# A spectacular Santa rally on Wall Street this year!



## Ralphy1 (Dec 24, 2014)

Stocks usually go up in December but this year they went thru the roof reaching a record high.  And with the GDP higher than expected it looks like most Americans are going to have a prosperous New Year.  Stuff that good news in your stocking!


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## QuickSilver (Dec 24, 2014)

Great news...but why do I hear crickets from all the Critics and doomsayers?


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## Ralphy1 (Dec 24, 2014)

They just can't stand the fact that Obama is now on a roll...  nthego:


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## 911 (Dec 24, 2014)

Yeah, the market goes up, the Prez gets credit for it.
The market goes down, the Prez gets credit for that too.


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## QuickSilver (Dec 24, 2014)

911 said:


> Yeah, the market goes up, the Prez gets credit for it.
> The market goes down, the Prez gets credit for that too.



I don't hear anyone giving the Prez credit..


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## rkunsaw (Dec 24, 2014)

It's all Bush's fault.


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## SeaBreeze (Dec 24, 2014)

QuickSilver said:


> I don't hear anyone giving the Prez credit..



Thank you President Obama!  http://www.politicususa.com/2014/12/23/thanks-obama-economy-surges-gdp-growth-fastest-decade.html









> The federal government reported Friday that real GDP growth rose by 5.0% for the third quarter of 2014, marking the fastest growth in any quarter since 2003. The number was higher than most analysts had predicted as growth was expected to be robust by closer to 4% due to initial estimates last month setting the growth at 3.9%.
> 
> Increased consumer and business spending were the key factors leading to the higher number.With a second straight quarter of rapid growth, the conventional logic thrown about from conservatives that President Obama’s policies are destroying the economy and the Affordable Care Act is the “nation’s number one job killer” looks downright silly.
> 
> ...


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## Jackie22 (Dec 24, 2014)

Thank you for the very accurate article, SeaBreeze, that's telling it like it is for sure.


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## BobF (Dec 25, 2014)

I wonder how I am to live better with all the grocery stores prices rising, cost of medical insurance is up, cost of medical is rising and so has the levels between my cost and when insurance enters to help.

One thing not rising is the retirement payments and my saved money in the banks interest.   So who is really ahead now?    And for how long?    A dollar now worth only 20 cents is not worth more than a dollar was worth a few years back.

That gas prices for now are down a bit gives no one a promise of future gas prices as that seems to be more due to some middle east actions that could evaporate at any time.   Something more than just Obama doing this bit for the US.


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## oldman (Dec 25, 2014)

Since the Clinton years, the economy goes way beyond giving any one person credit for how good or how bad the economy in the U.S. acts. It was during that time that the U.S. began to feel the effects of the new "global economy." Up until just a year or so ago, China was considered to have the best economy. In fact, just recently, many publications announced that China had surpassed the U.S. as having the largest economy. Of course, everyone would have to agree, 'if' it was just basing that fact on GDP alone. However, if you figure in inflation, GDP and trade, then it all shifts back to the U.S. as having the larger economy. I will concede to the fact that China is still a larger producer with manufacturing, but now that they (China) are experiencing deflation, the numbers will shift by the second or third quarter, this I am sure. 

Also, we have to remind ourselves of the all time deficits that we now have and who will be paying the bill for that mess. In 2010, 2011 and 2012, the U.S. printed more money than at any other time in history. As of this moment, we are now above having an $18 trillion dollar deficit. Obama has added just under $7.5 trillion since he took office. Under the Republican's sequestration plan, the budget deficit has seen the smallest increase since WWII. This is all good news, especially with lower oil prices, which are predicted to stay low for some time. No one really knows how long the low gas prices will last. As we have seen time and time again, oil fluctuations are not uncommon in today's economy. With low interest rates (for now), low oil prices (for now), lower than expected unemployment rate (for now), higher taxes being paid into the treasury (for now), makes perfect sense for foreign countries to invest in America.

