Of course, the downturn in the stock market has nothing to do with Trump. He is only 'responsible' when it's going up. We have man/child for a president who is running the greatest con ever on the American public. Evidently, 40% of Americans will never catch on to his con game, even after Mueller spills the beans on him. Trump's M.O. is to accuse others of having his attributes, i.e. "crooked" and "lying".
The market is overpriced and it will, according adjust now that Trump is throwing gasoline onto the fire he's created with 'Jina'. His inappropriate derision of the Fed is simply more fuel on the fire.
We have to vote this November (I already have) and take some of this incompetent fool's power away from him and then "Fire!" him in 2020, unless he's already been impeached or stepped down to avoid prison in a plea deal. If so, we'll need to do the same for Pence, the sycophant who best belongs to be miniaturized and set on top of a wedding cake. But he won't do same sex marriages.
2
The stock market soldiered on without a hiccup when Trump started a trade war out of the blue that will (and already has) negatively impacted our economy.
But when interest rates go up—Which were completely expected and inevitable—the market completely freaks out, causing global ripples.
I wonder what will happen when Trump has to make good on his promise to NEVER sign a budget with such a huge deficit again.
2
Poor Trumpy! Can’t face the fact that his out of control political, diplomatic and economic polices have failed. All he can do is blame the Fed which has been valiantly striving to restore economic stability.
2
The Dow closed at 19,827.25 on inauguration day 2017 and it was overpriced then. Let us all hope it returns to that level or less.
Has there ever been a good October in the financial markets? It’s October.
With a narrow minded and astonishingly blissfully ignorant POTUS it is hard to have any confidence at all in the US economy or the global markets upon which we have an effect. Trump is apparently incapable of understanding more than very simplistic commercial transactions. There may be wiser heads around but that is little consolation since he does not listen to anything but his own intuitive hunches and is happy to charge around destroying treaties and trade pacts as long as he can spin the chaos into good sound bytes for his rural fans.
2
The Great Depression was marked as a beginning with a stock market crash. Yes, many people who were gambling with borrowed money, puts and calls, came to grief.
But in the days following there were tariffs, trade barriers erected that brought expected responses of tariffs on our goods. A trade war. It was the tariffs and trade war that sank the economy, put people out of work.
Yes, we've seen this before. Looks like we are stupid enough to do it again.
"Those who do not study history shall be forced to repeat it."
22
Why the world economies are dependant on peoples fickle emotions when they either decide to buy or sell shares is beyond me!
It's a mad artificial world propped up by government debt when things go pear shaped. Only really true investment is property. Tangible assets always win over intangible assets where you still have a property at the end of a crash. People always need somewhere to live and something to eat or drink.
10
@CK
So--ideally you need a property with garden space and you need to have the know-how to till, plant, weed & water and harvest. Oh if we only all had the sense to do this! It would be a better world, and if you had a small wood lot and room for a goat you'd be all set barring bombs, hurricanes, drought, locusts etc.
5
I agree with one caveat: climate change and rising sea levels due to melting of the polar ice caps is raising sea levels throughout the world and spawning massive hurricanes like the massive category 4 storm that just hit Florida in the States. Much of the world's most valuable real estate is located in coastal areas. Boston is already concerned about the impact of rising seas on a downtown high rise office buildings and multi-million dollar condominiums that are in danger of flooding.
1
My son just left for college. We thought we were prepared to handle the expense.
It kills me to think that I saved for college all these years to have my efforts squandered by tariffs, political squabbles and an unwise tax cut.
41
@Lydia
Well, you could have saved cash.
Was it really worth all those fees and paltry interest all those years just to see it all evaporate as it if never existed. If you saved cash, you'd still have cash. Yea, I realize "adjusted for inflation" bla bla bla. It's STILL cold hard cash.
2
@matty
This week's changes set the market back about 6 months. It's minuscule compared to the gains earned since the recession.
The S&P is double what it was in November 2012 and nearly quadruple what it was at the March 2009 low—plus there were dividend returns along the way.
If Lydia kept her savings in cash this whole time, she lost out on far more than inflation eroding her purchasing power.
The real question is why is she in risky equity investments if she knows she's spending her savings over the next 3-4 years?
Investment grade or Treasury bonds matched in duration to her expected liabilities would be the wise choice, precisely so she doesn't lose a nice chunk of change right when she needs it, as just happened yesterday, today, and possibly tomorrow...
@AGuyInBrooklyn
Money is fungeable and my saving strategiy was sufficiently diversified to reflect the competing goals of a) my own retirement b) my son's education, and c) some idiosyncratic features of my own situation not well summarized by your off-the-cuff summary. That said, when we made our decisions last April about paying for this, we were not expecting a downturn right as the tax year comes to a close.
So no, the question is not "why was I in risky equity investments."
Historically, a bear market has followed an initial run-up when a Republican President follows a two-term Democrat. Course Trump is not a Republican. And his budget-busting tax cut is not a Republican policy. But trees don’t grow to the sky, no matter what the government uses to prop them up.
10
With the caveat that Wall Street is not the real economy, its swings often prefigure what is going to happen in the real world business cycle.
This market crash results from Trump's reaping the whirlwind he and the Republican Congress have sown. The two trillion dollar giveaway to the billionaire class and Paul Ryan's proposed second tranche of deficit creation have plowed the ground for a recession but what has really put a match to the market is Trump's bat crazy trade war with China.
If the attendants at Bedlam asylum (AKA the White House) can't put get the Lunatic in Chief to negotiate an end to the trade war recession will arrive rather quickly, as world trade and the world economy tank. Arguably the Fed should have backed off its schedule of interest rate rises to take into the rising threat of a global downturn caused by Trump's economic policies and his Boltonesque fascination with going to war with Iran. But the FED is not the cause of the market's collapse, Trump is.
33
In the mid-90s Donald Trump’s first public company, Trump Hotels and Casino Resorts, started trading under the symbol DJT.
But within a decade DJT crumbled into a penny stock and filed for bankruptcy, costing shareholders millions of dollars. This was a casino company!
What year did it go bankrupt?
2004. The same year that The Apprentice was launched, already on to the next scam.
Even when his endeavors failed and other people lost money, this husk of a man some call president found a way to make money for himself, to market his Trump-branded products and to pay for his expensive lifestyle.
He has done it with every venture he has undertaken as surely as he is doing it now.
24
Well, Trump did say "we've been waiting for it", or something to that effect. He took all the credit for the rise, so now we can blame him for the fall. Neither has much truth to it. Everbody knows it's Hillary's fault.
6
Raising rates seems like a good way let some steam out of the economy. In fact, we’re still in a low rate environment and all our best laid plans are contingent upon it staying that way. That’s why tweaking the rates spooks the markets more than it reassures them.
1
Either the chickens are coming home to roost or the Republican’s game of chicken is playing out as excessive debt x no investment divided by tax cuts equals reality economics.
Not very entertaining.
7
Brilliant strategy by the Trumpster. Blame our impending economic collapse on the Fed... in other words, the "deep state". Even though he appointed the person who's currently raising interest rates. This means that in the end, he'll be able to twist this around so much that he can lay the blame on the Democrats... after all, everyone in the "deep state" is a democrat, even though all these FBI people are technically registered Republicans (it's all a hoax, I tell you!) Mr. Trump may not have any understanding of economics, but he sure understands red meat.
The real irony here is that Republicans want the stock market to rise and Democrats want it to fall, because it's supposed to be some kind of indicator of how well the economy is doing while Mr. Trump sits in the oval office... but regular people don't have a stake in the stock market anymore, and it has nothing to do with our economic prosperity in this day and age. Our economy can be measured by the proportion of people who have jobs that AREN'T at Mcdonald's, Wal-Mart or an Appalachian coal mine... and how much wages are rising for those who DO have those kinds of jobs (is it rising faster than inflation? Who can say?)
1
I think too many people now realize that Trump's economy is based on sand and a little water is washing it all away.
4
The Fed has raised rates steadily through 2017 and 2018. The current drop in the market is not a response to rate increases. A much more likely culprit is the chaos Trump’s trade wars has inflicted on the US and global economies.
14
Trump blames the Fed and claims he knows a lot more about managing a national economy than the Fed's Board. Ha.
Of course, his trade wars can't possibly be contributing factors, oh no, not at all...
If only he could be swiftly relegated to the status of demagogue without portfolio.
10
The market is very high. Maybe we will get a serious correction, maybe not. But it seems to me the purpose of raising interest rates is to protect against inflation and leave room to maneuver and this stabilize and protect the economy. Raising interest rates makes bonds more attractive to buyers, since they are more dependable and are offering a better return than at very low interest. The known and predictible outcome is to restrain a crazed up market in stocks, and lower the Dow. It is right to do this.
7
For better or worse, it really is Trump’s economy now. The Obama budget ended a year ago. The Dow (not an economic indicator, but still...) topped in January and fluctuated for most of the year before reaching a new high recently. (Something told me to get out, but I stayed...) And now it’s dropped a few pounds.
It’s likely just a correction. If it’s anything more than that it is, as I said, Trump’s (and the Republican Party’s) economy from here to November.
4
“Our strong recommendation,” Ms. Lagarde said at a meeting in Bali, Indonesia, “is to de-escalate those tensions and to work toward a global trade system that is stronger, that is fairer, and that is fit for purpose and fit for the future.”
Are we talking about a free marker economy? Then the remark above makes no sense. When was the global trade system ever about fairness?
Though I suppose I should hope for the same thing since my entire retirement depends on a strong market economy since employer pension plans have gone the way of the dinosaur.
The issue is that Trump, along with Joe Public has bought into the belief that “markets” reflect the condition of the economy.
Markets are systems, like casinos, where people, and increasingly, computer algorithms, bet against a varying number of probabilities. All bets are to make profits. Nobody buys stocks for dividends any more, they are betting the farm on capital gains.
8
Well, did J. P. Morgan not say, "They will fluctuate"? As a TIAA-CREF retiree, I am always ready to the gods of the bourses to demonstrate their displeasure, but I calm myself by the dualistic faith of the Manicheans and Cathars that life is nothing but Eternal Struggle of Good and Evil. Once one has an upper hand, then the other, and ultimately the things return more or less to an equilibrium.
At the beginning of my career, it took about 7 years after the crash of 1971-72 for the major mutual funds to recover their pre-crash levels. In the subsequent market drops the recovery took less time. Who knows what will it be this time? Grind the teeth, curse or pray ...
2
The idea that he was having a love fest today with Kanye meanwhile in Florida thousands were in destruction was totally inappropriate. As for the economy to many people rely on the social media for updates, maybe it's time to do some research and reading like the few of us do, the unemployment improving since 2010 as the National Conference of State Legislatures. The homelessness was at 549,928 in December 2016 compared to 553,742 in December 2017 we will see what's up in 2018. His tax cuts were not for us "the working class". Infact everyone I speak with didn't get that raise or bonus like I hear republicans speak on TV. The U.S. federal budget deficit for fiscal year 2019 is $985 billion. FY 2019 covers October 1, 2018 through September 30, 2019. The deficit occurs because the U.S. government spending of $4.407 trillion is higher than its revenue of $3.422 trillion.
Ford is laying off 20,000 - what's going on with Harley? The stocks are down 800 points since yesterday. Working class is earning on average 9 to 13 per hour and the rents are between 1200 - 2500 (for something decent). As for medical, they should educate themselves before talking and maybe the president should actually do some work instead of twitter and talk shows.
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The deficit is 18 percent greater than last year. The FY 2018 budget created a $833 billion deficit. Spending of $4.173 was greater than the estimated $3.340 revenue.
5
Why am I being forced to invest in the stock market as an employee of a big biomedical research institution? Why am I being forced by my employer to invest in the stock market when the stock market is subject to such fluctuations?
I see other avenues to invest other than Dow Jones and NASDAQ, to be happy. I think I'd rather start my own business, or invest in real estate, than to depend on my employers who not only de-value my contribution and are stingy with their raises, but also force you to invest in a stock market that is absolutely volatile and worthless. Where is the justice in this equation? You tell me. I have money put aside, but can't afford buying shares in Apple corp. that hide their corporation taxes by being based offshore. Donald Trump is not supporting the middle class, that is for sure.
9
C'mon folks. Give him a break. Running the country as President is just Trump's part time second job.
23
Just the beginning for trump's failed economic policies....Tariffs, isolationism, pulling out of agreements and accords, turning your back on our allies....trump will run the country into the ground before he is through..Get him out, get rid of him and bring back decency! Until then the US has bad Karma!
16
@Richard
And all that reconstruction that Florida and the gulf states are going to need will be far more expensive thanks to El Presidente’s tarriffs on steel and soft wood lumber from that national security threat country to the North.
11
It is the fat clown king's economy now with two years of insane economic policy that is now coming home to roost. The bankruptcy king is now bankrupting the whole country.
Maybe his voters will get tired of losing.
Let us hope so.
21
Trump fires Janet Yellen, who had been doing a decent job at the Fed, nothing flashy. He then installs his own loyal Trumpist. Now he's blaming the Fed for being "out of control." What is wrong with this picture? Can it be that Trump does not hire the "best people"? Can it be that Lil Donnie has no clue what actually comprises good management?
16
But Trump got to hang w Kanye so all is good.
20
Wow that was fast. We had Kavanaugh and now the DOW that’s will foil the republicans this election. Or it will be a hurricane. The left must be somewhat dismayed that the hurricane went through an area that will never change their vote.
What I want to hear is what the leaders of the Democratic Party will do for me after the election. Who is going to be speaker? Surely not Pelosi? The democrats are forward thinking. Surely not Shumer? The democrats will never do that. If that happens that will just mean that nothing has changed. So democrats who are you going to give us if we vote for you?
3
@Jim
I don't know about the Democrats, but I can tell ya what you're gonna have if you don't vote or vote red.
Trump wants credit for the economy. He will also get the blame and no, it's not the fed that is the issue.
3
The hurricane is going to hurt vote turnout, probably the most amongst the poor, because they will still be reeling come Nov 6 and voting is not going to be high on their lists of things to do.
