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

[David Green]

Yes, it just means that the .45 T that the Fed gave to banks & corporations
is collateral for them to borrow 10 times that, 4.5 T. That will be used
not in productive investment, but to maintain the appearance of fiscal
health. The cute Ruedi family is concerned that our 1% neighbors might get
the jitters and put their money into gold or mattresses, not good for the
wealth management business. Thus they have been buying a page in the Sunday
paper as an advertisement for the stock market, although it's not labelled
as such. Blatant but not surprising. There's a chance it will come crashing
down anyway, in which case the News-Gazette will have to sell the space to
Prairie Fruit Farm, because everyone south of Windsor will be going there
to live off the land. Just a heads up.


On Wed, Jun 10, 2020, 4:09 PM Karen Medina via Peace-discuss <
peace-discuss at lists.chambana.net> wrote:

> 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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>>>
>>>
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>
>
> --
> -- karen medina
> "The really great make you feel that you, too, can become great." - Mark
> Twain
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