I'd say "secular stagnation" pretty much describes the Obama years.
1
The markets are not booming, they're chugging along. The S&P 500 "is growing at precisely the same rate as it has for the past eight years." http://www.motherjones.com/kevin-drum/2017/03/economy-not-booming.
I recommend buying small denomination silver, gold, and copper asap! These drastic fluctuations are clear evidence of an eminent major crash. Those in the know are buying now, to get the motion going and then selling while it is high, then investing in solid monies...selling more stock to you in the mean-time to build up their own reserves. There will be many challenges in the coming months due to this joke of an administration. Be prepared...just saying. : / Back your electronic incomes with a solid foundation and transfer money from large corporate banks to your local credit unions. With tourism, immigration disruption and respect for our country in the world, solidly declining by the millions of dollars, the dollar and American production will certainly decline....more severe than you can even imagine.
2
Of course our parents and grandparents, without their consent, were shorn of the interest income on their savings they had been counting on to the tune by now of hundreds of billions of dollars, and we have hung $20 trillion of U.S. government debt around the necks of our kids and grandkids, without their consent, who will have to pay it back, and half of which was added just in the aftermath of the crisis by our beloved Obama, all in order to paint the rosy watercolor Neil loves so much. To say nothing of the lives upended if not destroyed by the crisis caused by Wall Street, for which no meaningful punishment was applied nor retribution obtained.
But sure, let's stop feeling lousy and all jump in the pool, right? Let's get happy!
Neil, we need better sir.
But sure, let's stop feeling lousy and all jump in the pool, right? Let's get happy!
Neil, we need better sir.
2
Mr Irwin and Readers: Since earnings ultimately drive stock prices, it is vital to be aware of the timing and correlation of earnings and stock prices. Money.cnn.com recently reported "the S&P 500 is trading at 17.7 times its projected earnings for the next 12 months, according to FactSet. That's the highest price-to-earnings ratio since May 2004, FactSet said."
A recent issue of USAToday cites work by Nobel economics Professor Robert Shiller as follows: "Data collected by Yale University's Robert Shiller shows that the ratio of stock prices to corporate earnings has been higher only twice since the year 1900-- in 1929 and 2000."
Money.cnn.com cites Warren Buffett of Berkshire Hathaway as follows: "We are not in bubble territory or anything of the sort." The article notes that: "The key, Buffett said, is that interest rates remain extremely low. That makes stocks look like a good deal by comparison."
With a P/E ratio of $17.7/$1; this ratio represents an ROI of about: ($1/$17.7) x 100 = 5.65%; for the S&P 500 as an index. For 10 year-bonds, which are currently yielding 2.35%; and, since a $100 bond would yield about $2.35; this represents a P/E ratio or ROI from this bond investment of about ($100/$2.35) = 42.5, for the 10-year bond's P/E. To briefly summarize: S&P 500 stocks: P/E ratio of 17.7; E/P ratio or ROI of 5.65%.
For 10-year bonds: P/E ratio of 42.5; E/P ratio or ROI of 2.35%.
[JJL Th Mar 2, 2017 4:31 p; Greenville, NC]
A recent issue of USAToday cites work by Nobel economics Professor Robert Shiller as follows: "Data collected by Yale University's Robert Shiller shows that the ratio of stock prices to corporate earnings has been higher only twice since the year 1900-- in 1929 and 2000."
Money.cnn.com cites Warren Buffett of Berkshire Hathaway as follows: "We are not in bubble territory or anything of the sort." The article notes that: "The key, Buffett said, is that interest rates remain extremely low. That makes stocks look like a good deal by comparison."
With a P/E ratio of $17.7/$1; this ratio represents an ROI of about: ($1/$17.7) x 100 = 5.65%; for the S&P 500 as an index. For 10 year-bonds, which are currently yielding 2.35%; and, since a $100 bond would yield about $2.35; this represents a P/E ratio or ROI from this bond investment of about ($100/$2.35) = 42.5, for the 10-year bond's P/E. To briefly summarize: S&P 500 stocks: P/E ratio of 17.7; E/P ratio or ROI of 5.65%.
For 10-year bonds: P/E ratio of 42.5; E/P ratio or ROI of 2.35%.
[JJL Th Mar 2, 2017 4:31 p; Greenville, NC]
2
I am not a doomsday type nor do I claim to have any special insights into the Market so I can't tell you why I'm setting aside a good chunk of cash, but I am. Maybe for a buying opportunity or a little better sense of security. Putting new money in at these valuations sounds a bit risky.
1
I am sure that ma and pa kettle are cheering, pointing to the stock market as indication how Trump is a great president, given how ignorant they are of the economy, it is very, very easy for Trump to claim "This is me".
The markets are all based on perceptions, and the stock analysts are betting that Trump will cut taxes, especially on the well off, he will allow banks and the like to go hog wild trading on wall street (like we had before 2008), and they are exhuberent that the fox is guarding the hen house. They also are shrugging off Trump being able to get through his border tax, assuming that Ruan and the Ayn rand brigade won't allow it, because Wall Street hates jobs being in the US or going to human beings instead of automated plants, to them people are a cost, and the more you cut that, the more the stock analysts smile on a stock.
My guess is that Wall Street is right, and ma and pa kettle are going to find out if they think politicians and the elite don't care about them, just how much wall street hates them, sees them as nothing more then people whining cause they can't be traders and brokers, and, of course, stock analysts.
The markets are all based on perceptions, and the stock analysts are betting that Trump will cut taxes, especially on the well off, he will allow banks and the like to go hog wild trading on wall street (like we had before 2008), and they are exhuberent that the fox is guarding the hen house. They also are shrugging off Trump being able to get through his border tax, assuming that Ruan and the Ayn rand brigade won't allow it, because Wall Street hates jobs being in the US or going to human beings instead of automated plants, to them people are a cost, and the more you cut that, the more the stock analysts smile on a stock.
My guess is that Wall Street is right, and ma and pa kettle are going to find out if they think politicians and the elite don't care about them, just how much wall street hates them, sees them as nothing more then people whining cause they can't be traders and brokers, and, of course, stock analysts.
3
No one is surprised the economy is doing well. In large, this is because pretend president obama is no longer in office pretending to be president. Rather, successful businessman Donald Trump is now president. Americans couldn't be happier with the desperately needed change. It's no longer embarrassing to be an American. But everyone already knows this..
5
That a lot of comments here seem negative in the face of good economic news should come as no surprise. We have just come through an election where we were conditioned to see the state of our union and our economy in starkly dystopian terms. The depictions of our decaying cities, stagnant economy, and bankrupt government were not true then and they are not true now. Is it any wonder that the public refuses to accept this new irrational exuberance?
14
It is a Trump bump, if by "TRUMP" we mean "Typical Republican Under-Managed Priorities." Corporate tax cuts! Military spending food fight! Rollback the regs! Health care--let market forces prevail! Infrastructure! Infrastructure! Infrastructure! The prospect of corporate tax cuts alone accounts for some exuberance, but beyond that the devil is in the details--and what a devilish devil it is. While we can bet on an uptick in military spending, and we know we are looking at regulatory rollback, the rest is mostly pie in the sky or unfunded future spending. That means markets are overvalued and Trumpish chaos has not been priced in to current investor thinking. The rubes are rushing in from the sidelines to jump on this gravy train, and that always means it's a wonderful moment to take profits and rebalance. But the exuberance is cheek to jowl with irrationality on the long-term outlook if you factor in fractured legislative outcomes, labor force chaos for undocumented labor, disruption of international agricultural markets, a failed healthcare system redo, and future Trumpian chaos on all fronts. Add to that where we stand in terms of labor force participation and the extra-long recovery cycle that chugged along like the little engine that could until now, and it's easy to guess that we are not likely to be on the brink of a new paradigm like 4% annual growth. (Dow 30,000! Not.) One thing we know we will not face: a disciplined federal approach to any of these variables.
12
Mr Irin I am so happy to have been right on my forecasts. And have the feeling that the world will continue to see more tangible consequences of the Trump bump. I think it´s about time that President Trump begins to act as such and go into full-presidential mode. I´d advise him to use up his huge charisma to make his electors become fully-compromised members of the GOP. And charge for it! Never has the GOP had so many people wanting to register as such (even Afroamericans and Latinos), but without ideas, and without a leader that embodies them this momentum shall pass. And momentums as historical as these only come once in a generation or two. Millenials might be led into the GOP if they see a fully drained Washington DC happening and high payimg salaries being paid under a full-employment ambience. The US economy and its society as a whole needs a Reagan moment 2.0 and a Laffer effect, today perhaps named after the new US Treasury Secretary.
The market apparently has a pretty high valuation of the short term gain portended in trashing the environment and deregulating the banks. Add to this the mythical repatriation of trillions of dollars in corporate profits hidden off-shore, which may or may not happen, and the market will stay hot for a while. In the future, we will be drinking Victory gin and watching the lifestyles of the Inner Party from the unsacrificed zones and periodic executions of enemies of the Party on TV, but the market could care less about the long term.
