American Politicians Nearly Always Ignore
The Class War Waged by the Rich against The
Poor and The Middle Class
Nearly every one knows we live in a
plutocracy. We have only the forms of democracy.
Democrats do nothing to change it. Republicans want the rich to get even richer
at the expense of the working poor. The super-rich control much of the
radios, TVs and newspapers. They control the T-party. Meanwhile, most
are absolutely controlled by Wall Street.
Last year, the top 10% of earners took in more than 50% of the country's total
The richest 400 Americans own more than the poorest 50%.
The super-rich own most of the stock market. When stocks double, they get even
What do they do with all this money? They speculate in the market. They invest
in tax-free municipal bonds. They hide their money in overseas tax-havens.
They invest overseas and millions of American manufacturing jobs are lost.
As a result, when the stock market goes up, there is very little
Main Street gets poorer and poorer. Real unemployment and poverty are impacted
by the stock market's doubling. Schools and bridges collapse. Individual fear
insecurity rise. Gun violence reaches levels unimaginable. The Super-Rich
demand more and more profits. They seek to pay less and less. They exports as
many jobs as they can. And then they get the Congressmen who they have bought
and paid for to heartlessly remove more and more of the social safety net.
the parasites will again destroy their host.
Always in the past, when the rich became too greedy and selfish, there was a
financial collapse. This was true in 1907, in 1929 and 2008. It will be true
Over-speculation in stocks by the idle super-rich produces over-production
and a simultaneous lack of consumer buying power by the 98%. A Crash
becomes a certainty. Sadly, right-wing austerity-madness now seems bound
to match Hoover's budget-balancing reaction to the coming of the Depression
in 1930, 1931 and 1932. The consequences will be the same. The next decline
could therefore be worse than the one in 2008.
Why Stock Market Bubbles Are Inevitable
"Stock market bubbles last
longer than most people expect. And sometimes, like now,
the Fed is afraid to take the Punch Bowl away from the party... Most folks are
uncomfortable with stocks up this much. They get vertigo. But the truth is
the DJI's steep uptrend now is quite normal in many ways. Hyperbolic uptrends
... are common in the late stages of an advance. This is not merely a
of arithmetic scaling. (Let's see why.)
"Late stage uptrends are ... based on a lot more than simply excessive
exuberance, envy (as when cocktail party bragging induces a timid person
to decide to find a stock broker) or even greed (where one cannot stand to be out of
the rising market for even a week.). I don't even think that excessive stock broker
hype, professional manipulation, boiler rooms or even TV shows promising
huge returns (as the silver and gold shils on TV did in 2012) can be blamed for the
developing stock market bubble we are probably in."
We need to understand the many basic political and economic
that produce stock market bubbles. They are built into the economic and
financial system that runs America. These conditions drive the market
higher and higher. The bubble of over-speculation and greed are self-reinforcing.
They must reach absurd levels before there is a break. And then the collapse
always goes to the opposite extreme. A sane person can readily see that Wall
capitalism as now practiced is highly reckless, wasteful, destructive and
It is not self-correcting. It is run by greed-crazed parasites.
"1) Professionals do manipulate the market. They hold it up as long as possible.
At critical junctures, they pump it up. The DJI is rigged to go to new highs and the
are forced to cover. Very often the DJI becomes particularly strong late in a bull market,
or in the third or fourth Elliot major (multi-month) wave up. Professionals know
pattern. They therefore use this information ahead of others. They are not afraid to
because they know how - or think they know how - to get out before there is a serious
"2) Politicians are mesmerized and
controlled by the Wall Street Elite Now that
Campaign Contributions are no longer much restricted, Wall Street has bought
the loyalty of more than half of the Dems and Repubs in Congress as well as the
Whitee House. Worse, they hold the American Economy hostage. If a President
challenges them, they sharply drop the stock market. They did this to JFK at the
start of 1962.
To keep the bull market going in the late 1990's, Presdient Clinton
allowed Rubin and Summers to promote de-regulation of banks. In 1999, they
got Congress to allow banks to become brokerages, to permit much greater
use of leverage by banks and to legalize credit default swaps. Bush II appointed
an ex-Chairman of Goldman Sachs as Treasury Secretary. When the Financial
Crash hit, Paulsen's solution was for Congress to make a massive $800 bil. loan to
the very banks that caused the crash. Obama was no different. He was very
careful to appoint a Treasury Secretary and a Chief Economic Advisor
that Wall Street would like. Right fromt he start of his term, he made it clear
that he would not prosecute any individual Wall Street banker for fraud. (Of
a President may lose control and make a big mistake, which allows the market
to fall. In July 2007, Bush gave his SEC Chairman Chief a free hand to
short sales on down-ticks again. It had been banned for 71 years to protect
Professiojnals' Bear Raids. Three weeks later the DJI began its long 54%
"3)...Stock rise when the Dollar is
strong, as now. Stocks rise when traders do not
have to fear the Fed will suddenly raise rates. Back in 2011, our Fed Chairman
promised very, very low interest rates for months and months. He delivered and
the stock market roared upwards.
