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Guest Post: If The Market Crashes, Who Owns Enough Stock To Even Care?

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Submitted by Charles Hugh Smith from Of Two Minds

If the Market Crashes, Who Owns Enough Stock to Even Care? 

Since 81% of all stocks are owned by the top 10%, a stock market crash has little effect on the bottom 90% of Americans.

It is assumed without question that the stock market is some quasi-sacrosanct barometer of the U.S. economy. But who even cares if the market crashes? Only the top 10% who own it. Yes, millions of (generally government) workers have an indirect stake in stocks and bonds via their state/union pension funds, but it's still informative to look at the distribution of who actually has a stake in the market's rise and fall.

This data is from pre-recession 2007, so I suspect ownership has become even more skewed to the top 5% as those below liquidated stocks to pay the bills as household income and housing equity plummeted.

So 81% of stocks are owned by the top 10%, and 91% by the top 20% of households. Thus we can conclude that 11.7 million out of the nation's 117 million households will actually be adversely affected by a stock market crash, while the consequences to the remaining 105 million households will be slight to zero.

A severe decline in the "wealth effect" would probably crimp the top 10% tranche's carefree spending, which accounts for some 40% of the nation's consumer spending. If the market crashes, high-end retailers and restaurants would likely see sales fall significantly. While there would be consequences, we should be careful not to overstate the stock market's role in the nation's Main Street economy.

And what are the chances of a real crash? For insight, we turn to the The Chart Store's chart overlaying the current rally and collapse with the Dow circa 1907. The similarity is rather uncanny:


The only difference is the Fed launched QE2 late in 2010, which kept the rally alive for another 6 months. But as we can see, it didn't change the future decline, it simply set it forward a few months: the current market has now caught up with the 1907 decline.

The past is simply one possible pattern of many to consider, but the remarkable similarity of these two charts suggests that there may be more downside ahead.

One last point: those who exited the stock market won't care if it crashes because they opted out of playing the risky game altogether.

 

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Sat, 08/13/2011 - 17:26 | 1557513 zorba THE GREEK
zorba THE GREEK's picture

A stock market crash could be positive for many people because it would give them a chance to enter the market

with little downside risks. I personally will just stay in PM's.

Sat, 08/13/2011 - 17:45 | 1557546 snowball777
snowball777's picture

Because they've been hoarding their cash until now?

 

Sat, 08/13/2011 - 18:03 | 1557585 spiral_eyes
spiral_eyes's picture

cash, bitchez

or.. not.

http://azizonomics.com/2011/08/13/why-cash-is-not-king/ 

enjoy your negative real rates NOM NOM NOM NOM

Sat, 08/13/2011 - 18:29 | 1557634 Missiondweller
Missiondweller's picture

The retail investor has basically been out of the market since 2008. There has been lots of documantation of this.

Sat, 08/13/2011 - 18:52 | 1557666 disabledvet
disabledvet's picture

Well of course this must be true since when the market collapsed in 1929 it had no impact whatsoever! Obviously this is a ridiculous article since WTF was the "plunge protection team" for in the first place? The real story and only story for the past two years has been the MASSIVE social unrest as a result of "bailout nation." clearly policy makers would be fools if they didn't see what has happened everywhere but East Asia heading straight for the USA.

Sat, 08/13/2011 - 19:26 | 1557723 Michael
Michael's picture

News flash;

Dr Ron Paul placed second within a cunt hair of Michelle Backmann in todays Aims Iowa straw poll.

  1. 28.56% (4823 votes) – Michele Bachmann
  2. 27.65% (4671 votes) – Ron Paul
  3. 13.57% (2293 votes) – Tim Pawlenty
Sat, 08/13/2011 - 19:35 | 1557731 spiral_eyes
spiral_eyes's picture

he won't pick up THAT much else. maybe a few from t-paw and cain and even steal a few from bachmann. the interesting thing though, is that perry will split the bachmann vote. paul's supporters won't deviate, and he will pick up a few more as the economy crashes more. liquidity traps, bitchez! prediction (plucked out of the air) of caucus:

bachmann — 25%
ron paul — 30%
perry —  30%
romney — 20%
santorum — 3%
cain — 2%

t-paw, huntsman, etc drop out.

all i hope is sarah palin comes into the race and splits the dumbass neocon vote some more. sadly i think the final two will be dr no and slick rick. stay optimistic, bitchez!

Sat, 08/13/2011 - 19:36 | 1557734 spiral_eyes
spiral_eyes's picture

KEEP THIS VILE ASSHAT OUT OF THE WHITE HOUSE!

http://azizonomics.com/2011/08/13/rick-perry-heir-to-bush-cheney/ 

Sat, 08/13/2011 - 23:38 | 1558263 JW n FL
JW n FL's picture

I thought everyone had their high risk 6% - 14% Monies invested in the Markets?

Was I wrong?

 

Sun, 08/14/2011 - 10:09 | 1558591 Bob
Bob's picture

Rick Perry has charisma that is right up their with Candidate Obama's.  Obama seemed to be impersonating MLK.  Watching Perry, I see Joel Osteen. 

Nobody would like to see him President less than me--another Clinton/Bush/Obama is not what I'm looking for.  IMO, though, most people don't vote on policy, but on whether they "like" the guy. 

I see Perry as our next POTUS.  Bachman or Paul as his VP on the basis of popularity; of course, a cipher like Romney would fit the role perfectly as well.

Sun, 08/14/2011 - 13:35 | 1559118 Lord Koos
Lord Koos's picture

Perry won't fly.  He's like a B-grade version of Bush -- people still remember what happened the last time they elected a governor from Texas.

Sun, 08/14/2011 - 19:00 | 1559962 Shirley Wilfahrt
Shirley Wilfahrt's picture

Barring the standard Live boy/dead grrl rule....

Perry in a landslide.

America.

Fuck Yeah!!

Sun, 08/14/2011 - 09:33 | 1558610 ceilidh_trail
ceilidh_trail's picture

This website states that it is nonpolitical, then goes on to call the Tea Party people "neocon warmongers". 'Nuff said, not worth another look.

Sun, 08/14/2011 - 10:15 | 1558656 Bob
Bob's picture

If it's any consolation, he did say that this is the case only because the inspiration of the early Tea Party has been hijacked and scurriously exploited by the fascist machine.

Sun, 08/14/2011 - 18:46 | 1559930 Cruel Aid
Cruel Aid's picture

From Texas... He is a classic Rino, ex Jackass. Hell he endorsed asshat Gore. LOL

Sat, 08/13/2011 - 23:04 | 1558214 Oh regional Indian
Oh regional Indian's picture

Michael, isn't it strange that Ron P has been hemming and hawhawhawing for the better part of 30 years about I'm not keen on keynes, gimmie some mises misery....blah blah... and then he places a cunt hair lower than Michelle Bachmann? 

It tells me a lot, both about politics and perception management in America. And it looks scary and those NUMBers DO NOT matter.

ORI

http://aadivaahan.wordpress.com/2011/08/12/crop-circle-craziness-and-thoughts/

Sun, 08/14/2011 - 10:23 | 1558668 Bob
Bob's picture

Perception is all.  That would appear to define public life in America these days, controlled by a corporate media machine.  Of course, we've been set up by generations of television, where commercials are the substance and programming only incidental. Suspension of disbelief has become the foundation of American "character."

I think we see how far this has gone with facebook.  Real life becomes incidental to "empowered" perception management at the individual level.  Sad indeed. 

Sun, 08/14/2011 - 10:40 | 1558697 Oh regional Indian
Oh regional Indian's picture

Sad Indeed. Indeed! I was in the US from 95ish through 2006 and I believe I saw the decline and fall before my eyes in that period. And being in the dot.con BOOM gave me a really deep insight. 

ORI

Sun, 08/14/2011 - 08:31 | 1558564 sessinpo
sessinpo's picture

And this means what exactly? I'm sure that you have heard that McCain did poorly in the last Iowa Straw Poll, yet won the nomination.

The Iowa Straw Poll means nothing. It is non binding. Heck it cost money to vote in it! The two top contenders will be Perry or Romney, but most likely Romney because he is an establishment player. Perry is trying to play hard to the Christian right. Unless Bachman or Paul get some HUGE upset wins (caucuses or conventions and not non binding  polls), they have no chance fighting the system set by the two parties - the Corruptocrats and the Corruptocans.

Sun, 08/14/2011 - 09:20 | 1558592 Dental Floss Tycoon
Dental Floss Tycoon's picture

Michael said: "Dr Ron Paul placed second"

Dr. Paul is the only dog I have in any political fight.  That said I don't believe he has much chance of winning.  Most Americans just don't have a clue what he is talking about.

But I would love to be wrong.

BTW did you notice how much more face time Michele Bachmann got than Ron Paul in the debates?  But that's the mass media doing what it does best.