IF anyone believes that we can sustain the growth and record low budget deficits and unemployment, you better not get too comfortable. The Treasury has promised, through veiled suppositions, that they will be raising interest rates, which will in turn, slow growth. That is a deal killer every time. I never quite figured out why it is that when the economy is churning along at a nice clip the Treasury has to put their nose into it by saying, "We are experiencing too much growth in too short a time and we will end up having inflation running rampant, so we are going to raise interest rates to slow down the economy." In theory, I agree with that thinking, but as we have all seen, especially when Greenspan was at the helm and he loved to play Lord of the Vault, the Treasury always, at least in my time, has screwed up by raising rates too high or for too long. The good thing about raising rates is that the consumer also sees his bank rate on savings, CD's and so on rise. And of course, when interest rates rise, the market sells off as the big investors shift their money from investing in equities to buying bonds. It's a tit for tat thing, I always said. 

At any rate, I like things the way they are right now. My portfolio is doing very well and I am sure that most all of you can say the same. We just need to be diligent and cognizant of the markets and when we see that downward trend appear after (if) rates rise, we will need to shift our money, just like the big investors. It really pays off if we keep checking the markets and business news. The only part that we have no control over are geopolitical events. We can't do much if Iran decides to invade Israel. But for now, we can all enjoy counting our winnings for 2014 and hope we have a very good 2015. Normally, I invest in the S&P's, rather than the Dow. It (the S&P) has just performed better over the years. Some analysts, which I don't have a lot of faith in, predict that we will hit 20,000 on the Dow in 2015, which should give the Democrats a big boost in the beginning, at least. Of course, if the Treasury times their increases with the election, the economy could burst a few bubbles and it would have the alternate effect. Glad that I am an Independent. That way, I always win, no matter who else does or doesn't.

Hope everyone has a great day.


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## QuickSilver (Dec 25, 2014)

I like the looks of my portfolio also..  But it kind of scares me..   I remember the fear when the Dow tanked to 6,000.   My advisor told me to hang in there.. and to keep buying...  Fortunately I took his advise..  I  didn't even open my statements for a time.   Now at 18,000?   I like the looks of it all.  I have been slowly moving stuff to more secure holdings for the last 5 or 6 years now.  Which is the smart thing to do the closer you get to retirement.


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## SeaBreeze (Dec 25, 2014)

Jackie22 said:


> Thank you for the very accurate article, SeaBreeze, that's telling it like it is for sure.



You're welcome Jackie, here are some more positives to consider regarding this administration...http://dish.andrewsullivan.com/2014/12/23/a-good-closer/




> If you were to track this pattern – strong start, weak middle, winning final streak – throughout his entire presidency, you might have expected his worst year to be the one when he was just re-elected and had the wind at his back. And you would be right. 2013 was truly awful.
> 
> But you’d also expect his final years to be strong. Until recently, much of the Beltway was engaged in a rather sour judgment on this score. He was an anachronism, shellacked for the second time by the midterms, a crippled fowl hobbling toward mediocrity. The future belongs to … Mitch McConnell!   Or not.
> 
> ...


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## BobF (Dec 25, 2014)

(Crime remains  at historic lows; *the deficit has been slashed*; healthcare costs – the  key indicator of future debt – have been falling; inflation remains low;  interest rates have not soared as many conservatives predicted; and  unemployment is half what he inherited.)

Wow, when has this happened?    Our debt is now nearly 10 trillion more than when Obama became President so how has our deficit been slashed.   The entire section is a twist of facts and not a bit truth.    Unemployment is half of what he inherited, true, but what he inherited was under the watch and control of a couple of his Democrat friends, Barney Franks and Chris Dodd, during Bushes years.    The last two years of Bush were totally under Democrat control and Bush had to comply if he wanted a budget to pass for his war efforts as Pelosi and Reid held both House and Senate.

Reducing the deficit is a false way of saying we owe less.    Deficit reduction merely means that we are spending less in relation to the income than before.    Another look at that means if we have income of 50 billion and we spend 55 billion we have a deficit of 5 billion.    So if we reduce our deficit then it means we will be spending 54 billion and compared to income of 50 billion we will have  lowered our deficit to 4 billion.    But we will still be owing for all of our debts till paid off.    We are just going deeper into the hole in a slower way than before.