Under Bernanke, the Fed has put trillions of dollars into the hands of big banks,
often accepting worthless mortgages as collateral or just buying them outright
all without any outside scrutiny. Nothing in this insider rigged process protects
the taxpayer or the citizen who will suffer when the Dollar ultimately declines
because the FED has paid trillions for so many non-paying mortgages
in run-down and over-valued properties. And just as pernicious, nothing has
the big banks from taking the Fed's money and buying stocks so aggressively as to
make the giant, unsustainable bubble we now see. Incredibly, the Fed has made
trillions available to the big banks without once insisting that they make any more
loans to Main Street businesses and homeowners.
"4) Another factor explains how markets
can go up sharply when business
conditions are poor. At these times, big corporations may not be
able to find new places to invest. A weak world-economy like we have now
is actually a good environment for a wave of mergers and buyouts.
If the governments will let them, the heads of big corporations
may choose to deploy their "idle" cash in buying out rising competitors.
When interest rates are low, creative book-keeping being what it is,
such a strategy may be a cheaper way to keep the company's profits and its
stock rising. Since the 1980s, Federal anti-trust actions have become less and
less common. So, the conditions have been excellent for such mergers.
Wall Street, of course, loves the finders' fee that buyouts bring. But higher
stock prices based solely on mergers and the hopes of being bought out
do not mean economic growth or more jobs. In the end, there actually may be
fewer jobs and less advertising as a result.
"5) Often in a fast rising stocks market, like now, inflation (apart from health care
is under control. Producer prices, basic materials costs and wages are all
falling or flat. Jobs in 2013 are still going overseas where labor is cheaper,
The mantras of free trade and freedom of capital to go overseas dominate both parties'
elites and Wall Street. (The President has said nothing much about the
drop in the Yen and says he want to encourage free trade with Japan, if
keeps its markets open.) Falling producer costs mean bigger profit margins
and rising stock prices.
"6) After a bear market and business
slump, it is normal in the recovery for stock prices
to go up months before there is a substanial improvement in the US economy. In fact,
the economy need not even improve much for many years. British unemployment in the
1920s never fell much below 8% from 1920 to 1929, yet the Brisih stock market rose 73.2%
fom October 1921 to September 1929. True, this was a modest gain compared to
the 394% DJI gain from August 1921 to September 1929.
In many ways, the DJI goes up the most when economic conditions are not robust.
This is not much appreciated. But when business is good and everyone is working
and has money, there are lots of other ways than Wall Street to make money. Capital
creates new businessed rather than mainly chase rising stock prices. In good
like the 1950s. investors will certainly keep buying stocks, but not so exclusively.
People do not need to keep pushing stocks up and up because it is "the only
game in town". If economic conditions were sunny, they could also choose
start, expand or improve a business.
Our Accumulation Index rises to high levels
and stays there for a long period
often when institutions and private investors (rich and not so rich) are forced by
rising equity prices, low bond yields and the absence of viable alternative investments
to keep pushing stock prices high. This is a powerful factor now, just as it
was in 2008,
when many more conservative Funds (like the California Teachers) took to buying
lots and lots of Crude Oil futures and ETFs..
And don't forget how Unemployment disciplines Labor. Low wages help
corporate profits, which in turn, quickly translates into higher stock prices.
The opposite often helps unions start organizing. The 1946 25%
Stock Market decline took place in a tight labor market when Labor could afford
to go out on strike.
Good earnings can be reported even without higher revenue if most
costs go down. Thus, the DJI was very strong from 1927 to 1929, in part
because commodity prices fell sharply in the late 1920s.
"10) Even without a large pool of
well-off consumers, many items eventually have to be
replaced. Air-conditioners, refrigerators and cars wear
out. They are
( From Tiger Hotline 4/10/2013: Wall Street Bubbles while Main Street Goes Broke )
But, eventually there is over-production and profits must start to fall
because there is not enough consumer buying power. Large numbers of
Unemployed and low-pay workers put defnite limits on any bull market.