8
The stock market was making steady and historic gains well before Trump was elected, and clearly was on an upward swing since the depths of the Great Recession--this must be seen as the Obama administration's greatest and most remarkable achievement. All this of course, flies in the lying face of Donald Trump, who preposterously claims he inherited a "mess."
He's riding a wave that he had no part in, except for the new round of Reagan-redux greed anticipated by Wall Street with Trump's reckless promises of gutting business and environmental regulations, cutting income taxes for the rich, and packing his cabinet with billionaire fatcats.
He's riding a wave that he had no part in, except for the new round of Reagan-redux greed anticipated by Wall Street with Trump's reckless promises of gutting business and environmental regulations, cutting income taxes for the rich, and packing his cabinet with billionaire fatcats.
19
There are a lot of negative comments here in response to what is pretty much uniformly good economic news. The stock market rise is clearly in response to Trump's election and policies, there is no other plausible explanation for it. There may be negative aspects to this, nothing is all good, every development has risks, but it is positive for employment, wage levels, job security and economic opportunity for all Americans.
There is much bitterness about Trump's election, so much that many liberals would rather see him fail than see him benefit those they would claim to be their constituency. The better things get the unhappier they will become.
There is much bitterness about Trump's election, so much that many liberals would rather see him fail than see him benefit those they would claim to be their constituency. The better things get the unhappier they will become.
3
This is a pretty clear prediction. Who knows what the Trump administration will do. It will be instructive to revisit this prediction in a year.
2
Clearly, the strength of our economy and the run up of the market is Obama's fault, just like everything else is.
19
The booming stock market just goes to show that most players in stocks are suckers. It will only end in tears.
2
Businesses are banking on labor having no support in Washington, deregulation, tax cuts, and a judicial system that won't hold them accountable even if they do break the law. The majority of Americans, as workers and consumers, haven't realized how this is going to hit them personally through death by a million cuts.
Think about wages as an example. It's not just about raising the minimum wage. If employers aren't held in check through employment regulation, they can compel unpaid overtime, misclassify workers as exempt employees or contractors, or engage in outright wage theft. Unionization efforts will receive no support, and in fact be met with outright hostility.
And wages are only one example! Insurance companies can slow-pay claims of all types, banks can arbitrarily impose fees, industry can destroy residential property values, and the list goes on. Inflation will be devastating to those on fixed incomes, and good luck getting a COLA out of this administration.
The profits will head to offshore tax havens and there's a good chance many in our country will never recover.
Think about wages as an example. It's not just about raising the minimum wage. If employers aren't held in check through employment regulation, they can compel unpaid overtime, misclassify workers as exempt employees or contractors, or engage in outright wage theft. Unionization efforts will receive no support, and in fact be met with outright hostility.
And wages are only one example! Insurance companies can slow-pay claims of all types, banks can arbitrarily impose fees, industry can destroy residential property values, and the list goes on. Inflation will be devastating to those on fixed incomes, and good luck getting a COLA out of this administration.
The profits will head to offshore tax havens and there's a good chance many in our country will never recover.
9
Investors have chugged the kool-aid. In the view of many economists and money managers, stock prices are generously over-valued. The Bush era tax cuts, if followed by Trump's tax cuts to the rich, if followed by Trump's massive military and infrastructure spending, can only mean a staggeringly larger national debt. Only a slight increase in interest rates will send send payments on this debt to the moon. Trump is volatile. Market forces do not like volatility. Now is the time to sell and increase liquidity, in my humble opinion.
8
The booming stock market certainly is not an indicator of the strength of the US economy, nor will the benefits be seen by many other than the financial elite. The market is reacting joyfully to the Trump administrations stated goal of eliminating all environmental regulation, huge corporate tax cuts, deregulation of the financial sector and the elimination of all corporate oversight. Most likely all of this will lead to another economic meltdown but, hey, why let such things get in the way of making a quick buck?
16
But trump says we are in the worst shape we've ever been in ! Listen to him he knows! After all since he's been elected the anointed one has done such wonders!! Singlehandedly! No help from m any other soul in the planet !
Wow . Guess I gotta go back to school ... trump school of fantasy
Wow . Guess I gotta go back to school ... trump school of fantasy
8
A Christmas surge in the market this year became the TRUMP rally. When reality sets in, there will be such a rush out the door many will get crushed. With May just around the corner, it may not be a long wait. The bitter end may be more than just bitter as the most greedy who will hang on to long. That said the markets are so highly priced, the cost % wise may not be devastating to the billionaire class.
4
My thanks to Obama and his administration for turning the economy around and growing this recovery, despite unprecedented Republican opposition. He has handed a big gift to Trump...who will doubtless fail to say thanks
21
"My thanks to Obama and his administration for turning the economy around and growing this recovery, . . ."
The net stock market gains since 2008 are due to corporate share buybacks amounting to over $4 trillion. Share buybacks reduce the number of shares, thus the price (and earnings) per share goes up. The Obama bull market was fueled by share buybacks, financed primarily by debt accumulated at record-low rates.
The net stock market gains since 2008 are due to corporate share buybacks amounting to over $4 trillion. Share buybacks reduce the number of shares, thus the price (and earnings) per share goes up. The Obama bull market was fueled by share buybacks, financed primarily by debt accumulated at record-low rates.
4
It's old fox in the hen house example. And, we have really left the door open!
What most people don't realize with the example is that when a real fox gets into a real hen house they will kill every hen. They may eat only one, but they kill them all. It's too bad, because the typical farmer would give up an occasional hen as the cost of doing business. But, with all of them dead, the fox is very likely to be trapped or poisoned, never to return.
With the banks, all the foxes were allowed to live. (We could say, we even threw them some extra hens just because they asked for them.) Those guys don't even think of bad consequences, and why should they? It's socialism for them, and a hard bitter lesson of capitalism for everyone else. Boom and bust, they make money either way.
What most people don't realize with the example is that when a real fox gets into a real hen house they will kill every hen. They may eat only one, but they kill them all. It's too bad, because the typical farmer would give up an occasional hen as the cost of doing business. But, with all of them dead, the fox is very likely to be trapped or poisoned, never to return.
With the banks, all the foxes were allowed to live. (We could say, we even threw them some extra hens just because they asked for them.) Those guys don't even think of bad consequences, and why should they? It's socialism for them, and a hard bitter lesson of capitalism for everyone else. Boom and bust, they make money either way.
12
Don't you feel like you can begin to breathe a little easier? What a welcome sight to see retirement investments start to grow. The last 10 years have been frightening and depressing!
2
Funny, our retirement savings took a huge hit as a result of the 2008 recession/housing crash and gradually went up very nicely during Obama's term. Perhaps we had different types of investments.
9
I wasn't able to save any of my income back then...just starting out. I'm sorry you suffered losses, I know you were not alone. All I am saying is the recent uptick is refreshing after several years of little growth.
1
#circumspect,
Funny, I and many, many others felt that way when Bush left office. As I recall, he was 'in charge' while we were losing 300,000 jobs per month.
You may not like President Obama, but he *did* pull this nation out of a tailspin.
It seems clear that there are those partisans in the GOP who want to go back to those same failed polices. Perhaps you can thank Putin when the economy tanks under your fair haired boy.
Funny, I and many, many others felt that way when Bush left office. As I recall, he was 'in charge' while we were losing 300,000 jobs per month.
You may not like President Obama, but he *did* pull this nation out of a tailspin.
It seems clear that there are those partisans in the GOP who want to go back to those same failed polices. Perhaps you can thank Putin when the economy tanks under your fair haired boy.
9
OK, Neil, you are on record more than once predicting that the economy is "taking off" and breaking out of its trap of "low growth and inflation". I hope that you are right. This article certainly does not make a convincing argument for your prediction, but that does not mean that your prediction is wrong.
Many of these comments are ridiculous. As someone who trades the markets, the robust returns in almost all indexes is good for millions of people who have money in IRAs and 401Ks. And please stop trying to predict what the next move is-the best and brightest on Wall St. have no clue, and neither do you.
8
Hmm, if no one has a clue, does that imply we're all qualified to be stockbrokers.
Only the partisan would say this is not because of Trump.Global markets believe he will cut regulations and taxes causing a jump in economic activity. Sentiment is just as important as actual activity and will carry a market.
I find it interesting that under Obama, who sought to be fair to all,his regulations caused a drag on the economy.In his quest for fairness he hobbled the economy with rules that took on a life of their own,bureaucratically speaking.
Excessive rules take the dynamism out of the economy. However there is a line between safety and growth, that in essence, is the divide between Republicans and Democrats
I find it interesting that under Obama, who sought to be fair to all,his regulations caused a drag on the economy.In his quest for fairness he hobbled the economy with rules that took on a life of their own,bureaucratically speaking.
Excessive rules take the dynamism out of the economy. However there is a line between safety and growth, that in essence, is the divide between Republicans and Democrats
4
Please give specific examples of how Obama "hobbled" the economy through regulation. And please have your examples be accompanied by actual numbers.
6
Kelly
It is you who appears partisan here. There is zero chance trump has had a measurable effect on the economy after 4 1/2 weeks in office.
Economics revolves around *facts*, not 'belief' or 'feelings'.
It is you who appears partisan here. There is zero chance trump has had a measurable effect on the economy after 4 1/2 weeks in office.
