares gave up 76 cents, to $20.83.

The Russell 2000 index of smaller companies rose 5.42, or 0.76 percent, to 718.99.

Overseas, Japan's Nikkei stock average fell 0.72 percent. Britain's FTSE 100 finished up 0.95 percent, Germany's DAX index rose 0.32 percent, and France's CAC-40 added 0.27 percent.

[Jubelum]

... and in other news... Dell announces further layoffs... stock rises.

[tonton]

... and in other news... Dell announces further layoffs... stock rises.

Yet people still support "supply side economics", "Reaganomics", "Trickle-down Economics", "voodoo economics", "The Bush Tax Cuts" and say it will benefit the middle class...

Morons.

[Jubelum]

Yet people still support "supply side economics", "Reaganomics", "Trickle-down Economics", "voodoo economics", "The Bush Tax Cuts" and say it will benefit the middle class...

Morons.

I'm middle class. The Bush Tax Cut meant I was able to expand my business. And that is exactly where that money went... not to Washington.

Morons. ;)

[e1618978]

Yet people still support "supply side economics", "Reaganomics", "Trickle-down Economics", "voodoo economics", "The Bush Tax Cuts" and say it will benefit the middle class...

Morons.

You think that the tax cut caused the current economic problems? I think you would have to have some kind of evidence to suggest something so counter-intuitive.

Recessions happen every once in a while - remember we had one in 2001 also (before Bush's tax cuts went into effect)

[a_greer]

... and in other news... Dell announces further layoffs... stock rises. there is a great monolouge in the movie Office space about this: it goes little something like this

they took your mid 20s, the best years of your life, and then they just let you go, and for what, so Bill Lumbergs stock will go up a quarter of a point!

[a_greer]

I'm middle class. The Bush Tax Cut meant I was able to expand my business. And that is exactly where that money went... not to Washington.

Morons. ;)

Bushes tax cuts wee OK, but really fucking pathetic over all.

I worked very hard in school, did all the stuff that one is supposed to, and landed a killer job: only problem: I have about 30% taken away before I see it, and then there are the taxes and fees on everything that i buy or do, not to mention the gas tax, I pay about half my post-retirement-withhlding income in taxes!

Everyone here in the US seems to bash the EU , talking bout their insain taxes, but as far as I know, their only tax is a consomtion VAT at about 20%...Please set me streight if I am wrong on that.

THE IRS IS CRIMINAL, IT SHOULD BE ABOLISHED

[tonton]

I'm middle class. The Bush Tax Cut meant I was able to expand my business. And that is exactly where that money went... not to Washington.

Morons. ;)

Well, congratulations. You may be 1 out of 100.

The other 99 will hire EXACTLY as many people as they need. It's not like they say "ooh look, I only need 10 people on my staff, but because of the tax cuts, I can afford to hire 2 more! I think I'll have 12 people on my staff now.

Of course not. They'll keep the 10 people in staff and buy another Porsche.

[Jubelum]

Well, congratulations. You may be 1 out of 100.

The other 99 will hire EXACTLY as many people as they need. It's not like they say "ooh look, I only need 10 people on my staff, but because of the tax cuts, I can afford to hire 2 more! I think I'll have 12 people on my staff now.

Of course not. They'll keep the 10 people in staff and buy another Porsche.

I know you're, as ever, clinging to the "Tax cuts for the rich only" party line. Please though. Just for a minute.

If I have a household income of 50-75k, which is middle class, my tax cut was $1400. A family of four making 50k a year is not "wealthy" or "rich." And about 10%, not your claimed 1% fit that 50-75k description. Look. (http://www.factcheck.org/here_we_go_again_bush_exaggerates_tax.html) About HALF of households in this country, the ones that make less than 75k a year, received anywhere from $8-$1400 back, based on what they paid in. So to say that it "only helped the rich" or that getting a tax cut in the middle class is somehow a rarity, is utter and complete BS, as if it matters to your position.

Either way, you're very much committed to the falsehood that the Bush Tax Cuts only benefitted those loathsome "rich people." That is long established. I know that whatever I cite will do little. It's a necessary argument in the class warfare rhetoric that is en vogue again this cycle.