2
It took Trump no time to pass the buck and denounce the loco culprit.
13
Get ready for another Black Friday tomorrow.
Many more than that guy who stole a million in wine from his Goldman Sachs boss will be leaping off roofs.
8
As far as I am concerned, any recession at this point belongs to Donald Trump. Of course, he will lie and try to weasel his way out of blame.
19
This market is rigged! Rigged, I tell you!!! The angry liberals and Dems are behind this. I just got through the Kavanaugh mess and came through with flying colors and now this! That this is happening so close to the election makes me believe it is the Deep State again!! Believe me!
NO COLLUSION!!!
15
This is our president's business acumen on full display. Enjoy!
24
If this helps break the strangle hold of Trumpism, it won't be all bad. Who didn't see this coming? Last week I moved a large portion of my IRA to cash. We've been stuck in Crazy Town way too long. Time to wake up, smell the coffee and face the music. And elect some adults.
38
@Just Curious
Good move. Despite "adjustments for inflation" you'll still have hard cash instead of theoretical value on paper.
8
@Just Curious
OMG I feel the same way, want to cash out on my IRA from working for a "respectable" research institution that forced us to invest more money in our IRAs about 2 years ago. Am really fed up with people telling me how to spend my income, how to invest my salary in a losing game called Wall Street. I have ideas about how to re-invest my salary but I would have to challenge my employer in a court of law to access that right, on how to invest part of my salary. I simply believe that your employer is not your mother or father, and they should not have any right to tell you how to invest part of your salary.
1
This just means that when it goes back up it will give Trump something to crow about. Those who are selling high should remember that, yet I doubt they care so long as they make a buck. A flat-lined patient is dead by the way.
5
Just so long as he doesn’t get to crow until after Nov 6 and far enough ahead of 2020 that his boasts about it will be forgotten.
Ahh That Midas touch we are a year in to his economic plans. And remember those 3$ an hour Polish asbestos removal workers in the Bonwit Teller building.
16
So will President "best __ ever", "I made the economy happen", "Trump bump" in the stock market; ever take any blame for the down-side?
No, I didn't think so. He's too busy constructing a tweet about how he made the sun rise.
21
This is not the 'big' one, that is still in the future.
The economy is not humming, it's on a crash trajectory.
The market is not the economy.
Comment I post periodically elsewhere:
I mark January 1, 2018 as the official end of Obama's economy and the beginning of the next economic crash trajectory.
Few supporting reasons:
1) corporate taxes were reduced by one third
1.1) creates artificial step increase in corporate performance without an actual increase in performance.
1.2) money was used for stock buybacks, not for investment or wage increases
1.3) huge government borrowing (from China?) to make up for lost tax revenues, injecting billions of borrowed money into the economy.
2) revoke Volcker rule, allows for propriety trading (gambling) with FDIC insured depositors savings by a few rich guys with access. This (combined with buybacks) is inflating another market bubble.
3) raised taxes (aka tariffs) on the middle class, which caused frontloading, another temporary bump in the economy.
4) two thirds of GDP is consumer spending, raised taxes (tariffs) places a huge drag on this.
The market is not the economy of course. The run up in the market (approx 8% ?) is not correlated with the economy (4.2%). The recent 4.2% number in the economy is dismal given factors enumerated above. Since it is not possible to time the market or the economy, it is impossible to know when the next crash will occur, but we are certainly on the trajectory.
26
@oldBassGuy
Excellent points you made. The average middle class worker is not knowledgeable about the stock market. If they are lucky enough to have a stable job with benefits it is unlikely that they would have enough knowledge about start-ups and hostile takeovers, etc., to know where to invest. The stock market is not an accurate barometer of this country's fiscal health. IMHO. Some folks like me are being forced by their employers to invest 3% of their salaries into the stock market. And I think it's unfair because where I work, the "Beloved" institution, is only giving me a 2.5% raise after 2 1/2 years of not having been given a raise. Shame on management. They are getting rich at the expense of the employees. Then again, this is the history of the world, no? What about Marie Antoinette. Did she not say, "Let them eat cake!"?
Sounds a lot like Melania Trump with her comments about how the media focuses too much on her attire.
Well, Eleanor Roosevelt was a true First Lady, that is for sure. Not like this first lady fashion model.
3
And China may use our debt against us.
The markets, already coping with a need for interest rate increases, trade wars and an erratic U.S. govt is now facing up to the fact that the tax cut induced drop in Federal revenues, at a time when interest rates must rise, will amplify the impact on the economy and the magnitude of the rises, thanks to our president. In turn, he, alarmed at prospects in November, is getting even wilder, day by day and will manage to make matters worse.
11
There is nothing on the horizon that makes the stock market crash. Right now it is a buying opportunity. If it goes down more, buy more. The stock market gets a bump after elections irrespective of who wins. Because, that eliminates one uncertainty. The trade war is a non-issue. Because, the economy is doing well before the tax cuts, now with tax cuts we can afford to pay more for goods due to tariffs. If Democrats win the elections now or in 2020, they wont change Trump policy on trade with China. The potential threat to the economy comes from the damage to the environment.
4
@Kodali
Perhaps you got enough of a tax gain to make up for the tariffs (tax), but I'm pretty sure that offset is not there for the 95%.
3
I am glad I don't own any stocks. So I have no problems to go to sleep tonight. Are we going to have a big crash as in 1929? It took FDR more than 10 years to rebuild our economy during WWII. Is Trump another FDR?
3
Live by the sword and you’ll die by the sword. While the markets were zooming up Trump claimed the credit: now that his policies have sent them tanking I doubt he’ll admit to responsibility.
24
Trump took credit for a rising stock market, now he can take the blame for the crash. Tariffs, trade wars, big tax cut to corporations, this is all on him.
31
The economy is a wave. The bigger the better for making a big money for true business persons like Mr. Trump. He pretends to blame FRB but is probably smiling inside. Who would start a trade war when the whole economy is going well?
6
Tomorrow, as sure as the sun will rise, an incoherent and brazenly false tweet, or two, will defiantly issue from 1600 Pennsylvania Avenue blaming all of this mounting economic woe on Clinton, Obama, Pelosi, and the Democratic Party. And millions of the Fake President's low or no information supporters can be expected to unquestionably believe his latest version of alternative reality. Just another day of state-sponsored propaganda in America, circa 2018.
32
I’m surprised that none of the analysis of the market drop has touched on the mid-term elections. But, if they’re doing what I’m doing, equity traders are reading the polls and seeing that, at the very least, Democrats will take the House. (My own gut feeling, formed from going door to door for Democrats in several states, is that the pollsters have missed the depth of passionate opposition to Trump among women.)
A split Congress checks the philosophy of corporate foxes run the hen house. It also could mean impeachment, and governmental chaos and paralysis.
With massive debt, a flailing trade war, and the end of the booster effects of the tax cut, traders know the good times are done. Worse Trump has gutted the parts of the government that dampen the effects of a recession. So, they’re evacuating, early. The rest of us may be stuck in the storm.
18
Trump’s tariff and foreign policies are creating massive uncertainties, tanking stocks left, right and center. His nutshell foreign policy:
-Allied nations are weak and should be mistreated;
-Dictators are strong and should be admired.
-Multilateral treaties are trash; only treaties that Trump sets up bilaterally have worth.
-Finger to the wind, always. If prevailing winds of at least 2/3 of the U.S. feel strongly about any topic, change position to the prevailing wind.
-Anything Obama did should be undone.
Congress should immediately pass a resolution censuring Trump for his Helsinki display; and Congress should immediately pass legislation preventing Trump from unilaterally pulling out of NATO.
What else is driving the uncertainty causing stocks to tumble?
Federal debt? Through the roof under Trump. Will top $22 trillion this year, with a $1 trillion budget deficit.
Trump's tariffs are forcing me and other working class families to paying lots more to buy groceries and other products.
Trump and Congress are also removing health care from the lowest wage earners in the country as quickly as possible, resulting in premiums that have raised 20 percent over what they would have been without these cuts.
Uncertainty flourishes under Trump.
He recognizes no moral, political or strategic commitments. He feels free to pursue objectives without regard to the effect on allies and the world. He has no sense of responsibility to anything beyond himself.
He is the problem.
38
America is deranged. I can't imagine anyone hoping that tomorrow is another Black Friday.Trump convinced his flock that Obama was an unworthy steward of the American economy and I know the GOP has a speech prepared for Black Friday.
America needs all hands on deck during these turbulent tomes and yet there was the vile and divisive Ted Cruz blaming half of America for everything bad that happens.
Men like Ted Cruz know what socialism is and know what a leftist is yet he directed his vitriol at 50% of the American population to try and further divide a population that should be brought together. Is this what Mrs Cruz learned at Goldman Sachs.
The one piece of information that should have woken Americans up and that was that the Cruzes are not without any friends in Washington; they are close friends with the Kavanaughs.
In hard times people should know they need to come together and Black Friday will come if not tomorrow another time and the division as bad as it seems now will be a catastrophe.
7
Is there ANY good news out there ? About ANYTHING ? Between Kavanaughs' becoming Supreme Court Justice despite extremely credible allegations of sexual assault, his having lied under oath in front of the Senate judiciary committee, Hurricanes Florence and Michael, the market tumbling and more., I can't recall the last time I heard anything positive.
20
Isn't it strange that every publication but the NYT publishes the actual numbers of the decline, but the NYT won't do that. It only offers the decline amounts in percentages. Second day in a row, too. Anyone know why they won't publish the specifics?
2
I'm really disappointed in the Fed. Rates had to get off the floor and they now are. Doing anything over 2 rate hikes a year at this point is ill-advised, them signaling a 4th rate hike for this year just threw me for a loop. Tariffs should raise core inflation that has yet to be revealed in the numbers and the labor participation rate is still too low to justify slowing the economy, so the Fed moving like this is confusing.
My main concern is the Fed will start chasing the extra inflation they're creating and misinterpret future core inflation increases from tariffs as "hot" economy related instead of structural policy. This will slow growth and probably facilitate a recession when we haven't recovered fully from the great recession, yet.
4
I've noticed that things seem to get soft around the time there's a potential political change. It looks like there's a decent chance Republicans will lose control of either the house or senate, with a smaller chance of losing both, with one or both causing changes in The Donald's legislative plans. Things might pop back up. Orrrr. . . if this is a more permanent correction, the line of best fit through the market's value during the presidency will start looking less impressive.
3
China has 350 billions trade deficit with USA , according to Deutsch Bank, American companies earn around 250 billions in revenue from their made in China product such as Apple, Dell, elevators etc. And if you factor in how trade is calculated, 1000 dollars iPhone is counted as trade deficit but in fact China only captures 70 dollars in the process, most components are sourced from South Korea and Japan...so when push comes to shove, China doesn't lack ammo in the trade war, it can go after the American companies in China.
3
The stock market declined about 300 points in the last 30 minutes of trading. This is not about rational investors making informed decisions about the state of the economy or the merits of companies.
This is program trading. When computers running algorithms try to treat the market as a game, with the mission of helping the 0.1% join the 0.01%.
The problems is program trading does harm, serious harm. The market gyrations we are now seeing can breed fear, and contribute to the sorts of cascading market declines that can turn into a recession. Think back 10 years or so.
Problem is, after the last major crash a decade ago, too little was done to prevent a recurrence. Few of the people responsible were prosecuted and punished. Companies were too big to be allowed to fail. Moral hazard, if you will.
What can be done? It may or may not be too late to stop another self-feeding crash. Corrections are probably good, but market crashes are not. We'll see what this turns out to be over the next few days and weeks.
We need to combat the folks that think the market is a game whose major purpose is to increase the wealth of financiers. This is easier said than done. But, perhaps, a good place to start would be a tiny transaction tax on trades. This would not hurt those who buy stocks as an investment, but might deter the computer based high speed trading that probably serves little or no useful good.
9
So:
If the market were to go down by two percent every day for the next 50 days,stocks would be worth nothing, and we would be rid of Trump.
Just saying.
11
@A. Stanton 2% every day for the next 50 days does not mean stocks go to 0.
5
@A. Stanton 2% of say 100 takes you to 98, 2% of 98 takes you to 96.04, 2% of 96.04 takes you to 94.12, you can essentially go on and on and never get to zero, but in real world trading transaction costs will wipe you out before anything else, its a simple confusion of the math's Stanton, or is your real name Steven Mnuchin?
9
It was supposed to be a joke fellas, not a math lesson. So how are your stocks doing these days?
What I don't understand is why Trump is against free trade as NZ has free trade and we trade with countries that want free trade and countries that don't want free trade and NZ does ok. NZ doesn't put tariffs on anything. We also have a universal government paid for health system and pension scheme.
Why would Trump pull out of the TPPA free trade agreement when it would be to his advantage. Is it because of all the tariffs the USA has on imports. No one ever mentions the tariffs USA has on imports from foreign nations.
11
Making America Great Again,I'm exhausted from all this winning!
19
In the end, there is no example anywhere, at any time, of a successful GOP economic plan.
Any state that has any success with Republicans in charge was blessed with natural resources, not GOP brainpower.
28
But their fiscally conservative ha ha ha ha. If I call my self Superman for the next 30 years....I’m Superman.
3
Trump should have actually cracked a book or two at Wharton, but then again, even if The Donald had read a business book from beginning to end, if it conflicted with his view that 'I am always right', it would have done him little good.
The self proclaimed King of Debt is now saying that what the Fed just did with raising interest rates is 'just crazy'. He also said at one of his recent rallies that Democrats are 'too dangerous to govern' and that they are 'wacko'.
For many in America, there is one sole individual who is both crazy and wacko and financially illiterate, and that is Donald himself.
63
Hey Dennison, when you're done with Kanye ask me how my 401k is doing.
MAGA My Assets Getting Annihilated
You were right: I'm getting bored with so much winning.