Economics revolves around *facts*, not 'belief' or 'feelings'.
1
By "excessive rules" I guess you mean rules against dumping of coal slurry, whatever it's called, into rivers and streams? That was first to go. Yay, team.
1
Don't care what the Dow is doing. Sold most of our stocks in anticipation of problems down the road. Not getting sucked into the giant orange PR machine.
12
Good plan. To me, the boost in the stock market is akin to something like the excitement before the first big frat party of the school year, with over-testosteroned bros high-fiving and shouting LETS DO THIS only to wake up the next morning hung over, naked on a strangers lawn, and probably arrested for some sort of unconscious illegal activity, precluding a future campus suspension, expulsions, and a huge PR cleanup.
3
Replacing a community organizer who could not even read a financial statement let alone understand one with a businessman who built an international multi-billion dollar business empire with a 1 million dollar loan has instilled confidence in the global business community. After 8 years of sub 2% annual GDP growth, America (and the world) now anticipates a doubling of the GDP growth rate and the prosperity that this will bring to those who are willing to work hard. The stock market indices reflect this new confidence.
4
Well, at least they're confident that the company will make money which is quite the same as the workers making money. And you are too smart to not know that Obama was digging us out of a hole that nearly brought down the world economy.
5
I work hard, am a capitalist, an entrepreneur, and am quite successful.
Trump is a financial con artist who uses OPM to line his pockets.
You can't put lipstick on this pig.
He's a fraud.
Trump is a financial con artist who uses OPM to line his pockets.
You can't put lipstick on this pig.
He's a fraud.
9
Aren't you forgetting his 5 bankruptcies, his Russian money laundering and constant lying? American banks won't even loan to the guy anymore. Wall St.'s hero. . . .
12
It takes two years for construction jobs to be drawn up, awarded, and begun. Tax cuts cannot be found until profits are realized. Regulations may discourage some business activities but if the business activities are just marginally profitable but if they are greatly profitable, they do not discourage them. Businesses which enjoy labor costs in countries in which the cost of living is one fifth of the U.S. are not going to relocate the U.S. just by lowering corporate taxes, because the proportional cost of labor verses income tax rates (where there are no applicable deductions available) are not even close to equivalent. So nothing that Trump has proposed can possibly improve economic performance over that which exists, now, is possible. So the markets are going to correct downwards fairly quickly because the economy will not significantly change upwards for some time.
9
The stock market does not represent the economy of the general population. It only represents business owners and people who have money to invest, whether it be individually or as retirement plan participants. Infact, the profitability that leads to high stock valuation often comes at the expense of workers who are asked to do more for less.
20
Wall Street isn't concerned with the Fed's possible puny rate increase. The game is over, and the Fed's are dead in their tracks. Tired of hearing Yellen go through her little exercise of explaining economic data that basically is more political in context than having anything to do with the economy. Basically the Feds have run their course and are essentially a forgotten part of the economy. As long as they continue to buy treasury bills/bonds so America can pay its bills, that is all that they count for, and more importantly that is all we expect of them.
1
This is great news. To all the commenters complaining about deregulation: America does not want socialism.
Hilary won the popular vote because Donald admitted to sexually assaulting women, not because of her economic policy.
Trump is the only politician calling for new trade agreements that favor the American worker.
How is artificially halting globalism (by imposing trade taxes) any different than slapping tons of artificial regulations on our markets?
Liberals are fine paying Chinese workers 10 cents an hour but can't stand deregulating American industries. Makes no sense.
Hilary won the popular vote because Donald admitted to sexually assaulting women, not because of her economic policy.
Trump is the only politician calling for new trade agreements that favor the American worker.
How is artificially halting globalism (by imposing trade taxes) any different than slapping tons of artificial regulations on our markets?
Liberals are fine paying Chinese workers 10 cents an hour but can't stand deregulating American industries. Makes no sense.
1
Lviv Athens Salonica Germany ... history of d littered with relics of the "my country first" 3rd rate city states today
If people have this in mind they perhaps should starting reading their history again Economic nationalism takes countries from 1st rate to 3rd rate Fast
Just like trump's favorite place: Russia
If people have this in mind they perhaps should starting reading their history again Economic nationalism takes countries from 1st rate to 3rd rate Fast
Just like trump's favorite place: Russia
1
The US economy was hamstrung by the Republicans in Congress to hurt Obama politically. The constant threats and actual gov't shut downs and not servicing the national debt along with mindless austerity were a giant lodestone on the economy. But there was enough pent up demand from the 2008 recession with Obama's too small stimulus plan and the Feds quantitative easing to allow the economy to grow. But a full scale recovery was thwarted. With quantitative easing the stock market went up and Banks benefitted but the economy where the middle class lives was stiffed. Now Trump comes with the business cycle pretty far along since 2008 and wants to put in place a giant stimulus package which should be have been enacted years ago. Along with unnecessary increases in defense spending and insanely expensive tax cuts to the wealthy one can readily see that the Trump boom could easily become the Trump crater after the bubble bursts. Irrational exuberance is now a clique for the reckless optimism of the stock market.
13
The stock market and the economy are not the same thing. A bunch of financiers seeing a fat juicy pork chop in front of their trading eyes in the form of a crony shyster president promises nothing of beneficence for our economy or society.
18
It says the gamblers on wall street love a good bubble.
14
The market is telling us we are happy with Trump and his business approach, the socialisim that was being shoved down our throats by the Obama, Clinton Sanders cabal is what is being rejected.
Simple put that is why the market is climbing.
3
Right, Because Wall Street was so unhappy by the tripling of the Dow under Obama.
3
This story is conflating the rise in the stock market with the health of the overall economy. Remember, the stock market has been booming for years and Wall Street has been raking in huge profits, but that hasn't necessarily translated out into the entire economy. So let's please stop pretending that the rise in the stock market trickles down to the Average Joe on Main Street - it doesn't.
Wall Street is happy with Trump and the GOP control of Congress because they're more interested in helping companies, and they only talk a good game about helping the Average Joe. If the GOP really cared about the average American, they wouldn't have been resisting every single effort by Obama to try and help the average American for the last 8 years.
Give this stock market obsession a rest already. It's not the economy.
Wall Street is happy with Trump and the GOP control of Congress because they're more interested in helping companies, and they only talk a good game about helping the Average Joe. If the GOP really cared about the average American, they wouldn't have been resisting every single effort by Obama to try and help the average American for the last 8 years.
Give this stock market obsession a rest already. It's not the economy.
11
The Trump Bump is closer to what a quack doctor gets credit for curing a patient just by entering the room; this after a rigorous 8-year regiment of treatment by a previous doctor.
14
I see people being very upset at Trump's policies but elated at their monthly brokerage statement. This is I think the America we will be seeing in the next years - quasi schizophrenic.
We have to see that the stock market is just another arm of the Trump's administration policies that will plunder and ravage all that is left of a 'healthy' society.
Why not put our money where our mouth is and retreat from all stocks that are oil, banking related and relate to other sectors that are harmful for society and the environment therefore sending a signal that the people still have a word in all of this.
Let's not have the Trump administration and Wall Street remake American society at their whim. The question America has to ask herself is - what do you really care most about? Is it making money or is it a healthy society and environment? Well...?
We have to see that the stock market is just another arm of the Trump's administration policies that will plunder and ravage all that is left of a 'healthy' society.
Why not put our money where our mouth is and retreat from all stocks that are oil, banking related and relate to other sectors that are harmful for society and the environment therefore sending a signal that the people still have a word in all of this.
Let's not have the Trump administration and Wall Street remake American society at their whim. The question America has to ask herself is - what do you really care most about? Is it making money or is it a healthy society and environment? Well...?
4
It's frothy Pie In The Sky......
Earnings: That's what matters
If your bottom line isn't improving in *measurable* ways, all this talk is nothing more than a bubble.
Earnings: That's what matters
If your bottom line isn't improving in *measurable* ways, all this talk is nothing more than a bubble.
11
Once again, the Times falsely equates the activity of the stock market with the health of the economy at large. Time to revisit your previous reporting from 2012, "The Economy and the Stock Market: A Big Disconnect" : "history has shown that lousy economic conditions, or even dismal corporate results, don't necessarily lead to disappointing stock market returns in any given year - or decade."
The bets of the upper classes do not necessarily reflect actual economic activity: they reflect the herd mind's hopes, gossip, and what their peers think is important.
The bets of the upper classes do not necessarily reflect actual economic activity: they reflect the herd mind's hopes, gossip, and what their peers think is important.
9
There is little to no correlation between wealth and intelligence . Many wealthy folks think they are smart because they have $
Yet they pile on into the bubble yet again
What short memories they have
What greed they exhibit
Lehman Bros anyone?
Yet they pile on into the bubble yet again
What short memories they have
What greed they exhibit
Lehman Bros anyone?
4
Let's hope this rise is not at the expense of our planet and savings accounts. I do fear that if the market rises this fast it will crash even faster.
7
It's the early stages of a bubble, which will be stoked by unsustainable tax cuts and a one-off sugar hit from repatriation of foreign corporate money.