[MarcUK]

Everyone here in the US seems to bash the EU , talking bout their insain taxes, but as far as I know, their only tax is a consomtion VAT at about 20%...Please set me streight if I am wrong on that.

THE IRS IS CRIMINAL, IT SHOULD BE ABOLISHED

is that statement for real? hahaha :lol:

[SDW2001]

I know you're, as ever, clinging to the "Tax cuts for the rich only" party line. Please though. Just for a minute.

If I have a household income of 50-75k, which is middle class, my tax cut was $1400. A family of four making 50k a year is not "wealthy" or "rich." And about 10%, not your claimed 1% fit that 50-75k description. Look. (http://www.factcheck.org/here_we_go_again_bush_exaggerates_tax.html) About HALF of households in this country, the ones that make less than 75k a year, received anywhere from $8-$1400 back, based on what they paid in. So to say that it "only helped the rich" or that getting a tax cut in the middle class is somehow a rarity, is utter and complete BS, as if it matters to your position.

Either way, you're very much committed to the falsehood that the Bush Tax Cuts only benefitted those loathsome "rich people." That is long established. I know that whatever I cite will do little. It's a necessary argument in the class warfare rhetoric that is en vogue again this cycle.

He won't listen. I got about the same amount of my own money back. But that's because I'm a Rich White Guy™



Well, congratulations. You may be 1 out of 100.

The other 99 will hire EXACTLY as many people as they need. It's not like they say "ooh look, I only need 10 people on my staff, but because of the tax cuts, I can afford to hire 2 more! I think I'll have 12 people on my staff now.

Of course not. They'll keep the 10 people in staff and buy another Porsche.

It's not just the marginal rate reductions. It's changes to things like depreciation of equipment, capital gains, reducing the marriage penalty, and expanding the child tax credit. That last one is a whopper...it isn't an adjustment to one's gross earnings. It's a straight reduction of tax owed. It lowered my tax bill by 20%.

But yeah...no help there.

[tonton]

I know you're, as ever, clinging to the "Tax cuts for the rich only" party line. Please though. Just for a minute.

If I have a household income of 50-75k, which is middle class, my tax cut was $1400. A family of four making 50k a year is not "wealthy" or "rich." And about 10%, not your claimed 1% fit that 50-75k description. Look. (http://www.factcheck.org/here_we_go_again_bush_exaggerates_tax.html) About HALF of households in this country, the ones that make less than 75k a year, received anywhere from $8-$1400 back, based on what they paid in. So to say that it "only helped the rich" or that getting a tax cut in the middle class is somehow a rarity, is utter and complete BS, as if it matters to your position.

Either way, you're very much committed to the falsehood that the Bush Tax Cuts only benefitted those loathsome "rich people." That is long established. I know that whatever I cite will do little. It's a necessary argument in the class warfare rhetoric that is en vogue again this cycle.

So... are you willing to give rich people $10000, $50000, $100,000 because you got your $1400? That's what we object to. We're not denying that you got $1400. Good for you. Bad for the country to give the rich so much more.

[Frank777]

So... are you willing to give rich people $10000, $50000, $100,000 because you got your $1400? That's what we object to. We're not denying that you got $1400. Good for you. Bad for the country to give the rich so much more.

The rich got more back because they paid more in the first place. It's called math and basic fairness.

I'm not a big fan of 'economic stimulus' plans, whether it's conservatives giving tax rebates or liberals trying big government job creation. I think, in the words of a Canadian political leader, that it's like trying to jumpstart a 747 with a flashlight battery.

But one has to agree that if you are going to do it at all, the people you are banking on to 'spend the economy out of a recession' are not in the lower-end tax brackets.

[tonton]

The rich got more back because they paid more in the first place. It's called math and basic fairness.

I'm not a big fan of 'economic stimulus' plans, whether it's conservatives giving tax rebates or liberals trying big government job creation. I think, in the words of a Canadian political leader, that it's like trying to jumpstart a 747 with a flashlight battery.

But one has to agree that if you are going to do it at all, the people you are banking on to 'spend the economy out of a recession' are not in the lower-end tax brackets.

You're totally wrong. 1,000,000 worth of rice employs far more people than 1,000,000 worth of Ferraris, or even 1,000,000 worth of "business expansion", for that matter.