Sat, 08/13/2011 - 19:29 | 1557726 Fred Hayek
Fred Hayek's picture

The majority of the populace had no significant stake in the stock market in 1929. But everyone had money in banks, which were collapsing for a variety of reasons. Almost everyone in farming states was hurt by dust bowl conditions. Almost everyone was hurt by the Fed actually slashing credit as the depression began. Almost everyone working in an export related industry was hurt to some degree by the revenge tariffs on american goods inspired worldwide by the passage of the Smoot-Hawley tariff. Etc etc etc. Yes, the stock market crash of 1929 was a bad event but a hugely overleveraged economy was hurt in several other ways that probably mattered more to the average american.

Sat, 08/13/2011 - 22:16 | 1557794 Kayman
Kayman's picture

the passage of the Smoot-Hawley tariff.

Lucky us, we already exported enough jobs that we have none to protect now.

Sun, 08/14/2011 - 09:21 | 1558596 JW n FL
JW n FL's picture

++++++++++++++++++++++++++++++++++++++++++++++++++++

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++++++++++++++++++++++++++++++++++++++++++++++++++++

++++++++++++++++++++++++++++++++++++++++++++++++++++

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what else can I say?

Sun, 08/14/2011 - 14:47 | 1559240 jerry_theking_lawler
jerry_theking_lawler's picture

In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.

__________________________________________________________________________________________________________

From Ferris Bueller's Day Off....that's where I learned my economics!!

Sat, 08/13/2011 - 20:31 | 1557880 New_Meat
New_Meat's picture

freddy, you nailed it.  If there were a greenie thingie, I'd give you one. - Ned

Sat, 08/13/2011 - 19:31 | 1557728 Caviar Emptor
Caviar Emptor's picture

This ain't 1929, bro. There's no retail stock market mania. 1929 was like 1999 cubed: everyone was in, everyone thought it would last forever. There was also leverage the likes of which make 2008 look cautious. It actually didn't take much to wipe people out totally. Not at all what we have today. Most of the trading isn't people. It's bots passing shares back and forth giving the appearance of demand. Few people hold overnight positions at all. There's nothing to wipe out in a crash

Sat, 08/13/2011 - 21:06 | 1557982 disabledvet
disabledvet's picture

Retail is all cnbc and now even bloomberg talk about. Now how many publicly traded companies were there then? 30? And now? 12,000? We have no private economy like we did back then to fall back on. In other words "this better work."

Sun, 08/14/2011 - 14:26 | 1559198 A Lunatic
A Lunatic's picture

There's nothing to wipe out in a crash

Interesting observation. There is sooooo much more to gain by almost crashing. Preventative measures, that's where the big money plays are.

Sat, 08/13/2011 - 18:08 | 1557588 DormRoom
DormRoom's picture

wtf.. Using a chart from 1907?  The General Theory of Employment, Interest and Money hadn't even been published yet.  Policy makers have more tools @ their disposal now, then 1907.

 

Too bad American politics is too dyfunctional to apply what is needed: more fiscal stimulus.. Infrastructure bank.

 

It's an apple to orange comparison.  It'd be like looking at pregancy stats, prior, and post creation of the pill.

Sat, 08/13/2011 - 18:24 | 1557628 Pay Day Today
Pay Day Today's picture

You've assumed that trading psychology has changed beyond fear and greed. It hasn't. You've suggested that new tools and new theories will change market behaviour. Then you suggest two things - fiscal stimulus and an infrastructure bank - which could have been implemented 150 years ago.

Not sure where you are going with any of this. We are not smarter than we were a century ago (i.e. beoing more contrived and complicated is not necessarily the same as being smarter).

Sat, 08/13/2011 - 21:24 | 1558037 rosiescenario
rosiescenario's picture

I'd go back even further...we haven't changed since the tulip mania or South Sea Bubble, though we do now have far more complex derivatives, HFT's, not to mention almost instantaneous news delivery. Actually, in giving this some more thought, we are probably far better equipped today for rapid herding...today we have gazelle herding vs. water buffalo herding of prior centuries.

Sun, 08/14/2011 - 08:54 | 1558574 EFNuttin
EFNuttin's picture

You've assumed that trading psychology has changed beyond fear and greed.

I have a theory that fear and greed are our trading equivalents of the primitive reactions of flight and fight.  When prices are falling sharply, the fear leads to flight from the market.  When prices are rising quickly and "everyone else" is getting rich while we sit back skeptically until doubt is overcome by greed, we then jump into the "fight" to grab some of the largesse.  Does anybody know of writings that connect "fear and greed" with "fight or flight"?  I highly recommend viewing Reason.com video interview on YouTube of Vernon Smith, Nobel Prize winning economist who, unlike 99 percent of economists, believes that financial bubbles are intrinsic to human nature.  PBS filmed "Mind Over Money" which profiled Chicago-school economists who essentially don't believe in bubbles, versus actual bubbles since the Tulip Bulb Mania and Vernon Smith's work.  I wonder if Vernon Smith is related to Adam Smith.

Mon, 08/15/2011 - 06:07 | 1560858 Pay Day Today
Pay Day Today's picture

Thanks EF.

Sat, 08/13/2011 - 18:35 | 1557641 Diogenes
Diogenes's picture

Fiscal stimulus would work if the problem were too little credit. But what if the problem were too much credit, as it is now? What if the consumer cannot spend because he has no money, and cannot borrow because his credit is maxed out?

In view of the fact that this has been the case since 2005, it is no wonder that l the massive  stimulus of the last 3 years has had no positive effect.

Sat, 08/13/2011 - 20:28 | 1557867 DormRoom
DormRoom's picture

Richard Koo, the man who coined, 'balance sheet recession' recommends fiscal stimulus.  Governments must spend as the consumer continues to deleverage.  Business won't invest, if there are no consumers. So it must be government.

Sat, 08/13/2011 - 21:03 | 1557972 Pay Day Today
Pay Day Today's picture

I agree with Koo's analysis; however he doesn't deal with how to destroy debt, only how to pay it off over a very long period of time once asset valuations have collapsed.

This is an answer that the banks like of course; debt restructuring is not.

The Japanese economy would have got on to its feet far faster if in addition to spending, debt moratoria were mandated. Something like zeroing the interest on household debt would have greatly sped up debt repayment.

Making it easier for households to declare bankruptcy would have also helped destroy bad debt.

Both these steps would have hurt the Japanese financial insitutions - of which Nomura is a big one.

Sat, 08/13/2011 - 21:07 | 1557990 Greenhead
Greenhead's picture

So what if Koo said spend more?  That only means more debt since we are already running a large deficit.  Where is the stimulus money to come from?  Either more debt, more taxes or more pinting which is another hidden tax anyway. 

How about instead of trying to stimulate consumption which really means more leverage and debt, we try and figure how to save more some we can actually produce something sometime?

What do you say, new paradigm?

Sat, 08/13/2011 - 21:18 | 1558024 Pay Day Today
Pay Day Today's picture

"Where is the stimulus money to come from?"

Same as now, except instead of the Fed printing it and giving it to the primary dealers, the USG prints it and injects it directly into the real economy to create 5M-6M new jobs.

I would call this a new paradigm but it already happened in the 1930's (WPA).

Sat, 08/13/2011 - 21:43 | 1558081 Greenhead
Greenhead's picture

Brilliant, like no one ever thought of counterfeiting before.  Let's just print pieces of paper and call them money and inject them into the economy and pretend they have the same value as the other pieces of paper.  Prices won't go up, gas costs won't change, commodities will stay constant cause ... what?

This is the most infantile, wishful piece of thinking I've read in a while.  Still drinking the koolaid I guess.

Sat, 08/13/2011 - 23:10 | 1558223 Pay Day Today
Pay Day Today's picture

I don't get your problem. The Fed is printing money now. Has been for years.

All I am saying is get rid of the Fed (Ron Paul style) and have the USG take over those functions.

The USG can then inject that money directly into the real economy - bypassing the primary dealers. It's not rocket science and the US has done it before.

Sun, 08/14/2011 - 10:19 | 1558663 goldsaver
goldsaver's picture

You are right... it has been done before... Wiemar, Zimbabwe, Argentina.....

Sun, 08/14/2011 - 10:40 | 1558619 Bob
Bob's picture

Funny that we look at a debt-money fueled stock market in an environmnent of demand destruction in the real economy and don't see overinvestment in the market as a central problem. 

We've incentivized investment in the financial markets OVER investment in the REAL economy by providing tax favored status on capital gains.  The people who have significant wealth that COULD be invested elsewhere are highly sensitive to taxes and people who would otherwise be contribuing to the real economy are consumed with playing the market. 