I'm old enough to know that when you see the early signs of a bubble, PILE IN! Once it has gone up 50% or shows signs of slowing, pile right back out again (i.e. rebalance into bonds).
The stock-market is going gang-busters at the moment because everyone in the know with cash to spare already knows this, and is acting accordingly.
I'm old enough to know that when you see the early signs of a bubble, PILE IN! Once it has gone up 50% or shows signs of slowing, pile right back out again (i.e. rebalance into bonds).
The stock-market is going gang-busters at the moment because everyone in the know with cash to spare already knows this, and is acting accordingly.
14
The stock market is not the economy or a measure of its health.
54
It's hard to not believe that much of the surge since the election isn't due to Wall Street's frothing at the mouth dreams of "When the cat's away the mice can turn into rats" or without regulations and restrictions otherwise known as forced ethical practices profits and greed can once again rule.
12
So far, Trump hasn't done anything of real consequence on the economy, except talk, so aside from relief that he hasn't blown anything up yet, it's hard to ascribe any other reason for the booming markets. Once he has enacted his policies, then we can discussion about whether they were good or bad.
Trump is a terribly impatient man and ignorant in a world ever more demanding of patience
His vanity and thin skin and refusal to learn are real liabilities in the real world, and he is making the world a lot more dangerous every day. "Donald Trump was a stock market disaster: Trump Hotels & Casino Resorts reported losses of $647 million from 1995 through 2004" http://www.marketwatch.com/story/donald-trump-was-a-stock-market-disaste...
His vanity and thin skin and refusal to learn are real liabilities in the real world, and he is making the world a lot more dangerous every day. "Donald Trump was a stock market disaster: Trump Hotels & Casino Resorts reported losses of $647 million from 1995 through 2004" http://www.marketwatch.com/story/donald-trump-was-a-stock-market-disaste...
3
Utter and complete decadence combined with irrational exuberance. Look out below.
1
when the bubble pops. the usual suspects will be rounded up. and the cry baby republicans will blame everyone but themselves, then be forgiven by the liberal democrats, for a price...........
2
So far, so good for the 1%. The of us are waiting for the trickle down.
3
all those public lands seem to now be opening up for business development, no more pesky environmental regulation - sure the market will boom until everything gets used up :(
2
Thank you, America and President Trump. Could this be sufficient to tame the petulant, brainwashed juveniles of the radical Left into softer and more civil demonstrations, or will it require a much stronger 2"x4" to obtain their attention?
As they say a rising tide lifts all boats. Let's hope that the economic boom assists the 94 million Americans who are not participating in the labor market, especially those who have given up looking for work altogether, discouraged the over regulated economy of the last 8 years. Thank you.
1
94 million is a lie, period. Don't believe anything g the Conman says...
1
We have all kinds of houses in this country: personal places we live, the house of 'representatives' [stop laughing], and the unstable house of cards, better known as the stock market, the biggest little casino in the world, where jack pots and crack pots mix. It's supposedly a barometer for how some in the economy are doing.
I guess my amnesia medication is wearing off. I remember 2008 when the financial sector was desiccated in the hot greed of Wall Streeters who siphoned our 401k's into their pockets and took our houses away. And now the GOP wants to get rid of all that pesky Dodd-Frank.
The GOP will ram through their usual sack of insane junk: lower or no taxes for the rich, deregulation of the EPA so we'll all have garbage in our water, deforestation, nuclear power, oil drilling offshore, all the deregulation that the earth can handle in the name of economic 'growth'.
There will be a big market in gas masks, oxygen tanks and defibrillators, I suppose. We'll live in asthma- and cancer-making, soul-destroying pollution just so our betters can make more money out of our shared environment and not pay for it.
But how silly of me. How can the GOP maintain the billionaire class if we don't all participate by giving them a brand new tax cut? How can they preserve and protect the millionaires and billionaires without sacrificing our shared environment, our health and well being, while waiting for their next bubble to burst so we can bail them out?
I guess my amnesia medication is wearing off. I remember 2008 when the financial sector was desiccated in the hot greed of Wall Streeters who siphoned our 401k's into their pockets and took our houses away. And now the GOP wants to get rid of all that pesky Dodd-Frank.
The GOP will ram through their usual sack of insane junk: lower or no taxes for the rich, deregulation of the EPA so we'll all have garbage in our water, deforestation, nuclear power, oil drilling offshore, all the deregulation that the earth can handle in the name of economic 'growth'.
There will be a big market in gas masks, oxygen tanks and defibrillators, I suppose. We'll live in asthma- and cancer-making, soul-destroying pollution just so our betters can make more money out of our shared environment and not pay for it.
But how silly of me. How can the GOP maintain the billionaire class if we don't all participate by giving them a brand new tax cut? How can they preserve and protect the millionaires and billionaires without sacrificing our shared environment, our health and well being, while waiting for their next bubble to burst so we can bail them out?
5
Looks a whole lot like early 1929 to me.
6
Populism is a euphemism for white nationalism. Trump, Putin and Netanyahu are all white nationalists. Along with being misogynist xenophobic corporate plutocrat corrupt crony capitalist oligarchs. Trump is the tiny teeny tinny boy in this gang of three thugs.
3
The Shiller PE ratios currently at 29.42, about where it was on Black Tuesday. It went up to 44 on the bust of the Dot-com boom, but that was a real outlier.
Does anyone have some rationale why the market is currently "fairly priced"? If this build-up is based upon Trump putting a big punchbowl in front of the financial community, has anyone determined what the deficit -hawk-driven GOP in congress is going to support that?
Seems like another con by the con-king Mr. Trump. I have my money in non-equity funds at this point.
Does anyone have some rationale why the market is currently "fairly priced"? If this build-up is based upon Trump putting a big punchbowl in front of the financial community, has anyone determined what the deficit -hawk-driven GOP in congress is going to support that?
Seems like another con by the con-king Mr. Trump. I have my money in non-equity funds at this point.
2
I remember the brief, but dramatic, dip after Obama was reelected. Wall Street barely knows how to allocate capital in light of economic factors, let alone political ones.
2
"Supermarket Sweep" It’s getting to be that I gotta get loaded just to go
supermarket shopping these days. Medication de rigueur, just to brave the dazed & demolished faces of forlorn fiends, those 400 SAT score, scoured souls stuck all this time in the lower middle classes. Down for the count, a toothpaste tube-squeezing cohort, squishing out the last dollop of Colgate Optic White from their menial, un-redemptive misery; caught on a crumbling ledge, soon to fall even lower--Darwin’s social Ziggurat still happily-ever-crazy after-all-these-years.
Meanwhile, the rich--the few, that lucky few--get ever more clever, ever more rich, devising sinister tricks & subterfuges, to wit: exterminate inflation while simultaneously jacking prices higher and higher on a weekly basis. Double-digit inflation: the best kept Official Secret in Washington DC. Meanwhile the poor know better, grow more bitter each day. It's not even subtle anymore. Everything costs more. Everything is expensive when you have no money to buy. Soon you will see predator packs roaming the grocery aisles, reminiscing the good old days when a job seemed an American birthright. Apple pie: no longer as American as . . . Dazed and ragged like Zombies, they roam the cornucopia, carnal grins on ravenous lips. “Clean-up on Aisle 5,” screams the cashier.
supermarket shopping these days. Medication de rigueur, just to brave the dazed & demolished faces of forlorn fiends, those 400 SAT score, scoured souls stuck all this time in the lower middle classes. Down for the count, a toothpaste tube-squeezing cohort, squishing out the last dollop of Colgate Optic White from their menial, un-redemptive misery; caught on a crumbling ledge, soon to fall even lower--Darwin’s social Ziggurat still happily-ever-crazy after-all-these-years.
Meanwhile, the rich--the few, that lucky few--get ever more clever, ever more rich, devising sinister tricks & subterfuges, to wit: exterminate inflation while simultaneously jacking prices higher and higher on a weekly basis. Double-digit inflation: the best kept Official Secret in Washington DC. Meanwhile the poor know better, grow more bitter each day. It's not even subtle anymore. Everything costs more. Everything is expensive when you have no money to buy. Soon you will see predator packs roaming the grocery aisles, reminiscing the good old days when a job seemed an American birthright. Apple pie: no longer as American as . . . Dazed and ragged like Zombies, they roam the cornucopia, carnal grins on ravenous lips. “Clean-up on Aisle 5,” screams the cashier.
2
Happening during Trumps presidency...lol. Okay, thats literally true, but to grant him any real influence is absurd.
Everytime I hear that line, it makes me think of my fellow NY Jets fans during past preseason and early seasons where the team is winning games...and we get all psyched up, drunk on the early wins...thinking this is the year they go all the way. Then they mess the bed.
Its too early to tell where and or why the markets are going in any direction.
The WH hasnt truly done anything meaningful, certainly not in regards to the markets, or the economy...so this new record is nothing but normal speculation, and an influx of questionable investors.
Plus, hasnt the market just kept setting new records, year after year...? It seems sort of pointless to keep hyping the latest record, when its only going to be beat in the near future. Its not like the market has ever set a real and hard to beat record. Its not the Olympics...unless we want to make a steroids analogy...