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## oldman (Dec 26, 2014)

From the CATO Institute:

http://www.cato.org/publications/commentary/no-bill-clinton-didnt-balance-budget


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## Jackie22 (Dec 26, 2014)

The below article states that the presidents policies do affect the stock market, which I agree with.


http://onmilwaukee.com/market/articles/jagerstockmarketandpresident.html


This article shows that the stock market has been higher more often under Democrat Presidents than Republicans.


http://www.forbes.com/2004/07/21/cx_da_0721presidents.html


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## Josiah (Dec 26, 2014)

SeaBreeze said:


> Thank you President Obama!  http://www.politicususa.com/2014/12/23/thanks-obama-economy-surges-gdp-growth-fastest-decade.html


Thanks SeaBreeze that certainly sums up how I feel.  

Paul Krugman had a fine column along the same lines here http://www.nytimes.com/2014/12/26/o...idings-of-comfort.html?partner=rssnyt&emc=rss


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## oldman (Dec 27, 2014)

We have been in a Global economy since the Clinton days. No one person can take credit for the surge in the markets. In all fairness, if you are going to give the President credit for the market surge, then it's only fair to give him credit for increasing the national debt, at least it is in my opinion. You should also give the Republicans credit for lowering the budget deficit because of their sequestration plan. I know it is painful for Republicans to give Democrats credit and vice versa, but as an Independent, I have no problem with doing so. But as I said, no one person can be given credit for the markets. That is just ridiculous. There are a lot of factors as to why the markets have surged that it would make one's head spin. 

In the end, it doesn't matter who or why, I still win with my portfolio increasing and I can pull some profits out to put into safe money, as I call it. That is money that I invest into other investment instruments that will not be lost to market fluctuations. It is a good strategy that I have used for many years and has worked well. The idea is to have pulled out all of my original investments in equities and only have money that I have earned from the investments in those equities until I only have "earned" money remaining in my portfolio and then I am only risking "earned" money. For example; I start with $1000.00 and I earn $100.00 or 10%. I pull out that $100.00 and put it into safe money. Now, I am back to having $1000.00. I again earn $100.00 and I pull out that money and put it into my safe money account. I continue doing this until I have $1000.00 in my safe money account and that will be what I originally started with, so it is my original investment that is in safe money. The money in the equities account is the amount of money that I have earned and hopefully, I can continue to build on that. But, I am now only risking the amount of money that I made through my original investing. There is a bit more to it, but you get the idea. BTW, I didn't make up this strategy, I read it in a book by Peter Lynch. 

Happy Investing!


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## Josiah (Dec 27, 2014)

oldman said:


> We have been in a Global economy since the Clinton days. No one person can take credit for the surge in the markets. In all fairness, if you are going to give the President credit for the market surge, then it's only fair to give him credit for increasing the national debt, at least it is in my opinion. You should also give the Republicans credit for lowering the budget deficit because of their sequestration plan. I know it is painful for Republicans to give Democrats credit and vice versa, but as an Independent, I have no problem with doing so. But as I said, no one person can be given credit for the markets. That is just ridiculous. There are a lot of factors as to why the markets have surged that it would make one's head spin.
> 
> In the end, it doesn't matter who or why, I still win with my portfolio increasing and I can pull some profits out to put into safe money, as I call it. That is money that I invest into other investment instruments that will not be lost to market fluctuations. It is a good strategy that I have used for many years and has worked well. The idea is to have pulled out all of my original investments in equities and only have money that I have earned from the investments in those equities until I only have "earned" money remaining in my portfolio and then I am only risking "earned" money. For example; I start with $1000.00 and I earn $100.00 or 10%. I pull out that $100.00 and put it into safe money. Now, I am back to having $1000.00. I again earn $100.00 and I pull out that money and put it into my safe money account. I continue doing this until I have $1000.00 in my safe money account and that will be what I originally started with, so it is my original investment that is in safe money. The money in the equities account is the amount of money that I have earned and hopefully, I can continue to build on that. But, I am now only risking the amount of money that I made through my original investing. There is a bit more to it, but you get the idea. BTW, I didn't make up this strategy, I read it in a book by Peter Lynch.
> 
> Happy Investing!


