Dow soars to 4-year high

[sinkingfeeling]

http://money.cnn.com/2012/05/01/markets/stocks/index.htm?hpt=hp_t2


NEW YORK (CNNMoney) -- U.S. stocks rallied Tuesday as investors welcomed a rise in U.S. manufacturing activity and digested a mixed batch of corporate earnings

The Dow Jones industrial average (INDU) rose 108 points, or 0.8%. Earlier in the day, the gains pushed the blue-chip index to a multi-year high of 13,338.66, the highest since December 2007.

The S&P 500 (SPX) added 14 points, or 1%, and is just a handful of points shy of a 2012 high. The tech-heavy Nasdaq (COMP) increased 23 points, or 0.7%.

The rally was broad, with more than 80% of the Dow's 30 components in positive territory.

[Lionessa]

1. Whooptee f'ing doo. The rich manipulators are at work, they need new clubs for their

summer gold circuits.

[sinkingfeeling]

3. Please consider that millions of Americans now 'rely' on corporate stocks

feeding their 401Ks to provide retirement someday in the distant future.

[Lionessa]

4. So what, does that change reality in some way?

You want me to pretend so no one worries? What? Be happy about it? F', NO! It means worse than nothing in the long run when the market rises, it just means the overall population is still being screwed and ultimately when those 401Ks start coming due just as the boomers hit their highest, the market will conveniently crash again after all the big boys make strategic bets on the economy failing.

[Common Sense Party]

7. It is incumbent upon every investor to reduce their equity holdings as they get closer to

retirement. One never knows when the market will crash or drop substantially. Someone getting close to retirement should shift some (perhaps half) of their portfolio into less volatile investments, including a mix of bonds, cash or guaranteed/stable value funds.

[Yavin4]

12. And Shift Funds Into What?

You need your investments to outpace your cost of living, and with rates on safe investments like Savings, CDs, Money Market Accounts, Treasuries, etc. being so ridiculously low, investors are forced into the market, just to get a decent return.

[Lionessa]

13. Ding ding ding ding ding!

[dmallind]

14. Bonds, blue chip high dividend stocks, preferred stocks, etc?

[Lionessa]

20. Some what from the pot to the kettle, some might say,

and even so not available to many average folks that don't actually understand or have a say in how their pension funds are handled. Not all are individual 401K's, right? Though on the decline it does seem that large pension funds also have no "safe" place to store money and keep up with the cost of living. So I understand the illusion of the markets, I just think the problems are not nearly solved, the corruption is rampant, and most that are small investors, individual 401K holders, etc, will ultimately get screwed en masse with one of the next strategically placed crashes, each which will be used to justify even more pension funds dying in bankruptcy, thousands more losing their homes and nest eggs, not being able to pay medical bills, . . . . before a magical recovery in spite of questionable data, and loop te loop we go.

[dmallind]

45. Some would be wrong then

Anybody can buy these things. The days of 1000-share minimums and a need for personal NY-based stockbrokers are decades gone.

Illusion? Compared to the pension funds being snatched away?

HOW will individuals get screwed in the next crash any more than the last one unless they are clueless enough to sell in crashes more thaqn absolutely necessaary to survive? Anybody in DJIA index funds alone (a silly but easily represented investor) who did not stupidly panic in 2008-9 (which I recall advising against here) has been made whole by now thanks to dividends and rebounding value. Anybody who wisely bought at that stage has seen a nigh doubling oftheir money. Try that in a savings book account and you'll know what an illusion is.

[Lionessa]

51. The point is that most average 401K holders don't know the

hows, whys, and whens of stocks vs bonds vs commodities. They know mutual funds and money markets, and they are told over and over to leave it for the long haul, so they never get the education you claim to exemplify. Not to mention that 401k aren't like regular stock ownership in that they can't be "cashed" whenever the time might seem right even to those that might have a clue as to when "right" is.

[WinniSkipper]

53. But that's not an excuse

for not knowing what is going on with your money. Resources are available. Anyone who does have a 401K can get any info or advice they need from their plan manager. Or Amazon - http://www.amazon.com/401-k-s-For-Dummies/dp/0764554689. Or there is the internet - simple searches will talk about investment strategies

What are you suggesting as an alternative vehicle for retirement savings to the 401K?