IMO, every day that we continue to incentivize "investment" in Mr. Market's casino is another day that dot gov is actively "stimulating" the financial economy.  And, given that this "stimulus" is tax revenue negative, it severely constrains the government's ability to fund programs that would directly impact employment. 

The only difference that I see between this tax-driven stimulus and a more traditional fiscal stimulus that COULD yield jobs is that it focuses ONLY upon the welfare (perceived, at least) of the top 10% of the population.  POMO/MOMO and PPT only amplify this tax policy-driven misalignment of investment. 

We need to eliminate the 15% capital gains tax rate.  A financial transactions fee would be additionally effective for reasons that most of us readily recognize.  HFT anyone?

The corporate media has over the past year installed Mr. Market as our national mascot.  He's replaced the flag as a prop on news casts about the state of the US economy. 

Supporting this sick sock puppet has become Job One for the American people.  Hey, if you're a trader this may not bother you--there are still fortunes to be made in the casino.  But if you want to see increased investment in the real economy, we've got to stop incentivizing "investment" in the finance casino. 

Sun, 08/14/2011 - 09:39 | 1558613 Pez
Pez's picture

Plenty O' businesses/ consumers in China. USA dont gets it.

Sun, 08/14/2011 - 20:08 | 1560114 Bobbyrib
Bobbyrib's picture

Well, what was the massive stimulus over the last three years spent on? Infrastructure projects or pork?

I'm sure the middle class tax breaks helped passed in the Porkulus package, but they also spent billions on garbage we didn't need. The Republicans were right to rip that bill apart. It's as ugly as any bill coming out of Washington.

 

Sat, 08/13/2011 - 19:13 | 1557700 robobbob
robobbob's picture

so how long have you worked for the white house? and did you have to apply for the job, or did the job just come with your donation thank you card?

Sun, 08/14/2011 - 14:47 | 1559239 Miss anthrope
Miss anthrope's picture

HEH he's in a dorm room fresh out of government indoctrination camps,  he pays THEM to work!!

Sat, 08/13/2011 - 22:17 | 1557804 Kayman
Kayman's picture

more fiscal stimulus..

Yeah.... pissing money into the wind, seems like a good policy.

 

Sat, 08/13/2011 - 20:27 | 1557861 RafterManFMJ
RafterManFMJ's picture

I agree. When I buy something with my galactic black card, I'm just charging it off to the fine creatures of Alpha Centauri.

Although their currency is fixed at 6 Zolots to 1 USD, we both maintain the polite fiction that they will ever collect; it really is a sweet deal as I get blue skinned whores with prehensile tails, and they get a warm feeling from paper promises.  Everybody is winner!

Sat, 08/13/2011 - 19:07 | 1557697 RumCurrency
RumCurrency's picture

I doubt it... 2/3 of Americans have less than $1,000 in savings.  And if the market collapsed, the average joe would think putting money in would be more risky, rather than less risky.  Smart money holds gold as cash and then buys solid income-producing investments as the market gets cheaper.

Sat, 08/13/2011 - 19:16 | 1557702 Rynak
Rynak's picture

Yup, i explained this to a buddy a few days ago, like this:

Does the current financial crisis affect a tiny minority the most? Yes, however, that minority has a lot of "buffer" to spare, while the majority average joe has almost zero buffer. Phrased another way: While it affects a minority the most, that minority's survival does not depend on the majority of their wealth..... while those being affected less, have near zero reserves, and thus are strongly affected *no matter how small the loss is*!

TL/DR: Those most affected can afford to lose. Those least affected cannot afford to lose anything.

Sat, 08/13/2011 - 23:14 | 1558230 Things that go bump
Things that go bump's picture

On another blog, I was privileged to read a post by someone who was old enough to witness the Great Depression with his own eyes.  He was in his early teens at the time and wrote about how it affected his family, which was fairly well to do.  This is what I remember of his story:  He said the stock market crash didn't touch his father, as he owned no stocks. He said that was the year his sister graduated from high school and his father was able to buy her a blue roadster with yellow tires for her graduation. His father was the manager or part owner of a manufacturing plant of some sort and the next year the business took a turn for the worse. They were forced to let go all of the women who weren't the sole support of a family and all of the single men at the plant. At home they had to make economies and they let go the man who did their yard work and took care of their furnace (it was coal).  He said he and his older brother took over those chores and pushed the lawn mower and fed the furnace several times a day and cleaned out the soot.  His mother was going to let go the girl who helped her in the house, but she said she would work for room and board and she really needed a place to stay. He said his mother hated that she couldn't pay her, but couldn't put her out in the street.  She and her daughter took on more chores because she felt guilty working the girl too hard. His oldest brother lost his job and had to move back home with his wife and children.   They ended up moving into another small house located on the property. They also cleaned up the chicken coop and put in a stove because the housemaid's parents were evicted and needed to move in there with their other children.  He and his brother moved to a cold and drafty room over the garage so that his mother could rent out their rooms in the house.  His brother left one day to ride the rails west in search of work.  He found something eventually in Colorado for a few months.  He wrote home and promised he would save his money and be home in several months.  At the plant, they had to cut the work week down to a couple of days a week, and often they had the men sweeping or painting because there was no real work for them to do.  They hung on as long as they could, but finally they had to close the plant. His brother in Colorado wrote to say he was coming home, but he didn't show up when expected.  Finally, they got word that he was found dead in a railcar. Apparently, a railroad detective knocked him unconscious with a billy club, locked him in the railcar and left him to freeze to death.  He still had $120.00 pinned to the inside pocket of his coat.  Eventually, through some connection or other, his father finally found some sort of janitorial work.  The bank had some sort of note on their house.  They didn't have mortgages as we know them back then.  This was apparently an interest only loan and the principal had to be paid back in a lump sum after a certain term.  They were in danger of losing the house and property, but some program of Roosevelt's allowed him to finance through the government and pay back the note. Near the end of the depression he was able to sell that little blue roadster for some ridiculously small amount of money. He kept that janitorial position until he was able to collect social security.  By my calculations at the height of the hard times they were feeding and housing 15-17 people.  The gentleman who wrote this story went on to college and apparently had a long and successful career in what I think was academia. I found his eye witness story quite moving.  My parents were too young to remember much of the depression and my grandparents and all their siblings are gone so the stories they didn't tell me are lost.  


Sun, 08/14/2011 - 00:47 | 1558331 Escapeclaws
Escapeclaws's picture

This is a really good post. Those people had so much character, which is sadly lacking nowadays. It's funny how the rich never have worries and live soft pampered lives. In a crisis, they couldn't cut their way out of a paper bag.

Sun, 08/14/2011 - 10:38 | 1558680 Bob
Bob's picture

I hear a loss of decency since that time.  Can you imagine anybody in today's world who has servants actually pitching in to help out with their work due to guilt about taking advantage of their misfortune?

Those were some very different times. 

Sun, 08/14/2011 - 10:41 | 1558701 Diogenes
Diogenes's picture

Read the story again. Those WERE the rich people. An executive with his own home, a guest house, a chicken coop, servants, and enough money to buy his daughter a new car for a graduation present.

By the standards of the 1920s those were the rich people in the big house at the top of the hill.

You don't want to know how the poor people survived. If you are curious you should look up a story by William Mitchel about a couple who survived the worst winter of the Depression living in a cave in Central Park. In the story he comments that compared to some of the people he interviewed for his paper that winter they were living off the fat of the land.

Sun, 08/14/2011 - 09:05 | 1558581 Moe Howard
Moe Howard's picture

My father lived through the depression in Chicago. His father died just before it, 1928 I think. There were 10 brothers and 2 sisters. They first lived in one room in the back of a shack of a candy store on the corner of wood st., then shortly before Grandpa died they purchased a 2 flat with a funeral home on the first floor.  He pointed out the "candy store" to me [a wood and tar paper shack next to the rail yard] and told me the story when I was in my 30's, I always knew the two flat in Pilsen neighborhood because Grandma lived there. He was too ashamed to tell me how poor they were before. He quit school in 8th grade and sold newspapers on the streets. That story I got from my mother as again, he was too ashamed to tell us. He brought the money home to my grandma every day, every penny. Several of the older brothers hit the rails and went west because they couldn't find work and didn't want to take food from the younger kids. They sent money went they had it. My older aunt became a nun, the younger one got married and they helped kick in as Uncle Henry had a job of some kind. My dad joined the Civilian Conservation Corps as soon as he was able, he did logging out west in Washington state. I've seen pictures of him, a city boy in the woods. According to what he told me, they were required to send most of the "pay" home except for personal hygiene money. As soon as he could, he joined the Navy in 1938, so he was a seasoned sailor by the time the war broke out. He served on the battleship USS New York, but was a plankowner on the Destroyer USS Kidd, DD 661, "Pirates of the Atlantic and Pacific" [Currently moored on the Misissipi at Baton Rouge] and was in most of the island invasions. I have seen color movies of a Kamikaze smashing into the ship off Okinawa. His older brother Bruno, my inspiration militarily, was a paratrooper in the 503d PIR [I was in the 502d] who dropped on Corregidor in Manila Bay. My dad had a picture Bruno send him of Bruno with a tommy gun, sitting on a pyramid made of wooden boxes labeled TNT, smoking a cigarette and smiling. Bruno suffered from jungle rot in his feet for the rest of his life that he caught during the island campaigns. I used to hide under the kitchen table when Bruno came over, once a year, to get drunk with my dad on St. Joseph's Day. That was the only time Bruno talked about what happened on those islands.