The main reason supply-side economics doesn't work is simple, even if under some sort of wet-dream "best case scenario" where whatever additional spending power the rich have goes 100% to investment. The fact is that when there's a limited demand, increasing supply only dilutes it. If one supplier expands his business, it will cause another supplier to lose business. The only way to drive the economy is to increase demand. Adding jobs in a diluted market can only ever be temporary. Giving those with low-level jobs more spending power causes them to spend more at the low level, driving the market more than giving those with high-level jobs more spending power (simply because you're giving more individuals more money, not fewer individuals more money). That, in turn, is what creates more demand, which would naturally need to be filled by market EXPANSION, not market DILUTION.

[Frank777]

If one supplier expands his business, it will cause another supplier to lose business.

I'll take awhile to consider the broad substance of your post, but this part is clearly, totally, wrong.

An economy is not such a finite thing. You are not taking into account the introduction of new products or investments that lead to entirely new markets or export sales.

[tonton]

I'll take awhile to consider the broad substance of your post, but this part is clearly, totally, wrong.

An economy is not such a finite thing. You are not taking into account the introduction of new products or investments that lead to entirely new markets or export sales.

The problem is that the lower and middle classes have a fixed amount of money they are able to spend, new markets or no new markets. The upper middle and upper classes have a fixed amount they budget to spend, new markets or no new markets. the only way to drastically increase spending is to increase spending power for those who want or need to spend more... on something other than investment. Export sales... sure. but that's clearly not where the bulk of the investment is going. Giving the poor and those living on a month-to-month budget more money would put 100% of what's given to them right back into the economy in a way that will expand markets. Giving those who are already saving and investing more will only put a fraction of that back into market expanding economic routes.

[tonton]

tonton, what you are getting into is the basic "fault line" in economic thinking between production (supply-side) vs. consumption (demand-side) with a mix of a zero-sum vs. non-zero-sum wealth theory thrown in.

Your posts appear to put you solidly in the "consumptionist" (which is basically a Keyensian, demand-side view) as well as in the "zero-sum wealth" camp. The zero-sum idea is demonstrably false, so I won't even bother with that. The consumptionist view is also wrong, but here (http://www.mises.org/story/2079) I point you to something that lays out the productionist vs. consumptionist views pretty well.

Also, contrary to popular conception, it is not (consumer/consumption) spending that ultimately drives the economy but saving and investment. Basically production precedes consumption. Always.

Here are a couple more things to read on this:

(shorter) http://www.mises.org/story/710
(longer) http://www.mises.org/story/2878

The fundamental bottom line is that wealth is created (ultimately for everyone) by savings/investment/capital accumulation. This is accomplished when the people with the propensity to save/invest have more money. They are the "rich".

Well, we'll have to agree to disagree... STRONGLY...

There are a huge faction of economists that agree with my reasoning and a huge faction who agree with yours. But I think to deny the failure of Reagan's economic initiatives in terms of general standard of living is complete and utter blindness and denial.

Once again, you seem to be looking at the economy in terms of GDP, rather than in terms of most common standard of living and reduction of poverty. The fact that you refuse to admit that a man working at McDonald's in Denmark has an incredibly much better standard of living than a man working at McDonald's in the USA and that that should be the ultimate goal is clear evidence of such denial.

[tonton]

By the way, Mises is an already proven failed economist in practice. Just because he agrees with your ideas and simplistic view of socialism doesn't mean he is correct.

By the way, in reading all the anti-socialist propaganda you and your links spew, it is clear that those arguments are ALL only applicable in a purely socialist environment, in other words, one where there is no element of capitalism.

I'd be first to agree with you that pure socialism (Marxism) is doomed to failure. But you're too short-sighted to understand and admit that pure libertarian capitalism is equally as doomed.

[tonton]

Citations please.

Please tell me how that Econo-fascist thing worked out for Dollfuss and the Austrians... damn near tore the country apart before his assassination. Yeah, a country torn apart because of an economic policy is a success... :lol:

[Fellowship]

I think you all have this wrong.

My take is that America today is the economic machine it is due to the degree that "roots" have been seated so far / wide / and deep into the economic landscape.