[Lionessa]

55. EXCUSE!?!?! F' that meme. Perhaps if banking had remained safe and sane

people wouldn't have to worry about the types of risk associated with all that has been mentioned with regards to 401Ks. THAT's the point. One should not have to be to the level of financial education you are demanding in order to save for their retirement. It creates economic elitism that excludes average working folks from the security of a reasonable retirement.

[WinniSkipper]

56. Are you saying

that people don't have responsibility for learning about where their money is, and what types of investments and strategies are available for retirement planning? Do you think it is better to put the trust for your money in a pension, totally controlled by the company and any hedge fund raider who wants to break up the company?

And you ALWAYS have to worry about investments. ALWAYS. That includes pensions and social security.

And the book I referenced was a "Dummies" book. Do you think those are directed at the economic elite?

And where are you proposing retirements savings come from (other than Soc Sec)? You haven't answered that one yet

[FSogol]

61. +1 n/t

[Yavin4]

27. IOW, Take On More Risk When You Can Least Afford To

Everything that you list carries a higher risk than a CD or a Savings account.

[dmallind]

43. Many bonds have never ever defaulted, many dividends have never missed. A meteor could strike too

If you want better than 0.2% return, savings accounts (which have failed far more often than US bonds - infinitely by definition) are useless.

[hack89]

18. Would you prefer some inflation to get those rates back up? nt

[Recursion]

25. Yes (nt)

[Yavin4]

29. We Already Have Enough Inflation To Justify Higher Rates

Or do you believe in the fantasy government inflation stats?

Look, I would have no problem with loose monetary and fiscal policies if it were going to productive projects that would employ people and modernize our infrastructure. But that aint what's happening. What's happening is that the loose monetary policy is going to help the bankers get out from under their bad debts.

Low rates are forcing people into the market even when they don't want to, and bankers get a piece of every dollar that goes into the markets.

[Common Sense Party]

30. I believe I clearly stated what we should shift money into.

You leave half to 60% in equities for the long run, the other 40-50% you put in items offering relative safety, even if the yield ain't so hot. You draw income from your fixed and non-equity side, bit by bit you shift from equities to fixed.

[Yavin4]

33. IOW, Keep Gambling and Take On More Risk

And when the market collapses like it did in 2008 and 2009, just suck it up, right?

[Common Sense Party]

37. Not what I said at all. If you would read what I said, you'd know that.

[dmallind]

46. No - then you buy.

I BEGGED doomers on here to sell me Dow futures at 8000 when they confidently predicted 4000 and below. they did not have the courage of their "knowledge" of course but luckily for me index fund operators have less choice to blather and not back it up so I madee my money there instead.

[Yavin4]

58. Sure, You Can Play That Game When You're Young

and you have your life ahead of you, but when you're old and you need money because Paul Ryan has cut off Medicare, you cannot afford to play money games with Wall Street. Money becomes the line between life and death.

[Egalitarian Thug]

8. Please consider that that scheme has been exposed as an illusion

three times in just the last dozen years. Tens of millions of Americans are trying go back to work in their 60's, 70's and even their 80's because they were counting on a payout for their decades of work, only to have it stolen when they needed it. Or do you imagine that that gray haired lady is working @ Taco Bell just to get out of the house?

"You give me $1,000 today and I promise* I'll give you $100 a month until you die, starting in 30 years"

Most 10-year-olds can spot this as a scam, why can't Americans?

[sinkingfeeling]

11. Really? That's how you think a 401K works?

[Egalitarian Thug]

19. That's not what I think, that's what we've seen.

In theory this scheme works, but the Devil is in the details. A 401(k) is restricted specifically to make it completely vulnerable to market vagaries while generating a constant source of income to the financial sector.

[Common Sense Party]

31. That's not what I've seen.

[Egalitarian Thug]

34. Then you're just not looking. There are millions of cases of this happening to people from across

the nation and from across the economic spectrum.

[Common Sense Party]

35. Actually there aren't, but, hey, believe what you wanna believe.

Whatever gets you through the night.

[Egalitarian Thug]

39. That's pretty funny.

You're in the business...

[Common Sense Party]

40. That's pretty boring.

Not to mention predictable.

[dmallind]

47. And there are tens of millions who didn't panic and saw nice DCA gains.

Who lost who was not silly enough to sell too heavily in panic markets - a no-no as well known as srepping into the street without looking?

