01/01/2014 archive

Wall Street had a boomer of a year, everyone else not so much.

Stock Market Has Great Year, You… Not So Much

By Mark Gongloff, Huffington Post

This has been the best year for the U.S. stock market in at least 16 years. But that great news is meaningless for many Americans. [..]

But only about half of Americans own stocks, including those in retirement accounts. Meanwhile, corporate profits are soaring largely because companies have been squeezing costs — especially labor costs. In the chart below, tracking the change in average hourly wages for private-sector workers against corporate profits and stock prices since the stock market bottomed in March 2009, you’ll notice one line is badly lagging.

Click on image to enlargew

You guessed it: The lagging line is your sad hourly earnings. They have barely budged since the market bottomed in 2009, while the Dow has skyrocketed 153 percent. Between November 2012 and November 2013, the latest data available, hourly wages for nonsupervisory workers rose just 2.1 percent, just barely ahead of inflation.

Gongloff concludes that Wall Streeters are “bullish on 2014,” others not so much. Our friend David Cay Johnston looks at tech stocks, like FaceBook and Twitter, that essentially have no profits, yet, through speculators and the Federal Reserve policy of nearly zero interest rates, these stock have greatly exaggerated value.

The coming stock market collapse

By David Cay Johnston, Al Jazeera America

Tech stocks have returned to bubble levels, thanks to PR, weak financial journalism and cheap credit

Markets can benefit from speculators, who take risks that prudent people and institutions should avoid, but speculators should represent the edges, not the core of the market.

It’s bad enough that the financial press allows the inflated commentary of tech companies to go unchallenged. But why in the world should Americans tolerate hedge funds and other speculators being subsidized with cheap and easy credit, thanks to the Federal Reserve’s policy of near-zero interest rates?

Only speculators would buy companies with no profits. And only subsidized speculators would bid up prices on companies with a PR in three digits, like Twitter.

Back in 1995, Alan Greenspan, then chairman of the Federal Reserve, asked a rhetorical question about stock prices, “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions, as they have in Japan over the past decade?”

We now suffer through a prolonged period with high unemployment, flat to falling wages for most workers and unrealized potential for economic growth. But the speculators are making out like bandits, thanks to government suppression of interest rates, allowing massive borrowing by offshore hedge funds, and to lax rules for both accounting and trading.

Given the history of stock markets since 1995 and today’s blinking red indicators, no one can rationally claim they were not warned when the next collapse comes, as surely it will.

Click on image to enlarge.

So what will happen to the market when the Fed starts to raise interest rates? 2014 may not be the “boom” that Wall Street expects.

Live at the Fillmore East – New Years Eve 1969 going into 1970

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day.

Follow us on Twitter @StarsHollowGzt

New York Times Editorial Board: Saying ‘I Do’ Amid the Roses

By all accounts, the standout entry in Wednesday’s Tournament of Roses Parade in Pasadena, Calif., will surely be the marriage of two men, Danny Leclair and Aubrey Loots, beaming amid the array of lavishly flowered floats to be viewed on national television and beyond. [..]

Opponents of the single-gender nuptial display in the hallowed parade have dished heavy umbrage in petitions and blogs, calling it “unbiblical” and urging a boycott by onlookers. But the tournament executives have said they are pleased that love will triumph on a day when the tournament theme is “Dreams Come True.” [..]

And now, Danny and Aubrey saying I do. The new couple’s float is titled, “Living the Dream: Love Is the Best Protection.” It is hard to disagree as the new year parades forward.

Robin Hardman: What Really Matters

What is essential to a great culture, as I’ve said before and will say again, is according people respect and allowing them to have control over their time and their work.

Oh, yes, and a couple more things: a living wage and — for all but the very smallest companies — access to decent healthcare. In fact, both Maslow’s hierarchy of needs and plain old common sense would suggest that being able to afford to eat, pay rent and see a doctor are surely the most important building blocks of a great company culture.