What the heck is Fellows saying here? you may be asking?

Americans (for the most part) have been "sold" on the idea of bigger / better and more.

Bigger home

Home Theater room

Huge Kitchen with $60,000 of Sub Zero and Viking appliances etc.

RV for trips

Summer home

Bigger car

Weekend car

Bigger television with more networks to choose from

Television in every room of the house

Flip down television in each auto.

IPhones, Laptops and Blackberries for each adult and kid in household.

Eat out at restaurants often despite the "for show" $100,000 kitchen.

Drink $5.00 drinks from Starbucks on a daily basis

Fill up the HUGE SUV with $130 of unleaded weekly

Put the 3.25 kids through college

Visit the time share property at least once a year

Hire the pool service

Hire the nanny

Hire the cleaning person

Hire the landscaping crew

Go to the health club

etc. etc. etc. I could go on and on you get the point...


The thing you don't hear these people ask themselves is....

"Is this sustainable"?

Fellows





So how does this "lifestyle" get floated?

[tonton]

I think you all have this wrong.

My take is that America today is the economic machine it is due to the degree that "roots" have been seated so far / wide / and deep into the economic landscape.

What the heck is Fellows saying here? you may be asking?

Americans (for the most part) have been "sold" on the idea of bigger / better and more.

Bigger home

Home Theater room

Huge Kitchen with $60,000 of Sub Zero and Viking appliances etc.

RV for trips

Summer home

Bigger car

Weekend car

Bigger television with more networks to choose from

Television in every room of the house

Flip down television in each auto.

IPhones, Laptops and Blackberries for each adult and kid in household.

Eat out at restaurants often despite the "for show" $100,000 kitchen.

Drink $5.00 drinks from Starbucks on a daily basis

Fill up the HUGE SUV with $130 of unleaded weekly

Put the 3.25 kids through college

Visit the time share property at least once a year

Hire the pool service

Hire the nanny

Hire the cleaning person

Hire the landscaping crew

Go to the health club

etc. etc. etc. I could go on and on you get the point...


The thing you don't hear these people ask themselves is....

"Is this sustainable"?

Fellows





So how does this "lifestyle" get floated?

Fellows, my apologies in advance, but while you may be living fine in your suburban lifestyle, most Americans live in the cities, and in the words of Ice-T, "Where I come from, SHIT AIN'T LIKE THAT."

You're talking about luxuries only a few can afford. That's neither a measure, nor a driver of standard of living for the majority.

[Fellowship]

Fellows, my apologies in advance, but while you may be living fine in your suburban lifestyle, most Americans live in the cities, and in the words of Ice-T, "Where I come from, SHIT AIN'T LIKE THAT."

You're talking about luxuries only a few can afford. That's neither a measure, nor a driver of standard of living for the majority.

I agree with you... Please understand I agree..

Did you see the question I posed at the end where I ask how this lifestyle gets floated?


Fellows

[SpamSandwich]

Well, congratulations. You may be 1 out of 100.

The other 99 will hire EXACTLY as many people as they need. It's not like they say "ooh look, I only need 10 people on my staff, but because of the tax cuts, I can afford to hire 2 more! I think I'll have 12 people on my staff now.

Of course not. They'll keep the 10 people in staff and buy another Porsche.

Oh, puh-leeeeeze! Who cares what it's used for, whether more people are hired, or the money goes toward a new car (or whatever). WHO CARES? Do you seriously believe that all people "deserve" a job? Give me a break, man! If a company decides to spend money foolishly, it may not be competitive, and it may not succeed. On the other hand, there are many companies that succeed despite incompetence of a million sorts. What's the point? It's not your business.

[Jubelum]

What's the point? It's not your business.

but...uh... EVERYTHING is their business.

[Jubelum]

So how does this "lifestyle" get floated?

For many, it comes down to one word: credit.

In other situations, that lifestyle is floated by people working hard, investing, developing new products and ways of doing business and EARNING the creature comforts that the behaviours mentioned above achieve.

And to many, that success just isn't fair.

<turns up the Snog "Third Mall from the Sun" album playing in the background>

[tonton]

What's the point? It's not your business.