[Egalitarian Thug]

59. Two problems with this logic. One a retirement plan is not disposable income with which

to gamble. Two, reaching the age of retirement or being retired at the time of a major contraction drastically reduces account capital. I assume you understand how interest works, so you also understand that this individual has lost ground which cannot be made up without moving capital to riskier investments just when that is the worst move. Any unexpected event sets off a chain reaction resulting in financial deprivation.

The 401(k) scheme effectively extend the years required to work and gives no guarantee of providing sufficient income after a person is no longer able to work, but it does force nearly everybody to participate in the Wall Street casino regardless of the individual's capacity to understand, let alone play in, the game. True that most will do fine and a few will do really well, but the issue are those for who it will, and has, crushed.

The bottom line is that this scam is primarily set up to benefit Wall Street, not the individual. A society that regularly steals the assets of 10% - 15% of the most vulnerable population in order to fund profits for the rest is doomed. Your self satisfied admonitions about those "silly" people is shot sighted, mean, and irrelevant. The facts on the ground are that the 401(k) ensures a significant number of your fellow citizens will, after a lifetime of work, be thrown into poverty so you can pretend that you're smart.

And Wall Street is laughing at you even as you defend them. Thanks for the money sucker.

[WinniSkipper]

54. I think you are referring to

all the 'pensions' people were supposed to have.

[Egalitarian Thug]

62. No. Legalizing the looting of pension funds necessarily preceded and motivated the

move to push the entire American workforce into their casino. In the early years, people were given a choice between a guaranteed annuity and the "much higher returns" possible playing in their casino, and people overwhelmingly chose the former. That didn't fit the plan, so...

[WinniSkipper]

65. What companies out there right now

are the model you are looking for - this guaranteed annuity?

What companies do you trust enough to provide this?

[Egalitarian Thug]

66. None that I know of, that's the point. I'm sure there are many tiny to small

companies that are run well by decent businessmen dedicated to the longevity of the company, but finding them is almost as difficult as securing a position with them. I've heard that Leatherman Tools is one, SAS Software used to be legendary, but they are rare exceptions.

Our system now is a twist on the old company store game. Looting a pension fund has been legal for quite some time now, so it is a big risk for both the employee to enter into as well as for a well intentioned employer to offer. So in almost any case, a 401(k) is the only option.

The point is that we have/had a successful model for stable and secure pensions here and it was deliberately dismantled in order to coerce the workforce into the financial industry's game. A game which few can play at all and which far fewer understand well enough to excel in. The inevitable result is that a significant number of workers will lose their life's savings by being forced into a game for which they are not prepared.. That is not a good system for societal stability, but it is a great system for creating a small number of unimaginably rich and powerful organizations.

[WinniSkipper]

70. I agree with your first two paragraphs

I think business ethics are not what they once were. To put it mildly.

However - I think the 401K is a much better option than a pension. I do not want my retirement in the hands of a board of directors. I do not want my retirement in the hands of a greedy CEO who sees a pension fund as leverage to make a boatload for himself. I want to control my money. Not a company, and not the government. And there are available resources for people to learn about 401ks. It is their money - people do have a responsibility to learn how it works. At least understanding the basics of of what types of funds to have their money in at certain stages of their lives. Anyone within 10 years of retirement who had their money heavily in stocks rather than a more stable investment was running a risk. The market fluctuates.

Is it an ideal system? No. But nobody is forced into it. People do not have to sign up for a 401K. You can take your money and put it under a mattress if you want.

The point is that we have/had a successful model for stable and secure pensions here and it was deliberately dismantled in order to coerce the workforce into the financial industry's game.

But that model proved NOT to be successful. Because of greed of the companies. And because how many people now spend an entire career with the same company? How many of those companies are even around when someone retires? If I look back on my career, only one company is still around in it's original form. Companies go broke, and with them goes the pension

[eridani]

22. They rely a hell of a lot more on their paychecks, which have been shrinking

--for a dozen year now. Small fry represent a pretty small percentage of total investment dollars.

[sinkingfeeling]

42. Retirees get paychecks?

[eridani]

64. They get Social Security and (if lucky) defined benefits pensions

I don't even personally know any retirees with investment accounts of any kind, though I do know some who rolled over their 401k money into annuities.

[bluestate10]

68. I have done well as the DOW has risen under Obama. The rich are not the only benefactors.

I don't know what %er I am and don't fucking care to know. My life has never been about money.