28
Donald aren't you going to take credit for this? Yeah, kinda hard to lie your way out of this one. But have you considered this angle, "the sell off is a natural market reaction to lying democrats taking over The Congress. Can you blame them?". Tweet it out now and you will be able to reinforce it again on Fox and Friends in the morning.
14
@DWS He can lie his way out of anything. Remember his Helsinki Maneuver?
5
Mother market is calling her loan. Trump mullets first.
11
Good. The one-percenters aren't laughing anymore are they? I hope Trump bankrupts all of them.
22
@Daniel Kinske, I suggest you familiarize yourself with the concept of short positions, a.k.a. "shorting the market".
The house Always wins
8
President Trump if he did not already done it, will blame the stocks plunge on President…. Obama.
11
@Wilbray Thiffault, I voted 2x for Pres Obama, and even despite the catastrophic administration that preceded him, Press Obama continued to harken back to Bush, 3-4 years into his term, long after Bush was home painting. Assigning blame (to others) is an intrinsic trait of politicians.
2
Market go up= touting success of stock market
Market go down= the Fed has gone crazy= not my fauly
21
Seems like the world economy is addicted to stimulus, the U.S. economy especially.
It's going to be hard to kick it. The temptation to just keep rolling with stimulus is soon going to re-assert itself. Chances are, at some point, things are not going to end well.
8
Looks like, based on the graph, that the tax cuts are pretty much a wash in the larger picture, maybe a drain on the overall economy, at least as much as the S&P would seem to represent. Is this where we ask, how's that workin' out for ya?
6
What is it with the month of October? The disasters happen with the precision of fine German craftsmanship.
Very disorienting.
11
Since 2010 economists worried on how the Central Banks could safely wind down their portfolios (after printing unprecedented amounts of money) with out disruptively the asset bubble it generated (as it was mostly captured by the rich that funneled it into assests).
The Fed's, the first one to try, attempt is not going well.
4
Trump has added more risk and uncertainty and it’s time the markets accurately reflected this reality.
34
Best comment
5
Trump will never, ever own this stock market plunge. He will either keep his mouth shut or throw out some pablum like "Markets rise and markets fall but the fundamentals of our economy are fantastic, the best ever!"
Since only 52% of Americans own any stock at all, the stock market plunge over the past several sessions will mostly affect the wealthiest 10%. This means the market losses are not likely to affect the Trumpaholics, who will in all likelihood be voting only for Republican candidates next month.
10
@ALB In all fairness, this trumpapbobic is planning to vote the Democratic ticket this time, just like he did in '16.
3
Most of our retirements are tied to the market in 401k’s, so when it crashes we suffer real losses while the 1%’s cash out and take another chunk of our hard earned saving.
2
The Fed brought us two more years of "growth" by not raising rates fast enough. What has really happened is that they have forgotten their charter: to lop the top and bottom of the business cycle. Instead they have become the source of extremes of boom and bust.
And next bust they are outta ammo.
14
and not before time.
While corporate leaders and stockholders have been laughing all the way to the bank, worker salaries have gone up a few pennies.
This is no way to live. Stop pretending the economy is great when it only works for Trumpsters and his supine supporters and enablers.
16
So, a whole lot of unfunded money was pumped into the economy via President Trump's tax cuts, causing a spike in economic growth that threatened to cause inflation problems. In response, the Fed raised interest rates to try to restrict that economic growth, causing the stock market to fall as that growth slowed. This is all economics 101. The only people who couldn't see this happening were the fools who advised Mr Trump to implement his tax cut in the first place. After the sugar hit, comes the weight problems.
51
America's laughing stock took an even bigger hit today.
19
Hopefully Kanye gave Trump some advice on this during their lunch today. Yes folks, it's come to this.
59
So the DOW and the Russian space station rocket have something in common, one has crashed and the other is crashing.
Then the idiot president comes out and says it's because the federal treasury raised the interest rates and which idiot is in charge of the federal government that let them do that.
Well nobody ever wanted their IRA or 401K to last for ever.
26 more days to midterms.
22
Time for a 10%, or tad more, correction in this overly long 10 year bull market! But hope it would be a swift one kind of like the fast and furious post “9-11” type in 2001. I bought on the sharp “V” back then as it dropped fast, and just as fast came back up as I recall. Held tough in the 2008/09 crash, and am doing the same now with a 45/55 folio heavy in treasures...
4
I hope someone is taking a look at Wilbur Ross's activity over the past two days.
34
The Trump DUMP.
29
Dear Zeus help us! Trump's crazy policies viz China and Iran are hurting economic growth just as the world was beginning to recover from 2008.
Not only were we recovering, albeit too slowly for developing countries and US/European working classes, we had a comprehensive climate change agreement in place to help mitigate and the expenses of global climate emissions.
With Trump, all is lost. Vote!
23
No financial losses for the investor class can possibly matter to the average American. Yes, trickle down pain will occur, but when you're already just scraping by, just scraping by a little harder won't matter all that much. On the other hand, puncturing this myth of invincibility Trump has built up around himself with the help of Murdoch Inc is job one. Bring on the Wall Street collapse if results in the immediate end of Oval Office insanity.
10
I hate tRump as much as you but rooting for a global economic collapse is insanity. It DOES trickle down. As a small business owner, if my profits get cut I will cut personnel or hours and that salary reduction ripples through the economy. Be very careful what you wish for.
14
@Leigh
That is not correct. The average American who has done any retirement saving (a must in this post-pension era) probably has their money in all sorts of vulnerable products. Some of those families may also have 529s - again, quite vulnerable.
It is the investor class who are in the position to hedge or participate in more complicated and countercyclical products. We are all exposed.
8
@Steve Cohen
Nonsense. Nothing in our economic experience, past or present, suggests this is true. Cutting back on labor is a last resort, not a first one. Reducing production means losing market share, and I don't care if you are selling fish in a small store or making electronic components.
At some point, prices begin to creep up, perhaps, but that's happening anyway because of tariffs.
Owning a business does not always make people smart about business more broadly. It just means they own a business, at least until they behave foolishly.
Carefully study what happened in the aftermath of the last, le's say, 6 to 8 recessions. You'll notice a pattern: after the dust settles; after the countless "news" reports by the corporate (mainstream) media speculating about the reasons for the "selloffs," whether "China," the Fed "monetary policy," or whatever, you'll notice that there would have been a transfer of "real assets" from the productive (working, middle class, hourly wage earners) class straight into the pockets of the oligarchical/plutocratic class.
I challenge anyone reading this to spend just a little time studying wealth and income comparisons between the 99 percent and the 1 (and especially the .01) percent. You will notice a pattern of wealth transfer; a patterns that exacerbates income inequality.
This is not an aberration; this is by design. Recessions can be seen as "harvest time" for the ruling class in what is essentially a neo-feudal system (Neoliberal capitalism).
Furthermore, now that after 40-plus years of Neoliberal (creeping facism) we tipped over into an authoritarian kleptocratic kakistocracy, again, if you study history, you will see that chaos, fear, confusion ALWAYS works to the benefit of the authoritarian regime (and strongman), as it works on dismantling liberal democracy.
If there is a big, historic market crash, wars, fear, confusion, in the aftermath we'll end up living in a corporate state fascist oligarchy. This is what "Disaster Capitalism" is all about. The end game.
15
Trump's nitwit comments about the fed are utterly reckless and irresponsible. And they normalize the many right-wing fringe conspiracy theories that seek to undermine trust in the fed. Econ 101: the fed must remain independent of meddling politicians. If monetary policy is left to politicians, they will immediately drive interest rates to zero. The inevitable result is a dangerously overheated economy with hyper-inflation, followed by an equally inevitable financial collapse that will make the Great Recession look like a picnic. A primary mission of an independent fed is to smooth out the boom-and-bust cycles that are characteristic of a market-based capitalist economy. Monetary policy is a delicate balancing act that needs to be in the hands of impartial experts, not politicians looking toward their next election.
18
Who knew Kava-naughty would be the least of our problems.
12
Don't count on the Democrats to save this one. This is only the beginning.
Sooner or later folks who voted for and support the Trump Administration will find they have been sawing on the wrong side of the limb. When it goes down, they (and us) go with it.
Ever try to put a limb back on a tree?
After crowing about how the stock market success was his doing alone, now he's crowing about an "expected correction". With the P/E ratio around 32, twice the "normal", you didn't have to be a stable genius businessman to figure that was unsustainable.
Smart cookies: those corporate stock buy backs using the Trump tax breaks. They saw this coming. Now, like me, they will wait til the dust settles, swoop in and take what is left of your 410k. I gave folks a break after the last stock market crash because I thought they got a raw deal. No more. You got into it, now you get out of it. Some tax break for the middle class!
He doesn't know how to manage finances! He does know how to cheat and let us pick up the tab.
I really don't see a way out of this over the next several years. YEARS! If someone does, let us know.
18
Here is another perspective on the decline from a Southern Hemisphere point of view -
www.stuff.co.nz/business/opinion-analysis/107789230/why-markets-are-slid...
3
Who's more crazy, Trump or Kanye West ?
Thanks, GOP.
23
This could be the first tremor of a more serious correction. Steve Mnuchin and his neo-Supply Siders pushed through a tax cut that was advertised as "paying for itself" through the resulting economic growth. (You may recall David Stockman and friends tried this during Reagan's reign; this theory has long since been discredited.) What will we get? Massive deficits which goose up interest rates. In the meantime, the rich will line their pockets via lower taxes and corporate buybacks. Who said we won't get fooled again?
There is no economic justification for massive deficit spending at the top of a business cycle. We're beginning to see yet another facet of Trump's imbecility. Allowing this uneducated thug to manage our nation is the greatest danger we face.
33
@DW
Helpful, DW. It is also worth noting that most of the tax breaks given to large corporations was used to buy back stock, not to expand capacity or increase wages.
In other words, they are playing the market with taxpayer cash. Sounds like a plan Trump would have thought of if he was capable of thinking about actual plans.
19
If they bought back shares at high prices and the market suffered a steep decline, exactly how does that help the wealthy?
2
@Steve Cohen
When they buy back stock, they are not just tucking it away in the safe behind the painting on the wall. It's in motion constantly--using it to leverage loans, shifting ownership, and, if in the worst case (which seldom happens) they write off the losses.
Anyway. Steve, I fear you have missed the actual point, and that has to do with what does not happen with the influx of wealth created by tax cuts.
Trump express headed straight down. Ray Sipe
11
Trump will always take credit for positive events and find blame for negative ones. His followers will always agree with him. Trump could start a disastrous war and then blame democrats for all the Americans killed. His petty, glib and mercurial behavior ignores the facts as they exist—he and his party have absolute control of all three branches of government. Any problem or failure rests squarely with them. You’re kidding yourself (i.e., delusional) if you think trump can do no wrong.
25
@Billbo Just like religion Trump/god always gets the credit when things go well and never gets the blame when disaster strikes. Now's about the time when Cult 45 reminds us to "have faith."
6
What exactly is a ‘correction’? I see it on stocks all the time!
2
A correction, is a drop of 10% or more, an arbitrary but useful definition. Similarly, a drop of 20% or more is the definition of a bear market. Again, an arbitrary amount, but good for describing the long-term swings of stock markets.
9
The jungle is returning, and all the world knows it. Except for us.
9
And once again, the little guys on the ground are left looking up with little influence over anything.
Your vote matters less - because the electoral college favors wealthy landowners.
Your dollar towards retirement matter less - because the stock market is governed by powerful economic forces far outside of your control. Also, its just a crap-shoot.
But you know what? We'll always be able to grow our own food...
8
@htg
Right, unless your property is underwater due to rising sea levels. Oh, and by the way, don't bother fishing for food on the water that covers your land. All fished out, or so full of chemicals and heavy metals that you will glow in the dark if you do find some fish to eat.
But it's all part of the Trump inspired Republican long term plans for America,and for the rest of the globe. Profits come first, and somehow, in some way still mysterious to them, those profits will create not just richer corporations but a more prosperous middle class.
Dazzling stuff, right?
8
So, Trump is going to take credit for this. Right? Right? You can't have it both ways. If you brag about it doing well, you can't say you have no effect on it when it does poorly.
33
Leave it to Don the Con to blame everyone and everything but his “best ever in the world executive orders”.
8
The stock market fluctuates all the time. Sometimes up, sometimes down.
But this downturn is a doozy. It's a real fall.
As others have posted, who will trump blame for this.
I understand he blamed the "feds" first of all.
I just can't wait for his tweet storm blaming everyone under the sun except him.
Maybe George Washington for winning the revolution.
Maybe Lincoln for freeing the slaves. Or maybe Sessions for recusing himself from the Russia investigation.
Trump's philosophy of life: Never apologize, never admit guilt and deny, deny, deny.
31
Not true. Sometimes he also chooses to lie as well as deny. A twofer.
8
And not just under the sun. He’ll blame the sun. But still deny global climate change.
2
@angfil
The trouble with talking like this, angfil, is that it plays into the long standing myth of markets as 'natural,'' beyond comprehending, mysterious.
It's kind like the way climate change deniers talk about the increased destructive power of storms, and especially extraordinary storm surges. 'Well, mother nature is like that, right? It's beyond our power to intervene.'
Which is ill informed at best and cynical at worst. The increased surges actually do have a cause, and it's one not all that hard to grasp. Same with markets, where much of what happens relates directly to what people have chosen to do.
That's the lesson of the 2008 economic disaster (one that banks have forgotten but many average people still live with)--people chasing excess profits did things that were both illegal and immoral. There was nothing mysterious or natural about the consequences.
Even if there was such a thing as 'free markets' way back in the hazy past, anyone who claims to believe they exist today is playing an angle.
3
Most presidents do not brag about the stock market because they realize it can fall at any time.They are loathe to tie their presidencies to a fickle market.All presidents refrain from criticizing the Fed.If Trump is looking for someone who is "loyal" to him at the Federal Reserve, he is not only delusional , he is so far off base that he is not even in the ballpark.Trump must have missed any Econ course that was taught at Wharton.
