[Peace-discuss] [Peace] Excellent letter to the NG, by David Green

[Karen Medina]

David, Thanks for putting all the US$ into the same terms. That does help.

Could you explain the debt leverage?
This is what I found :
What is debt leverage?
"Leverage, in business terminology, really just means debt. It's the
borrowing of funds to finance the purchase of inventory, equipment, and
other company assets. ... Using debt increases the company's risk of
bankruptcy but can also increase the company's profits and returns;
specifically its return on equity. "

On Wed, Jun 10, 2020 at 3:40 PM David Green via Peace-discuss <
peace-discuss at lists.chambana.net> wrote:

> Mort, you should have majored in physics.
>
> On Wed, Jun 10, 2020, 2:20 PM Brussel, Morton K via Peace <
> peace at lists.chambana.net> wrote:
>
>> It is good that David keeps writing, but just how many people will
>> understand his sentence:
>>
>>  But that $.45 trillion can/will be debt-leveraged by 10 times, meaning
>> that $4.5 trillion dollars has been/will be printed for corporations and
>> banks.
>>
>> I didn’t.
>>
>> — Mort
>>
>>
>> On Jun 10, 2020, at 8:00 AM, Karen Aram via Peace <
>> peace at lists.chambana.net> wrote:
>>
>>
>> Market reflects wealth inequity
>>
>> Local wealth manager Paul Ruedi (May 24) asks: “So why isn’t the stock
>> market much lower? Is there a disconnect between economic realities and
>> stock market performance? Economist Dr. Fred Giertz has said the stock
>> market is a leading indicator for the overall economy, and is not
>> interested in what has happened, but only what is going to happen.”
>>
>> Nevertheless, the stock market has already responded to what has indeed
>> happened. I refer to the CARES Act, by which $1.5 trillion was given to
>> households, small businesses, state/local governments and public health,
>> with $.45 trillion to “big corporations.” But that $.45 trillion can/will
>> be debt-leveraged by 10 times, meaning that $4.5 trillion dollars has
>> been/will be printed for corporations and banks.
>>
>> This ensured that their coffers would be artificially inflated regardless
>> of profit during the pandemic and regardless of small business failures,
>> family immiseration and death.
>>
>> Investors, thus reassured, bid back up stock indexes 20 percent from
>> their low on the day of CARES passage (March 23) to May 22. Thus continues
>> four decades of consolidation of stock wealth among the top 10 percent (80
>> percent), and the top 1 percent (40) percent, and the nonpartisan political
>> subservience that goes with it.
>>
>> There was a time when modestly rising stock values meant modestly rising
>> general prosperity. Under globalized/financialized neoliberalism, rising
>> stock values mean increased inequality and stagnating wages during the
>> “best” of times. During the pandemic, the hammer is being brought down in
>> even more shameless ways on the working class — wealth manager crassness
>> notwithstanding.
>>
>> DAVID GREEN
>>
>> Champaign
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-- 
-- karen medina
"The really great make you feel that you, too, can become great." - Mark
Twain
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