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$105,637 for Me, $80 for You!
$105,637 for Me, $80 for You!
Isn't this economy FANTASTIC?
It sure is for those of us in the top 1% (1.4M) - people earning over $352,000 in annual income. We made $105,637 more Dollars in 2010 than we did in 2009 - thanks in large part to the Fed's fantastic policy of printing more and more money, which lets us borrow cheaply or invest with leverage in inflating equity as the Dollar collapses.
Sure the Dollar collapsing hurts everyone - but an extra $105,637 keeps us ahead of inflation, right?
I'm still jealous of course (good Capitalists are always jealous), as the top .01% (14,000 people) - who earn an average of $23.8M, were able to add another $4.2M to their annual incomes in 2010. That's 52,500 TIMES the average $80 increase earned by the bottom 99% (thank goodness we're not one of THEM!).
That's right, somehow, the riff-raff in the bottom 99% managed to grab 7% of the Nation's total increase in income - clearly Congress needs to make immediate changes to prevent this travesty from happening again!
Steve Rattner has a different opinion, saying: "The only way to redress the income imbalance is by implementing policies that are oriented toward reversing the forces that caused it. That means letting the Bush tax cuts expire for the wealthy and adding money to some of the programs that House Republicans seek to cut. Allowing this disparity to continue is both bad economic policy and bad social policy. We owe those at the bottom a fairer shot at moving up."
That's Commie talk! If we allow the bottom 99% to make a fair share of the money, they would make 5% more and you know they would only SPEND it on stuff they need TO LIVE. Then our companies would have to provide more goods and services to the bottom 99% and jobs would be created and we, at the top, would have to WAIT for the money to trickle UP from the bottom as only companies that do a good job servicing the bottom 99% would increase in value.
Even worse, we may have to WORK (a four-letter word) to provide goods and services for the people who have money in order to EARN (another four-letter word) our Incomes. That's no fun for us at all!
We like it when we get ALL the money and we create just the jobs we choose by buying really expensive cars or really expensive homes or really expensive ($8.50) burritos at CMG because you know an $8.50 burrito creates more jobs than four $2 burritos that poor people would buy at Taco Bell - it's a Rich Person's FACT!
My $1M, 6,000 square-foot home created 2 more jobs than the standard $250,000 2,000 square foot home and sure, you could argue that 4 could have been built instead of one for the same price and that 16 people could have been housed instead of 4 and - oops, what was my point going to be???
Of course it's not just flesh and blood people in the top 1% that hog all the income - top 1% Corporations are also choking off the bottom 99% by sucking up all the money.
On the right, there's a chart that illustrates how AAPL has GAINED 8% in earnings since Jan 2011 while the ENTIRE rest of the Technology sector has LOST 3% as a group.
AAPL employs 60,400 people while the rest of the sector employs (employed) millions but, to be fair to AAPL, it probably employ millions of Chinese people, so it's all good somewhere on the planet.
The fact that the bottom 99% of the Nasdaq 100 is actually going DOWN in earnings per share doesn't stop investors from taking the AAPLdaq to fresh highs for the century but we're bearish on the Nasdaq because we feel that IF AAPL falters, the crash is going to be SPECTACULAR. Even if AAPL does well, what happens when the sheeple who sampeded into tech get the Q1 earnings reports and discover that AAPL is one of the only positive stories out there?
Last year, the Nasdaq rebalanced AAPL from 20% of the index down to 12% of the index but now AAPL is almost back to 20% again, as it completely shreds all competion and grabs up those consumer Dollars before they can accidentally trickle anywhere else. Even in the S&P 500, AAPL is now 3.8% of the index, well ahead of #2 XOM (3.3%) and #3 MSFT (1.9%). AAPL's 33% gain (so far) has boosted the Nasdaq and the QQQs 16.6% and added 9.6% to the entire S&P 500.