34
@JanetMichael
Trump says he gets everything done. Right now he is marching the USA into bankruptcy exactly what he did with some of the Trump company projects,
9
Another thought - China owns $1.17 trillion dollars of USA treasury bonds - what happens if they decide to sell them - China probably holds the Ace card in the trade war.
38
@CK
The problem is that while that is certainly a good card to have, it also ties China to the US at the waist. An attempt to sell them would probably crater the bond market and cause a financial downturn that would seriously damage China as well.
Really its financial Mutually Assured Destruction. No one is MAD enough to press the button, right?
8
@Z
Great point Z. We are way, way behind the mirror, where all the off ramps just lead us back to where we were.
But let's be honest. Trump didn't cook all this up in the past few years. It's the creation of post-industrial global capitalism, which has always skated on that slim edge between greed and anarchy.
If it all blows up, don't bother searching for mysterious bad guys. It was an inside job.
The thing to realize is that most of what Trump’s doing is flailing around aimlessly, churning the store shelves like crazy, and bragging about the results whatever happens.
Oh, and thise t-bill yields probably tell you the other thing he’s doing, which is to sell off the seed corn and brag about the pittances we get for it.
15
Robots (program trading) fuel these moves in the market.
Coming soon to a manufacturing facility near you, you guessed it: robots. The market, banks, hedge funds, brokerages and the mega-rich are investing heavily in AI to put Trump's base out of work, permanently. The Trump "base" will then be screaming Lock Him Up.
Maybe Putin will need a few out-of-workers.
10
Trump's house of cards: His isolationist, anti-globalist nonsense, his tariffs, that we are already paying $12B to farmers for (so much for the big $1.3B in reduced taxes he brags about), combined with the fact that he has a history of bankrupting companies and stiffing people he owes money to, is coming home to roost for the American investor. Any fool that trusts Trump and his half-baked ideas deserves to lose their money. The rest of us have to bite the bullet and hope we can take the house and senate in the mid-term and stop this madness.
25
"The market interest rates on Italian bonds have spiked as investors worry that the country may not be able to service its debt, which is equivalent to more than 130 percent of annual economic output."
for comparison US debt is at 106 % of annual economic output.. and rising ..
15
I was just reading your article on why Dems should not get too excited about the markets plunging...
1
Of course things are in a "delicate situation," as it's generously and politely put. The USA is led by an imbecile, uncertainty abounds in every direction from political hyper-ventilation to tariffs. The Fed's gone crazy? The man likely has no idea how even a savings account works, let alone a bond curve.
The financial world is rattled right now because it can't figure out what's going on because Pennsylvania Avenue's infant just throws junk out every day.
Thanks to Mitch, Paul, and all the others, we the people get slammed back and forth.
A few weeks back the shortly-famed "anonymous" assured us there were adults in the room. Where were they in the last two weeks? Clearly those adults are part of the Kool-Aid group.
VOTE.
37
OK, this is either a hoax or a Democratic trick, reporting of the market crashing just before the mid-terms. And if you don't believe me, ask the Great Prevaricator. He who took credit for the wonderful economy his Corporate and Wealthy Tax Cut was producing a few months ago has to take "credit" for its all-too-predictable fall. Trillion dollar deficits do not encourage investors. The old adage of Abe Lincoln is coming home to roost for the Republican Party: You can fool some of the people all of the time (read: base), all of the people some of the time, but you can't fool all of the people all of the time.
17
@The Lone Protester As usual Trump will say that it's Obama's fault.
5
A tariff is a tax on the consumer. Since Navarro and Trump don’t understand that, it’s time to elect a Democrat majority in Congress who will actually do its duty and create the legislation to replace the executive orders and stupid trade policy the crazy men have issued.
Peter Navarro is a hack and needs to be sent packing.
49
I'm waiting for the tweet where the President takes credit for the buying opportunity created by the market correction.
9
"The simple solution to stop this is cut the corporate taxes to 15%" - The GOP
9
Trump's stupidity and venality is epic. The market correction was due, but his policies have brought it on sooner and made it worse.
He fired Janet Yellen, so he OWNS the Fed and it's actions
He OWNS the disastrous tax cuts for billionaires, spent on CEO enrichment and stock buybacks with a trillion dollar hit to the national debt and no benefits to the 99%.
He OWNS the idiotic Trump Tariff War that is sinking world markets.
In short, he OWNS the looming recession.
Of course he blames everyone and anyone but himself.
And now all he has to run on for the mid-terms is hate. anger, and fear. "Lock Her Up!" will motivate the myopic MAGA-heads, but the rest of us had better vote in November or we are doomed,
65
The questions for Donald 'The buck doesn't stop here' Trump is who can he blame for the stock market downturn, the hurricane's massive destruction in Florida, and, most importantly, what was in the lunch that caused Kanye West's mind-blowing meltdown/rap this afternoon.
23
@Stan Carlisle At least Kanye can get back on his meds. The terrifying thing about the President Crazy-Town is that he's sober.
11
Trump , who’s been boasting every time he opened his mouth about how fantastic the stock market is doing, as a result of his policies, is now blaming anyone he can think of for the markets slumping.
To use one of his favorite phrases, what a lowlife.
31
Of course, Trump will man up and take credit for this.
Oh, just kidding!
He'll blame it on Obama, the Fed, Jeff Sessions, the deep state, the basa nova, crooked Hillary, Niki Haley's departure, the Dems, Roger Ailes ghost, and the toilet paper stuck to his shoe that no one bothered to tell him about. i do do wonder how long it was there?
20
Just remember as you check your 401(k) that Trump says, "Trade wars are good and easy to win."
31
Trump doesn't care if Americans lose money because he fights with China.
Trump doesn't care about anyone else.
He's indulging himself.
He likes to fight. It's his temperament. He'll fight with anyone about anything. To Trump, the whole world is against him and he's spent his life in combat with thousands of people, in media blitzes, in public threats, in name-calling, in lawsuits. He relishes fighting. About anything or nothing.
We heard from people during the campaign that Trump didn't have the temperament to be president. This is one of the key
reasons why. Anyone whose personality drives them to fight with people and wage wars of aggression that are completely unnecessary is by nature impulsive and destructive. That person is not in control of himself. That person is nobody you want to do business with.
That person is not someone who has any business being President.
46
Tomorrow is Black Friday.
7
It's all that "whining". Oh wait ... winning, winning. It's all that winning. (cough, cough)
8
So far, this is normal, garden-variety, end-of-bull-market trading activity. Nothing out of the ordinary, given the extraordinary length of the uptrend and how high stocks have gone. What will turn it into something worse is a stupid act on the part of the monetary authorities or the president - such as more tariffs, more meddling in international trade or more criticisms from Trump of the Fed Chairman and interest rate policy. Public confidence in the markets can be very tenuous, especially at a time like this.
12
I knew toilet paper on his shoe would bring bad luck.
14
One of the substitute teachers at the school where I teach made a fortune as stock trader (then retired). As such, he is a lifelong Republican. I asked him today what was up with the market, and he replied, “The market hates volatility. The knucklehead in the White House’s middle name is Volatile. I didn’t like the last guy, but at least he wasn’t certifiably insane.”
65
Here comes the blame game!
Will it be Hillary, Obama, the fed, environmentalists, the women’s movement, all of the above. I’m sure our idiot pres will lie and make up ridiculous non facts to soothe his sycophants
30
Even if we get sucked into another recession/depression.
Trump and the Republicans will just blame everyone else.
And, the American public will just sit by and believe whatever is told to them- even if it isn't in their best interests.
That is why education is so important- and why Republican run states have some of the worst grades. Nothing like keeping those voters as stupid as possible.
37
Now we are beginning to see the Trump effect. While carrot top is running his deranged mouth at propaganda style rallies, cities are being destroyed by vicious storms (what climate change?) and the economy is nearing a cliff (what deficit? The market is up ?) I can only hope that when it falls over, it will take Con Don and his boatloads of deplorables with him.
38
The worse than expected and ominous climate report on Monday portends immense and expensive climate mitigation responses by the world's governments.
I propose that such news and Trump's shrug about the report, continuing his disbelieve and ignorance about climate change, contribute to stock investors' economic concerns and negative outlook, leading to the markets' declines.
18
Looks like the handwriting could be on the Wall Street wall now. Not good news when the country is in such turmoil about so many issues, including the upcoming elections, the China market menace, and the devastation caused by Hurricanes Florence and Michael.
We knew that a correction was bound to happen, but this is a terrible time for the market to start plummeting—let's hope that investors don't choose now to lose their nerve and all start bailing at the same time.
Talk about fastening our seat belts for a bumpy ride
7
Trump and Republicans created a huge budgetary deficit (through their notorious tax-cut) that continues to accumulate every year. For the US governmet to keep borrowing money in order to pay off its deficit, it needs to borrow money. It is natural that the interest rate goes up in the face of stronger demand for money. The higher interest rate hinders corporate activities in private sectors, as hinted at in this article. It also stifles the governmental activities, because the goverment cannot pay off its deficit cheaply anymore.
In short, the Trump-Republican tax-cut was doomed to fail the US economy from the beginning.
30
America according to our Gropenfuerher Commander In Chief America seems to becoming not only great again, but invincible to economic blowback from his blustering and risky duels with leaders like China. Of course being a master miscalculater Trump never really weighed the consequences of his dueling tariffs with China, which are now being played out on Wall Street.
12
I still believe irrational exuberance will prevail into 2019 for awhile, but I’m getting out of securities big time by the 2nd qtr 2020. The coming tailspin will ensure Trump’s defeat. And we will be looking at a long bear market as we dig ourselves out of $3 trillion national debt.
15
@Phaedrus
$3 trillion? Trump would not only have to balance the budget but, would also have to pay off $18 trillion in debt between now and then for that to occur.
5
@Charles
I was basically agreeing with Yuri Asian in his assessment of our total debt. The point is, that much debt is only acceptable for national crises.
@Phaedrus
Believe me, I'm with you.
Ms. La Garde calls for a trading system that is fair. I find v
it incredulous that La Garde doesn't understand that the CCP isn't interested in fair. The CCP wants all the marbles in the game, and they are more than willing to lie, cheat, and steal to win. The big problem for the CCP is that they can never achieve a western style economy without giving up control of Chinese society. Unless the CCP changes its ways confrontation with the west is probably inevitable.
3
We have an unstable head of state who holds zombie ideas about things that are not within his area of expertise and who is surrounded by a cabinet of sycophants.
We have an unstable head of state who is managing areas of our governance for which there is supposed to be an appointed head of cabinet. On trade, we know he's told Wilbur Ross to stay out of it. Congress has intervened minimally.
We have an economy that is tied to other economies by virtue of trade agreements and years of corporate policy of offshoring jobs in return for cheap goods. While some might see this as detrimental to American workers, yanking deals as Trump has isn't the way to go.
Trump, overall, has cast a destabilizing influence that not even Wall Street, which had been doing amazingly well, can ignore. Stock trade, in the end, depends on companies that are stable and able to do business. Trump just slammed a huge poke in the wheel.
The Tax Scam Bill is the mother of all mortgages and a majority of the jobs that have been created are not sustaining jobs, with sustaining hours or sustaining pay.
Prices which are expected to rise not only on electronic doodads, but food, clothing, fuel and a variety of other staples, as a result of Trump's war on China, should be of concern to all. Our version Nero is burning down our economy while the Republican Congress, content to have given away the candy store, does nothing.
---
Things Trump did while you weren't looking
https://wp.me/p2KJ3H-2ZW
60
"The Trump administration also moved to more closely scrutinize corporate deals by foreign investors in the United States, a step aimed primarily at China."
China should have had the foresight to support Trump and launder their money through the Trump Organization like Trump's Russian benefactor, Putin. Guess they missed the Trump boat.
26
Now we'll really see how "gut" and "instinct" affect the stock market. It's been a giddy ride up to this point, taking gains while overlooking the utter moral and ethical bankruptcy of the Trump administration. In America, it's the God Almighty dollar which rules and tanked investments may prove finally to be Trump's true downfall. He has such an outstanding record as a don, errrr, businessman after all...
20
Good. Perhaps just a bit of sanity.
5
There is a relationship between a single one day downturn in the stock market and POTUS criticism of Federal Reserve. Because, you know it's someone else's fault and he is soooooo much smarter. From the man who took quite a while to understand why we weren't USING nuclear weapons.
17
Let the twitnit in chief tweet and complain all he wants about how Jerome Powell is ruining "his fine economy"...Drumpf bashed Yellen for keeping rates low during the campaign. When, oh when, will his boorish/cultish base realize they've been the biggest "marks" in US history? The hedge funds, the investment banks, the private equity folks all got "their" via the tax cuts and they've surely squirreled away their mega millions as the market begins its meltdown.
15
End of the empire? Or just the end of your 401? Either way, the poor working guy or gal who voted for Trump loses.
18
Maybe the drops have been because China is stealing the US blind, you know, that widening trade deficit that has actually grown under Trump.
6
No cause for alarm. I'm sure when he sees he needs to, Fred Trump will step in and fix whatever his son has broken. It's always worked that way in the past and Fred is still around, right?
13
Trump/GOP chaos economic theory working to perfection. Give the filthy rich 1% tons of free money; slap tariffs on friends and enemies alike; blow the deficit through the roof. Perfection! Vote out the GOP. Now please. Ray Sipe
36
@Ray Sipe-Add in the next cuts to the safety net (Medicare, Medicaid, Social Security) and then privatize more government functions. Voting is key but the GOP is bent on disenfranchising more voters--Georgia, North Dakota, etc. being some of the latest. Apparently, it's easy to keep people from voting.
First there was the Trump Bump.
Now, sit back enjoy the Trump Slump.
13
I can assure you one thing, if on January 2O, 2012 the stock market began to drop so far and fast that several of the worst days in it's history, if it had taken until October for it to recover just to the same place and then it lost all that value in a week, the attacks on Obama would have been defining. Instead the Times calls this a wobble and suggests that somehow it will hurt the Democrats....maybe it was all rigged by crooked Hilary.
