If 30 “public” companies have strong earnings- stocks can go up. If, simultaneously, “100” private businesses close their doors in, let’s say, New Hampshire, laying off 2,000 people- then, in such case, stocks of public companies can rise while many private businesses close-up shop and people lose jobs. So- let’s say that, because of job losses, the New Hampshire housing market starts feeling pain, while 30 public companies located in San Jose, California, raised their earnings by selling more widgets in China and Singapore- what happens?
Now, let’s say the New Hampshire problem also occurred in Florida and Texas.
So- the point is that for every 30 companies that cause the Wall Street Journal or CNBC to say that corporate earnings are up, we have private companies- ones that you never hear about- closings their doors, or losing money, or laying off people all across America.
Stock market earnings do not represent the economy. This is why housing markets crashed in 2007. What they say on TV for the companies they follow- “public” companies- is different than the experiences of the mass of people and businesses across the country. For every Microsoft that had great earnings, there are 300 tech companies across America that are treading water or losing money and jobs.
Here’s an easy way to understand it. Let’s say only 1 company in every industry was public. And let’s say that for those companies, individually, and collectively, earnings are up 15%. Now lets say, the other 1,000 companies in each of these industries is a private company and their earnings went down 7%. So, the stock market can go up based on what it follows. But the economy- consumer spending and housing- would go down. And then, because spending is going down, even those public companies would be negatively affected by what is happening in the “real economy”.
In addition, because of the scale offered by the Internet and how companies like Amazon are overtaking entire industries, large companies and large public companies, do not represent the experiences of small businesses and private companies. In fact, the large public businesses with scale, more than ever in history, are in much stronger positions and much different positions than the rest of American companies it heir same industries.
The stock market is not the economy. But the economy- all the other businesses that are not in the stock market and what they are experiencing- can, eventually, determine the stock market (see year 2007).
Neil S. Siskind, Esq., President
The Siskind Law Firm
Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Learn more at: http://www.neil-siskind-the-fatherhood-assignment.org/
Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
The Neil S. Siskind Nature Preserve is over 8 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.
Neil Siskind, Founder, “National Fatherhood Day” – March 29th
Read about the non-profits and charities whose missions Neil Siskind supports and promotes: www.neilsiskindsupports.com
Caring is Free®
You can read what clients and associates say about Neil Siskind at: http://siskindlawfirm.com/neil-siskind-bio/.
Neil Siskind’s Volunteer Work:
– Memorial Sloan Kettering Cancer Center, Volunteer
– Memorial Sloan Kettering Cancer Center, My Fundraiser- Help Neil Siskindhelp children with cancer to be more comfortable: http://mskcc.convio.net/site/TR?px=3182108&fr_id=2632&pg=personal
– Make-A Wish Foundation- Help Neil Siskind make sick children’s wishes come true by creating your own fundraiser: Neil-Siskind/Help-Make-A-Child-Smile.htm
– DonorsChoose.org- Donate to one of my needy public classrooms: http://www.donorschoose.org/NeilSiskindGiving
– Champion Children– We seek to inspire people through stories of children who have overcome challenges: http://siskindlawfirm.com/neil-siskind-champion-children/
Neil Siskind’s Pro Bono Work:
– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com
– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/
– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/
– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.
Neil Siskind’s Government Work:
– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern
Neil Siskind’s Community Assistance:
Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.
Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/
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