What are these "safe money" investments? Are they bond holdings?


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## QuickSilver (Dec 27, 2014)

Yet.. one must understand that many folks don't feel the benefits of the Market..  People that have no savings or any IRA don't feel the upturn in the economy.  They only know that they are not working... OR are underemployed in minimum wage or part time work..  The market at over 18,000 means nothing to them.


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## rkunsaw (Dec 27, 2014)

QuickSilver said:


> Yet.. one must understand that many folks don't feel the benefits of the Market..  People that have no savings or any IRA don't feel the upturn in the economy.  They only know that they are not working... OR are underemployed in minimum wage or part time work..  The market at over 18,000 means nothing to them.



I benefit from my modest investments but  the rising cost of food and other goods makes what gains I get in the stock market burned up in the grocery market. Those without investments only see the rising costs without the rising stock market.


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## Jackie22 (Dec 27, 2014)

oldman said:


> We have been in a Global economy since the Clinton days. No one person can take credit for the surge in the markets. In all fairness, if you are going to give the President credit for the market surge, then it's only fair to give him credit for increasing the national debt, at least it is in my opinion. You should also give the Republicans credit for lowering the budget deficit because of their sequestration plan. I know it is painful for Republicans to give Democrats credit and vice versa, but as an Independent, I have no problem with doing so. But as I said, no one person can be given credit for the markets. That is just ridiculous. There are a lot of factors as to why the markets have surged that it would make one's head spin.



Well, what I am saying is that the President's POLICIES do affect the stock market.  The POLICIES affect people's confidences, job growth affects the stock market, and if you do some checking, you'll find the job growth has been better under Democrat presidents as well.


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## WhatInThe (Dec 28, 2014)

Too much cash sitting in corporate coffers. Theoretically buying stock is sort of like giving a company a temporary loan which theoretically should be used to spend on the business. This is what is not happening. This is also why stock prices do NOT necessarily reflect what the company is doing. Never confuse the company stock with the company business.

http://www.economicpopulist.org/content/corporations-hoard-cash-while-americans-go-without-job-5508

Just as you do not confuse stock price with the actual business the stock market shouldn't be confused with the economy which is reflection of actual business conducted.


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## oldman (Dec 28, 2014)

*"Theoretically buying stock is sort of like giving a company a temporary loan which theoretically should be used to spend on the business."

*I am confused as to why you believe that when a person buys stock it is like giving the company a temporary loan since the company does not see any of the money from the purchase of their stock after the IPO?


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## Son_of_Perdition (Dec 28, 2014)

Credits and Debits  from LenPenzo.com 12/28/2014

Credit: Is America a great country, or what? After all, where else can policemen earn more than $300,000 annually? If you don’t believe me, just ask one of those eight New York Port Authority officers who did this year.

Debit: Surprised? You shouldn’t be — why do you think it costs $14 to cross a bridge into the Big Apple?

Debit: By the way, those paychecks are a prime example of government excess: $300,000 is significantly more than the average medical doctor earns in a single year.

Credit: Truth be told, paying even $200,000 — overtime included — for any job with an almost-unlimited pool of potential applicants is senseless.

Debit: By the way, those humongous police paychecks help level-set the cops’ taxpayer-provided pensions too. Of course, to earn that much, they have to work upwards of 100 hours almost every week. Really?

Debit: How effective can anybody be working 100 hours week after week? Even working over seven-days, that leaves less than 10 hours per day for family, errands, commuting, sleep, and everything else. Well … assuming they aren’t sleeping on the job. Just sayin’.

Credit: Did you see this? According to Politico’s Michael Grunwald, the US economy is “awesome” too. Yes, “awesome!” I bet there are at least eight New York Port Authority cops who are nodding their heads in agreement right now.