5
It's not Trump's fault!!!
Its all the Federal Reserve!
Trump only gets CREDIT - remember that!
When the market goes up, it is *all* due to the brilliant policy genius of Trump - "reducing regulations", being tough on China, "bringing manufacturing jobs back".
When the market goes sideways, and companies (or farmers) start talking about the problems tariffs are causing - that's all Obama's fault... or the Fed's fault. Never, ever Trump's fault.
Remember Reagan, with his 'teflon suit'? Trump has teflon all the way through... solid. That's why he does the things he does - he's always, his entire life, skated by responsibility, skated by consequences. Bluster, brag, deflect, lie, threaten - but never, ever, ever take responsibility.
Question for the rest of us - Why do we let him get away with it?!
22
All is transitory.
2
Every good Republican knew through the past decades that adding to the country's debt without any plan as to how to pay that debt would put the economy in jeopardy. Every good Republican knew throughout that time that tariff wars and trade spats would actually harm Americans. I believe those good Republicans still know this. One day soon, they will act on that knowledge.
8
@Simon Potter However, the smartest ones are playing the stock market and making a bundle. The market-roiling effects are all public; you don't need insider trading access for a lot of shrewd buying and selling, as long as you aren't trying to make the last cent out of any transaction. I've heard several Republicans comment that they were stoked about doing this, anticipating what would happen after Trump won the Presidency. But, like the LOTTO, you have to be in it to win it.
Simon Potter....'good Republican' ?
That ship sailed 38 years ago.
13
I do not believe that all those sensible people have suddenly been rendered doltish or amnesiac. They have for a time been rendered impotent, or unwilling. It is a tragedy but it is not irreversible.
3
It may be worth noting for future reference that ‘The Golden Rule’ does not function well with King Midas and his court of jesters.
Glad tidings to all. We’re saying Merry Christmas again.
13
I’ve taken one hit on my retirement already (can you say September 29, 2008). Now instead of being 49 I’m 59. I wish I didn’t have to take another one. Rainbows and Unicorns.
13
@Sally Same with me, lost so much in 2008, told me I'd need to hold out another 10 years, I am NOW 65 and planned to retire spring of next year at 66. Now what????
7
Perhaps Americans voters will see their portfolios take a hit and finally decide they’ve had enough of Trump’s headstrong, nonsensical attitudes with respect to the global economy and trade. Important social issues may not register well with centrist voters, but money talks. Democrats across the country need to be talking up this issue if this decline continues as the midterms grow ever-closer. Hopefully they will capitalize and help turn a potential blue wave into a tsunami so we can get some semblance of sanity back in our federal government.
40
Herbert Hoover in 1929, Eisenhower in 1958, Reagan in 1987, among Bush in 2008--GOP fiscal incompetence in action, and its results.
74
Republicans break it.
Democrats fix it.
And the Know Nothings keep on demanding more Republican punishment.
What a dumb collection of voters America has.
30
And why should the wealthy worry about the economy? They have every incentive to crash it. That’s when they swoop in and buy real estate at rock bottom dollar and then sit on it for another generation. In the meantime, their lifestyle is not affected one whit, and they may even be saved by the taxpayers. Win-win.
108
@Louisa Glasson I 100% agree that they purposely tank our economy just to buy on the cheap. It's disgusting!
8
In the past, Donald Trump has boasted that he was responsible for the rise in the stock market so he must now take blame for the decline.
84
Let's say you are 60 and have been socking it away for nearly a decade. You have been feeling good about taking the high risk road but starting to worry about taking any more risks. The idea of losing 20% is too much. Everything political, including the impending failures of federal agencies due to mismanagement, seems highly risky. The debt picture in the US looks risky. Seems like its too late to take it off the table, but the thought of losing more messed with your sleep last night. Does this look like a Dow of 18,000?
36
In the middle of all this, the Bankrupt One declares the Fed `out of control'. We live in a very, very strange time.
83
In 1750, wealthy people owned, dominated, and controlled EVERYTHING economic, and political (and to an extent, religious and social) for nothing other than their own benefit.
Since then a variety of events occurred that changed this world order. Enlightened revolutions ushered in eras of political & economic reforms. The industrial & scientific revolutions created technologies that ushered in the modern industrial age. Populations exploded & were accommodated only thanks to new technologies that cured illnesses and produced more food.
But the most important difference during this time was the rise of a middle class driving innovation and demanding changes in the social, political and economic order. No one can argue that this was to the detriment to anyone, other than the wealthy and political elite
The middle class was the foundation of economic diversity and stability that created a vision of prosperity for generations even as the wealthy continued to prosper.
Today we are faced with a backlash from the super wealthy, those who seek nothing other than to own and control everything again. As in 1750, the wealth of the entire world is becoming dominated by very few.
It's high time the super wealthy realize that we're all better off in a situation where the wealthy do not own and control everything and where a middle class thrives.
129
Well put.
It is true also that a republic depends upon a stable middle class for survival. The wealthiest are happy with authoritarian right wing government that protects their wealth, and devil take the hind-most. A population heavily weighted with poor is ripe for revolution. Witness the Great Depression. Read Grapes of Wrath.
11
@matty This time around let's just use a guillotine of taxes.
4
@matty
Agree. With the added complication the we now posses the capacity to produce all the goods and services that we need to survive with about 50% of the human resources. Can you imagine half of the world population jobless?
And let us not get into the environmental devastation. Water wars anyone?
If we don't start engaging in intelligent conversation about this soon...
Meanwhile, back at the White House, the twit tweets his tantrums.
5
Global markets require stability to thrive. The US market also depend on stability; such as strong confident economies that can count on and trust its trading partners. President Trump has roiled the world wide economic order causing severe disarray.
Hopefully, this minor correction is just a bump in the road. Without a major change to our (lack of) diplomatic stance the long term forecast is dim.
37
Stanton's sure-fire, never-fail, ten-point primer for weathering stock-market storms.
1. What goes round comes round, i.e., market breaks eventually repair themselves, more or less.
2. Inflation is perpetual and ongoing; regardless of what the government may claim, the money in your pocket is always declining in worth.
3. Buy and hold common stocks that produce products that people want and need such as food, drugs and oil; that have long track records of success. Avoid banks and financial companies looking to make a fast buck; and flashy new technology and entertainment companies where the chances for success over the long term are slim. Boring companies that produce products like minerals and chemicals are safer and will often do much better in the long run.
4. Favor dividend-paying stocks. Avoid cash, bonds and annuities like the plague they are.
5. Reinvest dividends, whenever possible.
6. Keep informed about the state of your investments, but do not obsess about them. Checking the state of your investments on an hour-by-hour basis is a pathway to financial ruination.
7. If you cannot tolerate risk, move into a police station. Life is risky.
8. Sell only when all your instincts tell you to. Otherwise hold, hold and hold some more.
9. Gold is a good investment. But only in the sense that stocking up on guns, ammunition, canned goods and water is a good investment.
10. Save, save and save much more.
30
Well, Trump takes credit for the bullish stock market. Will he accept blame when it goes bearish? Inquiring minds want to know. Nah, I already know.
77
@Glevine During the 8 years of Obama's presidency, my IRAs had slow but steady growth. Under Trump, they seem to go up and down in a jerky fashion. And this week they've been way down.
8
@Glevine Took the words right out of my mouth!
4
The protectionism on USA goods is high because if you look at The New Zealand Whisky Collection website, under investment, they don't export to the USA and I'd say that has something to do with protectionism and that hasn't just happened overnight, as there has always been tariffs on some USA goods. The world isn't going the way of tariffs as there are lots of free trade agreements that are in progress and trending now.
5
@CKOops! A correction - they don't ship to the USA because of high taxes: You need to buy from an international stockist from within USA - Hotaling & Co.
2
@CK Yes, all the above. Analysts still try to understand the economic situation as though it was still a 1950's "circular flow" model. Not. Everything is interconnected, macro, floating currencies; floating everything. "Creditopia." Now I see DJT is criticizing the Fed. Down the slippery slope.
3
I hope the "market" takes a nose dive and stays there, which is what it should do, given that it's nothing but a rich man's shell game, with rules written by the rich men, and in favor of the already-rich man.
These people seem to thrive on "speculation." How about investing in something real and tangible.
21
Grow up, Matty. Many companies whose stock is traded on the market produce "tangible goods" and employ people to do so.
16
@Kathleen880 Maybe when those corporations you mentions start paying a living wage and reduce the disparity of wealth between the owners and the workers, we will start to care about the stock markets once again.
2
@matty Please, I have my retirement as on Optional (read Stock Market) Retirement fund. There are lots of folk like me, 65, due to retire next year, and now what? That is all I had to live on. Took a big hit in 2008, and they told me if I could hold out another 10 years, I'd be OK. And I am NOT a rich man.
6
Why isn't Trump bragging about the market now?
48
This can be Mr. trump's tweaks?
2
This drop is going to continue and get even worst . The pretend economic growth that trump said was the greatest is now on the way down.
25
There is literally no support whatsoever historically for throwing wealth at the very rich while starving the poor. This cruel method invariably leads to economic collapse. Noam Chomsky has written about this most cogently in recent years.
The clown, Trump, is a shield against the Social Darwinist/Fascist ethic that is fully integrated with the current, decayed Republican party ethos... starve the poor. Let then eat paper towels. Take their insurance. Pollute their streams. Foul their air.
Take their money. Prop up the country clubs the Mar-a- Lagos and the gated communities, and in point of fact initiate a kind of slow genocide of all but the billionaires. Sure enough, you will collapse the economy every decade or so.
53
What did your mommy used to say?
" too much of a good thing ( candy ) will make you sick"
The economy is red hot.
Everybody has a job.
Things have not been this good in many decades.
A cooling off period is needed.
If I had to pick a good reason why the market is down,,this is it.
Unfortunately politics is in play , again, and there are some here that hate Trump so much that they would rather see the market go down and loose their own money.
A powerful form of hatred to have to live with , I feel sorry for you.
4
@Joe Paper, I didn't see the part of your comment that also thanked Obama since he got us out of the deep recession of 2008 and at least 3/4ths of the jobs that were created since then occurred under his watch not to mention that last quarter's 4.2% growth rate would have only been 4th best during the Obama years. Perhaps the higher debt shown in this chart under Trump plays a factor in this: https://stevenrattner.com/2018/10/morning-joe-charts-the-sting-of-higher...
Take a look at how much the issuance of debt has gone up and is projected to go up due to the tax reform bill from last year.
37
@jonathan
Johnny,,I say what I see.
Everybody , every contractor, every store, is busier than ever.
Houses sell in days.
Help wanted signs up and down the highway..good jobs.
Local factories expanding.
What did I see during the Obama years?
Gloom and doom.
You know that....your smart!
@Joe Paper Do not conflate the desire for financial trouble with a dislike of Trump. No one "wants" bad times. However, Trump is giving us lots of bad times. There's no good reason to send markets into anxiety, but his policies do just that. That's not good governance.
(Oh - and he's a terrible person, too.)
15
Just in time for midterm elections! Nothing like a significant market correction to generate enthusiasm for the opposition party.
Let's listen - do we hear Fearless Leader crowing about 'what I've done for your 401(k)' at the next gathering of his bellowing, red-hatted lynch mob? Of course, in the Brave New Fact Free World, he just might do it anyway. After all, those folks are gathered to hear Trump's Greatest Hits, not to grapple with reality.
33
@chambolle I expect him to do exactly that: he'll claim that someone else is causing this market crash and that his policies are the only way to stop it. His cultists will believe him.
7
This self-inflicted market sell-off is single handedly created by Trump's protectionism and initiation of tradewar.
48
I wouldn't call it a "wobble", I would call it a Crash.....no the question is just how did crooked Hilary cause it?
43
Who cares about China, etc? With the gloomy news coming from the IPCC, that to me is the impetus for the stock drop. It's time to pause and take notice that our life support system is in peril. Economic growth is nothing compared to what humanity is facing. Carbon tax here we come! Let's do it now. There's no time to waste!
17
The "Trump Bear Market" is upon us. The reasons are the trade war with China, the "Trup Tax Cut" for the ultra wealthy causing the $1 trillion deficit, the lousy salaries paid to the average worker in the US, who cannot afford more than bare necessities or decent health care or a secure retirement. In addition, many of the under 50 year olds have college debt that crushes them. I am surprised this did not happen earlier.
34
It's just the large investors cashing out the gains. Stock increases don't matter of they are only on paper. Once the market has dropped enough they will buy back in with many times over the buying power.
5
The stock market went up almost every day during Trump's reign. That is NOT normal. It doesn't even seem possible. Maybe if we were coming out of a recession and there was a major recovery going on. That was not the case.
My thought is that the stock market was voting for themselves everyday since the election. They've been manipulating the market for their own gain. Economic indicators and reality have been waiting in the wings for months.
Now Trump says the Fed doesn't know what they're doing, and he's the genius. MORE LIES.
Who ya gonna blame next, Donnie?
53
@TrumpLiesMatter
The buck stops ANYWHERE but here. Our POTUS.
7
@TrumpLiesMatter
He'll blame Soros. And you know who that really means.
5
@TrumpLiesMatter Yes, the market went up because of the tax cut stimulus injected a lot of cash into the economy. The pros expected corporate profits to increase. Simple. But the tax cut is like drinking another shot when you are already twice the legal limit. You may feel good in the moment, but it's going to be a massive hangover. And it will be compounded by the disastrous tariffs.
1
The Chinese economy suffers from excessive government intervention while our American economy suffers from too little. Despite President Trump’s unwise politically motivated initiation of a trade war, our government must take measures to democratize our financial system and corporate governance to promote broad prosperity and reverse the inequitable concentration of wealth at the top of the socioeconomic ladder. After all, we are supposed to be a democracy. (Cue up the laugh track). We must accept the fact that there is no such thing as a free market economy devoid of government intervention. Governments routinely pick economic winners and losers through their lawmaking and regulatory powers. The issue is finding the proper balance between government intervention and market freedom, one that preserves freedom, promotes invention, and rewards risk-taking while creating the broadest prosperity possible and promoting social responsibility.
