wpe50.jpg (1913 bytes)    TigerSoft News Service    9/26/2013      www.tigersoft.com      
                  Financial Parasitism:
It Is Not Accidental that Wall Street Is Booming
                                    while Main Street Is in Survival Mode.

by William Schmidt, Ph.D.   (Columbia University)

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            "Financial Parasitism:  It Is Not Accidental that Wall Street Is Booming
                                        while Main Street Is in Survival Mode."

                   Parasites create nothing real and they steal the food and nourishment of their hosts.
                   They weaken and cripple their hosts.  They even take over the host’s brain. 
                   They eat and eat, until they eventually kill the host and then themselves,   The super-rich
                   in America now are like this.  They will eventually destroy not just the poor and
                   the middle class, but also themselves.  Their greed has made them insane. 

                   What they believe is insane.  For example, they actually believe that they
                   create jobs in the US.  They actually believe that society is better off because
                   they are compensated with obscenely high salaries and bonuses and then only modestly
                   taxed.    They actually believe that those who are now unemployed are parasites, even
                   though it was the Wall Street parasites' wildly excessive greed that collapsed the US economy.   
                   These parasites actually believe that people who work hard in the fields and kitchens of America
                   for $8/hr. are parasites.   They are insane.  But they are also very rich and powerful.  This
                    makes them very dangerous to the rest of us.

                   The super rich clearly now dominate American society, politics, the
                   media, the economy, even universities.  More and more, those who rebel are spied on.
                   They are denied good jobs.  Some are jailed.  Meanwhile, Wall Street
                   goes up and up, reflecting how dominant the rich and their banks and
                   corporation are.  But parasites always go too far..  The Wall Street bubble
                   in the making now is evidence of that.    They learned nothing from 2008's
                   financial collapse.  They will crash the market and economy again.
                   Always, they believe that they themselves will be saved by a friendly President and


           Howell County's first National Register sites -- newly rehabbed thanks to the state's Historic Preservation Tax Credit program!Howell County's first National Register sites -- newly rehabbed thanks to the state's Historic Preservation Tax Credit program!Howell County's first National Register sites -- newly rehabbed thanks to the state's Historic Preservation Tax Credit program! 2013

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Will The Market's Recovery Ever Reach Main Street?   Very Doubtful...
                                         Declining disposable income since 2000 has been falling.
                                       20% of  Florida Homes Vacant   9.5% delinquency mortgage rate
                                          How many Americans are now homeless?
                                         44 million Americans have no health insurance. 
                                         18% Real Unemployment

Economic recovery fueled by low-paying jobs

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American Politicians Nearly Always Ignore
        The Class War Waged by the Rich against The Poor and The Middle Class

Nearly every one knows we live in a plutocracy.  We have only the forms of democracy.
                  Democrats do nothing to change it.  Republicans want the rich to get even richer
                  at the expense of the working poor.   The super-rich control much of the heartland's
                  radios, TVs and newspapers.   They control the T-party.  Meanwhile, most Demcrats
                  are absolutely controlled by Wall Street. 

                  Last year, the top 10% of earners took in more than 50% of the country's total income. 
                  The richest 400 Americans own more than the poorest 50%. 
                  The super-rich own most of the stock market.  When stocks double, they get even richer.
                  What do they do with all this money?  They speculate in the market.  They invest
                  in tax-free municipal bonds.  They hide their money in overseas tax-havens. 
                 They invest overseas and millions of American manufacturing jobs are lost.  
                 As a result,  when the stock market goes up, there is very little "trickle-down". 
                 Main Street gets poorer and poorer.  Real unemployment and poverty are impacted
                 by the stock market's doubling.  Schools and bridges collapse.  Individual fear and
                 insecurity rise.  Gun violence reaches levels unimaginable.  The Super-Rich parasites
                 demand more and more profits.  They seek to pay less and less.  They exports as
                 many jobs as they can.  And then they get the Congressmen who they have bought
                 and paid for to heartlessly remove more and more of the social safety net.  Eventually,
                 the parasites will again destroy their host. 

                 Always in the past, when the rich became too greedy and selfish, there was a
                 financial collapse.  This was true in 1907, in 1929 and 2008.  It will be true again.

                 Over-speculation in stocks by the idle super-rich produces over-production
                  and a simultaneous lack of consumer buying power by the 98%.  A Crash
                  becomes a  certainty.  Sadly,  right-wing austerity-madness now seems bound
                  to match Hoover's budget-balancing reaction to the coming of the Depression
                  in 1930, 1931 and 1932.  The consequences will be the same.  The next decline
                  could therefore be worse than the one in 2008. 

