This new rule could reveal the huge gap between CEO pay and worker pay

And, I probably should add ... When you (JayFarrar) have done all that (especially part 1), I'd be thrilled to handle the methodological work on that paper we could write. I could use another top-tier hit on my vita -- and that sort of thing would definitely fly at that level -- but I'd gladly serve as second author.

 

I guess it's only called class warfare when there is an attempt at a counter attack, otherwise it continues to be a massacre.

 

My understanding is that high-frequency trading didn't start until 1998 or 1999 and that those trades now account for at least 50 percent of all activity.

My ballpark guess of a 10,000 point differential is right on as trading was around 7,500 in 1997 and today it closed at 17,540.47. It was over 18,000 less than a month ago. As an aside, when I played the stock market game in high school, the Dow traded 1,700 or less than 10 percent of what it is now. As a PPS, I also won the stock market game because I correctly guessed that shoe company stock would go up during and immediately after the NCAA tournament because those companies would see increased sales leading to higher stock prices.

Since the advent of HFT, the numbers have been consistently going up to the point that 20,000 is in sight.

Also, the number of people who day trade and the number of people who are less sophisticated investors are also both up and they are much more like to have a quick reaction to what they perceive is good or bad news.

Those things all seem to me make the stock market a different beast with a different set of rules.

One of the things noted in the VQR piece was the lack of more recent scholarly work, which is curious and might make for an interesting read.

 

"Actually, there’s been class warfare going on for the last 20 years, and my class has won. We’re the ones that have gotten our tax rates reduced dramatically."

-- Warren Buffett

 

Bullshit

If you are not selling enough goods or services, you cut overhead. The largest budget lines in most companies is HR and benefits.

Why eBay, American Express, Baker Hughes Are Laying Off Workers

eBay: 2,400 jobs
On Wednesday, eBay announced it would be cutting 2,400 jobs in the first quarter of 2015. The company says that the layoff figure includes positions that are unfilled, so the actual number of people losing their jobs will be less than 2,400. What’s more, eBay points out that the figure represents only 7% of the company’s total workforce. (Are we the only ones surprised to hear that eBay currently employs 34,600 people?)

Among the factors influencing the layoff decision: “Weak holiday sales” and revenues that have been lower than analysts expected, as well as a company restructuring in anticipation of the spinoff of eBay’s online payment service PayPal. The company said it may also spin off a third division, eBay Enterprises, which runs e-commerce operations for other companies, explaining in a statement: “It has become clear that [eBay Enterprise] has limited synergies with either business, and a separation will allow both to focus exclusively on their core markets.”

American Express: 4,000 jobs
During the course of 2015, AmEx plans on cutting costs by trimming 4,000 jobs after failing to meet long-term revenue growth target of 8%. The Wall Street Journal pointed to “a stronger dollar, a weak December for retail sales and the sharp drop in gas prices” as forces that hurt the company’s fourth quarter results—which actually showed revenue and profits increasing, just not enough to satisfy investors. The 4,000 layoffs represent 6% of AmEx’s total workforce of roughly 63,000.

Baker Hughes & Halliburton: 8,000 jobs
The two energy companies agreed to merge last autumn, and both ended the year strongly, with Halliburton posting revenues up nearly 15% and Baker Hughes achieving record revenues for the quarter. Nonetheless, in light of plunging crude oil and gas prices, oilfield services provider Baker Hughes announced plans for layoffs of 11% of its workforce, roughly 7,000 employees, while Halliburton plans for about 1,000 job cuts of its own.

“This is really the crappy part of the job, and this is what I hate about this industry frankly,” Baker Hughes CEO Martin Craighead said this week in a conference call with analysts. “This is the industry, and it’s throwing us another one of these downturns, and we’re going to be good stewards of our business and do the right thing. But these are never decisions that are done mechanically.”

Do you think Baker and Halli will turn profits next year?

 

It's not that there isn't recent scholarly work, it's that the recent work is just working around the edges, explaining (or attempting to explain) residual variation. The thrust of the 1997 piece is, like the others of its vintage, the operative view.

Today's market may be different in drivers of trading volume, but there's certainly no reason to think it's less efficient than it was before. And the suggestion that CEOs harm their firms' long-run prospects for short-term gains rests completely on a view of markets as fundamentally inefficient. I may be an especially vocal proponent of the efficient markets hypothesis, but you're going to have a helluva time finding credible advocates for a view of markets that are that inefficient.

 

I should probably explain one thing, and that's that a negative abnormal return doesn't necessarily mean the stock's return was negative. Rather, it was negative relative to what it was estimated it would have been that day under normal circumstances. So, maybe the market as a whole was up that day, but the stock in question wasn't up as much as it normally would have been. Works the other way -- i.e., it was down more than it otherwise would be -- too.

 

Anyone else chuckling at 93Devil's "Gotcha!" that supports Ragu's point about companies not gutting for a short-term increase stock price? (Hint for 93Devil: Check Halliburton's latest revenue report and crude oil prices.)

 

You can't juice a stock price by gutting a company? Tell that to Eddie Lampert.

 

Lampert didn't gut anything, as the stock price is at a 12-year low. How do you gut a company with same-store sales falling for 10 consecutive quarters and double-digit declines for two consecutive quarters, and been in trouble for several years before Lampert took over?

 

Jesus, Ragu.

You would post 10,000 words at 8 a.m. that the sun didn't rise at 7:30 a.m.

The fucking story, written by Time, point blank shows major companies cutting jobs because not enough profit was made.