[Lionessa]

69. Bluedog much?

[cbdo2007]

2. That's impossible!!! I heard it right here on the DU that them stocks is a scam!!>!>!>!

[Johonny]

5. damn you Obama

[RobertEarl]

6. Where is the money coming from?

I bet money is fleeing Japan. And being deposited here, where, so far, it is safe.

But why do i get this sinkingfeeling that the only way to go is down? That we are just riding a new bubble?

[Egalitarian Thug]

9. As we move through this summer, go back and look at the market behaviour in

the summer of 2008.

[RobertEarl]

15. I remember that

Of course what is different now is the fact that a Bush is not in power.

Still the fundamentals are basically the same. Of course housing can't crash, but it can go lower. What I wonder what could be the trigger this time?

[Egalitarian Thug]

32. And just what is this "resurgence" based on?

Pretty much everything is worse today than it was then, so why the "irrational exuberance"?

[JoePhilly]

44. The Market should have never dropped below 10k.

And jobs are coming back ... UE is down to about 8.2% from a high of 10.2% in Oct 2009.

After the crash, businesses that survived decided to hold onto more cash to protect themselves from the need for significant financing. That slowed hiring, but businesses decided that the did not want to be "cash poor" going forward ... so they held on to cash for longer during this recovery. So most businesses have more cash on hand today as compared to 2008.

[Egalitarian Thug]

60. So, because you have some faith-based notion that the market's response

to the collapse of the global financial system was too extreme? That global shipping rates fell to zero because they didn't consult you?

Check my original response to this reply and do your homework.

And you can add this to your list; New Orders For Factory-Made Goods See Steepest Drop In Three Years

[JoePhilly]

63. Na ... once some one calls me "faith based" ... I generally stop reading.

But I will point out that you might want to re-read what I wrote ... I said the DOW should not have dropped below 10k.

I really did not say anything about the depth of the global collapse. Its causes, and its path, is rather complex given the various issues the many nations involved face, and the rather disjoint actions some of them have taken as to their response.

And then you shift to shipping rates.

NA ... I'll read what I want to read. And you can keep misreading what others write.

[Egalitarian Thug]

67. Oh no, if you don't see the relevance of nothing being shipped around the globe to the stock market

you definitely need to spend some time learning.

Good luck with that.

[BadgerKid]

10. Part of the election cycle, I wonder?

It's seemed there is usually a large drop that starts before November.

[Tarheel_Dem]

16. K&R

[cthulu2016]

17. Which makes perfect sense

Stocks reflect corporate profits.

Corporations are more profitable than ever, having found they can make do without employees.

It makes sense for stocks to be high.

A perversity of the market is that a stock jumps every time a company announces it is firing a bunch of people. Apply that to the whole economy and we are where we are.

[Tierra_y_Libertad]

21. I'm sure it will trickle down to the commoners..someday...maybe..if conditions improve..never mind.

[cbdo2007]

23. It does trickle down to many of us who have investments in the stock market.

I've done great the past 4 years!

[cthulu2016]

24. ...

http://www.democraticunderground.com/1002632759

[cbdo2007]

48. Not sure what this is trying to disprove....

did you reply to the wrong post again?!?!

[cthulu2016]

49. Can you not imagine a reply that isn't intended to rebut?

It is parallel or at least tangential to your comment, not in opposition.

[cbdo2007]

52. hahaha, ok, thanks. Sorry!

It's hard to tell in stock market discussions sometimes which side people are on

[C_U_L8R]

26. And in other news, Mitt Rmoney bought pizza

the clueless chump can't even get on the playing field.

[yellowcanine]

28. In other news, Republicans accused Obama of exploiting the death of bin Laden for political gain.

[Warren DeMontague]

36. To all the people here who laughed at me when I said "buy" in March of 2009

I humbly accept your apology.

As you can see, your prediction that "It's gong down to 3000!!! Fuck that, 300!!!!!!" turned out to be a bit off the mark.

[Common Sense Party]

38. Über-pessimists never apologize. They just invent one more contrived conspiracy theory

to explain how the whole system is rigged and stacked against us and how NOBODY can win unless you're the 1%...

And meanwhile, boring ol' long-term investors keep plugging along, making decent average returns.

[ErikJ]

41. Obama DOUBLED the Dow! 6500 to 13000

That's all you need to know and use for beating Sketchy for 2012.

[Scurrilous]

50. Terrible news.

[raouldukelives]

57. Great news for investors!

Bad news for people who oppose climate change.