Folks, we have no idea how bad it can be, my father's family had it better than most, and they had it bad. They didn't have that far to fall. Dust bowlers had it worse. My dad told me about some new sailors that had never owned nor wore a pair of shoes and how difficult it was for them to adapt to showers, shoes, the food, etc. One guy, Jack Beaver, I met as a child, he seemed to have great respect for my dad, they were great friends, he had a giant chicken farm and plenty of money. He was one of the guys who never wore shoes before the navy. He was a decent human being who did not forget his roots nor those who befriended him. I might add my father ended up owning his own business in Chicago, lead a frugal life, retired at 65 with about a million dollars he saved, lived off the interest and actually increased the principal while retired. He died in 1996 of lung cancer. He loved the United States. His mother and father were immigrants from Poland, although my Dad visited Europe, he never went to Poland, he said, why go see what Grandma and Grandpa fled from - they never regretted leaving, they loved America.

It's only one generation back, the banksters have destroyed us before and they are doing so again. Prepare yourselves by being debt free, storing wealth in PMs, have food and water on hand for temporary disruptions, and start learning how to grow a garden and preserve food. Spread the word about the banksters. The people need to know.

Sun, 08/14/2011 - 09:31 | 1558607 JW n FL
JW n FL's picture

The Bankers should have been ALL Hanged then!

Their Welath Spread around to feed those hungry and suffering becuase of the Bankers Greed!

This time! there will be Banker Blood! an Ocean of it!

This time the Country will return to "We the People"!

or I will be dead.

one or the other will happen.

Sun, 08/14/2011 - 10:38 | 1558695 Bob
Bob's picture

Heroic sentiments, JW.  Since you've got PM's, however, I'm wondering how you'll justify risking everything at the moment of truth.

Sun, 08/14/2011 - 11:05 | 1558753 JW n FL
JW n FL's picture

My secret plan is NOT so secret!

Move the Loved ones offshore.. which is really like the woods for me.. (Bahamas, which is 54 miles away from me.. dock to dock, not as the crow fly's)

and get back here to get the work done!'

I think we are blessed to live in interesting times! not cursed!

once we round up the lobbyists / bankers / government lobby whores! and until we Vote a REAL HUMAN BEING into office! that "We the People" really put in Office! NOT some electoral group! "We the People" will be able to do some hard core spring cleaning!

I am sure when the dust settles that all of the do gooders who did not lift a fucking finger will blame those of us who worked for being too hard on the scum that ruined the earth.. but I can live with that and die with a clear conscience.. and I will go one better! I dont think God will hate me for protecting my fellow human beings from being ass raped from another 100 years by banker / lobbyist / lobby whore scum!

it will be a shame that the people who right the world will then be martyred by the lazy, snooty politically correct crowd. but the world is like that! no good deed goes un-punished!

 

the world needs to be free of the top 1% of 1% and their support apparatus.

 

All the monies confiscated from those that have robbed America blind will more than pay for rebuilding America's infrastructure and educating all that seek to learn.. as well all of FOOD that Farmers are paid not to grow or to destroy to maintain market prices.. will be used to feed the hungry around the world.. after everyone at home is feed first.

 

think of a world minus bullshit? minus the FED and Minus the Monkeys who waste what God has given them.

as for being ready? just because I have a way to feed my family in good or bad times has nothing to do with if I am ready or not! If I am breathing I am in the fight!

 

The tough part will be dealing with the ignorant masses who are still plugged in! but like the head ATF guy said when sending those AK-47's to Mexico! You have to break some eggs to make an omelet! think of all the innocent people that were killed with those guns? but as soon as it is a Nazi Pig that gets gunned down! because that Nazi Pig was in Uniform? the Nazi Pigs get all teary eyed! but fuck the civilians! they dont matter! kids? fuck the kids! it is because one lil piggy got removed from the earth that they other piggy's started crying!

 

The Government is set up, it is in place too! FUCK OVER "We the People"! not protect us.. the Police Terrorize a MILLION Times more Americans every day than the towel heads, FACT! Israel was the first to start terrorizing, FACT! but you will never hear that shit on Cable News in Heavy Rotation!

 

81 Congressional Lobby Whores are in Israel or on their way! for a weeks vacation! after fucking with Americas finances just enough so that the Owners of the Federal Reserve can charge "We the People" just a little more money! Gods Work! dont chya know! pays well!  

 

so back to the point! yep! lets get rid of them! the sooner that austerity is forced upon the old and poor of this country! the sooner more trillions are passed out to Wall Street! the sooner we can put out the fires and clean up the mess the Bankers / Lobbyists / Government Lobby Whores have created Globally!

 

7 Million manufacturing jobs to China! in the past decade and that number is lite!! and everyone knows it! all for a few lobby dollars. TREASON! the Government is AGAINST America! not for. The numbers speak for themselves.

 

Sun, 08/14/2011 - 15:09 | 1559222 Bob
Bob's picture

Let's do get rid of them.  All of them is fine if you insist.  Long as you're doin' the work. 

I just saw video from yesterday of 300k people participating in street demonstrations in Tel Aviv.  They were protesting economic conditions . . . severe biflation and dizzying income disparity. 

Seems we all have a common enemy--the real jews included.

Sun, 08/14/2011 - 18:32 | 1559885 JW n FL
JW n FL's picture

Bob.. my business partner is a Jew.

I am NO! Nazi!

I hate the lobby's!

so when I post the truth about who owns our Lobby the powers that be can hide behind the thought that I am some nazi.. but I am not and the truth does suffer becuase of the nazi bullshit they throw in..

but the facts are! what they are! and I did not pay Israel to bribe my Government! so it can NOT! be my fault.

I am the messenger.. who often enough gets killed for brining bad news.

http://www.presstv.ir/usdetail/193966.html

The Israel lobby group AIPAC has sponsored the trips to Israel of 81 members of the U.S. House of representatives during their summer recess, in order to win Jewish voters in Congressional districts as well   as their contributions, says American author William Blum.

 

This is in fact bribery. They [U.S. lawmakers] are being paid by a Jewish organization with the expectation that in the future these Congressmen will vote a certain way on those [issues] which concern Israel,” Blum, the author of “Rogue State: A Guide to the World's Only Superpower”, told Press TV's U.S. Desk on Sunday.

 

The visits are sponsored by the American Israel Education Foundation known as the AIEF, an organization affiliated with the all-powerful Israel lobby group, AIPAC. The lobby group brings large delegations of congressmen to Israel every other August.

 

or for your thought! which I am well versed!

 

http://www.youtube.com/watch?v=yK6-nQ95icc

 

Leaders of social protests in Israel are calling for people to bolster demonstrations across the country. Over the last month up to three hundred thousand people in Tel Aviv have been demanding cheaper housing and social justice. But as RT's Paula Slier reports there are outsiders in the Jewish state fighting a much tougher battle...

 

 

 

Sun, 08/14/2011 - 12:38 | 1559023 Pinky
Pinky's picture

My dad used to warm his feet in fresh cow dung before heading out to milk the cow.  Barefoot, and not in the south either, he grew up in northern Minnesota. He had shoes every now and then but sometimes when he outgrew them his mom - his dad was away getting red lung in an iron mine - couldn't afford to buy him a bigger pair.

(Sometimes I wonder if my own shoe collecting thing comes from some kind of ancestral feeling of deprivation. My stiletto heels would be any use milking a cow, but still.)

Anyway, my point, agreeing with you: People have NO idea just how BAD things were for so many back then.  No clue whatsoever.  It scares me.  People were strong and hardworking back then, and had resources (farms) to fall back on. What of now?

Sun, 08/14/2011 - 13:49 | 1559142 Shirley Wilfahrt
Shirley Wilfahrt's picture

To Moe:

My deepest respect to your father sir. 

Coincidentally, I myself am one year away from a USN retirement....and I lost my father to lung cancer in 1995.

That was indeed a different generation of Americans....much more prepared for the hardships of a broken economy.

Now the kids start wailing if the sat dish or the cell phone reception is wonky....God help them....they're gonna fucking need it.

 

And now back to my grrlfriend....Shirley give the man a drink!!

