Wall Street Interests at Odds with Middle Class and Working Interests?

[General Lee]

The Wall Street crowd likes the fact that fewer jobs were created just so they can benefit in the smaller than expected interest rates!

Stocks Jump on Weak Payrolls

Dow spikes after news that the economy added 138,000 jobs last month, much lower than expected. Expectations for an interest-rate hike in June drop. Four Seasons and El Paso climb sharply on quarterly results.

The market rallied at midday as investors applauded tepid job growth in April, which cast doubt on whether the Federal Reserve would hike interest rates in June.

The Dow Jones industrials jumped 114 points, 1%, to 11,553. The Nasdaq composite gained 17 points, 0.7%, to 2,341 and the Standard & Poor's 500 index rose 11 points, 0.8%, to 1,323.

Cyclical stocks were especially strong, with Caterpillar (CAT, news, msgs), Boeing (BA, news, msgs) and Alcoa (AA, news, msgs) leading the Dow higher.

http://articles.moneycentral.msn.com/Investing/CNBC/Dispatch/060505markets2.aspx

[Grateful for Hope]

1. Again, this comes as no surprise

I have seen stocks rise when there is news of huge layoffs.

[eliphaiku]

3. You would think this would put the myth to rest

That market economies are good for providing goods and jobs. Of course that myth was easier for class enemies to maintain when it didn't take nearly an hour of minimum wage work to buy a gallon of gas.

I thinks loads of false consciousness will persist until this unjust economy crashes and people can see the system for what it really is, poorly compensated wage slavery.

[Grateful for Hope]

4. Unfortunately, I think you are right

It is going to take a catastrophe such as the collapse of our economy to expose the deceit.

[xchrom]

2. short answer: yes.

[Telly Savalas]

9. I disagree.

In the long-term, large corporations will have an awfully hard time maintaining earnings growth if they don't have a thriving middle class to buy their products and services. Policies aimed at strenghening the middle class indirectly support Wall Street.

[Greyhound]

14. And that's why they've been busy building a middle class in

China and India. They've moved the means of production and most of the capital, now it's just a matter of waiting for the life-style to take hold.

Mark my words, they are abandoning amerika. They've just about bled us dry and it's time to move to the next phase.

[ikojo]

5. Please tell me you are not surprised....

This is why "Wall Street" hates Costco because their employees are paid a living wage and provided benefits. Those on Wall Street and in Washington would love it if slavery were made legal again. NO wages!!

[Al122]

6. New Deal Reforms Have Postponed the Day of Reckoning for the Past 70 Years

The reason our economic system never approaches the same kind of crisis point it did in 1932 is that today we have an activist Federal Reserve, FDIC, unemployment insurance, Social Security's SSI component - all which were viciously opposed by the Milton Freidman types of that era. FDR himself was said to have remarked that he was the "best friend capitalism ever had."

That being said, the Bush administration and today's myriad "free market" boosters sure seem to be doing their best to finally bring what we have been taught to call capitalism to its knees. The exploding collective debt of this country (all forms of public and private)constitute the biggest financial bubble in its history (see Kevin Phillips new book "American Theocracy). Real estate values are completely out of whack with reality owing to the Fed's reckless loose money policy of 2001-04. Perhaps the greatest danger of all is the incredible amount of unsecured borrowing being done by the nation's largest banks, brokerage firms and hedge funds. In 1998, when the hedge fund, Long Term Capital Management was threatening to bring down the entire stock market when their unsecured bets went against them, Alan Greenspan immediately sprang into action and forced their lenders (Citibank et al) to keep them alfoat.

This country is in desperate need of a New, New Deal. The problem is that the people running it are either to greedy to see the danger or too stupid and preoccupied with the politics of religion to address our real problems.

[demigoddess]

7. yes, so basing an economic policy on whether wal street is doing well

is stupid. However, if the economy is doing well, wall street can do well, too.

[Al122]

8. Exactamundo

The strongest period of middle class growth in this country was not the unregulated 1920s but the, by today's standards, super-regulated, heavily unionized 1940s, 50s and 60s. Wall Street lagged in the 40s and 50s, in no small part due to the hangover from 1929-41 but did quite well in the 60s. We do need to recognize, however, that part of this post-war miracle had to do with the lack of serious international economic competition and part of it with enormous military spending. But there is no question that those years were better for average Americans than the credit fueled boom of the 1920s.

[Telly Savalas]

10. So to translate CNBC's reasoning into English:

The Street thought the economy will be strong because the Fed won't raise interest rates because the economy will be weak.

My analysis of today's market results:

The Dow Jones went up a percentage point because thousands of investors made specific decisions regarding specific stocks they were investing in, and in aggregate these decisions led to the Dow going up for the day.

But I'm part of the "lunatic fringe," so what do I know?

[TheWatcher]

11. If you get most of your information from CNBC

Then you don't know much, sad to say. Notthing personal against you, it's just that CNBC is a very poor avenue to get real information about what truly goes on.

You might start with the fact that 58-75% of most trading done on the Dow on a given day is Computer Program Trading. There is not much in the way of investing that goes on anymore. The Big Hedge Funds, The Fed with their OPMO's and their Coupon Passes, the big Money Center Banks and Trading Desks, also help put lipstick on this pig everyday.

This Market is about as artificial as it gets.

But then, you probably think I'm part of the lunatic fringe, so what do I know?

[Telly Savalas]

12. Try reading my post again.

CNBC is mentioned because it's what the original poster cited.

And in case you don't notice on the second reading, I was attacking CNBC's reasoning.

[sandnsea]

13. As always

Payroll is a business cost. Whenever there is a tight job market, it keeps wages down. That means more profits for the investors. It was exactly the same in the 80's.

[Zookeeper]

15. Lately, it has seemed to me that there is a total disconnect...

between Wall Street and anyone who ISN'T part of the "Investor Class." Business and economics is one of my least favorite topics, so I'm no expert, but everytime I read about good news for investors and big business, the effect on middle and working class people is never part of the calculation.

It's as if they live in a parallel universe...