                                              Why Stock Market Bubbles Are Inevitable

"Stock market bubbles last longer than most people expect.  And sometimes, like now,
                  the Fed is afraid to take the Punch Bowl away from the party... Most folks are
                  uncomfortable with stocks up this much.  They get vertigo.  But the truth is that
                  the DJI's steep uptrend now is quite normal in many ways.   Hyperbolic uptrends
                   ...   are common in the late stages of an advance.  This is not merely a reflection 
                  of arithmetic scaling.   (Let's see why.)

                  "Late stage uptrends are ... based on a lot more than simply excessive
                  exuberance, envy (as when cocktail party bragging induces a timid person
                  to decide to find a stock broker) or even greed (where one cannot stand to be out of
                  the rising market for even a week.).  I don't even think that excessive stock broker
                  hype, professional manipulation, boiler rooms or even TV shows promising
                  huge returns (as the silver and gold shils on TV did in 2012) can be blamed for the
                  developing stock market bubble we are probably in." 

                  We need to understand the many basic political and economic conditions
                  that produce stock market bubbles.  They are built into the economic and
                  financial system that runs America.  These conditions drive the market
                 higher and higher.  The bubble of over-speculation and greed are self-reinforcing.
                 They must reach absurd levels before there is a break.  And then the collapse
                 always goes to the opposite extreme.  A sane person can readily see that Wall Street's
                 capitalism as now practiced is highly reckless, wasteful, destructive and inefficient. 
                 It is not self-correcting.  It is run by greed-crazed parasites.

                 "1) Professionals do manipulate the market. They hold it up as long as possible.
                  At critical junctures, they pump it up.  The DJI is rigged to go to new highs and the shorts
                  are forced to cover. Very often the DJI becomes particularly strong late in a bull market,
                  or in the third or fourth Elliot major (multi-month) wave up.  Professionals know this
                  pattern. They therefore use this information ahead of others.  They are not afraid to buy
                  because they know how - or think they know how - to get out before there is a serious

                 "2) Politicians are mesmerized and controlled by the Wall Street Elite   Now that
                 Campaign Contributions are no longer much restricted, Wall Street has bought
                 the loyalty of more than half of the Dems and Repubs in Congress as well as the
                 Whitee House.  Worse, they hold the American Economy hostage.  If a President
                 challenges them, they sharply drop the stock market.  They did this to JFK at the
                start of 1962.   To keep the bull market going in the late 1990's, Presdient Clinton
                 allowed Rubin and Summers to promote de-regulation of banks.  In 1999, they
                 got Congress to allow banks to become brokerages, to permit much greater
                 use of leverage by banks and to legalize credit default swaps.  Bush II appointed
                 an ex-Chairman of Goldman Sachs as Treasury Secretary.  When the Financial
                 Crash hit, Paulsen's solution was for Congress to make a massive $800 bil. loan to
                 the very banks that caused the crash.  Obama was no different.  He was very
                 careful to appoint a Treasury Secretary and a Chief Economic Advisor
                 that Wall Street would like.  Right fromt he start of his term, he made it clear
                 that he would not prosecute any individual Wall Street banker for fraud.   (Of course,
                 a President may lose control and make a big mistake, which allows the market
                 to fall.  In July 2007,  Bush gave his SEC Chairman Chief  a free hand to allow
                 short sales on down-ticks again.  It  had been banned for 71 years to protect against
                 Professiojnals' Bear Raids.  Three weeks later the DJI began its long  54% crash.)  

                 "3)...Stock rise when the Dollar is strong, as now.  Stocks rise when traders do not
                 have to fear the Fed will suddenly raise rates.   Back in 2011, our Fed Chairman
                 promised very, very low interest rates for months and months.  He delivered and
                 the stock market roared upwards. 

                Under Bernanke, the Fed has put trillions of  dollars into the hands of big banks,
                often accepting worthless mortgages as collateral  or just buying them outright
                all without any outside scrutiny.  Nothing in this insider rigged process protects
                the taxpayer or the citizen who will suffer when the Dollar ultimately declines
                because the FED has paid trillions for so many non-paying mortgages
                in run-down and over-valued properties.  And just as pernicious, nothing has prevented
                the big banks from taking the Fed's money and buying stocks so aggressively as to
                make the giant, unsustainable bubble we now see.  Incredibly, the Fed has made
                trillions available to the big banks without once insisting that they make any more
                loans to Main Street businesses and homeowners.