The problem has become so acute that several major analysts are delivering clients two sets of market reports, one with Apple included and one "ex-Apple." The chief equity strategist at UBS AG (NYSE: UBS) creates two versions of his S&P 500 outlook reports; so do analysts at Goldman Sachs Group Inc. (NYSE: GS), Barclay's Capital, Wells Fargo & Co. (NYSE: WFC) and Morgan Stanley (NYSE: MS). For example, they point out that the S&P's fourth quarter 6.6% rise would have been only a 2.8% gain ex-Apple (reflecting Apple's 40% gain since Thanksgiving) and profit margin growth, which registered a 0.05% gain in the fourth quarter, would have actually been a negative 2.2% ex-Apple.
Oh well, that's Capitalism, isn't it?
AAPL does to bottom 99% of the Nasdaq what any top 1%'er does to the bottom 99% of the American people - they make more and more while the bottom 99% make less and less, or work harder just to stay in place.
As long as you look at the WHOLE basket - it looks like things are getting better for the group - only a closer examination shows you how disparate the incomes of the top and the bottom have become over time.
Of course things seem just fine if you are in the top 1% and they can only get "better" if you make more money and that means - very simply - less for the bottom 99%. When do we have the ideal amount? When we have 100% and the bottom 99% has zero? We already have 25% and in 2010 we captured 56% of the income gains so our diproportionate share is, indeed, growing even more disproportionate every year.
Don't you think we should have a stated goal for how little we want the bottom 99% to have? We've already put them below the 50% line that held in the great depression.
Actually, there's a funny story there because the bottom 99%'s share of the income bottomed out in 1927 and that was 3 years BEFORE the US Economy collapsed. One might say we over-did it back then as the resulting Depression impacted the incomes of the top 1% as well but, as noted above, the top 1% have their own top 1% and, every once in a while, it's good to purge the bottom 99% of the top 1% because those 14,000 people have never had it so good.
While the bottom 99% may complain that they only got 7% of the income gains in 2010 - the bottom 99% of the top 1% also got screwed, capturing just 1/3 of the gains for 1.4M while the top 14,000 took 66% of the pie.
Just like in 1927, the stock market is roaring as the rich get richer and trickle their increased earnings into stocks and commodities, with commodities being the most fun as rich people get to buy things they don't need like bars of gold or tankers full of oil. They SPECULATE that the prices will go up.
Of course, when people who don't need a commodity take large quantities of the commodity out of circulation with no intent to consume it - they create an artificial shortage that drives the price of that commodity higher - it's BRILLIANT!

It ends very badly, but what a ride! No one wants to miss out on the rally, regardless of the consequences and the top 1% have LOTS of money to throw into the markets and, when your income jumps 20% a year - you do tend to want to toss a little more cash into the market and that's how "hot" money flows in.
That then is followed by what Guy Lerner refers to as the "dumb money," - four groups of investors who historically have been wrong on the market: 1) Investors Intelligence; 2) MarketVane; 3) American Association of Individual Investors; and 4) the put call ratio. This indicator shows extreme bullishness.
As stated by Lerner last week: “If we look at the “dumb money” indicator in figure 1, we know that as long as the indicator stays above the upper band (see green arrow on chart), prices should continue to go higher – albeit in a grinding fashion at this stage of the rally.
I had made a similar observation in Friday's post, saying anything other than a move up into Friday's end of quarter would make us very bearish. We had added some bullish plays in expectations of this but yesterday's move up was so sharp that we took the opportunity to press a few bear side bets - just in case we don't get another crack at yesterday's highs.
If we do head higher into the week's end, we still plan to short some more - and if the markets do hold up into April, we'll be happy to capitulate and add more bullish trades but, for now - I'm just not seeing the internals to support these levels.
We've exhausted our 10 Bullish Trade Ideas from our 3/14 post and we took the 50% profit and ran after just 2 months on our "One Trade for 2012" (BAC) - although some of our trade ideas are still playable and will do very well if Bernanke comes through with April QE3 but now we're going to look at MORE AGGRESSIVE trade ideas if our new 13,200 goal on the Dow holds up along with 1,420 on the S&P (our 2.5% line). We keep pressing our levels because - IF this is a real bull market driven by underlying inflation and Fed money printing - then we expect it to go up and up and up. Any signs of faltering should immediately turn us more cautious - you DO NOT want to be the last man to leave this Ship of Fools if it starts to sink.