:)

 

 

Sun, 08/14/2011 - 16:14 | 1559455 Miss anthrope
Miss anthrope's picture

I do hope they put all of these ZH archives up sometime>  I love the stories of the depression.  I had the good fortune to be living in a house where a man had passed away who lived through the depression and he wrote his memoirs and I found them.  Real grapes of wrath story.  He talked about how he was an engineer and there was no work anywhere so his wife who was a nurse brought home some meals from the hospital when they had nothing else to eat.  They were sharing a little duplex but when the landlord found they couldn't pay the rent he let them stay anyway.  !  In the end he went to California and got in on government contracts to build war ships.  So, it looks like the war will come....... only something tells me this time it will be right here.

Sun, 08/14/2011 - 09:26 | 1558603 JW n FL
JW n FL's picture

+++++++++++++++++++++++++++++++++++++++++++++++++++++

+++++++++++++++++++++++++++++++++++++++++++++++++++++

+++++++++++++++++++++++++++++++++++++++++++++++++++++

+++++++++++++++++++++++++++++++++++++++++++++++++++++

Great Read!

Thank You for Sharing!

 

Sun, 08/14/2011 - 12:01 | 1558922 boiltherich
boiltherich's picture

The crash of 29 did affect my family, my great-great grandfather had started a lumber/general store business in the 1800's that grew to a small empire around Puget Sound, and my great grandmother was quite wealthy by the early part of the 20th century, her son, my grandfather, was raised "in the lap of luxury" according to all accounts I have heard of it.  They lived in a fine big manse of Victorian splendor, had nice cars at a time when most were still in buggies, and they had the fine manners of the most gilded of the age. 

By 1929 my grandfather was 14, the crash came and in early 1930 they received a guest from the bank who gave them till COB to gather what they could get into one of the cars and leave.  They drove south to Medford Oregon where at 16 my granddad was lucky enough to get a job hoisting sacks of grain into train cars for a nickel an hour, when so many men with families had no income at all. 

He was always trying hard to be optimistic and happy, but he was really scarred for life by the depression, he was that old man in line at the grocer with the little rubber change purse counting out dimes and pennies that made you wait while he very precisely paid for his food.  When he died we all got together to clean out his house and divvy up the mementoes, and sell the rest at an estate sale, we found cash in envelopes, much of it from the 50's and 60's, taped to the backs of photos, paintings, in the flue of the chimney that was sealed off, under the soundboard of the piano, in a hollowed out chunk of firewood, in a well sealed jar in a toilet reserve tank, many other places that make an alcoholic hiding booze blush with envy.  Who knows how much was in items that were tossed or sold.  Or buried on the property, in the walls, under floorboards, etc.

After the depression he worked 16 hours a day at two or three jobs at a time, as well as buying older houses and fixing them up as rentals.  But, again, the bust of the early 70's nearly wiped him out when housing dipped hard then.  He died a bitter and cynical old man that saw any further living as a death sentence rather than a gift.  I also try to be happy and optimistic, it is not easy when you have ethics and integrity, a generous spirit, but no matter your efforts never ever get ahead.  Especially when you see intricately puckered assholes that never worked (or ever will work) a single day in their lives inherit real wealth.  I do not need or want excess wealth, but I want both work and the spoils of labor shared.  I am rather insistent upon this as some of you know.

Sun, 08/14/2011 - 19:22 | 1560011 Anonymouse
Anonymouse's picture

Great post.  How very sad a situation for all involved too.  Shows how the economy affects everyone whether directly or indirectly.  I would hope that today people would be of sufficient character to band together the way they did and help others.

There is a great book (http://www.amazon.com/Great-Depression-Diary-Benjamin-Roth/dp/158648799X) that is the diary of a young lawyer in Youngstown OH covering the period.  It coincides well with the story above.  One big item is how people worked for the promise of pay.  Their companies could not pay them, but they figured having a job with the promise of pay some day was better than having no job.

I think today, people would demand their rights, strike, and ultimately burn the companies they used to work for.  Likewise, the companies would not fire taking family needs into account.

It's a different world now.  OTOH, in times of trial people do tend to better recognize what is important, so it could be a painful but ultimately beneficial event for society as a whole.

Wed, 08/17/2011 - 02:44 | 1568105 boiltherich
boiltherich's picture

That was what happened to the people of the Soviet Union when it broke up, they still went to work if there was a place left to go to because even though they were not paid they might get paid when society healed itself, and even if not it was a way to hang on to their lives.  They did not starve because they bartered and looked out for each other, but it was a depression that is still in full sinking mode outside Moscow and St. Petersburg.  Lovely young women and mothers whoring for bread.  Theft and bootlegging and any other crime men can do to raise enough to get through it.  Not just Russia, here soon enough.  But they do have their 0.00001% that are wealthy so all is well. 

Sat, 08/13/2011 - 19:32 | 1557730 Caviar Emptor
Caviar Emptor's picture

Yup

Sat, 08/13/2011 - 20:16 | 1557836 johngaltfla
johngaltfla's picture

There would be few positives because God knows how much of the preferred and common stock the banksters are being allowed to carry as "Tier 1 Capital" on their books. Legally they shouldn't be but since the Fed and FDIC have even more oversight responsibilities, when did the rule of law even remotely begin to matter?

Sat, 08/13/2011 - 17:38 | 1557514 anynonmous
anynonmous's picture

so in other words he is suggesting the markets are irrelevant - hmmm not sure about that, fixed yes, corrupt yes but irrelevant ...

 

____________________________

 

visit Roubini's new blog  http://www.economonitor.com/nouriel/

Sat, 08/13/2011 - 17:31 | 1557521 Printfaster
Printfaster's picture

A better question is:

"what proportion of a person's wealth is held in stocks"  for each quartile of income.

Many have their only wealth in 401ks with RE having crashed.  Many have their wealth in a pension fund such as CALSTRS.

Sat, 08/13/2011 - 17:50 | 1557554 WonderDawg
WonderDawg's picture

Excellent, I was thinking the same exact thing. I'm going to sit down with a friend tomorrow, she wants some direction on what to do with her 401K, what her options are and how to protect it. This is her retirement savings, and she has no idea about how it's set up. None. 50ish, divorced, two teenage kids. She has no idea what is going on with her sole source of retirement savings, and there are hundreds of thousands more, just like her. I'm not a financial advisor, but I can look at her plan and give her the right questions to ask her plan's contact person.

I usually like what CHS writes, but the 401K thing is a big miss, and he barely mentions the pension funds, which encompass huge sums of money and the retirement plans for millions union members.

Swing and a miss, Charles.

Sat, 08/13/2011 - 18:00 | 1557580 TwelfthVulture
TwelfthVulture's picture

If the union pension funds get wiped out, maybe taking a few unions down the hole with it, there will be dancing in the street.  About time that the unions (public & private) that have been responsibie for destroying so much of this country and have so much disdain for capitalism are forced to face some SHARED SACRIFICE.

Sat, 08/13/2011 - 18:15 | 1557613 Reptil
Reptil's picture

A friend said to me today: "Sacrifice" is a word with a religious meaning. It has no reference to any market.

Sun, 08/14/2011 - 10:12 | 1558651 dwdollar
dwdollar's picture

WOW...  Maybe we should just cut "sacrifice" from the language?

Sun, 08/14/2011 - 11:26 | 1558824 Boxed Merlot
Boxed Merlot's picture

"Sacrifice" is a word with a religious meaning. It has no reference to any market...

 

"Who, for the joy set before Him endured..."  Heb 12:2

 

I'd say sacrifice is the definition of the market.  Without it, no one would save, capital would be non-existent and investments would never occur.  Self control / restraint is a neccesary component to avoid eating the seed corn for next year's crop.  Thankfully someone before me didn't consume everything but left the knowledge, tools and opportunity to learn, use and enjoy teaching, motivating and guiding the next generation to do the same.  imo.

 

(...the cross, dispising the shame and is now seated at the right hand side of God.)

Sun, 08/14/2011 - 12:39 | 1559026 decon
decon's picture

+1 I'll have to remember that one.

Sat, 08/13/2011 - 18:40 | 1557649 scatterbrains
scatterbrains's picture

for real those dirty fucking union guys.. if it wasn't for our bankers and politicians outsources jobs and lbo'ing buisness to the hilt this country would have been destroy long ago by those rotten union guys.

 

Sat, 08/13/2011 - 19:03 | 1557675 Pay Day Today
Pay Day Today's picture

You have to be idiots to think that destroying worker organisations is good for workers. What needs to happen is union reform to get rid of the rot and the entitlement which exist in the hierarchy of some unions, and ensure that they are democratically and directly connected to their membership.

Today, workers need strong, organised worker collectives more than ever before to combat the predation of the multinationals and their political servants.

Unions are a fundamental construct of social democracy and are a crucial counter-weight against free market neoliberalism.