8
The Fed raised interest rates 3 times in 2017 during which time the DOW grew by 25%. Blaming the current drop in the market on rising interest rates is absurd. Of course we have the chaos of Trump’s trade wars but I’m not sure if this in itself spooked the market. Someone more knowledgeable should fill in the blanks on overvalued stocks, p/e, etc.
10
Lots of start up NZ businesses are getting crowdfunding to grow their businesses and that way they don't have debt and interest rates don't affect them.
Also, think of it this way, it spreads the wealth around instead of a selected few people owning everything so the more of the public that profit from the businesses growth through shareholdings then the more locals who spend locally so businesses profit and the governments tax take goes up.
I've bought a few shares on Pledge Me start ups that want to expand their businesses; medicinal cannabis, Ocho chocolate, and intending to invest in The New Zealand Whiskey Company. When the economy collapses people always have money for booze, chocolate.
5
A pretty tortured analysis to arrive at a conclusion that confounds 100 years of market history.
Interest rates going up is not good new for this market. The notion that rates will rise as fast as they are, but that inflation will not result, is flat wrong. In fact, when interest rates are as low as they are, even small moves in interest rates can have outsized inflationary impacts. Mr. Irwin is whistling past the graveyard.
The market has not yet digested the recent increase in yields and the new Fed Chair promises further increases. Each time, the market will fall.
Interest rates, in any event, are not the only concern about inflation by any stretch. Trump's tariffs have not yet had their full effect, the deficit is rising, and there is no one at the economic wheel.
The market is struggling today, but it's still a pause that refreshes, draws in rookie investors, and will then drop again.
I don't think this column represents advice that seasoned investors will follow. We are all scratching our heads as to why stocks and bonds fell the same day yesterday.
I'm in cash.
8
This sell-off is overdue but it's more about the trade tactics than interest rate increases. The pResident should take ownership of this selling just as well as the credit for when it was going up.
Heading into the elections too. Nice timing .....
16
@Heywally Maybe this is Wall Street voting against trump. Interesting thought.
8
Hold on to your hat, it's going to be a bumpy ride.
14
I’m so glad that I never bothered to become emotionally attached to a political party.
Also, that I made sure to learn what ‘bad faith’ actually is. And now I’m nauseous.
3
@ubique
Nausea sounds about right, as I begin the slow drawdown of son's college savings....
I acted in good faith and feel a bit duped by the fact that this sell-off is probably related to tariffs and the TCJA deficits.
1
@Lydia
Brace for impact, and don’t panic.
"It seems that the economy always does better when the Democrats are in charge." - Donald Trump.
You can find video of him saying the above comment.
21
@susan Historically, that has been true.
3
This may be what not knowing anything about economics, world trade, and just plain un-fradulent business looks like.
Are you tired of winning yet? Tired of being in a reality TV show you otherwise wouldn't watch in a thousand years?
31
And Trump's latest whipping boy is the Federal Reserve. He is incredibly adept at blame shifting, and has almost elevated it to an art form.
15
World Markets down. Thanks Trump. Chaos President "Promises made;Promises kept". Trump is delivering on this one. World Economy in down spiral. GOP ; crickets. Trump playlist of World Hate is paying deep dividends for Trump; for us citizens; not at all. Ray Sipe
14
Who is surprised?
It takes the Democrats
years to rebuild until
greedy Republicans
want so much that it
crashes (again). The
.00001% are not hurt.
They have so much
they can gamble for more.
The little & middle suffer.
52
America is just another casino for Trump to bankrupt.
183
“Joe Torres signals to the bullpen *enter the sandman blares on the speakers* here comes the closer Barack Hussein Obama from the bullpen to save this game once again”. If only we had a bullpen for when things start going south and we can pull the starter....
8
Just more "American carnage" due to Tariffer Trump and his trade war. It's October; it's the time when all the wizards of Wall Street are back from the Hamptons and taking stock (pun intended) of the trade war between the world's two largest economies, the rise in interest rates, the massive U.S. debt, and the end of the tax cut sugar high. A perfect storm is brewing and it's not Hurricane Michael; it's financial deregulation; massive U.S. debt resulting from an unaffordable tax cut forcing interest rates up and up; and the economic shock of China-U.S. trade war. Could it just be 2008 "deja vu all over again"?
31
and gold is finally panning out (pun intended)
7
The Times gives little attention to market increases, except to note that they are tenuous. But when the market drops a couple of percentage points, it gets lots of attention.
The market has done well under Trump. And those of us who despise him need to put that into perspective. Suggesting that a crash is on its way is not objective reporting. What is objective is that the market fluctuates in a way that often has little to do with economic trends.
6
The gains of the last year vanished in two days. It's a big deal
20
@Angry Just my point. You know when the market declined. What you don't know is that it quickly rebounded to all time highs.
If you just know the bad stuff, you're a skittish investor. Moreover, the market has risen so much that a 5% decline, which would be newsworthy, would require an unprecedented decline of 1300 points on the Dow.
A 600 point decline in the Dow is about 2%, which is not newsworthy. But the Times is reporting it on the front page.
@michjas Wait. It isn't over.
Why all the partisan attention to the stock market? Most Americans are not directly affected by its ups and downs. It is not a measure of quality of life, and it is not a measure of the prosperity of most Americans. If you are not rich and living off gains, or about to retire, or ready cash out a 529, this news probably has little direct impact on your life. It is only one indicator of the economy. Yes, there is cause and effect, but that is more complicated than "Trump did it, in the oval office, with a pen."
1
@Syliva, the Times has always reported on the stock market. Reporting has nothing to do with being partisan, and the market's ups and downs directly affect millions of Americans, especially those who invest for their retirement.
Should the Times report on the downward pressures on the stock market, such as rising interest rates and the trade war with China? I think so, because investors make decisions based on those pressures. Nowhere in the article do I find your phrase "Trump did it, in the oval office, with a pen," but his trade war certainly contributes in a significant way.
31
Why all the partisan attention to the stock market? Perhaps because Fearless Leader crows at every opportunity about the rising Dow as an indicator of his 'winning' strategy?
Perhaps because with every fresh abomination, with every new wave of chaos emanating from the White House and Trumpublican enablers in Congress, the retort is always 'are you complaining about this miraculously strong economy?'
Perhaps because one of Fearless Leader's sure fire applause lines, during his frequent taxpayer-funded appearances before carefully screened red-hatted mobs is "how do you like your 401(k) now"?
It's true, most of those folks in red hats don't have enough money in the stock market to pay grocery bills for a week; but that doesn't seem to matter to them, any more than it matters that the 'big beautiful tax cut' is going to a handful of people wealthier than they can imagine; or that nobody is really 'bringing back coal,' a fading industry that employs fewer people than amazon employs in Seattle alone; or that the U.S. trade deficit is headed up, not down, despite Trumpublican isolationist trade policies.
The U.S. economy isn't a closely held business; and its leadership can't beat its chest about 'all this winning' when the picture is rosy; and then hand the disaster to the Bankruptcy Trustee and the creditors' committee when it goes bust - while walking away with a nice fat monthly allowance for the private helicopter.
Perhaps the red hats will understand that much.
11
CNBC today. Roger McNamee , age 62, says he is being conservative with his investments because a long down-in would be harder to recoup in stocks at his age. (Hmmmm?) He appears to lean towards intermediate treasuries now.(Hummmm again.) I just bought some value stock in my Vanguard account anyway. Not much, but this is a new fund for me, and I bought in high and may as well catch some bargains now...?
1
This is a harbinger. The financial system set up by 2016 Republicans is a sure-fire train wreck, and every American knows this, at least in their hearts.
I doubt Black Friday is tomorrow, however. I don't expect the depression to hit until 2020, with 2019 being up and down.
At the end, the U.S. will be bankrupt and/or will be using Medicare, Medicaid and Social Security funds to pay interest on the debt caused by the tax reduction for corporations and rich people.
This is going to lead to a world-wide financial conflagration, and, I believe, Russian, Chinese and Saudi oligarchs will own America. That probably will spark war of some sort.
44
It took 7 years for the Bush Jr. tax cuts and spending increases to destroy the economy left to him by President Clinton. Trump has done it in less than 2 years.
278
@HL: The economy grew at a 4.2% clip last quarter. Unemployment is at an historical low of 3.7%. More racial minorities are employed that at any other time in our history. The stock market achieved record highs numerous times in the past 2 years. Americans have more discretionary money in the pockets due to the Trump tax cuts. And you call that a "destroyed economy". Nobody ever said Democrats, liberals and progressives were honest.
3
@paul Our annual budget deficit in this fiscal year is 350 Billion more than the annual deficit when Obama left office.
Interest on our debt is going to be higher than our defense spend. Stop pretending you're a fiscal conservative. There is nothing conservative about the theft of the US treasury, public institutions and lands. Blaming this destruction of the future of the USA on liberals, Democrats and progressives makes you sound like a Russian bot.
12
@paul
A dose of reality to counter your "alternative facts":
The last time the economy grew at a 4.2% annual rate for a quarter was in 2014. Don't recall Republicans referring to 2014 as boom times. So far, GDP growth under Trump has been basically a straight line continuation of what began under Obama, juiced slightly by the combined fiscal stimulus of the tax cuts and spending increases passed in late 2017. That small uptick in GDP growth has also come with an increasing the deficit back to nearly 2010 levels, but with no Great Recession to blame this time.
Unemployment fell from a high of 10% in mid-2009 to 4.7% in 2016 when Obama left office. The current unemployment rate is nothing but a straight line continuation of that trend. Same with minority unemployment which also fell precipitously under Obama. Job creation was actually down in 2017 compared to 2016, and is below 2016 pace still as of today.
The S&P 500 grew at an annualized rate of 16.25% under Obama. That is the 2nd best out of the last 15 presidents (#1 was Clinton at 17.49%). Trump ranks 6th at 15.35% - before the recent 3% drop. Hard not to hit records when starting at near record highs.
Real post-tax wages are down despite nominal wage increases because of an uptick in inflation which began in 2017. Inflation that is no doubt strongly linked to the counter cyclical stimulus of recent tax cuts & spending increases.
Destroyed the economy is hyperbole, but so is any claim of real improvement.
8
What we're seeing now: bubbles pop - and the hugest Trumpian bubbles of all leave us with nothing but a sorry wet trail of back to the blowhard who inflated them.
We should be smarter than this. Obama rescued the economy after the last GOP administration bankrupted it. Instead, Republicans voted in a 6-time bankrupt president. Why? It's a lot of fun for wealthy people to spend other people's money. While Republicans spend and spend to the tune of Trump's irresponsible trillion dollar deficit, Democrats understand that we need a functioning, sustainable middle class to drive real demand for goods, services, real estate - and logical tax and education policies that reinvest in the infrastructure that builds individual and corporate financial success. In short, Democrats work to elevate the whole playing field instead of propping up an oligarchic few while the vast majority suffer down below. It's hard work, for committed people - and there are no shortcuts.
VOTE Democratic for real growth and prosperity. The lasting kind.
200
I left out a word - probably obvious!
...trail of slime...
6
You are joking, right?!
@common sense advocate
Hear, hear.
1
Why did the fed raise rates when the data shows inflation is soft and not a problem? What is the uncertainty in their forecasting? That seems like a good way to choke off growth. Maybe they will skip the next rate increase. If most of the loans are in US dollars around the world then low inflation makes it harder for those companies to pay off debt.
If bond yields are higher then it makes sense that people would diversify into what is considered to be the safer asset. However, I think this puts us in a better place to avoid a bond yield inversion.
2
@PictureBook
Inflation sure is a problem for me! It is contributing to the bigger than expected deficits this year, which in turn gave cover for the president to say "there's no room in the budget to give the federal workforce a wage increase" which in turn will mean I have less purchasing power than I did last year (even after factoring in any changes to my bottom line from the TCJA).
Granted, it isn't the Reagan years, but inflation is certainly cutting into my purchasing power right now.
19
@PictureBook Because high interest rates benefit wealthy investors which is the main goal of this corrupt administration.
7
If not for Trump and his dopey trade wars, this economy would still be soaring.
16
That plus the tax cuts and huge increases in spending.
15
The only way we can get away from this false idea that the stock market is a measure of the actual economy for everyday schlubs like myself is for news outlets like the NYT to stop obsessing over it. So the NASDAQ dropped 4 percent. Ask how many people this affects. Answer: 1%.
22
@MR
More than half of Americans have invested in equities over the last half century. Many Americans do not even realize their 401k’s and Pensions are invested in equities.
19
Whay happened to the Trump Bump??
More like Trump Slump/Trump Dump.
And, this free-fall is happening with the election just 26 days away!!
More tariffs...more tax breaks for the 1%ers...more, more, more.
24
Likely a Trump "Pump and Dump" -- we should demand that the SEC investigate trading activity of the Trumps and all their associates before and after comments and actions that DJT has taken to artificially put his thumb on the scale of the DOW.
13
This is a strange article. The volatility index opened today a touch lower than yesterday, but still much higher than any time in the last three months. To make an article stating that anxieties are relenting that is counter to an actual measurements of such anxieties seems to just be poor journalism.
7
Trump the chaos President. Chaos in our Economy is Trump's fault. Vote out GOP. Ray Sipe
26
Not very good reporting, the NY Times shouldn't be second guessing markets. As I write this (11:20 AM Eastern time), The S&P 500 has fallen over 1% today. Stop this kind of reporting.
2
90% are computer trades, beware the quants. They don't care if it is up or down.
7
The world economy is like a stone soup. We all add a little of this or that and hope it tastes okay and that there is enough to go around. But now it’s turning orange and has a bunch of yellow hair in it and nobody wants to be the first to sample it.
13
@R. Koreman --- Trump thought he was the soup stone. Where everyone else would be bringing edibles to throw in the pot, while he supplied nothing but the myth.
20
Brilliant.