So we, in the top 1%, don't fear inflation - nor do we fear a devaluation of our currency because we get to borrow that currency cheaply and leverage it up into massive gains against relatively small moves in the market and, best of all - we get to pay the bottom 99% people the same wages we paid last year, perhaps even with less benefits, using that rapidly devaluing currency in exhange for your increasingly productive labor. No wonder Corporate Profits are at record highs (even if it is just the top 1% of Corporations)...
God bless Capitalism!
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This entire rant exemplifies our country's biggest problem; that of minding everyone's business but our own. If you are jealous of the income or property of another, learn the skills needed to compete with him. You will find that (#1) he is worth his cost, or (#2) you can take his business at a lower cost. If you lack the courage or vitality to do this, quit bitching and live with your decision.
Tax everyone 100%, pure equailty.
Well now, what to do with my $80....decisions, decisions...oh I know: I,ll put it in a bank and I'll feel so much better that it's in a safe place!
Now it's $105,717 for you and for me: nothing!
Buy physical gold and silver!
Tyler puts Ilene's column in just for a spin up.
Works every time.
Daddy , wont you take me back to ethical trading , .. down by the east river where wall street lay...
well im sorry my son but you're too late in asking ,..the brokers and bankers have thrown it away.....
Dear Stacker, Dear Stacker-
You have no complaint!
It used to be fair and now it just aint
Stop wishing for good luck and knocking on wood
It's all really bad now and will never be good
Signed,
Dear Abby
Are you sure I got $80. I don't remember ever receiving it.
A good 'ole bear market will solve this problem prontissimo
this was due to Fed's reaction to the good 'ole bear market.
This was by design of the US government:
50% income tax for workers.
15% capital gains tax for capitalists.
ilene, did you take advantage of my suggested shortcut for copy and paste
ctrl+c
ctrl+p
just find an article you resonate (or whatever) with and presto you become (insert name here, in this case __ilene__ , the magic blogger
of course your real name could be Phil or whomever in which case please excuse my snark but if not I ask this question:
how do you live with yourself as a copy and paste blogger?
Well, anonymous, this is part of my work. You have no name, no face and as far as I can tell, no point.
ctrl+p is reserved specifically for Benny Bucks.
I think this is the android you are looking for:
ctrl+v
I love the generalities. Not everyone works on Wall Street and invests in equities. Some of us bust our ass, while dragging along a few slacker employees more interested in beer thirty than the quality of their work, and hope l ike hell that the business we have invested our entire lives in doesn't eat our ass. SAy what you want but i don't owe any of you a damn thing. The poor 99%. I've been working with them my whole life and they are still standing there with their hand out, not able to understand why just showing up isn't enough. And same goes for all the gamblers that think they should make a living from placing bets, rather than actually creating something, and then bitch when they figure out the game is rigged. Maybe if you gave the game up these crooks that run the government and banks would have to get a real job too.
As a 1%er in his mid- 50's I have made many sacrifices in my life to get where I am.
100 hour weeks were the norm for the first 20 years of my work life, as were continuous fights with the wife over current vs. future consumption, i.e. saving and investing like mad. Discount shoes and clothing for the kids bought at the outlet mall in increasing sizes to allow for growth....again saving and investing.
I have not bought myself a new auto in the last 20 years, frugality dies hard!
Now I have a mid-six figure income from both my job and my investments.
I never asked anyone for crap, I earned my position and my investment income...now the rest of the people who did not make their lives exponentially difficult the way I did to achieve the Merican dream want my hard earned wealth to buy votes and to buy cell phones for a bunch of slackers.
Bite me!
Keep demonizing me you fools and I WILL sell my company to people who will run off the older, less productive employees. Be careful what you wish for!
Dog
PS- If my memory serves me correctly, over 2/3rds of the Forbes 400 are self made, don't buy into that generational class warfare BS!
PPS- Keep stackin bitchez!
I too an in the 1 % and busted my butt to get it.
When I came out of college I had NO debt, yes I worked my way, none the less I had NO DEBT
When I graduated from college, I got to chose from several job offers.