Germany shows exactly how strong effective unions are crucial to a high wage economy.

Sat, 08/13/2011 - 19:04 | 1557691 scatterbrains
scatterbrains's picture

I was being sarcastic.

Sat, 08/13/2011 - 19:17 | 1557712 Pay Day Today
Pay Day Today's picture

Color me embarrassed. Sorry.

Sat, 08/13/2011 - 21:07 | 1557988 WonderDawg
WonderDawg's picture

You must be in a union.

Unions served a purpose decades ago, but they've morphed into a huge drag on industry, and a lobby with unholy power.

 

Sat, 08/13/2011 - 21:34 | 1558057 Pay Day Today
Pay Day Today's picture

You're talking about unions as if they are GS or JPM. Look at union membership and budgets over the last 20 years. They have been absolutely decimated. Only a tiny proportion of private sector workers belong in unions any more.

Capitalists have effectively crushed the private sector union movement in the US.

At the same time, I am not disagreeing with you that some union hierarchies need serious reform and retooling to better democratically serve the interests of their membership.

As for the purpose of unions - unions were formed because workers were being treated like dirt and paid like dirt, and employers had all the leverage in negotiations and workers none. This seems more relevant today than ever.

Sat, 08/13/2011 - 22:45 | 1558191 TwelfthVulture
TwelfthVulture's picture

And yet their power in general and primary elections is legendary.  Fuck the unions.  Bust them all.  Just another group of leeches sucking at the teat.

Sat, 08/13/2011 - 23:12 | 1558227 Pay Day Today
Pay Day Today's picture

Unions cannot spend 1/10 the money in campaigns that corporates, banks and the Koch brothers can. And the US needs strong organised labour unions more than ever because workers are being crushed by offshoring and downward pay and benefits pressure exerted from the top.

Sat, 08/13/2011 - 23:40 | 1558267 WonderDawg
WonderDawg's picture

So, you are in a union, then, right?

Sun, 08/14/2011 - 05:59 | 1558494 Pay Day Today
Pay Day Today's picture

To answer you, I have done support work for unions before but never been a member myself.

Sun, 08/14/2011 - 09:37 | 1558612 JW n FL
JW n FL's picture

dont you know that the Koch Brothers Spend $100's of Millions on people who offer one line of drivel to stir the pot all over the internet?

they are almost as bad as Israel.

http://abcnews.go.com/Blotter/iran-us-israel-bring-cyber-war/story?id=14255216

me and ABC news are secret Nazi's!

Sat, 08/13/2011 - 23:52 | 1558278 espirit
espirit's picture

Don't knock unions unless you want include two of the biggest, the AMA and the American Bar.  For all intents, these two negotiate rates and bennies, lobby to no end - and you must belong to participate.  Professional org's my a**, nastiest unions in Amerika.

Sun, 08/14/2011 - 03:16 | 1558440 Antipodeus
Antipodeus's picture

Don't forget the Mortgage Bankers' Association, or National Association of Realtors, or any of the 'unions' out there who are sucking the blood out of the economy.  Those anti-union thugs here make me want to puke.  Retard tools of the banksters sucking the Koch of Faux Noise.


 

Sun, 08/14/2011 - 05:41 | 1558489 Pay Day Today
Pay Day Today's picture

Well, capitalists have understood the value of socialism better than anyone else. Hence the various Chamber of Commerces etc. The wealthy understand the power of collective action.

Sat, 08/13/2011 - 20:37 | 1557893 UGrev
UGrev's picture

Unions may exist with one exception to their powers. That is the power to negotiate wage. If they want to organize against poor working conditions that's fine. But the power to negotiate wages is the strangle hold. You take away the power of the purse and it will regulate itself accordingly. People who don't want to get paid based on the going rate will find new work. People who want raises do so by virtue of merit. Enough with the fucking "free" money. 

Sat, 08/13/2011 - 21:37 | 1558070 Pay Day Today
Pay Day Today's picture

Why would any worker wish to paid "the going rate" when the going rate is specified by Kleptocrats intent on bringing US wages down to Chinese levels?

The same Kleptocrats happy to give themselves 20% pay increases and million dollar bonuses, because they set that as the "going rate" (for themselves)?

And you talk about "free money". Don't be hypocritical. You know who can access the Fed Window at 0% (that really is FREE money) and it isn't the unions.

Sat, 08/13/2011 - 23:36 | 1558259 UGrev
UGrev's picture

Everybody's in it to win it, bub. You have the absolute freedom to NOT work for a company that doesn't pay well.. so please, go bore someone else with your garbage. 

Sun, 08/14/2011 - 03:22 | 1558442 Antipodeus
Antipodeus's picture

 

 

And moronic retards like you have the absolute right to go fuck yourself!  With apologies to actual retards, who can't help themselves, and don't know any better. Unlike Koch-suckers like you.

 

Sun, 08/14/2011 - 09:23 | 1558599 UGrev
UGrev's picture

Awww..did I strike a note with your cognitive dissonance? 

Sun, 08/14/2011 - 03:57 | 1558460 the tower
the tower's picture

and if the union of companies decides to keep all wages low you just not consume

 

hmmm

 

capitalism at dead end

 

UGrev, fukking moron

Sun, 08/14/2011 - 05:45 | 1558490 Pay Day Today
Pay Day Today's picture

UGrev seems to think that being paid appallingly poorly or being paid abysmally poorly or not being paid at all means that workers now have 'choice'.

And we are all for freedom and choice, aren't we.

Sun, 08/14/2011 - 07:46 | 1558540 Greenhead
Greenhead's picture

I am trying to sell my house and after a couple of months the realtor says I should lower the price to attract more possible buyers.  Since we are in a soft market, it makes sense. 

We are in a soft labor market too, high level of supply give the unemployment rate.  It sounds as if you don't want to lower the labor cost.  Probably won't sell more use of labor.  What you are ignoring is that by resorting to your union to "protect" wages you create an artificailly high wage cost given the supply and demand situation.  And yes, we are part of a global economy.

Sun, 08/14/2011 - 09:19 | 1558590 UGrev
UGrev's picture

It must be hard not being able to take advantage of free will. It's quite simple.. if they don't pay,you don't play. Go find a different job. Eventually, the company won't be able to hire quality people and they're business suffers and/or goes under. So they either pay you prevailing wages or go under. It's happened before and is a NATURAL market force.

My last job sucked and they decided they wanted me to work 60 hours a week and not pay me.. so I left and found a new job. My first interview with a potential company wanted to pay crap, so I didn't take the job... It's not rocket science. If I can do it so can others.

Unions are the noose around the neck of businesses. If you want to talk about barabous relics.. Unions are the prime example. Other than strangling businesses by practical extortion, they force people to join their cult even if they don't want to so they can extract money from them as well. Well, fuck that shit. All I see on this site is people bitching about money being stolen from them by big banks etc etc..and you have the fucking gaul to support unions? bunch of hypocritical ass-hats... 

Sun, 08/14/2011 - 09:21 | 1558594 UGrev
UGrev's picture

What? you think they won't adjust to survive? are you for real? 

Sun, 08/14/2011 - 18:39 | 1559897 boiltherich
boiltherich's picture

Right wing morons always think that labor has a perfectly elastic price, and that it is as subject to supply and demand as beef.  Entirely without a sense of irony or any fear of appearing stupid they brand a ban on union labor or any kind of collective bargaining "the right to work."  And while most merely hope and pray and wish for an end to the minimum wage laws few will actually say such a thing, a few will, but notice how the ones seeking votes never promote that concept even when we all know they want it like a Titanic passenger wants a life preserver. 

The ONLY way to counter such mendacity and greed is to respond with equally harsh terms for the other side should it be they who lose the class war, a maximum wage, a confiscatory estate tax, and a progressive wealth tax on all property and chattel worth more than 1 million, excluding family owned and operated farms, puppy mills don't count.  Now were cooking. 

"There’s no minimum wage in Hong Kong, and the prosperity there is “tremendous,” says Jim Dorn. He’s a policy analyst at the Cato Institute, and he thinks the U.S. should follow Hong Kong’s lead and let the market set employee wages." 

Why this is the so far unspoken capstone in American political circles to their amnesty for illegal aliens, and their free trade pacts that make US labor compete with pennies per hour poverty slaves in foreign shitholes. 

Dorn by the way is either blindly ignorant or just another wingnut neocon liar when he claims says prosperity is tremendous in HK, in fact it there is tremendous prosperity for a very VERY few, but in reality HK has one of the worst rates of poverty in the "advanced" economies.  Even more educated workers have far lower standards of living than their American or EU counterparts, and by the way what they count as poverty would be seen as desperate poverty here.  http://www.hkcss.org.hk/cb4/ecp/pov_rate_91-05.pdf

Mon, 08/15/2011 - 06:11 | 1560861 Pay Day Today
Pay Day Today's picture

You really know how to cook.