                "4) Another factor explains how markets can go up sharply when business
                 conditions are poor.  At these times, big corporations may not be
                 able to find new places to invest.  A weak world-economy like we have now
                 is actually a good environment for a wave of mergers and buyouts.
                 If the governments will let them, the heads of big corporations
                 may choose to deploy their "idle" cash in buying out rising competitors.
                 When interest rates are low, creative book-keeping being what it is,
                 such a strategy may be a cheaper way to keep the company's profits and its
                 stock rising.  Since the 1980s, Federal anti-trust actions have become less and
                 less common.  So, the conditions have been excellent for such mergers.
                 Wall Street, of course, loves the finders' fee that buyouts bring.  But higher
                 stock prices based solely on mergers and the hopes of being bought out
                 do not mean economic growth or more jobs.  In the end, there actually may be
                 fewer jobs and less advertising as a result. 
                 "5) Often in a fast rising stocks market, like now, inflation (apart from health care costs)
                 is under control.  Producer prices, basic materials costs and wages are all
                 falling or flat.  Jobs in 2013 are still going overseas where labor is cheaper,
                 The mantras of free trade and freedom of capital to go overseas dominate both parties'
                 elites and Wall Street.  (The President has said nothing much about the
                 25% drop in the Yen and says he want to encourage free trade with Japan, if
                 it keeps its markets open.)   Falling producer costs mean bigger profit margins
                 and rising stock prices.

                  "6) After a bear market and business slump, it is normal in the recovery for stock prices
                  to go up months before there is a substanial improvement in the US economy. In fact,
                  the economy need not even improve much for many years.  British unemployment in the
                  1920s never fell much below 8% from 1920 to 1929, yet the Brisih stock market rose 73.2%
                  fom October 1921 to September 1929.  True, this  was a modest gain compared to
                 the 394% DJI gain from August 1921 to September 1929.

                  "7) In many ways, the DJI goes up the most when economic conditions are not robust.
                  This is not much appreciated.  But when business is good and everyone is working
                  and has money, there are lots of other ways than Wall Street to make money.  Capital
                  creates new businessed rather than mainly chase rising stock prices.   In good times,
                  like the 1950s. investors will certainly keep buying stocks, but not so exclusively.
                  People do not need to keep pushing stocks up and up because it  is "the only
                  game in town".   If economic conditions were sunny, they could also choose to
                  start, expand or improve a business.

                   Our Accumulation Index rises to high levels and stays there for a long period
                   often when institutions and private investors (rich and not so rich) are forced by
                   rising equity prices, low bond yields and the absence of viable alternative investments
                   to keep pushing stock prices high.   This is a powerful factor now, just as it was in 2008,
                   when many more conservative Funds (like the California Teachers) took to buying
                   lots and lots of Crude Oil futures and ETFs..

                   "8) And don't forget how Unemployment disciplines Labor. Low wages help
                    corporate profits, which in turn, quickly translates into higher stock prices.
                    The opposite often helps unions start organizing.  The 1946 25%
                    Stock Market decline took place in a tight labor market when Labor could afford
                    to go out on  strike. 

                     "9) Good earnings can be reported even without higher revenue if most
                     costs go down.  Thus, the  DJI was very strong from 1927 to 1929, in part
                     because commodity prices fell sharply in the late 1920s.

                      "10) Even without a large pool of well-off consumers, many items eventually have to be
                      replaced.      Air-conditioners, refrigerators and cars wear out.  They are
                      necessities. "   
                           ( From Tiger Hotline 4/10/2013: Wall Street Bubbles while Main Street Goes Broke )
                        But, eventually there is over-production and profits must start to fall
                        because there is not enough consumer buying power.  Large numbers of
                        Unemployed and low-pay workers put defnite limits on any bull market.
                        It is no accident that wealth concentration in 2007 matched its pervious peak 
                        Policies which promote excessive wealth concentration should be viewed, I think,
                        as very short-sighted.  When enough Insiders see that the future does not
                        look good, their selling is noticed by Professionals.  That is why we watch the
                        Closing Power.  After it fails to confirm a new high and instead breaks its uptrend,
                        the market will become very dangerous if there has been an "artificial" stock
                        bubble like I have just described.  Usually, too, the A/D Line has failed to
                        confirm the DJI's final advance by a wide margin.  Only the very biggest companies,
                        the ones most completely in control of their markets, keep advancing at the
                        end of a long and hyberbolic advance....