My starting salary was substantial higher than what a "baby engineer" is offered today.... and that was 40 YEARS AGO!!!!
I had health care coverage.
I believe that you have forgotten (perhaps your ego and "old timers disease" has interfered with your memory) the opportunities that society made available to you, those opportunity allowed you to bust you butt and make it into the 1%, good for you (and me).
You and I have a responsibility to ensure that the next generation has the same opportunities that we had!
Never had a good worker in your entire life? Come on, get over yourself. You're really not that special. I was someone else's employee for twenty years before I started my own business. Made my employer easily half a mill profit my last year. I finally saved enough to start my own gig. Banks aren't lending, so had to scrimp and save. I'm the same guy I was before. And who are you selling your shit to? Go ahead. Kill the goose.
You people who claim to have never had a good employee are either really bad managers, or just narcissists. Let me guess -- did some of your employees come in with good ideas that you later adopted as your own, and then you asked them why they didn't think of it?
You must be a hell of a guy to make your boss a half a million! I've been self employeed for 30 years and never made a half a million. Of course we actually have to build something so a million bucks is a lot of money. When you are simply in the multiplication business its a lot easier. Salesmen. Don't give a damn about anything as long as they can get their commissions. I've had a few good employees but most have gone on to do their own thing and have nothing but respect. For all others they seem content to stand in place and wait for something to come their way. They don't save and they aren't interested in more responsibility. Many seem to be more interested in making sure i don't make anything then them actually making more. Self employement is not for everyone and that is fine, but don't demand what i earn when you don't want to do what i do. It is a bad deal for those trying to start out because they see no future in it and i would have to agree. I'm just sick of these asses constantly bitching about people who make 200-300 k a year like they are the problem. we know who the problem is. Its those grabbing it all with the help of our government and those demanding their fair share, no matter who they have to take it from.
I'm not a salesman and I don't sell stocks, bonds or any other kind of investments.
I would have stayed had the old boss been willing to share even twenty percent of the profit. Even before I became an employer I understood that he took the risk etc. Like you, he thought all employees were worth whatever he said they are worth and/or whatever the guy down the street paid. Food for thought -- you could have kept the good people had you paid them fairly. Because you were so obsessed with keeping most of the profit, the good ones left. You probably made less money in the long run, and you had to put up with the bad employees who could not/would not do their own thing if forced to.
Actually i pay top wages and provide full health insurance. I have put up with bad employees because i don't have the heart to fire them. Maybe my negative perspects are partially due to this, but i doubt it. I know too many other small business people that have had the same problems. My industry attracts few college grads except for the misfits that just can't handle corporate life. MAybe you upper classmen have a different view. You know there are guys working oil rigs that can make upwards of 250k a year. Are they to blame as well? My point is simply that while it is difficult most people can advance themselves, but society today allows many to wallow in their failures and blame everyone else. They may have a bad deal but they have to get over it. It can be done, it just hard. Today only the chumps bust their ass. Easy money is where it at. And the LAST thing you ever want to do is make someone else MONEY!
You do realize that you are wallowing, right? Read your earlier posts. Hypo. Crite.
My sister is in the top 1% and has earned it, but she isn't the one, like yourself, who have made the whole system unstable. I was responsible at one time for $26 million of quality product getting out the door for customers, was doing the job that formerly 5 engineers were responsible and I didn't get paid jack shit for it. I later looked on monster . com india and saw the job I used to do on it ... that is what is wrong with this country. The globalists and financial sector weenies who have corrupted and bankrupted the whole system. When people generalize about those who make a considerable income, don't think they are pointing the finger necessarily at you... they are pointing the finger at those who have profitted from the loss of their financial future. Only you know which camp you truly live on, the financial sociopaths like to pretend they are not responsible (as all sociopaths do for whatever they do to humanity) for the devastation that is spreading while they make out like the thieves that they are.