It is no accident that wealth concentration in 2007 matched its pervious peak
Policies which promote excessive wealth concentration should be viewed, I think,
as very short-sighted. When enough Insiders see that the future does not
look good, their selling is noticed by Professionals. That is why we watch the
Closing Power. After it fails to confirm a new high and instead breaks its uptrend,
the market will become very dangerous if there has been an "artificial" stock
bubble like I have just described. Usually, too, the A/D Line has failed to
confirm the DJI's final advance by a wide margin. Only the very biggest companies,
the ones most completely in control of their markets, keep advancing at the
end of a long and hyberbolic advance....
"Don't be fooled by Obama being a
Democrat. Wall Street has grown to love this man,
even if they dare not
say this in front of wealthy donors to Romney and other Republicans.
2009 to 2011, the top 1% got 121% of the entire income growth in the US. The
99% saw incomes decline. Obama has rekindled Wall Street's appreciation of
his Presidency by his
budgetary stance this week, It is clearly to the right of President
Nixon, who never
attempted to take away seniors' Social Security or Medicare. It is
to the right of Paul
Ryan's budget. Both Progressives
and many Republicans
that Obama would take
away future Social Security and Medicare benefits from seniors.
Defenders, of course,
say that Obama is just being "pragmatic" in the new age of
he has wholly embraced, just when Europe is starting to wake up to how
horrible this policy is when
unemployment is already high.
"Progressive critics suggest that Obama will once again demoralize his
base just in time for the
2014 mid-term elections, much as he
did in 2010; that he is a lot more"Ivy League" than
community organizer, way too
academic and hopelessly out of touch with the economics
of the lives of most working and
"Rhetoric aside, he is ...no FDR. He
and his advisors are "trickle-downers", free marketers
and definitely not fervent
supporters of financial regulation. Real unemployment
is probably more than 13% but Obama and
his advisers still believes that a Wall Street
boom will benefit Main Street.
This has been the hidden message of our rising
Closing Power since March 2009.
Now the DJI seems headed for 15000, and all the
splashy headlines it can get, to
draw in more new investors. "
American Political Economy - The Stock Market and Plutocracy
Public Systen Confidence in Wall Street has cracked
but will the big bankers pay? No. They
Obama does their bidding and Republicans need their
too, and won't confront the Fed.
Four Political scientists the widening gap between
the rich and
poor as beign the result of the following:
they said, both parties have embraced free-market capitalism,
they say benefits those at the top. (The key problem in
....changes in immigration and voter turnout mean the voting population
now skewed toward the wealthy. ..(I have no idea what this sentence means!?)
rising overall wealth in the country has made part of the population less reliant
government. (Not clear!)
rich have also used their resources to "influence electoral, legislative and
processes," (Pretty obvious! At least these political scientists
America as a plutocracy, even if they don't use the word.)
and the political process is now distorted by gerrymandering." (True and
will last until 2020 census.)
Obama Signals Wall
Street He Will Not Prosecute. March 19,2009.
Obama's Alliance with
Wall Street Boosts Stock Prices. April 4, 2010
Goldman Sachs is
The Greed Connection between Washington and Wall Street, April 9, 2009
approves AIG CEO getting $10.5 for 2011.
Insider Trading in Stocks Is
How TigerSoft Spots Key Unofficial Insider and
Insider Trading Bounty Hunter
Rig Stock Prices Upwards with Extra Fed Help
April 9, 2010 The Power Elite's
Biggest Gamble of All. They Cannot Afford to Lose.
That's Why The
Market Looks Like It Will Keep Rallying.
April 4, 2010 Why The Stock Market
The Secret Deal
Obama, The Fed and Wall Street Have Reached.
April 9, 2009 Goldman Sachs Is "The GREED CONNECTION"
between Wall Street and
April 25, 2009
Reserve Fraud and Corruption Story Breaking..
Up Hundreds of Billions of Dollars in Losses
from Bad Loans
The Fed Made To Banks Using Toxic Collateral.
March 23, 2009
Obama Obama's Biggest Wall Street Contributors Fleeced
The Way Down And Now Will Fleece Taxpayers on The Way Up.
March 25, 2009 Why Is The Stock
Market Rallying? Wall Street Now Sees That Obama's
Rhetoric Is Designed To Fool The Angry Public Obama Is Signaling Wall Street
He Will Protect
Make Big Money!
Insider Trading Charts to Level The Play FIeld,
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The Trading Opportunities
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