Everytime I hear that line, it makes me think of my fellow NY Jets fans during past preseason and early seasons where the team is winning games...and we get all psyched up, drunk on the early wins...thinking this is the year they go all the way. Then they mess the bed.
Its too early to tell where and or why the markets are going in any direction.
The WH hasnt truly done anything meaningful, certainly not in regards to the markets, or the economy...so this new record is nothing but normal speculation, and an influx of questionable investors.
Plus, hasnt the market just kept setting new records, year after year...? It seems sort of pointless to keep hyping the latest record, when its only going to be beat in the near future. Its not like the market has ever set a real and hard to beat record. Its not the Olympics...unless we want to make a steroids analogy...
4
Thank you President Obama. It took eight years for you and your administration to dig us out of the economic disaster George W. Bush and the Republicans created from 2001 through 2008. And now our current President and the Republicans are determined to set us up for another economic collapse in the future. The same old story. Lower taxes on the ultra rich and corporations. Get rid of regulations and allow Wall Street to do whatever it desires. The Trump voters wanted change. This is the change they will get.
12
It's the swamp realizing it's not going to be drained.
17
The Dems say this is a result of Obama policies. Can't have it both ways!
The booming markets are telling us you're doing great if you're rich and and pretty pathetic and sad if you're not
End of story.
End of story.
39
but that is what Trump wants- oh wait a minute he is supposed to help the deplorables- the ones with no savings, no health care, and no skills. Humm does not seem to fit. In fact nothing these days seems to fit- cemeteries desecrated; child care centers threatened with bomb attacks; alternative facts the rage; protests every where; folks scared and worried about their children; fear in the land- but a booming stock market-
But wait until their bottomless greed leads them right back into shady financial deals, bad loans, obscenely high salaries, and failed "stress tests." They'll all be back in DC in their limos begging for government bailouts.
The booming markets tell us nothing about the global economy. The markets are simply an ideology.
Booming markets tell us as much as quiet volcanoes told us about the efficacy of sacrificing virgins to the Volcano God.
Booming markets tell us as much as quiet volcanoes told us about the efficacy of sacrificing virgins to the Volcano God.
4
This seems to happen over and over. A Democrat stabilizes the economy, starts getting the deficit under control, oversees either spectacular growth (Clinton) or brings back growth after near disaster (Obama) and then a Republican comes in and squanders it. People take the good for granted--give them prosperity and peace and they get bored.
7
"The stock market reached yet another new high on Wednesday, the latest development to make a mockery of what savvy economic commentators thought they knew about the world."
No one predicted a collapse of the U.S. economy would happen within 40 days of Trump's swearing in, and 40 days is no harbinger of what the next few years will be like. Many of us believe we will be in another great depression within two years, if not sooner. I see no reason to think otherwise at this point.
No one predicted a collapse of the U.S. economy would happen within 40 days of Trump's swearing in, and 40 days is no harbinger of what the next few years will be like. Many of us believe we will be in another great depression within two years, if not sooner. I see no reason to think otherwise at this point.
4
We need to bring in one word that was noticeably absent before the 2008 crash: over-incentivizing.
Over-incentivizing certain aspects of the financial world leads to, at best, unethical behaviors. At worst, criminal behavior. After all, you can buy a great team of lawyers when you have a hundred million dollars lying around.
Modest incentives are good, crazy incentives (like the ones still operating in the realm of real estate and the ones curtailed by Dodd-Frank) will inevitably appeal a bit too much to some people and create another crash.
Over-incentivizing certain aspects of the financial world leads to, at best, unethical behaviors. At worst, criminal behavior. After all, you can buy a great team of lawyers when you have a hundred million dollars lying around.
Modest incentives are good, crazy incentives (like the ones still operating in the realm of real estate and the ones curtailed by Dodd-Frank) will inevitably appeal a bit too much to some people and create another crash.
4
I remember reading an article recently in the Wall Street Journal about a growing crisis facing American farmers and the increasing number of farms going bankrupt. It reminded me of what I've read about the 1920s, where there had been a similar decline in the agricultural sector while the stock market had been booming and how that portended a much more grim future than most people realized at that time. In politics, the 1920s were an era of pro-business, pro-deregulatory politics, and an era where nationalistic and anti-immigrant rhetoric were en vogue. The parallels between today and the 20s are striking to me.
After every boom there follows a bust, and the bigger the boom, then, typically, the bigger the bust. The Fed is all out of policy tools to deal with another crisis at this point. Either they will be forced to engineer a succession of small recessions by bringing interest rates back up to a level where they ought to be or they will take the risk of the asset bubble they've created in stocks popping at a time where they would not have the ability to do anything about it and triggering another great depression. Either way, this boom will have to end. Will the cronies Trump will install at the Fed have the guts to pull the plug on the easy-credit gravy train that their boss's grandiose plans depend on? I doubt it.
After every boom there follows a bust, and the bigger the boom, then, typically, the bigger the bust. The Fed is all out of policy tools to deal with another crisis at this point. Either they will be forced to engineer a succession of small recessions by bringing interest rates back up to a level where they ought to be or they will take the risk of the asset bubble they've created in stocks popping at a time where they would not have the ability to do anything about it and triggering another great depression. Either way, this boom will have to end. Will the cronies Trump will install at the Fed have the guts to pull the plug on the easy-credit gravy train that their boss's grandiose plans depend on? I doubt it.
20
Succession of small recessions sounds like a great college radio band name. Aren't you glad I found something hopeful in your comment?
1
Long term investing in the stock market is still the best place to put money you will not need for 5 years or more. Smart investors realize that politicians, and their policies, come and go. Invest on a regular basis and do not try to time the market. Invest in quality, low cost, index funds. Than sit back and enjoy.
13
As a long time investor and long time retired I agree with your advice. I wonder how many people will take your advice. I keep 10% cash in reserve when the market is high to invest when the market drops. It is not a question of if; it is a question of when.
1
A conundrum. A bunch of lemmings piling into the market. 1987, 2000, 2008 again? A fed rate hike in March could mean more hikes. I call this the compounding effect as more people and businesses borrow not because of need but the fear for rates rising. Right now gold is weak but if I am correct (history should be believed) this is one asset class that should be in all investing portfolios.
1
Everyone's counting on those infrastructure spending and tax cuts that Trump is trumping on, even if they won't admit it. For whatever the long term drastic impact might be on the deficits, investors love those immediate sugar rush.
5
"Much of the buoyant optimism on Wall Street is driven by investors’ expectations of corporate tax cuts and deregulation under the Trump administration."
Yep. Investors are hoping for the "good 'ole days" before Dodd Frank, before the Consumer Financial Protection Bureau. They can't wait to fleece the bottom 99% again. The FCC just put on hold new privacy rules. Trump and his billionaire cronies can't wait to destroy regulations that protect ordinary people. If Wall Street could make a profit by eliminating laws/regulations/standards that require air bags and seat belts in vehicles, the administration would probably go for that too. It's open season on consumers.
Yep. Investors are hoping for the "good 'ole days" before Dodd Frank, before the Consumer Financial Protection Bureau. They can't wait to fleece the bottom 99% again. The FCC just put on hold new privacy rules. Trump and his billionaire cronies can't wait to destroy regulations that protect ordinary people. If Wall Street could make a profit by eliminating laws/regulations/standards that require air bags and seat belts in vehicles, the administration would probably go for that too. It's open season on consumers.
31
While higher interest rates will help retirees with savings like me, higher inflation will not. I predict that the quick rise in the stock markets will be followed in short order by a quick fall. It happened in 1987 after similar conditions.
16
After 1987 it didn't take long for the stock market to, not only reach pre-1987 crash levels, reach all time highs. I continue to dollar cost average into the S&P 500, but would welcome a market decline and would use any such pull-back as an opportunity to move even more money into U.S. equities. Right now, even with our deficit, unemployment and infrastructure problems, the U.S. economy is the strongest in the world. If you don't believe me, ask Warren Buffet.
1
It seems that Republicans love toxic bubbles. From fracking to banking there is nothing too toxic for our boys in Congress or for any Trumpette. They seem to love these bubbles so much that they do not care that the toxicity creates more homelessness and is killing people every single day. Not one Republican has mentioned that 1 out of 4 children in America goes to bed hungry, but stop abortion? Full speed ahead for these bubble loving killers of good faith, good will and tolerance. Ever tried to do business without good faith? Can't be done and the Republicans offer none. Without good faith a crash looms not in the ether, but as a promise.
24
The vultures are circling
15
It's no phenomenon or stroke of luck this is all happening at the time Donald Trump has been elected. Businesses and the world economy is EXCITED for Trump. Corporate tax cuts, deregulation of government and business all mean very good signs for the American economy. Had it been Hillary Clinton elected it may have been a different story.
5
"Had it been Hillary Clinton elected it may have been a different story."
I bet they would also be very excited.
I bet they would also be very excited.
1
The markets rise and fall on emotions, not reality. The tech bubble and real estate bubbles were based on emotions and when reality caught up with emotion, the bubbles burst. Think gambling and gamblers and you'll understand the stock market.
You mean the markets are making a mockery of Paul Krugman and his election night prediction of a depression from which we would never, ever recover?