Yet, the year that’s just ended was rich with news about employers that would seem to have put a lot of energy into denying their employees these basic rights. While it can be tough to sort out facts from “truthiness” when news is filtered through politics on both the left and the right — especially news related to the Affordable Care Act — a few things can be said: [..]

Perhaps I shall write more later.

In the meantime this is sufficient.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

January 1 is the first day of the year in the Gregorian calendar. There are 364 days remaining until the end of the year (365 in leap years).

During the Middle Ages under the influence of the Christian Church, many countries moved the start of the year to one of several important Christian festivals – December 25 (the Nativity of Jesus), March 1, March 25 (the Annunciation), or even Easter. Eastern European countries (most of them with populations showing allegiance to the Orthodox Church) began their numbered year on September 1 from about 988.

In England, January 1 was celebrated as the New Year festival, but from the 12th century to 1752 the year in England began on March 25 (Lady Day). So, for example, the Parliamentary record records the execution of Charles I occurring in 1648 (as the year did not end until March 24), although modern histories adjust the start of the year to January 1 and record the execution as occurring in 1649.

Most western European countries changed the start of the year to January 1 before they adopted the Gregorian calendar. For example, Scotland changed the start of the Scottish New Year to January 1 in 1600. England, Ireland and the British colonies changed the start of the year to January 1 in 1752. Later that year in September, the Gregorian calendar was introduced throughout Britain and the British colonies. These two reforms were implemented by the Calendar (New Style) Act 1750.

New Year’s Day

Probably observed on March 1 in the old Roman Calendar, The World Book Encyclopedia of 1984, volume 14, page 237 states: “The Roman ruler Julius Caesar established January 1 as New Year’s Day in 46 BC. The Romans dedicated this day to Janus, the god of gates, doors, and beginnings. The month of January was named after Janus, who had two faces – one looking forward and the other looking backward.” This suggests that New Year’s celebrations are founded on pagan traditions. Some have suggested this occurred in 153 BC, when it was stipulated that the two annual consuls (after whose names the years were identified) entered into office on that day, though no consensus exists on the matter. Dates in March, coinciding with the spring equinox, or commemorating the Annunciation of Jesus, along with a variety of Christian feast dates were used throughout the Middle Ages, though calendars often continued to display the months in columns running from January to December.

Among the 7th century pagans of Flanders and the Netherlands, it was the custom to exchange gifts at the New Year. This was a pagan custom deplored by Saint Eligius (died 659 or 660), who warned the Flemings and Dutchmen, “(Do not) make vetulas, [little figures of the Old Woman], little deer or iotticos or set tables [for the house-elf, compare Puck] at night or exchange New Year gifts or supply superfluous drinks [another Yule custom].” The quote is from the vita of Eligius written by his companion, Ouen.

Most countries in Western Europe officially adopted January 1 as New Year’s Day somewhat before they adopted the Gregorian calendar. In England, the Feast of the Annunciation on March 25, was the first day of the new year until the adoption of the Gregorian Calendar in 1752. The March 25 date was known as Annunciation Style; the January 1 date was known as Circumcision Style, because this was the date of the Feast of the Circumcision, being the eighth day counting from December 25 when Christ was believed to be born. This day was christened as the beginning of the New Year by Pope Gregory as he designed the Liturgical Calender.

As you can see there were a lot of events that happened on this day over the centuries. Some of them significant, even momentous, some not so much but interesting as a kind of trivia. I am not even going to attempt to edit that list today.

Thank you all so much for your work and contributions to this site. We at The Stars Hollow Gazette and Docudharma wish you and yours a Happy, Healthy and Prosperous New Year.  

To all of our readers may you and your s have an happy, healthy and prosperous new year.

So glad you asked.

You want to know my secret?  I’m angry all the time. – Bruce Banner

Yeah, Happy New Year’s Rocking Eve

Lyrics below so you sing along.