                "Don't be fooled by Obama being a Democrat.  Wall Street has grown to love this man,
            even if they dare not say this in front of wealthy donors to Romney and other Republicans.
            From 2009 to 2011, the top 1% got 121% of the entire income growth in the US.  The
            other 99% saw incomes decline.   Obama has rekindled Wall Street's appreciation of
            his Presidency by his budgetary stance this week,  It is clearly to the right of President
            Nixon, who never attempted to take away seniors' Social Security or Medicare.  It is
            to the right of Paul Ryan's budget.   Both Progressives and many Republicans expressed "shock"
            that Obama would take away future Social Security and Medicare benefits from seniors. 
            Defenders, of course, say that Obama is just being "pragmatic" in the new age of "austerity",
           something which he has wholly embraced, just when Europe is starting to wake up to how
           horrible this policy is when unemployment is already high. 
               "Progressive critics suggest that Obama will once again   demoralize his base just in time for the
          2014 mid-term elections, much as he did in 2010; that he is a lot more"Ivy League" than
          community organizer, way too academic and hopelessly out of touch with the economics
          of the lives of most working and retired people.  

           "Rhetoric aside, he is ...no FDR.     He and his advisors are "trickle-downers", free marketers
          and definitely not fervent supporters of financial regulation.  Real unemployment
         is probably more than 13% but Obama and his advisers still believes that a Wall Street
          boom will benefit Main Street.     This has been the hidden message of our rising
         Closing Power since March 2009.    Now the DJI seems headed for 15000, and all the
         splashy headlines it can get, to draw in more new investors.  "

       American Political Economy  - The Stock Market and Plutocracy
       Public Systen Confidence in Wall Street has cracked wide open.
       but will the big bankers pay?  No.  They run Washington. 
       Obama does their bidding and Republicans need their money,
       too, and won't confront the Fed.    

Four Political scientists the widening gap between the rich and
      the poor as beign the result of the following:

First, they said, both parties have embraced free-market capitalism,
                      which they say benefits those at the top.   (The key problem in
                      my view.)

                      "Second, ....changes in immigration and voter turnout mean the voting population
                      is now skewed toward the wealthy. ..(I have no idea what this sentence means!?)

                      "(R) rising overall wealth in the country has made part of the population less reliant
                       on government.  (Not clear!)

                      "The rich have also used their resources to "influence electoral, legislative and
                        regulatory processes,"  (Pretty obvious!   At least these political scientists
                        recognize America as a plutocracy, even if they don't use the word.)

                      " and the political process is now distorted by gerrymandering."   (True and
                        this will last until 2020 census.)


                     Obama Signals Wall Street He Will Not Prosecute.  March 19,2009.

                     Obama's Alliance with Wall Street Boosts Stock Prices. April 4, 2010

                     Goldman Sachs is The Greed Connection between Washington and Wall Street, April 9, 2009

                     Obama approves AIG CEO getting $10.5 for 2011. 

        Insider Trading in Stocks Is Rampant,  
       How TigerSoft Spots Key Unofficial Insider and Professionals' Trading 
       Become An Insider Trading Bounty Hunter


       Professionals Now Rig Stock Prices Upwards with Extra Fed Help 

April 9, 2010    The Power Elite's Biggest Gamble of All.  They Cannot Afford to Lose.
                                That's Why The Market Looks Like It Will Keep Rallying

April 4, 2010   Why The Stock Market Keeps Rallying:
                            The Secret Deal Obama, The Fed and Wall Street Have Reached.

April 9, 2009   Goldman Sachs Is "The GREED CONNECTION" between Wall Street and

    April 25, 2009       Massive Federal Reserve Fraud and Corruption Story Breaking.. 
                            Bernanke Covers Up Hundreds of Billions of Dollars in Losses
                            from Bad Loans The Fed Made To Banks Using Toxic Collateral.

  March 23, 2009        Monopoly Finance Obama Obama's Biggest Wall Street Contributors Fleeced
                           Shareholders on The Way Down And Now Will Fleece Taxpayers on The Way Up.                       

    March 25, 2009    Why Is The Stock Market Rallying?  Wall Street Now Sees That Obama's
                          Populist Rhetoric Is Designed To Fool The Angry Public Obama Is Signaling Wall Street
                          He Will Protect Them

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