Credit: Mr. Grunwald makes his case using November’s job numbers, the soaring stock market, falling oil prices, and the latest GDP print, which was revised upwards to 5% — the highest rate in more than 10 years. Hooray!

Debit: Sadly, in the same way a child believes that he really did see a magician cut his on-stage assistant in half with a saw, Mr. Grunwald takes the economic data he’s presented with at face value, while dismissing us party-poopers who dare to reveal the statistical sleight-of-hand. To Mr. Grunwald, guys like me are just “Chicken Littles.” No, no … it’s okay; I’ll find a way to carry on. Somehow.

Credit: The truth is, crashing oil prices are not indicative of an expanding economy — especially one as large as the United States that is, supposedly, growing at the frenzied pace of 5%.

Debit: You can believe America’s GDP ran at a 5% clip last quarter — but please, please, explain how that’s possible in the face of declining consumer spending and persistently stagnant wages — the Port Authority police notwithstanding. Lord knows economic cheerleaders like Mr. Grunwald aren’t.

Debit: As Zero Hedge points out, in reality, that revised 5% GDP figure is largely due to unabashed accounting gimmickry: In fact, roughly half of last quarter’s growth was attributed to previous consumer spending on — get this — those outrageously expensive Obamacare premiums. Forward!

Debit: As for that misleadingly “low” 5.8% unemployment figure … It doesn’t account for the US labor participation rate being at its lowest point since 1978; it also fails to highlight that, despite a growing population, fewer US-born Americans have jobs today than in 2007.

Credit: Then there’s the biggest “tell” of all: the Fed’s outright refusal to end its dollar-killing zero-interest rate policy — which has been running for five years now. If the American economy truly is as rosy as the GDP — and mainstream pundits like Mr. Grunwald — suggest, then interest rates should be rising. Sharply.

Debit: Yes, your 401k balance may be as flush as ever, but it’s only because of the Fed’s reckless easy-money policy. As Bull & Bear Mash notes, the S&P 500 is now so completely detached from the commodities market that a collapse is all but inevitable.

Debit: As Charles Hugh Smith rightly observes: “If the Fed can’t raise interest rates even a quarter-point without threatening to collapse the unstable pyramid of debt-based affluence and consumption, then what does that say about the fragility of (US) ‘growth’ and ‘prosperity’?”

Credit: It’s a simple question. I just wish mainstream economic cheerleaders like Mr. Grunwald would help out us Chicken Littles by answering it. Now that would be awesome.

By the Numbers

Like most anything else in the economic world, wages are generally a function of supply and demand. Last year, the annual mean US wage was $46,440. Here are the annual mean wages for the ten largest occupations in America (from 1 to 10):

$25,370 Retail salespersons

$20,420 Cashiers

$18,880 Fast food and other food prep workers

$29,990 Office clerks

$68,910 Registered nurses

$20,880 Waiters and waitresses

$33,370 Customer service reps

$26,690 Laborers and freight/stock movers

$34,000 Secretaries and administrative assistants

$25,140 Janitors

Source: Bureau of Labor


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## WhatInThe (Dec 28, 2014)

oldman said:


> *"Theoretically buying stock is sort of like giving a company a temporary loan which theoretically should be used to spend on the business."
> 
> *I am confused as to why you believe that when a person buys stock it is like giving the company a temporary loan since the company does not see any of the money from the purchase of their stock after the IPO?



True, this is why don't associate stock price with the actual business. Stock trading is after market.  I should've used phrases like "in a sense" and emphasized 'sort of'.

BUT the problem with stock is the way it is used,manipulated or viewed. It's the way stock price/sales/dividends cycle back to cash investors who are relying on stock ownership as well for profit or pay back. If they don't get their pay off they're gone with a lack of future funding and make underwriting or backing stock or bonds more difficult.

 More importantly as a buyer of stock in a company you are in essence giving them money or "loan" to make you money/profit through increased stock price(true the market dictates prices but the company "should" be able to affect the market in your favor). As a stock trader or buyer in particular you in a sense gave a company loan to make you money through their stock price.


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