What on Earth are you talking about? We're talking about public funds. Of course it's our business. Why does our money go to "expansion" of some rich guy's business rather than economic empowerment of the lower middle and lower classes?

[Jubelum]

economic empowerment of the lower middle and lower classes?

buzz word, line three... buzz word... line three.

Why is it that you don't see high taxes as one of the things that DISEMPOWER the middle class? :no: Ask me, I'll tell you all about it.

Public funds start out as... yep... PRIVATE, TAXED funds. The government has nothing unless it first takes it from people who earn it. It's not your business what anyone does with their own money. Sure, you're entitled to your vote in how public monies are spent, just like the rest of us. At issue is your *problem* with how someone spends the money the government lets them keep.

[Flat Stanley]

Socialism empowers no one but the bureaucrats paid to tend the dole. Government can not turn poor people into rich people, but it is pretty good at the reverse.

[Frank777]

What on Earth are you talking about? We're talking about public funds. Of course it's our business. Why does our money go to "expansion" of some rich guy's business rather than economic empowerment of the lower middle and lower classes?

No, we're talking primarily about the rich guy's money that the State took from him in the first place.

From there, you define it as "public funds" and say the public should spend it however they see fit.

It should never be forgotten that in most countries, the general taxation of income was only begun as a temporary measure to pay for war.

And until the practice is ended, the state of near-constant war on this planet will never cease.

[mydo]

And until the practice is ended, the state of near-constant war on this planet will never cease.

I never thought about it that way. But only in the US, Russia and China (sort of) do they spend so much getting read for what they say they don't want.

[tonton]

No, we're talking primarily about the rich guy's money that the State took from him in the first place.

From there, you define it as "public funds" and say the public should spend it however they see fit.

It should never be forgotten that in most countries, the general taxation of income was only begun as a temporary measure to pay for war.

And until the practice is ended, the state of near-constant war on this planet will never cease.

Lol great... so please tell me how many nations are thriving with no taxes... :lol:

[Jubelum]

Lol great... so please tell me how many nations are thriving with no taxes... :lol:

Andorra
Anguilla
Bahamas
Bahrain
Bermuda
Brunei
British Virgin Islands
Burundi
Cayman Islands
Kuwait
Monaco
Oman
Qatar
Saint Kitts and Nevis
Somalia
United Arab Emirates
Vanuatu

Yep. Broke. All of them.

What a silly tack. No one is saying we don't need to have money for basic government, just not money for government of this size and scope. And Frank is right... "Wars" raise money, wether they be wars on other nations, war on poverty, war on drugs, whatever.

I just don't think the framers had it in mind 200 years ago that we'd pay 1/3 of our national income to the government. Everything that happens in this country until April 30 of each year, income-wise, goes to pay for the big government wet dream. In reality, all of us have been working since Jan 1, and will work for three more weeks, just to fund the government. Bye, bye, earnings... we never got a chance to know ya...

Imagine how fast this nation would turn around if election day was April 16th.

[tonton]

Andorra
Anguilla
Bahamas
Bahrain
Bermuda
Brunei
British Virgin Islands
Burundi
Cayman Islands
Kuwait
Monaco
Oman
Qatar
Saint Kitts and Nevis
Somalia
United Arab Emirates
Vanuatu

Yep. Broke. All of them.

What a silly tack. No one is saying we don't need to have money for basic government, just not money for government of this size and scope. And Frank is right... "Wars" raise money, wether they be wars on other nations, war on poverty, war on drugs, whatever.

I just don't think the framers had it in mind 200 years ago that we'd pay 1/3 of our national income to the government. Everything that happens in this country until April 30 of each year, income-wise, goes to pay for the big government wet dream. In reality, all of us have been working since Jan 1, and will work for three more weeks, just to fund the government. Bye, bye, earnings... we never got a chance to know ya...

Imagine how fast this nation would turn around if election day was April 16th.

LOL. Look at your list. Now cross out those that have more than 75% of their GDP dependent on a single commodity (fossil fuels, tourism).

And I bet all those Islanders are really happy with their standard of living.

This list could easily as well prove the value of Islam.

[Jubelum]

LOL. Look at your list. .

You ask silly, misdirected questions (income vs ALL tax), you get silly answers, what can I say...

Oh, and +1 to what sslarson said.