Well, yes, that's true.
Well, yes, that's true.
12
Putin's Stooge has only been defiling the office for 5 weeks. It will take a few months to trash the economy. This rapid stock build up is spring 1929 all over again.
1
He needs to overcome his personal depression first. Then maybe he will see the light and invest in a low-cost S&P 500 fund and reap the rewards.
"Conventional economic theory" predicted "nine of the last five recessions." "Conventional economic theory" needs to quit assuming that there is a ladder when it jumps into a hole, instead of having an actual ladder. "Conventional economic theory" needs to bring human beings with their concrete human needs back into their calculations. One of those needs is for an economic calculus that includes ethical and moral consideration, not simply "predictions." "Conventional economic theory" would be better if it emulated history rather than physics. Mr. irwin's almost there, not quite.
9
Trump will, of course, take credit for Obama's hard work. Wall Street will make hay on rumors of deregulation, tax cuts for the rich, the unfettered free market and get out just in time to offload the huge losses in the inevitable bust onto the usual unsuspecting suspects - the middle class and workers who are investing for their retirement. Same as it ever was.
Doesn't anyone remember 2008? Of course they do. Those at the top made more money as that ship went down than other people lost in during that same period. They could care less about crashes. They make money on movement no matter what the direction.
My question is always the same. What good does all the money do when the world you inhabit is impoverished by your selfishness? Eventually, albeit in a different quarter and out of your ken, you will find yourself as impoverished as the earth you have plundered. That you already occupy that place in the truest sense of the word, can't possibly dawn on you because you have and are entitled to everything that money can buy and it's everything. What else is there? I couldn't possibly tell you because you would laugh at my idea of the richness of life in a world of simple beauty, dignity in work, love of family and friends, love of this earth and our purpose on it. Never mind. As you were.
Doesn't anyone remember 2008? Of course they do. Those at the top made more money as that ship went down than other people lost in during that same period. They could care less about crashes. They make money on movement no matter what the direction.
My question is always the same. What good does all the money do when the world you inhabit is impoverished by your selfishness? Eventually, albeit in a different quarter and out of your ken, you will find yourself as impoverished as the earth you have plundered. That you already occupy that place in the truest sense of the word, can't possibly dawn on you because you have and are entitled to everything that money can buy and it's everything. What else is there? I couldn't possibly tell you because you would laugh at my idea of the richness of life in a world of simple beauty, dignity in work, love of family and friends, love of this earth and our purpose on it. Never mind. As you were.
43
@Memi what you wrote is profound, way too profound for politicians. Unfortunately, the vast public has bought into the idea that rich means buying power. See all the new cars, the fancy TV's, a Nike store on a random Tuesday. Bless your elevated mind.
Last January I bought shares of Prudential insurance for the heck of it; I'm an income investor so I liked the dividend. I sold it all yesterday after about a 65% return. I'm a hold forever guy, but when Mr. Market hands you a fat gain, better take it and run.
11
Anyone recall the Tulip market run-up?
Most financial types live in a bubble similar to Trump where 'invisible' forces keep the economy and businesses from achieving their most efficient and elevated positions.
It has always been a bunch of self-serving delusional cr_p, and remains so.
We've reached the insanity level of market overvaluation, and those who don't see this will get slaughtered shortly.
Most financial types live in a bubble similar to Trump where 'invisible' forces keep the economy and businesses from achieving their most efficient and elevated positions.
It has always been a bunch of self-serving delusional cr_p, and remains so.
We've reached the insanity level of market overvaluation, and those who don't see this will get slaughtered shortly.
5
"Conventional economic theory..."
About as predictable as the Cubs winning the World Series.
Or Donald Trump winning, well, you know what.
Right, NYT?
About as predictable as the Cubs winning the World Series.
Or Donald Trump winning, well, you know what.
Right, NYT?
5
Having worked on wall street I can state with confidence that this rally should be called "the march of the ostriches." T. Rump is one of the few men on the planet who can open his mouth and tank the US dollar. No one seems to care.
Which is why banks should be regulated, not freed to play stupid games with our backing.
Which is why banks should be regulated, not freed to play stupid games with our backing.
24
The biggest Ponzi scheme in history is playing out in the stock market. Trillions of dollars created out of thin air to pump up the deflated housing bubble. Companies issuing dedt at rock bottom rates to buy back their stock at inflated prices. When inflation finally comes we're in for a world of hurt.
12
Does anyone here really think that Trump would be softer on banks than Barack "My AG Holder was a white shoe Wall Street stooge and I'll never prosecute anyone" Obama in the case of any sort of economic crash? Wall Street had already picked Obama's cabinet before he was sworn in whereas Trump isn't beholden to anyone
6
well, maybe just Putin and the mob. but that's business,eh?
2
I take your point that Trump is not as beholden to Wall Street as Obama was. The achievements of our 44th president would rank with those of FDR and LBJ were it not for his spineless toadying to the big banks and his delusory claim that Dodd-Frank secures us against a repeat of the banksters' undercapitalized and reckless gambling. Obama gave the banksters cover when he assured taxpayers that Dodd-Frank won't let our credit to be put at risk. Trump's policies are mostly abhorrent, but at least he won't try to save the banksters as the Obama-Bush team (Paulson, Summers and Geitner did.
2
Hey, thank you Donald. Everyone, including average American retirees from either side of the aisle, benefits when the stock market goes up like gangbusters.
8
Wait until it goes down like gangbusters. What goes up, must go down.
15
Shocking that no one is mentioning the FED. FED will be tightening in the near future. All the QE started in 2009 with majority in 10-year TB will be coming due in 10 years time. That means the current stock market boom is a precursory of a crash in 2019 or sooner. Readers beware.
6
So a pathological liar who courted white supremacists and expressed admiration for dictators becomes president, and the stock market surges, maybe that says something about investors they'd rather not discuss.
16
The stock market is just another form of gambling, and no one - not even the so-called experts - can predict the future. Most analysts never really make a commitment about how the stock market will go and which funds are profitable. They speak such as to say: it MAY go a bit higher, then fall; the bubble will burst; it will continue to fall, but then increase, blah, blah. It's just another snake-oil product, and the analysts are the hawkers.
8
Most of the 70 stocks I own have been paying steady dividends for years. I predict that in the future, they will continue to pay, and I will continue to receive the income. Sure, one or two will cut the dividend, but others will raise it.
2
The average P/E of the S&P 500 is over 26, while the historical average is about 15. The irrational exuberance we are now experiencing is a passing phenomenon.
7
This bubble is going to pop, review the recent history of the American financial press, say, the last twenty years. Irrational exuberance? Irrational cowardice? Yep!
Lemmings, sheeple, you got it, the wolves can count on the stupidity of the heard.
Second grader analysis, shallow understanding, abject pontificating and horse apple speculation? The NYTs can do better.
Lemmings, sheeple, you got it, the wolves can count on the stupidity of the heard.
Second grader analysis, shallow understanding, abject pontificating and horse apple speculation? The NYTs can do better.
5
Anyone watching the price-to-earnings ratio? It's creeping upward, so stock prices are getting ahead of earnings. The market run-up is based on expectation so far, much more than on actual growth. Will the growth follow? Are we sure?
9
What is says is GREED!
3
Yeah, right - the stock market will likely feel the "Trump effect" by October, when Congress is deadlocked on a "continuing resolution" on the budget when they realize the details aren't feasible. This stock market increase is so ridiculous that an October 1987-like crash seems inevitable. The "Trump effect" will likely end up as bankrupt and worthless as his businesses - remember, Trump filed for bankruptcy 4 times! He promised he'd do the same for the country that he did with his businesses....
11
"buoyant optimism" driven by unprecedented Central Banks money creation.
"full employment" if you forget about the tens of millions of Americans of working age absent from the work force.
"full productive capacity",please ignore crumbling infrastructure,potable water
shortages,vanishing topsoil,and depletion of just about every essential resource
our industrial society runs on.
Modern denialism at its finest brought to you by the NY Times.
"full employment" if you forget about the tens of millions of Americans of working age absent from the work force.
"full productive capacity",please ignore crumbling infrastructure,potable water
shortages,vanishing topsoil,and depletion of just about every essential resource
our industrial society runs on.
Modern denialism at its finest brought to you by the NY Times.
1
The real problem is that many average investors, including myself, are afraid to invest in the stock market after losing 40% in 2008, so our money sits in account paying 1% interest.
9
What does all that paper really mean?
It strikes me as very odd and wrong that so many companies value is mostly based on the feelings of people "investing" in their stock. How can you be investing in a stock when that stock has no concrete value when it isn't even attached to a physical thing or at least a quantified existing intellectual property with basic value?
All I can see is the failure of Capitalists to provide capital that builds factories and roads and bridges in the USA while they create paper entities and reap the "profits" and "losses" they create on paper by manipulating the news and information publicly known about those paper entities.
It strikes me as very odd and wrong that so many companies value is mostly based on the feelings of people "investing" in their stock. How can you be investing in a stock when that stock has no concrete value when it isn't even attached to a physical thing or at least a quantified existing intellectual property with basic value?
