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It's easier to collapse now because of the concentration of wealth, income and spending. Most of the consumer spending is now done by the top 10 percent of households.
Do you have a source for this?
I'd be interested to see some context, like how this has evolved over time.
95,000,000 Americans between age 18 and 65 are not working in our country. That is nearly three times the population of Canada. The top 10% of income earners do not spend most of the consumer market. The top earners invest and save. Yes, they have nice cars and homes, but many buy the same consumables as the rest of us. Short term, the bottom line is that our nation has not had a budget for seven years, just continuing resolutions to spend more than we take in. McConnell, Boehnor and Ryan gace Obama a $1.1 TRILLION dollar going away present with no strings attached.
Many of the largest banks are buying up gold and silver as fast as they can. Deutchebank. Has reached a plead deal where they will pay precious metals investors billions of dollars for artificially keeping down the prices of gold and silver. The mainstream medial is not reporting this, even of the financial pages of newspapers. You have to dig to find it.
This Deutchebank plea deal is like a common criminal turning state's witness against his fellow thugs. Actually, it is in the best interest of those old German burghers. They have long memories. They know that the last time they pulled something like this, the depositors who lost everything hung the bankers from lamp posts outside their banks.
I have an old book....that covered the 1929 crash day to day by publishing articles from each day. It was very interesting reading. When you are living through an "event" it is different than looking back years later.
I could see how people would hang on thinking that the the market would recover.
Interesting comment on the burst of the housing bubble. I was worried about it and searched the internet for how extensive the problem would be once the bubble burst.
THE WORST case scenario I could find was the savings & loan crises of the late 1980's and 90's.
THERE were a few comments that housing would affect the economy, but in a minor way since it was such a small slice of the entire economy.
That rabbit hole turned out to be a huge sinkhole. Unfortunately, we have NOT learned our lesson. The banks are bigger now and the next sinkhole will as a result, be larger.
The trick behind successful government regulation is to make sure NOBODY is too big to fail. AND that not everybody will be in the same rabbit hole at one time, thus converting into a sinkhole. The second part is real tricky due to human nature.
In many markets, real estate has gotten as badly goosed or even worse than it was at the peak, and most of these markets are overdue for a correction.
I'd be interested to see some context, like how this has evolved over time.
I'll see if I can dig it up.
It's been reported a number of times that 50% of consumer spending is done by the top 10% of households.
From 2010:
Quote:
According to new research from Moody’s Analytics, the top 5% of Americans by income account for 37% of all consumer outlays.
The data may be a further sign that the U.S. is becoming a Plutonomy–an economy dependent on the spending and investing of the wealthy. And Plutonomies are far less stable than economies built on more evenly distributed income and mass consumption.
I'd be interested to see some context, like how this has evolved over time.
It's pretty easy to find sources for this because the wealth of the country is largely owned and created by those who have access to easy credit. Government rules that were set in place to prevent predatory borrowing has denied many people of home ownership.
Without home ownership most people aren't building any wealth or equity. Their paychecks just go towards rent and never get anywhere unless they invest in stocks and millennials have largely avoided the stock market another wealth builder.
Somewhere like Dallas, the incomes tend to be higher as well. The places that are real askew are some of the overpriced coastal markets, where even higher earners can't afford a house, and rural areas where no one is making any money
95,000,000 Americans between age 18 and 65 are not working in our country. That is nearly three times the population of Canada. The top 10% of income earners do not spend most of the consumer market. The top earners invest and save. Yes, they have nice cars and homes, but many buy the same consumables as the rest of us. Short term, the bottom line is that our nation has not had a budget for seven years, just continuing resolutions to spend more than we take in. McConnell, Boehnor and Ryan gace Obama a $1.1 TRILLION dollar going away present with no strings attached.
Many of the largest banks are buying up gold and silver as fast as they can. Deutchebank. Has reached a plead deal where they will pay precious metals investors billions of dollars for artificially keeping down the prices of gold and silver. The mainstream medial is not reporting this, even of the financial pages of newspapers. You have to dig to find it.
This Deutchebank plea deal is like a common criminal turning state's witness against his fellow thugs. Actually, it is in the best interest of those old German burghers. They have long memories. They know that the last time they pulled something like this, the depositors who lost everything hung the bankers from lamp posts outside their banks.
Tick, tick, tick
That 95 million figure covers people aged 16 and over. There is no upper age limit. The largest segment of that 95 million are retired. It also includes large numbers of high school kids and college students and the disabled.
I have an old book....that covered the 1929 crash day to day by publishing articles from each day. ...
I could see how people would hang on thinking that the the market would recover.
Interesting comment on the burst of the housing bubble. I was worried about it and searched the internet for how extensive the problem would be once the bubble burst....
The stock market recovered from the harrowing crash of 1929-1932 in about a decade - or even faster, if we include dividends and deflationary effects. The real problem, as I see it, wasn't the Great Depression itself, but the fact that it was really only in the mid-1920s that the stock market had convincingly moved into positive territory for the 20th century. The euphoric run-up to the 1929 crash wasn't all that substantial, if viewed over the course of the preceding 30 years. So whereas the stock market recovered from the 1929 crash, it recovered to levels of meager cumulative returns going back to the 1890s or 1880s.
We see something analogous today; we recover from sharp crashes relatively quickly, but the level to which we recover isn't much above the pre-crash levels. It isn't crashes that hurt us, but decades of malaise and stagnation... volatility without cumulative gain.
Let me reiterate that, in boldface: CRASHES DON'T MATTER! What matters is the run-up before the crash, and whether the ensuing recovery merely retraces pre-crash levels.
To give this a concrete example, consider: if the S&P rises to 3000 by 2019, then crashes 33%, and then recovers in 3 years – so that it's back to 3000 by 2022 – is that really a problem? But now suppose that there's no crash between now and 2022, and instead we have only +-5% volatility, or +- 10% volatility, with cumulative annual returns of 2%.. now we're at 2300 in 2022. Which is worse?
The stock market recovered from the harrowing crash of 1929-1932 in about a decade - or even faster, if we include dividends and deflationary effects. The real problem, as I see it, wasn't the Great Depression itself, but the fact that it was really only in the mid-1920s that the stock market had convincingly moved into positive territory for the 20th century. The euphoric run-up to the 1929 crash wasn't all that substantial, if viewed over the course of the preceding 30 years. So whereas the stock market recovered from the 1929 crash, it recovered to levels of meager cumulative returns going back to the 1890s or 1880s.
We see something analogous today; we recover from sharp crashes relatively quickly, but the level to which we recover isn't much above the pre-crash levels. It isn't crashes that hurt us, but decades of malaise and stagnation... volatility without cumulative gain.
Let me reiterate that, in boldface: CRASHES DON'T MATTER! What matters is the run-up before the crash, and whether the ensuing recovery merely retraces pre-crash levels.
To give this a concrete example, consider: if the S&P rises to 3000 by 2019, then crashes 33%, and then recovers in 3 years – so that it's back to 3000 by 2022 – is that really a problem? But now suppose that there's no crash between now and 2022, and instead we have only +-5% volatility, or +- 10% volatility, with cumulative annual returns of 2%.. now we're at 2300 in 2022. Which is worse?
I don't think S&P will reach 3000 by 2019.
You gotta be realistic.
Even another round of QE wouldn't be able to move the index to this height.
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