Michael Lewis: 'There's a Real Chance There's Going to Be an Uprising Against Bankers

Quote from ByLoSellHi:

You may find you're viewing life through a bubble.

Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent, according to CapGemini and Merrill Lynch Wealth Management. Monthly income from stock dividends, which is concentrated among the affluent, has fallen more than 20 percent since last summer, the biggest such decline since the government began keeping records in 1959.

http://www.elitetrader.com/vb/showthread.php?threadid=173828
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I don't believe this is true. wealth only changes hands.

mega yacht sales are up substantially, looking out my window, I see 4 private helicopters and several speedboats on the river. not to mention 4 construction cranes on the water in Manhattan building new residential towers that keep getting taller by the week.

there have always been, and will always be those who win and lose--some multiple times.

i don't see much difference now.

surf
 
"I don't believe this is true. wealth only changes hands."

Not exactly. The value of stock is the price paid by the marginal buyer. for example a large order of dollar value X can change the market value of a company by 10X or whatever and all the holders feel richer.

However that new wealth never did and never can "change hands" it literally disappears when the price falls back down. Sure some can cash out but only a small % the market value change just as only a small % was required to drive the price up. Holds true for all of our paper assets.
 
Quote from Nattdog:

"I don't believe this is true. wealth only changes hands."

Not exactly. The value of stock is the price paid by the marginal buyer. for example a large order of dollar value X can change the market value of a company by 10X or whatever and all the holders feel richer.

However that new wealth never did and never can "change hands" it literally disappears when the price falls back down. Sure some can cash out but only a small % the market value change just as only a small % was required to drive the price up. Holds true for all of our paper assets.
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good point. however, does it actually exist in the first place if it isn't turned liquid? how about those who are SHORT when a stock collapses?? just some thoughts, thanks, surf
 
"does it actually exist in the first place if it isn't turned liquid? how about those who are SHORT when a stock collapses?? just some thoughts, thanks, surf"

Here is the thing surf. All those merrill lynch customers and everyone else marks the value of their portfolio and thus wealth to market based at all times on that marginal transaction.
If the marginal buyer invests 10m in a stock and drives the market value up 100m, all those customers think they are 100m richer.. Yet are they really? can they cash out? of course not. only the marginal seller can cash out at that price, regardless of if it is a long selling or short selling.


This to me is why investors must value a stock based on actual cash flows from the stock, in other words the security and growth of dividends, which is cash flow to investors from the real economy.

Trading is of course a different matter.
 
Quote from Nattdog:

"does it actually exist in the first place if it isn't turned liquid? how about those who are SHORT when a stock collapses?? just some thoughts, thanks, surf"

Here is the thing surf. All those merrill lynch customers and everyone else marks the value of their portfolio and thus wealth to market based at all times on that marginal transaction.
If the marginal buyer invests 10m in a stock and drives the market value up 100m, all those customers think they are 100m richer.. Yet are they really? can they cash out? of course not. only the marginal seller can cash out at that price, regardless of if it is a long selling or short selling.


This to me is why investors must value a stock based on actual cash flows from the stock, in other words the security and growth of dividends, which is cash flow to investors from the real economy.

Trading is of course a different matter.
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thanks natt. solid insight!

surf
 
I was at the airport restaurant today. I overheard two different tables of people conversing about the government becoming tyrannical. One was a couple of old air force pilots, the other table had an old couple in their mid 60's. They were saying that someone should stand up to the government.

90% of all political conversations I have come across lately, the subject is about mistrust of the US goverment.

My thoughts are, if a charismatic leader jumps into the scene bashing government and appealing to the middle class and elderly caucasions, there is going to be a revolt.

That said, they won't win. The bankers can contract credit to the point that no one will care about politics anymore.
 
As the global economy worsens, and it will, except in Surf and Clubber's neighborhoods, apparently, watch the anger against banks, bankers and anyone working in finance rise exponentially.

Gerald Celente is forecasting riots and mob violence targeting banks as soon as 2012.

I'm not saying he'll be proven right, but I would not bet against his predictions, either.
 
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