Periodically, for as long as I can remember, we're treated to pictures of anxious traders on a floor somewhere, looking up with concern at a declining board. The next week/day/hour, the market stabilizes and they get back to their usual numbers-game grind of making obscene money for themselves and the rich, with a few dollars going to modest investors.
If this were actually a useful enterprise culturally, socially, even socio-economically, ok. But it isn't. It's a minority of people getting richer, then poorer, then richer again. Not relevant.
34
@James
Except if you have a 401K or pension you are one of the people whom this directly affects. Definitely Relevant.
2
I blame this all on Jeff Bezos. He gave his workers a raise so all Amazon employees will now make a minimum of $15 hour. And then he called for all other companies to do likewise.
Everyone knows that inflation is never seen as a problem until worker's wages start to rise. The second that worker's wages start to climb the alarm bell rings and suddenly the sky is falling.
But it wasn't just the announcement of Bezos ratcheting up wages. It also was the delayed reporting that those wage increases came with loss of bonuses and stock grants to employees.
Considering the Trump tax cuts flooded corporate boardrooms with tons of heady cash for stock repurchases, increased dividends, and CEO bonuses, and the fact they have been quite stingy letting it trickle down to their work forces, This bit of Amazonian slap-and-tickle landed like a thud in the punch bowl.
What better a signal needed for all those companies and high rollers recently cashed up on newly engorged stocks to give themselves an early Christmas present by taking a little some-some off the table.
Plus the sell off was large enough for the shorts to pull in a little early Christmas cheer as well. Holiday season started early this year!
12
@medianone --- Should have included that the above comment was a bit of tongue-in-cheek sarcasm. Everyone likes to boil complex issues down to one "Lock her up!" chant or soundbite, so I took liberties invoking Bezos as the reason the sky was falling this week.
14
A "correction" was inevitable. Ultimately the market will have to survive without public assistance, or be replaced as the paradigm of the US economy.
4
@RC
A very sane comment.
At 68 I have seen the stock market do this many times.
The 2007 - 2008 crash was predicted for a couple years before it happened.
In the last few years we have heard from some of those ( that predicted the 2007 - 2008 crash) folk trying to ring bells about this.
Now we have a POTUS telling the federal reserve that raising borrowing rates to counter inflation is a bad idea. This is after Mr Trump instituted taxes on our allies as well as our competitors. As well as giving corporations a permanent tax rollback and an expiring tax break to most folk that is actually minor. That tax rollback will increase the national debt to almost 50% of the U.S. GNP.
I cannot exclude all this from this a possible recession. But I truly hope I am wrong.
10
Since you haven't been covering the fact that the Dow has never returned to where it was in January you might hold off until the end of the day on your rosy predictions. As I write this the Dow has fallen 250 pts. While no one could conclude that the Times has been overly favorable to Trump, the business page has systematically hyped every positive index and played down wage stagnation, under employment, dropping out of the wage market ( I have not been able to find a job in years, though I have 25 years of teaching experience) and inflation. Without Krugman ( and who is he, Nobel pfft!) you would think we have a golden age where all boats are rising.
12
@Greg Jones If you have not been able to find a job, you are looking in the wrong places, or expect some employer to pay you for skills that aren't applicable to the job market. There is plenty of work out there, just not the work that you feel is your entitlement.
1
@Ernest Montague You do not know me and so this statement is uncalled for. Yes, at 57 I could try to get a job cleaning tables at Panera. I would suggest that you would not take this job if you were a lawyer in California and New York and a former faculty member at Rutgers, as I was. I may not be entitled to jobs in these professions but that doesn't make me deserving of jobs that would be an utter humiliation for an adult.
1
actually there isn't. he said he was a teacher. 25 years of teaching experience. that probably puts him in his 50s. you can not find a job that pays a liveable wage in your 50s. God forbid you try to find a job to make mortgage payment in your 60s.
11
We live in a global economy. When the US market (the largest) gets a chill, the rest of the world catches a cold...we are so interconnected. Unfortunately US leadership, believes that we live on a different planet. We are now self-sufficient in gas and oil, and no-one else matters. Except for the very wealthy, American businesses generally speaking are having their global supply chains disrupted. It is the S&P500 companies that are responsible for over 80% of the economy and most American jobs who are the "victims" of our leaderships short sighted greed.
For the world to flourish economically, we really need to go back to "free-trade" where market rules apply. If a country such as China imposes an import fee on US goods, then a similar fee will be applied to their exports to the US.
A simple way to level the playing field is to put an import fee on the Carbon content of goods... and impose a Carbon Fee and Dividend tax on the Carbon (Oil, Coal, and Gas) producers in the US. Imported Chinese goods would pay a fee based on their Carbon foot-print. The fee, as a dividend will be returned to all working American families so that all Americans can use the power of the market to improve our nation's health, reduce the impact of Climate Change.
We need 21st Century methods to improve the quality of life for all humans. Not go back to the 19th Century as advocated by the US government!
18
@Geoffrey Brooks --- Going along with your thoughts on selective tariff... why not put a floating tariff on the wage component of imports manufactured in low and slave-wage countries. Where the tariff would be equal to the wage differential in the production/manufacturing phase between those countries and the U.S.
9
“How you react to the so-called housing bubble can be a barometer of your business personality. Are you the type of person who takes advantage of positive situations when they present themselves…or do you heed every message of doom and gloom, avoiding risks that could be some remarkable opportunities?” Donald Trump wrote in a 2005 post on his Trump University blog.
“Is it the so-called bubble you're afraid of or is it hard work? If you're willing to do what it takes, you will succeed in any market,” Trump said in his 2006 audio book “Bubble-Proof Real Estate Investing.”
And when the Great Recession came and the American housing market crashed economies around the globe, Trump's "business personality" was revealed when he chose to avoid "hard work" and instead defrauded middle class Americans with a sham University -- as well as a pyramid scheme (Trump Network) -- peddling smoke and mirrored fantasies from his three-ring reality show platform.
55
@D.A.Oh Good points. But also realize that this is the work of a ghost writer.
A prolonged 5000 point drop in the Dow is the best chance we have for getting rid of Trump.
I am rejoicing in the recent decline of the stock market and hope it continues to drop precipitously.
12
@A. Stanton
Can you afford that?
I hope so.
@Alecfinn
What I can't afford is any more Trump.
IMHO, The drops are NOT about fears of an interest rate rise; that has already been built into prices of stocks and bonds.
We had a extended period of free money for corporations, with interest rates so low they hurt plain vanilla savings, This could not continue in the face of full employment, skilled labor shortages, fully valued stocks and increasing inflation.
Large corporations operating in the US have built up huge cash reserves - NOT because of the buying power of consumers, but because money was cheap for over 8 years, and now, the tax change confirmed that they can keep more of that stash.
But what is driving volatility is that no one knows what is going to come next in trade rules and restrictions, and the US' erratic multiple foreign policy moves.
Trade is global: what upsets the world is going to upset us. Even if - a big if - the US can force the Chinese to operate with more 'respect' for intellectual property, change alone makes for volatility. (And who has figured out what the Chinese could do with their ownership of US securities?)
TenCent was mentioned: it had a total return in 2O17 of 113.39%: that puts recent drops in perspective.
Initiatives against other countries are confusing and are increasing the costs of some US businesses right now, whatever happens in the future.
Short selling among big hedge funds, who have been hoping for a "real" correction, just paid off on the recent drop.The trading increases volatility.
10
What was it our doomsday president said about winning at tariffs? "It's so easy to win, so easy". Anything is easy if you don't know what you are doing and you don't care.
40
C'mon Trump ! Don't break the bucket, spill the beans or do the things that aren't helpful to economies, trading nations and prosperity...
I'm an Aussie and we haven't had a recession since 1991 and were hoping we could get by and maybe sneak through having one ever again...we got through the GFC ...but you are sure making it difficult for us to escape what's coming...
Come on! Pay your Workers more ...and make sure Business doesn't get away with throwing out the baby with the bathwater and then get caught stealing the Kitchen sink and selling the bathroom to shareholders 5 times!
Pay fair, create demand and growth by ensuring people have enough money to spends building profits, revenue and business!
Give All workers 4 weeks paid leave like everybody else on the planet has for decades! Immediately double the hotel, travel and leisure industry and economy when everybody takes 5 weeks off a year!
OR...Pay peanuts, demand unpaid overtime, impoverish the workers who are also the consumers and wonder why business is not as it should be or could be.
Its NOT Rocket Science it is a recipe for National Prosperity....that thing that happened from 1948 to 1980 and created 150 million middle class successes!
You are racing your nation and its people to the bottom of the bucket just so a few wealthy but always greedy can make a few more bucks from an ever smaller pool of people who are treading water or going backwards just so a bunch of rich break new records for inequality.
102
Amen!
4
Well said Loomy!
2
@Loomy-Bless you. I hope your economy doesn't take a hit too.
Do not believe anything Wall Street experts tell you. The market was up and down for months before it crashed in 1929. Then they were the ones jumping out of windows.
Think about the reality. BIG investors are in a frenzy buying up the best land in the world - and housing around the world - because land is the only real asset we have. They already control the housing/rental market in America.
They are using bitcoin and other crypto currencies so they can trade among themselves - tax free - while the rest of us sink in the quagmire they have created.
Anyone who still has 401K money in the "market" is nuts. Get it off their craps table and put it in IRA CDs in your local credit union and/or bank - where it will serve your community - or put it into U.S. Money Treasury Fund at T.Rowe Price or some other reputable firm. Your money will still be tax-protected until you retire but you will not lose another dime.
That is not until The Con Don changes the rules and take away the tax deferral on 401ks.
Have a nice day.
33
@njglea The magical they.
2
My grandmother had no education. She grew up in the depression and never made more than 15K in her life. She died at 88.
She invested small amounts in stocks as low as 1 dollar beginning in the 30's. She had a very nice retirement.
It's nuts to listen to advise. It's not nuts to buy stocks over time at a rate you're comfortable with and ignoring the noise.
I can't predict what the stock market will do during any period of time. What I can predict is people will sell low and buy high unless they stop trying to time the market and average their cost by both buying constantly or selling constantly as their personal circumstances dictate.
4
@njglea Cash out your equities and buy some CDs or maybe some inflation protected Treasuries? That is great advice - if you can live with a 1% rate of return net of inflation.
For most of us, not losing money isn't nearly good enough. The median retirement saver will never accumulate enough without compound interest working in their favor. For the numbers to work you need *something* to compound and earning 1% on 1% year over year isn't going to cut it unless you don't plan on living very long after you quit working.
1
The stock market is like anything else in human behavior. React before thinking. It’s mob mentality.
13
Trump will play another round of golf while pondering: who can I blame for this?
Hint to Trump: look in the mirror.
In the meantime, Republican members of Congress send their thoughts and prayers.
69
@EdH-Speaking of golf...
Trump's golf tab for taxpayers: About $79,000,000**
https://trumpgolfcount.com
Talk about the Fundamental Contradiction...
While the status quo is still good, risks are increasing.”
3
This is a much needed correction. The American boom was nothing but a flash bang, a lot of smoke and mirrors. The economy is awesome! Look at those job numbers, those corporate profits! Except all of it was borrowed from the future, which is coming at us much faster than we ever imagined.
Have a look at how China's central authority keeps things humming along. "Worried about the impact of negative information on its citizens, China has censored negative economic news." Not so different from our modus operendi.
I guess it boils down to your capacity for self delusion, how desperately you need to believe in all the things you've been conditioned to believe in - a way of life that demands you give up a huge portion of your life to working for the things that make life pleasant; a large house with a lot of stuff in it, large cars; and a large debt that keeps you chained and the wheels of commerce nicely oiled.
Those pesky kids who have looked at that trajectory, decided that with the two jobs they are working just to get by, they can't afford it. They're the ones ruining it for everyone else. Hey, why do they get to not be slaves to the god of consumption? Isn't it their patriotic duty to keep up. What else is there?
Plenty is the answer and it's my fondest wish more of us get to discover that before we ruin this beautiful place we call home with our insatiable consumption.
The stock market is tumbling. Awesome news!
12
@Memi von Gaza -- "capacity for self-delusion" I suspect correlates very closely with voting Republican.
1
Just another Wall Street profit-taking cycle prompted by approaching mid-term elections. Will cycle in typical pump - dump - buy - repeat that generates billions in profits for electronic traders. Great for Wall Street and devastating for Main Street 401ks.
8
Joseph Kennedy once said in 1928:
"You know it's time to sell when shoeshine boys give you stock tips. This bull market is over."
10
Trump has taken credit for the historic Market climb. Now he will blame Obama for the slide.
112
@RLW why, he still wants to lock up Hillary.
2
Risks have been accumulating for a while.
When "Wrong Way" Larry Ludlow replaced Gary Cohn as Economic Advisor, documents stopped disappearing from Trump's desk and were signed instead.
With Cohn out of the way, vulture capitalist Wilbur Ross, who is reported to have stolen $120 million from business partners, teamed up with fringe nationalist economist, Peter Navarro, tariffs starting flying everywhere.
Domestic steel prices have risen 33%, Ford is laying off 12% of its US workforce, oil prices are ratcheting up in response to upcoming sanctions on Iran, agricultural output planted for export is piling up, Canadians, our largest trading partners, have taken the pledge to stop buying American and we are running a $1 trillion deficit in an already hot economy.
What could go wrong?
If you have some life savings and can move a little of it into safer assets every time the Trump Administration does something that appears economically wrong headed, you will be better prepared to survive the inevitable GOP wreckage without selling the rest at a loss.
119
Eighteen months ago I needed a AAA tow. The tow-driver was a chatty guy who’d been on the job years, and as I rode in the cab with him to the garage, I asked him what he thought of the new President. He pondered a while then responded: “Well, my modest IRA is doing well, and everyone keeps saying he’s a successful, clever business man, but then I think that he bankrupted a casino. Who bankrupts a casino?” These words keep returning to me.
421
@scamp02 There are two businesses that either a fraud or a mental incompetent can bankrupt: casinos and brothels.