All I can see is the failure of Capitalists to provide capital that builds factories and roads and bridges in the USA while they create paper entities and reap the "profits" and "losses" they create on paper by manipulating the news and information publicly known about those paper entities.
2
That is not really the case - those who own the stock own the company. If you own a utility, you own the power plants, the fleet of trucks, and the utility poles in the street. If you own a REIT, you own those office buildings right there in the middle of the city.
Now, naturally, people change their views every day on what a utility or a REIT might be worth, and how much they would be willing to pay to be the beneficial owner from the future stream of earnings all those physical objects generate. But the actual companies, they're not paper.
Now, naturally, people change their views every day on what a utility or a REIT might be worth, and how much they would be willing to pay to be the beneficial owner from the future stream of earnings all those physical objects generate. But the actual companies, they're not paper.
The Republican infrastructure plan, using what they call public-private partnerships, is designed to auction off "infrastructure" to the rich who will immediately place tolls, fees, and rent on that infrastructure in order to recover "their investments" in the stuff that "we, the people" used to own The core, underlying problems that plague us are the same problems that have driven every financial bubble in history: 1) wealth disparity; 2) wealth concentration; 3) culture of greed; 4) Corporate monopoly; 5) Corrupt political system; 6) 'Top down socialism and elitism', aka, oligarchy tempered by fascism; 7) Public feeding frenzy driven by all of the above. Many of the other articles in this thread offer more perspective on those issues.
6
By now, we should have learned that the spike in the stock market means nothing. All of us are projecting whatever we can imagine, or want to, on this new administration, an administration that is only consistent in its daily inconsistencies, sometimes reversing positions and policy by the hour.
Instead of the black dress, Mar-a-lago vs. Camp David weekends, this silly market frothiness, Kellyanne’s uncouth behavior, and all other such diversions, it will behoove us all a lot better if we focus on THE most significant and still unsettled issue of this new administration’s provenance – The Russian Connection. It is our duty to keep a laser focus on it, despite the daily side shows that keep getting ginned up to keep us amused and bickering, while this important issue somehow fades away from the public’s mind.
Instead of the black dress, Mar-a-lago vs. Camp David weekends, this silly market frothiness, Kellyanne’s uncouth behavior, and all other such diversions, it will behoove us all a lot better if we focus on THE most significant and still unsettled issue of this new administration’s provenance – The Russian Connection. It is our duty to keep a laser focus on it, despite the daily side shows that keep getting ginned up to keep us amused and bickering, while this important issue somehow fades away from the public’s mind.
8
"Animal spirits" in the expectation of corporate tax cuts and yet more deregulation. The only real employment growth is in low paid work, but never mind. We'll call it "full employment" and say the market's "booming".
Interestingly, it's no surprise to MMT macroeconomists or any other leftist macroeconomist that the GOP'S election has seen animal spirits in the market break out the champagne, bells, whistles, streamers and balloons. Let em eat cake. Mind you, a Democrat election would have seen a very similar result: business as usual is business as usual. Just a few less bells and whistles. Anyone bothered to listen to people like Mark Blyth over the last few years?
Interestingly, it's no surprise to MMT macroeconomists or any other leftist macroeconomist that the GOP'S election has seen animal spirits in the market break out the champagne, bells, whistles, streamers and balloons. Let em eat cake. Mind you, a Democrat election would have seen a very similar result: business as usual is business as usual. Just a few less bells and whistles. Anyone bothered to listen to people like Mark Blyth over the last few years?
1
It is time for Democrats and the media to revive the "It's the economy, stupid" slogan from the Clinton campaign.
They need to stop spending so much time on issues like immigration and Russian collusion and focus on the effect the policies of trump and his billionaire cabinet will have on trump's base, a continued and enhanced transfer of wealth to the very richest.
They need to stop spending so much time on issues like immigration and Russian collusion and focus on the effect the policies of trump and his billionaire cabinet will have on trump's base, a continued and enhanced transfer of wealth to the very richest.
5
What it shows is that Wall Street is doing well while Main Street isn't doing quite as well. As long as people have to worry, on a daily basis, about losing their jobs, paying the mortgage or the rent, going bankrupt, planning for the future because they can't, booming markets mean very little. They mean even less to people who cannot find work, are not entrepreneurial enough to strike out on their own, and who, as a result, cannot support themselves.
Booming markets do not help the average citizen unless there is some sort of policy in place to help them. All we've seen since the inception of trickle down economics, is a drought.
Booming markets do not help the average citizen unless there is some sort of policy in place to help them. All we've seen since the inception of trickle down economics, is a drought.
14
I love the New York Times, but this is just terrible reporting. You can't in any way attempt to qualify the significance of the markets in a vacuum. The fact that stock buybacks and/or the tendency of increasing wealth disparity to create investment bubbles was not mentioned even once is egregious here - as you cannot note record-breaking market behavior without also taking into account that those other elements are also at record-breaking levels. Can we point to some other time in history where, when corporate profit was already at record-breaking levels, we sought to deregulate across the board? At a time where stock buybacks are also at a record high? To the extent that any of this is extraordinary, it's most certainly not tenable.
10
Good points. Irwin seems to forget the economic importance of the trend in real capital investment, a variable that tells more about business optimism than the behaviour of traders of claims on existing assets.
2
There's also the "Previous Farmer took good care of the chickens and the New Farmer left the henhouse door wide open" effect. Some of this is ebullience, some is kleptocracy. Trump will reap the political benefits of Obama's diligent hard work.
16
So the investor class is increasing in wealth. Down here on main street, the rest of the 98% of America is so pleased for them. As we learned with Reagan, trickle down economics means, "If you want to feed the birds, give the horses more oats". The rise in equities simply says there isn't any other place for the wealthy to put their money. Hey Trump voters, get ready to be hung up by your heels until all the coins fall out of your pockets.
13
All well and good, until Trump starts his first "winnable" war. What then?
2
Another "win" for the iinvestors, but nothing of the sort of regular folks.
It won't last, as this is all built on illusion and spinning. Not until economics includes real costs and losses to regular folks, education, environments, water, air, health et al will there ever be any true accounting. Wall Street iseems like a god & the center of news in this country, but is not at the center of most peoples lives.
It won't last, as this is all built on illusion and spinning. Not until economics includes real costs and losses to regular folks, education, environments, water, air, health et al will there ever be any true accounting. Wall Street iseems like a god & the center of news in this country, but is not at the center of most peoples lives.
9
The resurgence in inflation is phony! China is buying its own coal, steel, copper, aluminum, etc. and having it re-processed over and over again. US shale and Gulf crude oil exports are already undercutting so-called OPEC production "discipline."
There is over-production and/or overcapacity in just about everything. This is going to be a very short interest rate "normalization" process!
There is over-production and/or overcapacity in just about everything. This is going to be a very short interest rate "normalization" process!
3
I believe that, like any potential bubble in the making, the rational investors who are considering getting out--in part or in whole--is increasing. And, serious investors who m might consider getting in--jumping in with large addicting, or adding incrementally--is decreasing.
The rally, as such, is based on the changes that Donald Trump will make; but, s far, he hasn't made any, and which ones might the GOP majority go along with, and which ones won't they. Like health care, Trump and the GOP don't always see eye-to-eye.
As the rally has progressed, the Price-to-Earnings ratio has risen, and even more so in certain sectors. If his policies feed little tax relief to the middle class a dwindling amount of Consumer Spending at a time where Trump's Trade Policies might cause a significant rise in Inflation--and no one to buy the corporate products, except for the bare necessities.
Consider: lower tax rates, cuts vital programs and adds to the National Debt. Trump's micromanagement, by brow-beating corporate CEOs could replicate the disastrous Soviet Five-Year Plans. And accelerating Depreciation might add to volatility as it would move corporate deductions forward, reducing tax collections in current years, and that reducing the impact of such deductions in future years.
The rationale for this "Rally" could leave us in a terrible muddle: Stagflation!
https://thetruthoncommonsense.com
The rally, as such, is based on the changes that Donald Trump will make; but, s far, he hasn't made any, and which ones might the GOP majority go along with, and which ones won't they. Like health care, Trump and the GOP don't always see eye-to-eye.
As the rally has progressed, the Price-to-Earnings ratio has risen, and even more so in certain sectors. If his policies feed little tax relief to the middle class a dwindling amount of Consumer Spending at a time where Trump's Trade Policies might cause a significant rise in Inflation--and no one to buy the corporate products, except for the bare necessities.
Consider: lower tax rates, cuts vital programs and adds to the National Debt. Trump's micromanagement, by brow-beating corporate CEOs could replicate the disastrous Soviet Five-Year Plans. And accelerating Depreciation might add to volatility as it would move corporate deductions forward, reducing tax collections in current years, and that reducing the impact of such deductions in future years.
The rationale for this "Rally" could leave us in a terrible muddle: Stagflation!
https://thetruthoncommonsense.com
2
This run up reflects the excessive glee of the finance, pharmaceutical, and fossil fuel industries, to name a few, at the prospect of the end of regulatory restraints. Once again the trick will be predicting when the bubble will burst. Hopefully not before I annuitize my IRA and SEP later this year.