In the East, a good job pays $1.25/hr w/o benefits (Foxconn). Other than Govt mandates/jobs, the prevailing wage in the US and EU will slowly and painfully drift lower and lower toward the these slave labor conditions in the East. Nothing, No one can stop it because of the internet where there are 7 billion people willing to work. And most work can be automated and reduced to simple procedures that need to be followed and can be monitored by computers. Yes, the elite, brilliant, connected few avoid the pain but for the 90% of the population we will be accepting a much lower standard of living. Living w parents in small apts, taking a bus(not having a car), waiting forever for substandard health care (go home and die), educating your kids in a locked down school by teachers who don't care will be the life for most. Look at the poor in any major city in an undeveloped country. Thats your future!!
Race to the bottom. It's ironic that so many fucks who considered themselves part of the productive class brought this shit upon us. Thanks fucking sociopath Ayn Rand.
LOLz. Yeah! This is all Ayn Rand's fault!! /sarc
Phil, normally I try to ridicule your articles, or at least, take issue with one or more or the points that you make. But this article is pretty good. Those who dismiss the overall point of extreme, and growing, income inequality are whistling past the graveyard. I'm not expecting the French Revolution to come out of this, but certainly, a less enjoyable world for all Americans, as envy, frustration, and desperation by many in the 99% seep into our everyday lives.
There is a solution, prosecute fraud and restore the rule of law. One way or another we end up here anyway.
The marginalization of money in a market cornered by fraud and insulated by government.
No one saw it coming but everyone got paid.
Let me guess, its the computers fault!
Too bad its declared and taxed incomes. Would love to see Phil try and scratch the surface of oversea tax havens personal and corporate... corporate surplus leads to bigger bonus' which arnt always declared! Im sure the rothschilds and rockefellers could wad up the all the 1%'s earnings and wipe their scaley assholes with them and not even bat a lash as they flush it down the pipe
Phil,
Haven't you heard? The problem is that we have too much regulation. The workers are earning too much and the productive class is not allowed to reach their full potential.
Ayn
Ah yes. All that nasty regulation, the markets correct themselves ... after the currency collapses.
Interesting comparison of 1927 to today in tems of the disparity in share of income. I find those two charts very revealing.
Very revealing, like a short skirt on a hot bod wearing no panties.
"Of course things seem just fine if you are in the top 1% and they can only get "better" if you make more money and that means - very simply - less for the bottom 99%."
so the world's income is a zero sum game? No way for a poor person to plow a field if the rich man has already plowed his....?
did I understand you correctly??
No, you didn't.
Class warfare.
Love ya Phil. Thanks, as always, for sharing.;
The obvious from Phil is getting more..............................obvious
Good article...one glaringly stupid error. This is not capitalism. Rigged capitalism perhaps. Government/Corporate cronyism has made it nearly impossible for real competition to take place. Let the big banks fail...let AIG fail along with Freddie and Fannie and anyone else so stupid as to run a company into the ground and then stand back and let hungry entrepreneurs build new banks, insurance companies, etc. and let them compete ona fair playing field, and all will be good. Just get off our backs!
You think free market capitalism is sustainable? Think again. If money can buy an Armani suit, it can also buy politicians and law makers. And you cannot stop it, no one can.
Free market capitalism is an utopia, just like communsim is. They are astable systems, both converge to dictatorships in the long run. Russians learned their lesson. Now it's Americans' turn.
Does the MSM mention the idea that rescuing bankrupt banks is *against* the free market ideology? No, it does not. Free market capitalism is long gone and no one can bring it back. We will have to wait till the empire melts down to its cores just like the Roman Empire did.
Ahhh....but then you would have less need for that holy grail of collectivist idealism: WE NEED MO' TAXES!! So why bother referencing the inconvenient little notion of GUBMENT-MANAGED-'CAPITALISM'....when it's so much easier to just go after capitalism itself.
Works wonders for debate over the illegal immigration problem too. If you're against it, then you are against 'immigration'. See how that works? Emo-logic.....it's what's for breakfast!
"That's Commie talk!"
neal boortz or sean hannity could not have put it better.
"Steve Rattner has a different opinion, saying: "The only way to redress the income imbalance is by implementing policies that are oriented toward reversing the forces that caused it. That means letting the Bush tax cuts expire for the wealthy and adding money to some of the >>>programs<<< that House Republicans seek to cut. Allowing this disparity to continue is both bad economic policy and bad social policy. We owe those at the bottom a fairer shot at moving up."