2
@scamp02
If it were possible to send friend requests here I would be sending one to you...
1
@scamp02
Just about every large-scale casino in the US has gone through bankruptcy at least once.
Markets go up and down. That's why they are called markets. Chasing short term gains, and selling on the big down days is a fool's errand. I have watched friends and relatives lose big money by doing so, especially in 2008. Invest in good stocks and funds, and sit back. Don't fall for the doom and gloom purveyors.
14
I'm not a speculator, but simply a long term investor. My parents were regular middle class people who taught me the importance of saving a small portion of your earnings every year and putting it into mutual funds (there were no ETF's in those days). Don't panic, the world is not ending and unless you are in dire needs of your long term investments- just sit tight like I am.
A few years ago, I engaged a low cost robo-advisor to manage my investments for me and automatically rebalance my retirement portfolio to my desired risk tolerance based on age and my retirement timeframe. If stocks fall, they simply sell bonds and buy more stocks at low prices. It's very comforting to know that they will step in and do so at no charge to me when restoring balance is necessary.
4
Trump replaced Janet Yellan before her tenure was over. Now he’s unhappy with his choice and the decision to raise interest rates. And of course there are his tariffs, and massive deficit. Wall Street is happy and taxpayers suffer.
17
Biggest factor - the Fed raising the interest rate for no real reason except that after two or three years of talking about it they decided its time to curb impending inflation. Pitiful academics. If it ain't broke don't fix it. For them to bungle on top of the administrations bizarro wanton economic policies is just the icing on the cake.
6
@Victor Huff I always know when to stop reading the comments because they stop making sense when I reach a certain level down in number of recommends. You're the stoplight today.
9
Everything Donald Trump touches eventually goes into bankruptcy. The US and world economy should be no different.
But the GOP got their huge tax cuts through so who is worried?
293
@avrds Please see:
https://www.youtube.com/watch?v=ZtparSnQhFc
1
Here it comes, ladies and gentlemen. The biggest global meltdown since the depression.
Don't worry though. The Con Don and his International Mafia Robber Baron cabal will be just fine. For every dollar you make on your 401K people like Carl Ichan makes $1 MILLION.
Losses do not evaporate. For every dollar you lose they MAKE $1Million.
The global markets are all on paper. China has assets to back up their paper. The U.S. does not - the assets have all been outsourced to China and other countries.
Please, do let panic, fear and anger overtake you and do not panic. WE THE PEOPLE - average people around the world - must help each other. Do NOT let them start WW3 in the chaos that's coming.
Not now. Not ever.
75
@Elizabeth Carlisle How was it doing before Trump's election?
2
If you're a longterm investor like myself, stocks are on sale this week. Hopefully you have some cash lying around to buy. Don't panic. Don't sell.
26
@Nick How many people have any idea what their IRA and 401K managers are doing? Even if they did, how could they affect it? It's sheep shearing time.
4
@Nick
Bummer that the only thing I will be doing over the next few years is selling as I and my son's 529 sell off shares to pay for college...
I hope when it is your time to enter one of the "spending periods" you are saving for, your timing is better than mine.
3
If you listen closely, you can hear the Democrats cheering. There's nothing they like more than a failing stock market, or bad economic news. It all fits their left-wing agenda: "you can't count on Capitalism to save you--only Democrats and their Big Government agenda can make your life better".
In reality, it's economic treason--Democrats cheering for bad things to happen to the nation--so they can gain power.
9
@Jesse The Conservative Democrats cheering doesn't cause the Stock markets to drop. That happens due to bad policy.
12
@Jesse The Conservative
I don't hear any cheering. I'm a Democrat and all I hear is the wailing inside my head as I contemplate paying for college this year from my savings and (shrinking) investments.
10
Jesse, I’m not cheering. Trust me on that.
12
Don’t look now if you have a weak stomach, but the stock market just got sick and tired of winning.
31
It was very stupid for the Fed to raise the interest rates the world have changed dramatically, economies are interconnected and even lowest unemployment and the highest economic growth have limited influence on inflation. Due to globalization excessive demand in the U.S would trigger more imports instead of inflation.
Increasing the interest rates will have only have downsides:
1- Greatly harming U.S companies competitiveness, and capacity to raise affordable debt.
2- Stifling the wage growth specially among the middle and the lower class
3- Reducing economic growth
4-Currently the tight job market give confidence for the employees to resign and look for more fulfilling jobs, and now this will be over
4
Trump already has failed, we’re just waiting for the other shoe to drop.
131
Markets are cyclical and this up market is long in the tooth. I fully expect a significant downtown before Trump is out.
73
Trump's scorched Earth, poisoning the well strategy is only going to lead to a world wide recession. A recession probably as bad, or worse, than the one 10 years ago. Throw in an administration who is making the economy look more rosier than it currently is, causing the federal reserve to tighten monetary policy (raise interest rates). This is now creating a downward spiral.
Meanwhile, for most Americans they are still waiting to recover from the Great Recession. There are many people who are not in the work force, because they cannot find work. Those who are working, are not seeing wage increases matching inflation. The real winners, in all of this, are the 1%, home owners in hot real estate markets, Wall Street investors and corporations.
The tariffs, coupled with tight monetary policy, is going to lead to another US created world wide recession. Another one formulated by the Republican Party, and a president, who may have a degree in economics, from Wharton, but has absolutely no clue about economics. It makes one wonder how much is father contributed to the University of Pennsylvania to get his son that MBA.
Finally, considering Trump/GOP are repeating the 1920s, the upcoming recession will be Great Depression II.
Again, DNC, Pelosi, Feinstein, and super delegates was it worth it?
79
What are you talking about, Mr. Metrowsky? Why would you bring democrats into it?
22
@njglea With all due respect Njglea I believe Nick was referring to the fact that were it not for the DNC, Wasserman Schultz’s, etc. insisting on it being Hillary’s “ turn” and denying Bernie Sanders an opportunity to take the nation in a different direction, we would not be at this point in our economy much less in the state of bitter divisiveness we find ourselves in as we head towards a recession at best, although aside from the asinine tax cut for the rich rather than investing that trillion in infrastructure as well as the long overdue hike in interest rates has much more to do with the markets wobble than does Trump. This “ Recovery” that never was for most people has been one engineered by the Fed into another asset bubble that has run its course, even seasoned hedgefunders have been bailing for sometime, they recognize a con when they see one and that’s what the ups and downs of our economy have become, we gave up being a nation of builders and achievers long ago , we are now a nation of spimmeisters and financial engineers with our “ best and brightest attempting to destroy existing industries rather than building new ones either through “ disruption” or vulture capitalism extracting “ shareholder value for the ten percent at the expense of ruining the lives of the other ninety percent, this will not end well, but it’s been decades in coming and not attributable to any one man no matter how politically desirable that may be, both parties are to blame.
@Nick Metrowsky so this is the Democrats fault? Are you among those people not voting, or worse, voting for Donald Trump to make a point, because Bernie Sanders didn't get chosen? I was a Bernie Sanders supporter, but it never occurred to me for one minute that I would not vote for Hillary Clinton. However, your remark shouldn't surprise us. Quite a few of us have known that once things begin to go bad, as they inevitably will, somehow it will be the Democrats who get blamed in certain circles.
7
Europe and China certainly understand that trump is the biggest threat to the global economy. To get rid of him (and his policies written by the nakedly greedy .01 percent), they will have to hurt the US economy, even though it will hurt their own, and probably severely. They have the power, and shouldn’t hesitate to use it. It’s always been the economy, stupid.
98
This is dumb. Eliminate the tariffs and restore good relations with China. Yes, China has some problems with how it does business. So does Trump. Crashing the markets and disrupting world trade is no way to run an economy. Trump wouldn't do this to Denmark. He's trying to punish China for the crime of being "successful while non-European."
152
I kind of picture the interaction of economic cycles and US Presidency as two kids squabbling over a toy -- maybe a wooden hobby horse.
When the economy is strong, the horse is exciting and new the big bully kid grabs it and rides it around everywhere, scraping it against walls and getting into all kinds of shenanigans. The other kid asks if she can have a turn and the big bully says "Ha ha no, loser."
Then -- KER-SNAP -- CRACK -- the toy breaks broken. The bully kid loses interest. The other kid says "can I try?" and no one cares enough to stop her.
Gingerly, carefully, she restores that old hobby horse, making and pasting on new whiskers, mending the rod, until after a while it's stronger than ever and looks even better than new.
And -- oh who's that behind her? -- it's the bully kid again. He's interested. He whacks her over the head, grabs the toy, and is off to the races.
I dunno, it always seemed to me like the 2008 Obama election was as much as anything a matter of the R ruling class saying "bah, fine, it's not even working anyway, you have a turn".
210
In other words, this is the standard sequence that the rich have developed to loot the economy. They put their guy in and he deregulates (takes the cop off the beat) and the Republicans steal everything they can with two hands. Eventually the economy has been robbed to the point that honest people can’t get paid and the economy collapses. The Republicans retreat and the Democrats elect someone trustworthy who does all the hard work of getting the economy on its feet. The Democrats never make the people whole again and they never prosecute the criminals whose theft broke the economy.
The rich Republicans come back in the next cycle on a platform of lies that blame everything on the trustworthy Democrats and the people, who do not have time to read or understand, buy it. When back in power the Republicans deregulate (take the cop off the beat) again and rob everyone again.
It is the standard cycle since the end of WWII and each cycle lowers the middle class standard of living a little more. Even the dumb middle class is starting to get angry but as usual they are angry at the wrong people. A population that is too ignorant to know who is robbing them is not capable of making a democracy work, as we saw in the last election. Either the middle class has to get smart very fast or we need a new form of government.
34
@Michael
I feel this way about public education. The greedy seem to me determined to drain all funds and destroy it, then some of my mom colleagues and myself will pick up the pieces, spend our own money, do what we can, and as soon as we have something beginning again—back will come the huge educational fund miners, the politicians who use schools like policy footballs. In rhetoric only, of course. No help.
11
Brilliant! Thank you.
Handing Trump the nuclear codes is only part of the folly of those who voted for him. The other part is playing out in real time because Trump thinks the economy is buying low and selling high.
After all Trump was paid $200K a year by his father when he was just 3 years old. Obviously a business savant while he was still in his nappies. Who knows more about finance -- or cheating -- than Trump?
Nobody tells him how the economy works. Gary Cohn gave up when the only influence he had came from swiping papers Trump didn't know were on his desk.
Trump gets his advice from rich friends like Carl Icahn whose idea of making money is not unlike how a vampire bites someone's neck. Carl tells him those sinister Chinese are robbing us blind, which is why there's a huge trade deficit.
The Economist is appalled that Trump is obsessed with China's trade surplus as if it measured one for you and two for me. Their analysis is that -- when trade balances are understood properly -- US and China are fairly even.
Corporate profit sheets look great thanks to Trump's tax cuts, kinda like bulging muscles from steroids. Now the turbocharger is off and those great quarterly gains are flat. US households are under a $1 trillion debt cloud, plus $1.5 trillion in student debt and a $1 trillion deficit. That's $3.5 trillion missing in action.
Markets measure optimism. Trump measures greed.
They don't play well together.
337
Well demolished, Yuri Asian.
A fine magnum opus.
4
@Yuri Asian
The Trumps are such savy business men.... I mean really! If just that $200,000 were invested in DJ stocks when he was 3, it would be worth over $20 million today........ and without all that shystering! That $14M loan he got (what he calls his "small $1million loan from daddy) would be worth $1.4 billion. And that is just a small part of the family fortune. Instead, he shystered the government and everyone else he came in contact with when he could have done far better by a simple investment. Some businessman! And to think he is running the country!
3
@Socrates
High praise from the master. Thank you. And thanks for all your brilliant, lucid commentary in this time of darkness.
Google "Donald Trump stock DJT" for a preview of what happens when trump is in control.
27
The thing I notice is the nasty edge of this situation. The US had an amazingly reckless tax cut and giant defense increases. US military interventions are expensive and hardly ever work out to any ones benefit. The Chinese and the US are maneuvering in much more belligerent manner. Trump wants to lead the country without allies and international business partners. Sanctions are being leveled with cavalier political gamesmanship. And Wall Street is worried about way over due wage increases.
150
Yes, the Koch brothers and their International Mafia Robber Baron cabal have been planning this for 40+ years, c harris. It wasn't "reckless". It was planned.
18
@c harris Wall St might be trying to punish Amazon for wage increases, and punish the other tech companies in warning, but I think it's just another round of profit taking. If you don't bring stock prices down every few months, there are no good buying opportunities. Thus, the IRA sheep and less wealthy and less savvy investors sell off when prices drop and the real wealthy and plugged in can buy some bargains. It's like a clothing sale that happens on schedule every few months, really.
3
I came across an old Mad book from the mid 1950's in my attic recently. There was an illustration of a man who represented the American economy with two woman who he had to choose between. One represented the Democrats and was homely, trustworthy and ran an efficient home. The other represented the Republicans and was dressed alluringly, in a black leather catsuit and was tempting the man with large tax cuts and a booming economy, followed by an economic crash.
Seems some things never change.
514
They can change, Rosie, if people wake up and vote for Socially Conscious Women and men who know how to run things instead of just steal from us.
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@njglea
Who's stealing from whom? I live in "progressive " Vermont, where the hardest working people, who are few, pay all the taxes and the rest pay little or nothing. People who go to work every day for a pay check and have to pay taxes, pay for the hippy progressives to stay home and make jewelry, or to mentor someone in how not to work too much because you might have to pay taxes. Obviously they pay no taxes. Small business owners? Forget it. They expense everything out and pay nothing. One in 3 people in this state is on Medicaid. Don't tell me I don't know what I'm talking about, I live in it. And I resent paying for all the "free" stuff these people lay claim to, when they chip in absolutely nothing.
@pamela - I live in Vermont as well and I'd love to know where you get the fairy tale about the mentorship.
Feel free to go live in a red state utopia like Kansas and let us know how that works out for you.
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