The "Psycho Social" Aspects of Spending?
Spotted yesterday in a financial forum:
The Consequences of Spending?
At the end of the day, the "psycho social" aspect or demographics of Macroeconomics, and SPENDING HABITS, as reflected in ability (income) and proclivity (choices, hoarding or flowing) are what drive the economy.
Reviewing the aspects of spending 101: Less spending, less income, less revenues, less latitude for producers to lower prices, less investment in future economic activity, less hiring, lower or stagnated wages, lower production, layoffs ensue, rinse, spin and repeat.
The inevitable affect for equities is a decline in earnings per share, whose steady long term erosion we are witnessing. Cautionary for investors, lowered EPS can have deleterious effect on valuations and their "psycho social" aspect. Therefore, one would think it unimaginable that an investor would not want to hear of the "psycho social" aspects and consequence of spending.
Borrowing from BDC's common sense: "I apologize for my idiotic bantor that clogs up your day despite your ability to, a) filter anyone you please, and b) simply scroll by conversations you find not to your liking."
I usually just ignore idiotic banter on this site but this one takes the (recent) cake. I am here to make money, not to discuss the psychosocial aspects of why or how someone may choose to spend their own money. ...Maybe mundane is a better term to describe it. - Cdel
I'm glad I was busier than a one legged man in an ass kicking contest. Sorry, but I gotta.... there's "something nasty in the wood shed". This comes to mind, I came to the trough to wet my beak, but I care not what is in, or if it is water I consume.
Newsflash for the commentator above, whether you like them or not, what follows is a facts of life crash course in the aspects of spending.
The Aspects of Income?
Newsflash for the commentator above, whether you like them or not, what follows is a facts of life crash course in the aspects of spending.
The Aspects of Income?
Banks stopped making money ex nihilo, when they stopped making loans. Why did they stop making loans? Demand dried up, and if the demand for loans was high, so would rates also be. Damn it Jim, why did demand dry up?
Your spending is someone else's income.
This axiomatic truth applies to all, so, less spending, less income, rinse, spin and repeat. It's not the dilithium crystals, the primary transmission mechanism of the economic engine done froze up Jim.
The Aspects of Monetary Motives?
The Aspects of Monetary Motives?
Another "mundane" fact of life related to the aspects of spending, Alfred Marshall's "cash-balances" equation lends to a paradox with respect to peoples monetary motives. This "psycho social" aspect in layman's terms:
By wanting more money, the public ends up with less, and by wanting less, it ends up with more.
Read this to see how that paradox is playing out, unbeknownst to many, at this very moment in the ongoing global contraction of today's real world economy.
The Aspects of Lending?
The primary driver of the economy is spending, as reflected in aggregate demand, and whose primary transmission mechanism is the ex nihilo creation of money, which occurs when money is lent for the purposes of economic development.
The Aspects of Lending?
The primary driver of the economy is spending, as reflected in aggregate demand, and whose primary transmission mechanism is the ex nihilo creation of money, which occurs when money is lent for the purposes of economic development.
Loans made for economic development purposes are NOT to be conflated with those made for house flipping, asset speculation and financial market concerns. Those non economic purpose loan funds are dedicated to asset swapping and making transfer payments.
Said non economic activities have a deleterious economic effect by diverting and sequestering capital, reducing transactions velocities, and retarding the ex nihilo creation of money into a negative growth state which leads to, drum roll please, less spending and less income.
The Aspects of Economy?
What economy? Abandon a robust foundation in tangible production (outsource) and master a vapor economy with no tangible end product (financialism and speculation). Then base the majority of your economic model upon a services sector dependent on the largess (spending) of others.
What you have left is nothing to fall back on when the grim economic reaper (hard times viz. less spending) comes a callin. Right now, with the collapse of automotive, the two legged economic dog called Lucky, is going to morph into a service based pogo stick stuck in the mud. Think EPS, falsity in econometrics, MSM narrative and cookin the books.
The Aspects of Economy?
What economy? Abandon a robust foundation in tangible production (outsource) and master a vapor economy with no tangible end product (financialism and speculation). Then base the majority of your economic model upon a services sector dependent on the largess (spending) of others.
What you have left is nothing to fall back on when the grim economic reaper (hard times viz. less spending) comes a callin. Right now, with the collapse of automotive, the two legged economic dog called Lucky, is going to morph into a service based pogo stick stuck in the mud. Think EPS, falsity in econometrics, MSM narrative and cookin the books.
The Consequences of Spending?
At the end of the day, the "psycho social" aspect or demographics of Macroeconomics, and SPENDING HABITS, as reflected in ability (income) and proclivity (choices, hoarding or flowing) are what drive the economy.
Reviewing the aspects of spending 101: Less spending, less income, less revenues, less latitude for producers to lower prices, less investment in future economic activity, less hiring, lower or stagnated wages, lower production, layoffs ensue, rinse, spin and repeat.
The inevitable affect for equities is a decline in earnings per share, whose steady long term erosion we are witnessing. Cautionary for investors, lowered EPS can have deleterious effect on valuations and their "psycho social" aspect. Therefore, one would think it unimaginable that an investor would not want to hear of the "psycho social" aspects and consequence of spending.
Borrowing from BDC's common sense: "I apologize for my idiotic bantor that clogs up your day despite your ability to, a) filter anyone you please, and b) simply scroll by conversations you find not to your liking."
Given the above facts of life, anyone claiming the bane of obliviot de minimus that "spending habits are not relevant to making money in the markets", is qualified to be POTUS, a member of Congress or more apropos, the FOMC. Get in the car, not confused, but amazed, dazed and Out.
Author's Note: we recently discussed the counter productivity of house flipping in our reflections upon The American Dream, An Endangered Ethos? and oil speculation in The Theorem of Greater Fools? At the bottom of both those missives, one can find more relevant links.
Author's Note: we recently discussed the counter productivity of house flipping in our reflections upon The American Dream, An Endangered Ethos? and oil speculation in The Theorem of Greater Fools? At the bottom of both those missives, one can find more relevant links.
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