massive layoffs = stock market ....... increase?

so, our economy is suffering, more people are able to buy less, unemployment is soaring with underemployment even worse..... and our stock market indices are RISING today?


i'm gonna fail economics.

They aren't laying off because demand is down, they are laying off in order to increase profit margins. They are laying off because they want to drive workers deeper into poverty.

people are saying DAMN...it can't get any worse than this!...and assuming a bounce by the end of the year...the market is always 6 months ahead of the economy I heard.

increasing individual productivity, laying off workers and moving factories off shore to save on costs are attractive to ''investors''.
the american capitalistic system likes to invite people in to cut their own throats.

See the thread about defeating a freeper in 3 minutes for a complete explanation.

and that will be what Bush will point to as the economy turning around.

Now you have to wonder about the broad spectrum of workers--including white-collar workers whose lives aren't improving under Bush's claim. Why should they vote for him?

If you try to compare one day on the stock market with general economic conditions. The stock market is a long-term tool. The gains or losses of one day will tell you nothing.

with layoffs

Some see a job loss...an investor may see "less overhead" or "lowered cost of production".

...have had effect on the market before -- i've seen it.

obviously i'm not an expert on econ, but there were some big news stories in recent days about huge layoffs.

isn't this bad for the economy?

...

"When it comes to protecting THEIR money, our money is no object to them...."

(Michael Parenti, on the logic of spending (say) $10 billion from the US Treasury to protect private &/or corporate investments of $5 billion, in a given 3rd World region...)

and only those who equate corporate health with economic health will tell you it is.

I've never been able to figure out how every paper in the country can have page after page of stock market info and then forget about the Enron's and Worldcom's who reveal it to be just so much smoke and mirrors.

The stock market can be affected by big news and world events....but in the long term such occurrences are a blip on the stock market radar screen. Do you remember what the stock market did during Clinton's impeachment? The first Gulf War? The Florida recount?

News of unemployment is nothing new, especially nowadays. And unemployment is just one of dozens (hundreds? thousands?) of different pieces of data that affect what happens in the markets.

Some stock "playas" watch layoff cycles to know when to invest.

It is another reason.

:)

were released this morning. Specifically, a GDP 2Q number came in at 2.4%, when it was only expected at 1.5%. Also, initial unemployment claims came in lower than expected.

... over the last 10+ years or so ... having survived 3 or 4 myself in the early 90s (within an extremely narrow window of time) ...

It's curious how the media tries to 'pump up' anything to help pretty-up the picture

i.e.

on the homepage under Business, 5 news items are typically featured for further story linking .........

one might say - unemployment claims are down

below it, another might say, May Dept Store to lay-off 3700 Lord & Taylor employees

:eyes:

Firms have reduced capacity to come into line with decreased demand. This improves their standing in the marketplace as they no longer have (as much) overcapacity. Hence, the stockmarket goes up.

Also consider how multipliers effect shifts in AE in response to shock. Some degree of bounce is to be expected.

the key going forward is "top line revenue growth"....a little tougher.

market is a "bit frothy" just looking at existing PE ratios....however it doesn't mean it can't go higher and screw people who think it's over priced.

My guess is a selloff after earnings and a Q4 rebound.

~75 people is somewhere around $5 million. When you have zero profits but soaring revenues, the numbers have to come from some where. Add in companies that are foreign owned, the exchange rate on the Euro is killer. If your stockholders are expecting a dividend paid in Euros, then you now have to make up an extra 12% just to give the same money from US sources as last year.

It's ugly... I know people who were whacked... and there will be more whackage, probably in my office next. That's why I'm paying off debt as fast as possible. The Tech market is dead (I went looking just in case), so I'm getting ready to find another career just in case.

:( :( :( :(

But I believe the reason for the recent increase in the stock market has to do with the dividends tax cut a few months ago.

I also believe it is only temporary. As soon as the real estate market sours, the economy has nothing left to stand on.

Just my opinion, like I said, I'm not an economist.