Sun, 08/14/2011 - 20:29 | 1560161 Things that go bump
Things that go bump's picture

Said Louis the XVI.

Sat, 08/13/2011 - 18:58 | 1557680 Pay Day Today
Pay Day Today's picture

"are forced to face some SHARED SACRIFICE."

Nah it's the multi-millionaires and billionaires who need to suffer their dose of shared sacrifice. Not important worker organisations.

Sun, 08/14/2011 - 01:21 | 1558370 sun tzu
sun tzu's picture

Important workers organizations like government unions? How about the UAW? HAHAHAHA

The Japanese and Korean automakers are doing fine without the UAW.

Sun, 08/14/2011 - 09:22 | 1558597 UGrev
UGrev's picture

Bingo.. 

Sat, 08/13/2011 - 18:06 | 1557595 Lazlo Toth
Lazlo Toth's picture

As a tip a PM IRA does the best of both worlds.

Sun, 08/14/2011 - 09:40 | 1558614 thatthingcanfly
thatthingcanfly's picture

My company's 401(k) offers a brokerage option within the plan. So, while my co-workers are throwing their money away on those terrible "Target Date Funds," I've got a hand-picked basket of stocks (including PAAS, EXK, FNNVF, SLW, etc.) under the same tax shelter. Best of both worlds indeed.

Sat, 08/13/2011 - 18:09 | 1557599 Keri at Bankste...
Keri at Bankster Report's picture

The whole 401K thing is an enormous mess.  Remember, 401k's have only been around since the tax law changes of 1978, and really didn't take off until the 1980's.  The ploy is so transparent: push money into the stock markets and financial system (read: into NYC), and away from traditional savings vehicles (read: which also happen to be anti-inflationary and higly localized).  I have also encountered people who have no idea what a 401k really is, and yet they see large chunks of their pay settlements siphoned off to this mysterious entity every week.  Many people don't even realize that they are putting money in the stock market!

Of course, that is to their shame, because we each have a responsibility to cover our own finances.  But it is likewise true that the false idea that "401k=retirement" has become a given to many.  It is sad.

Sat, 08/13/2011 - 18:19 | 1557622 Robert Neville
Robert Neville's picture

I tell everyone I can that 401Ks are just another Ponzi and they give me the deer in the headlights look. Using common sense the stock market can't expand any more than GDP yet the market, even at today's levels, have expanded more than 4 times GDP since 1980. The Nikkei was over 40,000 before the demographic time bomb hit Japan.  Look at it now. We will see the same thing.

Sat, 08/13/2011 - 18:35 | 1557643 Rick64
Rick64's picture

The Nikkei was over 40,000

38,915 was the peak not saying that your message isn't valid.

Sat, 08/13/2011 - 21:00 | 1557965 Robert Neville
Robert Neville's picture

I stand corrected. Next time I'll say around 40,000.

Sat, 08/13/2011 - 20:08 | 1557812 ThirdCoastSurfer
ThirdCoastSurfer's picture

Few have any idea how much money it actually takes to retire. 

To maintain your lifestyle, they say you'll need 80% of your net working earnings.  

So, if you plan to retire at 67 and plan to draw against it until 82, just what do think you'll need in your 401k? 

180 months at $1,000 a month before taxes makes it pretty simple to see what where talking about.  

Expect Social Security to throw in squat unless you are truly indigent and taxes to be about 30% without deductions if they are 25% now. 

Now work backwards. How much a paycheck at a 5% annual a return will you need to contribute at your current age to reach the amount?

If you set up a spreadsheet that allows you to manipulate the returns for several years at a time, go ahead and plug in a 10% return for 10 years as you add funds and then throw in something like -5% for one year followed by 2% for 5 years and see what happens to your goal and what you'll need to contribute to reach it! Throw in a 15% return. Just 1 negative return is bad enough to ruin even the best string of returns, much less 2 with a stretch of break evens. 

Only then will you see what a real Ponzi scheme 401k's are and what a mother of all unfunded liabilities it is.  

And these MF's want to privatize Social Security! And the public will buy it! Because they're too lazy to use the spreadsheet that comes with the thing that gets them to the internet! 

Sun, 08/14/2011 - 00:29 | 1558315 Keri at Bankste...
Keri at Bankster Report's picture

Social Security is a non-issue: it is a strawman.  Privatized or not, the problem with SS is that people have somehow come to think of it as supplemental retirement, or even as outright retirement--sort of like those 401k's.  SS was never intended to be either (and if you ask me, it should have never been started in the first place), and with the exception of the first collectors, who are long gone now, people will not receive what they contributed.  Furthermore, all of this is to say nothing of inflation: according to the official "inflation calculator" at the SS benefits sites, I'm eligible for $2365/mo in current-dollars after I retire (in many decades) which in "future inflated dollars" (SSA's words, not mine) will be about $10,066!  So, even using the low inflation expectations of the SSA, I'll need over $10K a month to live like I do today on $2300.  No way!

So, we can add that--inflation--to the spreadsheet, too (and that will have to be a matrix, because there are so many horrible possibilities ahead with inflation).  As for me, I don't care whether SS gets officially privatized or not: as far as I'm concerned, it is quasi-privatized right now because it is controlled by CB-determined inflation expectations and manipulated by politicians, who are purchased by banks; the primary benefactors of SS are not the recipients, but the administrators (including JPM).  Think through what SS really is: it is a massive subsidy for corporations, corporations which are entirely bank-owned.  It is a transfer of the financial responsibility of corporations to compete for labor based on full-package compensation from those corporations to the taxpayers.  SS increased corporate profits by reducing payroll/pension expenses, which increased the valuation of those corporations, which increased the "market" value, which increased their power, while shifting the expenses to the taxpayer, increasing taxation, increasing centralized government control over even more aspects of our daily lives, and increasing the entitlement mentality and welfare state.  It is a total disaster, and the sooner its done with, the better.

I personally think it is destined to flames, but more because of its dollar basis than anything, unfortunately.  I would at least like it to become optional, as I'm under no delusions whatsoever and KNOW that I will never get a penny of what I'm currently contributing.  I'd much rather use the money for something else, but of course as SSA is a Ponzi scheme, I (and others my age) represent exactly the payers needed to perpetuate it...at least until the next election...and the one after that....and the one after...

Sun, 08/14/2011 - 09:14 | 1558588 Moe Howard
Moe Howard's picture

Doesn't matter what they do with Social Insecurity, it is a tax, they have spend the proceeds, and you will or will not get something based on what the elite decides they will let you have out of the collective pot.

Be prepared to enjoy dandylion salad and cat food main course if you are depending on Social Insecurity.

Sat, 08/13/2011 - 18:58 | 1557684 chubbar
chubbar's picture

With any luck you will at least get a knobber out of it, regardless of the quality of advice! That's the beauty of a 50 ish divorcee  trying to get advice on the sly! Good luck!

Sat, 08/13/2011 - 21:02 | 1557969 WonderDawg
WonderDawg's picture

Thanks, Chubbar. If I was a drinking man, I'd say it was a possibility, but I gave up the firewater years ago, and this lady's not my type. Good thought, though, and maybe she has some friends that would like some advice. Gotta work it.

 

Sat, 08/13/2011 - 17:54 | 1557564 Manthong
Manthong's picture

There likely still a good deal tucked away in large and mid cap funds in 401Ks, IRAs and pensions waiting on a full recovery.

This is going to mean a lot of disconsolate and PO'd middle classers after the next downward move.

 

Sun, 08/14/2011 - 01:06 | 1558348 Escapeclaws
Escapeclaws's picture

That's true. It's amazing how most people are buy and holders. You can explain not taking more than a 10% loss to them, but they know better because their sell-side financial advisers tell them to just hold on because over time the stocks will recover. I get so sick of this, I'm happy to see them lose their money.

To others who ask what investments they should get into, I say cash. If you don't have an interest in markets and finance, stay the hell away from markets.

Sun, 08/14/2011 - 09:33 | 1558609 Freewheelin Franklin
Freewheelin Franklin's picture

"what proportion of a person's wealth is held in stocks"  for each quartile of income.

 

Right. Mutual funds, hedge funds and ETFs are based on market performance. There's no actual ownership of stocks for the average investor. The ownership rights of the stocks in these funds are held by the asset management companies. This entire post is quite misleading.

Sat, 08/13/2011 - 17:34 | 1557525 PulauHantu29
PulauHantu29's picture

From Peter Schiff:

 

Moving past the previously uncertain pronouncements that they would “keep interest rates low for an extended period,” the Fed now tells us that rates will not budge from rock bottom for at least two years. Although the markets rallied on the news (at least for a few minutes) in reality the policy will inflict untold harm on the U.S. economy. The move was so dangerous and misguided that three members of the Fed’s Open Market Committee actually voted against it. This level of dissent within the Fed hasn’t been seen for years. 