That's Commie talk!"
lol...
"If we allow the bottom 99% to make a fair share of the money, they would make 5% more and you know they would only SPEND it on stuff they need TO LIVE."
Steve Rattner of Quadrangle?...Obama's GM Car Czar?...pontifiating on the economy and the little people and governments plans for them?...this is fucking priceless.
Ten million in "restitution"...clearly a white knight ;-)
Why do you hate poor people?! Dontcha know the Boosh tax cuts ruin lives? You must be a 1% of the 1% of the 1%!! /sarc
If you really look in depth at who the 1% are it's readily apparent that MDs dominate the list. Next come the lawyers, financial managers, the landed wealthy, and lastly real entrepreneurs.
You are an idiot. Pick up a Forbes magazine and see who that 1% is. They are people closest to the "free money" spicket and their attorneys who keep the laws in their favor. It takes money to make real money. Sure there are a few innovative engineers in there too, but hey, if you gave me a ton of free money (no interest loan) even a fucking monkey can make a ton simply by loaning it back to the government for a few percent.
SoZ
maybe a fair number of MDs in the top 1% but there are not any in the .01% unless they were born with it.
In a meritocracy who would you put on top of the heap? ....of course if someone were doing any 'putting' is would not be much of a meritocracy...but who in you vision would 'deserve' to be the high income generators and who not so high...?
MD's?? Really?? My wife is a doctor, maybe she's being shortchanged? Are you making this up, or do you have a link to this 1% list?
What kind of MD is she. If she's not making over $500K she's getting shortchanged or needs to change fields (if she's in it for the money). The docs that make the most are the ones that can skim off of other people's work (pathologist, anesthesiologist, radiologist). For example an anesthesiologist can manage four cases at a time (CRNA's or AA's), and take 60% of the total fee for each case in his own pocket without doing any of the work. They can literally make $1,000 per hour while doing nothing but "supervising".
KingPin, Sorry to have to shine the light on your profound ignorance. I am a partner in a large practice of Anesthesiologists. I work 50-60 hours per week on average. We never assign anyone to cover more than 2-3 rooms and making $1000 per hour is pure fantasy. Last night, I covered a twelve-hour midnight shift, and placed 4 medicaid epidurals and spent several hours doing an emergency surgery for someone with a perforated colon. This person had no insurance coverage and I will likely never get paid for what amounted to four hours of critical care coverage in the OR. At about $19 reimbursement for a medicaid epidural, I will collect about $76 in professional fees for my expertise and time. 76/12=$6.33 per hour for last night's work. Certainly, I have days where I make considerably more, but you must view those days with the perspective of the work I did last night. "Supervising" often includes life-saving procedures that must be performed on a moment's notice. Last night, for example the patient's care required me to place an arterial line, central venous line and examination of the heart with TEE (transesophageal echocardiography). I was in the room the entire time taking care of a septic emergency. Don't get me wrong, I love my job and am happy to be able to take care of even critically ill patients--but hearing someone ignorantly trivialize the job that I do truly bothers me. God forbid, you or a spouse or child ends up in my OR at 2am with a life threatening bleed, airway emergency or infection....you can rest assured that a board certified anesthesiologist will be there to work with the surgeon help you survive the surgery. We will do this regardless of your ability to pay.
What exactly am I ignorant about? Just because you never assign anyone to more than 3 rooms doesn't mean everyone else follows the same policy. Just because you can't make $1,000 per hour doesn't mean no one does. What if you "supervise" 4 heart surgeries tomorrow for 4 people with insurance. How much will you make. That example probably iss't realistic but neither is your example of supervising a few epidurals and a perforated colon for someone with no insurance.
I'm not trivilaizing your job. Its a matter of what that supervision is worth. Your job is important just not important as you want everyone to believe which will justify your salary.
As for when my child ends up in the OR--no--an anesthesiologist probably won't be there. I don't know where you work, but outside of larger population centers CRNAs have taken over because there isn't enough money to lure anesthesiologists who want $1million per year. So the CRNA can place the arterial line that you think entitles you to $1million per year.