@UdotongE
If you want to understand the stock market, Bichler and Nitzan's 'power index' is a good starting point. It's the ratio of the S&P500 to the average US wage. The movement of the power index is revealing ... and scary. We are currently in uncharted waters. @BichlerNitzanpic.twitter.com/oYtrtXEB6i
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This chart also supports the breakaway from avg wage to s&p. Side by side they show the disconnect and what's behind the surge!
@PaulGambles2@ProfessorWernerpic.twitter.com/PiKiDgwssI
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It's rather easily explained by money being pumped from the top into stocks and financialized assets instead of employment, infrastructure
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Many S&P 500 companies are increasingly international. For example, twenty years ago, 35% of Intel's sales were in the US. Today that is down to 20%. Philip Morris' US sales are down around 5%. So, what does dividing global revenue by US wages really tell us?
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Good point. 1. The ratio of S&P 500 stock prices to the U.S. wage rate is a proxy for the power of S&P 500 owners relative to U.S. employees. 2. Using global instead of U.S. wages rates is likely to raise the *level* of the power index but probably won't affect its *movement*.
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