Read more: http://www.businessinsider.com/the-fix-is-in-2011-8#ixzz1UwjJtic6
Sat, 08/13/2011 - 20:16 | 1557832 Kayman
Kayman's picture
I believe that ultra-low interest rates are among the biggest impediments currently preventing genuine economic growth in the US economy

Read more: http://www.businessinsider.com/the-fix-is-in-2011-8#ixzz1UxQducgV

From Peter Schiff

Bernanke may offer himself up as some Great Depression Historian, but he is not a thinker.  Bernanke is the Problem while purporting to be the Cure.

 

 

Sun, 08/14/2011 - 03:26 | 1558367 Escapeclaws
Escapeclaws's picture

Antal Fekete talks about how cutting the interest rate in half doubles the "liquidation value of debt" and he also has insightful things to say about "perpetual debt". However he writes on too high a level, so his ideas will never gain traction, whereas Schiff, well, he's one of us. He can't think the way Fekete can, but problem is, people really don't like to think, and they especially hate reading anything that requires them to "grasp" something.

Once you reach adulthood, you go on autopilot the rest of your life. You accumulate experience which leads to "sound judgement", but thinking? Forget about it! So we have endless interviews like Charlie Rose etc where the intellectual effort we, the audience, have to make is essentially null. That's the way we like it. And our educational system, even for the elite, is designed that way. The proles are taught nothing and the elite are given the message that they don't need to think because they can hire thinkers to do that for them.

Thinking? God forbid! Better to spout off opinions and show "which side" you are on.

Sat, 08/13/2011 - 17:35 | 1557526 johnQpublic
johnQpublic's picture

i'd always assumed the readers and posters here had worked themselves at least into the top ten, if not five percent

 

statistically, even though i dont feel like it, i am at about the top 7 % level

so, unfortunately, i have to care

 

anyone here familiar with the rather minimal income required to hit the top ten percent?

Sat, 08/13/2011 - 18:10 | 1557601 Lazlo Toth
Lazlo Toth's picture

So help the rest of us out and go short equities and long Gold.

Tell your friends as well and we should all be fine together. :)

Sat, 08/13/2011 - 19:05 | 1557693 seek
seek's picture

From 2008 data (the most recent I could find) the cut-offs are

top 10% - $113,799

top 5% - $159,619

top 1% - $380,354

 

Top one-percenter here. I'm pretty sure the last web demographic report I saw supported your notion about readers/posters here, in fact I'm pretty sure ZH had the richest demographics of any financial news oriented site of meaningful size.

I agree, I don't feel wealthy either. In talking with other well-to-do friends, the concensus seems to be it takes about $15M in cash equivalent assets to really feel "rich." I know a couple people in that category, and it's absolutely a different world -- far more different than it is from say $20K to $500K.

Sat, 08/13/2011 - 19:39 | 1557740 Terminus C
Terminus C's picture

Are those figures assets or annual income?

Sat, 08/13/2011 - 21:07 | 1557986 seek
seek's picture

Annual income per IRS.

Sat, 08/13/2011 - 20:09 | 1557787 Koffieshop
Koffieshop's picture

European with a negative net worth here (student loan).

I am not here because I care about the numbers so much but because since 2008 I figured out that you need to understand international finance to truely understand politics.

Btw I have been lurking here a couple of months and there are plenty of people here that are worse off then me, it seems. I have seen comments from people who say they have lost their job / have no regular income anymore.

 

(First post! Hi everyone!)

 

Sat, 08/13/2011 - 20:18 | 1557841 Kayman
Kayman's picture

Welcome to Fight Club.

Sun, 08/14/2011 - 02:15 | 1558404 Midas
Midas's picture

Welcome! Hopefully you don't get junked to no end like I did on my first post.

Prepare to alienate everyone you associate with by discussing items you read on this website.

Sun, 08/14/2011 - 10:16 | 1558659 Prometheus418
Prometheus418's picture

Not all of us, apparently- I am right dead-on the median income, but I am only just entering my prime earning years.  

Geography does make a big difference, though- my $50k/year allows me to live like a feudal prince in my rural and very poor area, while it probably wouldn't get me a closet to sleep in and catfood to eat in NYC.

Sat, 08/13/2011 - 17:36 | 1557528 Eireann go Brach
Eireann go Brach's picture

"If the Market Crashes, Who Owns Enough Stock to Even Care"? Definitely not 98% of people on Facebook, which means most of the developed world does not give a shit either, as most would rather know if Snooki had a monkey stick a fucking banana in her fat ass, as opposed to caring about anything that has to do with finance and money. The ignorance is getting palpable!

Sat, 08/13/2011 - 17:43 | 1557541 Raymond K Hassel
Raymond K Hassel's picture

Not true. If the market crashes, advertising will plummet. No ads....no Dancing with the Stars, no Batchelor, no Biggest Loser. What the fuck will people talk about on Facebook? That's when the riots start.

Sat, 08/13/2011 - 23:57 | 1558289 espirit
espirit's picture

No reality shows?  Bring it on!

BTW- dump HSN and all the other buy-it-here channels.

Sat, 08/13/2011 - 17:36 | 1557529 toady
toady's picture

People are always shocked, SHOCKED, when I say I don't care. 'what about your 401k'? Nope. IRA? Nope. Pension? Nope. FDIC? Nope.

Get out while you can. None of the acronyms above will save you!

Sat, 08/13/2011 - 18:55 | 1557672 escargot
escargot's picture

....Bank account?  Nope.  Health insurance?  Nope.  Anything?  Nope. 

Let it burn.  Oh God please, please, let it happen now! 

Sat, 08/13/2011 - 19:54 | 1557772 toady
toady's picture

I only slide enough into a bank account once a month to keep the taxes paid.

And the 10k a year I pay for health insurance pisses me of throughly. My neice starts residency next year. I'll drop that shit like a hot potato as soon as I can start getting free care from her.

Sun, 08/14/2011 - 10:17 | 1558661 Absinthe Minded
Absinthe Minded's picture

Thank God Obamacare will save you!!!

Sun, 08/14/2011 - 16:46 | 1559562 toady
toady's picture

What a turd that is... SOOOOO many give aways it just wasn't worth it. 'don't let the perfect stop progress' my ass!

To think he wasted two years of both houses for that shit.

Sat, 08/13/2011 - 17:37 | 1557531 dontshoot
dontshoot's picture

This analysis seems a bit misleading to me. Dont a majority of retiring middle class rely on some sort of 401k/IRA plans? I know my dad has taken massive hits in his retirement. He a traditional middle class baby boomer who has worked his whole life, and is relying on that money to retire. The top 10% own a majority of the money in the country, so it stands to reason that they would have the most money in it. But a 100,000 dollar hit to a middle class retiree is much harder to deal with than a 50 million dollar hit to a billionaire.

Sat, 08/13/2011 - 17:51 | 1557561 SIOP
SIOP's picture

I think it's a bit misleading also, if the top 10% own most if it, where are the huge swaths of state and corportate retirement/pension funds?

Sun, 08/14/2011 - 03:40 | 1558451 Galen Slade
Galen Slade's picture

Being held in "non-marketable treasuries" like the Social Security "trust fund" is.

Sat, 08/13/2011 - 17:53 | 1557563 johnQpublic
johnQpublic's picture

the bottom 90% average 31,244 per year

if you took a 100k hit, you are top ten percent

average middle class cant take that big a hit because they never save or 401k or whatever anywhere near a hundred grand

Sat, 08/13/2011 - 18:14 | 1557609 DaBernank
DaBernank's picture

I call bullshit on you, you fucking idiot. My father is retired and scrimped and saved 25% of his teacher's salary all of his life. He took a 80k hit last week, asshole. Maybe middle class people who buy on credit and live beyond their means is who you are talking about and they are half of the problem.

Sat, 08/13/2011 - 18:35 | 1557642 prophet
prophet's picture

point taken, but realize just how bad is out there in the aggregate: your dad with 800k or so in savings is in the top decile or two.  43 million on SNAP, two million in jails, 14 million here illegally, and so on.

Sat, 08/13/2011 - 19:07 | 1557695 Pay Day Today
Pay Day Today's picture

SNAP numbers are up from 43M to 45.8M I'm afraid.

http://money.cnn.com/2011/08/04/pf/food_stamps_record_high/index.htm

Sun, 08/14/2011 - 01:34 | 1558380 Escapeclaws
Escapeclaws's picture

What about people with kids to support? Maybe they can't scrimp and save. Maybe your father was one of those fortunate ones who didn't have kids.

Sun, 08/14/2011 - 09:13 | 1558585 WonderDawg
WonderDawg's picture

LOL That's pretty funny.

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