5
It still all smells like a bubble to me. A correction is coming. Wall Street is marvelous at producing bubbles as well as new wealth. But terrible at producing actual jobs for the rest of us. And prices continue to rise while actual wages are stagnant or declining. I watch my small investment portfolio and 401k with trepidation, because what goes up usually comes down as well.
16
Inflation may benefit investors, but for the rest of us who have to live with stagnant wages and have no investments, inflation does nothing but drive up prices for consumers who are already in debt and whose incomes are already stretched to the maximum. Why is this good news? Booms bring higher prices for housing, food, gas, and every other necessity. You can argue that companies benefit, and in the old days that might be good news for employees, but these are the new days of weak unions and poor labor relations. Employees never feel the benefits of corporate profits any more. Companies may hire a few more people, but wages will remain low, while the cost of living skyrockets. Good luck to the average person who can't afford investments, or even to own a home.
30
While you've got a really good point, 2% inflation is nothing. Sorry, but it's not.
And in fact, one of the things figured into inflation is rising labor costs. As in "higher wages."
Now if inflation goes like a rocket...
And in fact, one of the things figured into inflation is rising labor costs. As in "higher wages."
Now if inflation goes like a rocket...
1
aint capitalism grand ?
Robert, it may be "nothing" to you, but 2% adds up if you apply it to everything you have to pay for, from food and housing to clothing and transportation. The average person is being nickeled and dimed to death.
Who believes in the figures used by the feds anymore? Who knows what to believe anymore?
All the indexes have been manipulated and don't give true facts i.e. unemployment rate and inflation rate and probably et al.
I believe workerbee below that buying back stocks by corporate conglomerates are what is driving this big bump. Trump makes it sound like all America is decaying which to some extend it is but not because of immigrant violence and crime. People are hurting all over as the cost of living is rising at unprecedented rates especially housing whether you're renting or buying.
All the indexes have been manipulated and don't give true facts i.e. unemployment rate and inflation rate and probably et al.
I believe workerbee below that buying back stocks by corporate conglomerates are what is driving this big bump. Trump makes it sound like all America is decaying which to some extend it is but not because of immigrant violence and crime. People are hurting all over as the cost of living is rising at unprecedented rates especially housing whether you're renting or buying.
6
Since when has Wall Street been a reliable indicator of the real economy? I think we can pretty much agree that its animating force is short term greed. Anyone who thinks otherwise still believes in the Easter Bunny.
22
When most of Wall Street agrees, most are completely wrong.
It has always been this way.
The most money I have ever made is betting against the experts when they mostly agree.
It has always been this way.
The most money I have ever made is betting against the experts when they mostly agree.
1
It took the same amount of time in 1999 for the stock market to go from 10000 to 11000, 24 sessions, as it did this year to go from 20,000 to 21,000. The Trumpkins are absolutely enthralled to the point of ecstasy over that. But the 1999 rally was 10% versus this year's 5%, approximately. Trump may want to take credit, but the current rally is based on late 2016 earnings reports now coming in. Earnings were stagnant earlier in 2016, so too the stock market. Let us not forget in 2009 early when the market was around 7000 but advanced to over 19000 by the time Obama left office.
Shall we talk about the sustained rally under Obama, Trumpkins? Obama left you with a very stable stock market, unemployment less than 5% and most people who want jobs have jobs, although the jobs should pay more and have better benefits, which with your anti-regulation, anti-labor, pro right-to-work policies surely won't help.
This won't happen, but it should: a tweet from Mr. President, simply stated; "Thanks, Obama."
Shall we talk about the sustained rally under Obama, Trumpkins? Obama left you with a very stable stock market, unemployment less than 5% and most people who want jobs have jobs, although the jobs should pay more and have better benefits, which with your anti-regulation, anti-labor, pro right-to-work policies surely won't help.
This won't happen, but it should: a tweet from Mr. President, simply stated; "Thanks, Obama."
38
That's cute. But when the stock market fell immediately after the election, Trump was blamed.
Several weeks later with Trump in office, Lefties want to credit Obama for the all time high in the Dow. It's good to know that liberals apply logic and unbiased opinions as needed, liberally.
Several weeks later with Trump in office, Lefties want to credit Obama for the all time high in the Dow. It's good to know that liberals apply logic and unbiased opinions as needed, liberally.
3
But wait - it's "No Thanks,Obama" because... he inherited "a mess".
Which is of course - why he gets an A for effort and credit for all these amazing things - including the stock market rising - that only he accomplished in just 6 weeks.
Which is of course - why he gets an A for effort and credit for all these amazing things - including the stock market rising - that only he accomplished in just 6 weeks.
1
Why not? Considering where we were in 2008, sure, I'll give credit where credit is due. The stock market hasn't fell in yet for Trump. I'll give it a couple more months. Scandal, scandal, lies and more lies... it will have a cumulative effect. Who said I was unbiased? Btw, time will tell which of us is more logical.
Pre-election it was the NYT economics babbler Krugman that foresaw markets cratering if Trump were to be elected.
Right as always.
Right as always.
13
Mr. Krugman did not say "right away"....in fact, I think he said in a couple of years. Once the veil is lifted from our very dishonest President and the debt ceiling explodes (pay attention to March 15) your world and financial confidence are likely to be rocked...So stay tuned!
1
Links?
Left, as always...and correct. See what happens.
1
I am so sick of listening to these corporate mouthpieces saying that the reason that the market is doing so well is because companies are optimistic about the future and now are willing to invest. There is nothing different today than there was 4 or 8 years ago. Imagine if wall street had invested in America instead of sitting on their piles of cash blaming Obama for all their woes. They have been able to borrow money for nothing and give to their CEO's in the form bonuses. Imagine where we would be today if these "patriots" had helped out 8 years ago.
27
Companies invest in capital, equipment and people because of demand for their products and services. Demand has been relatively weak for a long time now and that's why corporate investment has been relatively weak. Normally the government would step in and fill the void. Divided government held back government spending. Government spending is likely to increase now that we don't have divided government.
There is something very different today than there was 8 years ago. We aren't in a terrible recession where banks wouldn't lend money and demand was none existent. 4 years ago we still had an extremely slack economy with lots of unemployment and failing wages. Today is very different.
There is something very different today than there was 8 years ago. We aren't in a terrible recession where banks wouldn't lend money and demand was none existent. 4 years ago we still had an extremely slack economy with lots of unemployment and failing wages. Today is very different.
5
Can you think, for a minute, as to what you wrote.
For 8 years Obama was chastised for running up the debt, for spending too much money.
Now you are arguing that, in nominally 'conservative' hands, the government is now suddenly free to spend yet MORE money?
Buying into that argument is basically acknowledging that the GOP is not the party of conservatives, but the party of CON.
For 8 years Obama was chastised for running up the debt, for spending too much money.
Now you are arguing that, in nominally 'conservative' hands, the government is now suddenly free to spend yet MORE money?
Buying into that argument is basically acknowledging that the GOP is not the party of conservatives, but the party of CON.
DMJ-Power in government is derived from spending not restricting it. Neither party is restrained by that reality. They are only restrained by each other.
2
Irrational exuberance preceded 2008. When will this market crash?
5
When will this market crash?
About every 5 years or so.
About every 5 years or so.
1
What a scam, have we not learned from the past? It all goes according to plan: looks like we are ready for a another major shake up as happened in 07. The small investors will be wiped out while the big players are gobbling up assets for cheap.. and failing institution get a tax payer bailout.
4
It's far too early to make any comments about Trump's effect on the economy. We will have a sense of what it is around mid 2018.
12
The markets have risen just as sharply since Labor Day if you look at the chart. Care to write a 1000-word explainer on that?
7
If you get rich in China, you buy your way out before you die from the pollution.
8
Bubble much?! Get ready for the ride...
Prognosticators need to take a good look in the mirror as when the troubles begin, they have lost their credibility and have surely been relegated into the "fake news" category by the people most likely to suffer when the markets become bearish.
Prognosticators need to take a good look in the mirror as when the troubles begin, they have lost their credibility and have surely been relegated into the "fake news" category by the people most likely to suffer when the markets become bearish.
2
The same poison that got into the water supply of the fly-over states and caused people to vote for Trump against their own self-interests has now reached into the bottled water supply of the 1% and caused this stock market bubble.
4
Thats all we need. A good economy for Trump and all the Republicans taking credit for it. Hopefully the economy will crash and the nation falls into poverty and disparity. And war break out too. Better all that then give Trump credit.
2
It is particularly ironic to 'hope' that the economy will crash, don't you think? I am about to shift my retirement savings into more risky investments -- not sure about that....
Confiscatory taxation and draconian regulations depress an economy duh! Facts that dogmatic "progressives" simply don't have the intellectual capacity to comprehend. No one needs the NYT to tell us about the economy or markets.
3
California much?
Minor technical detail: so far, Trump's got nothing done to change either, even if you really think that an effective 15% tax rate is "confiscatory," and any regulation at all of financial services industries is crippling.
What's the top income tax rate now? 35%? Confiscatory?
Regulations that limit air pollution, for instance, are Draconian?
You don't have to to be progressive, much less dogmatically so, to recognize common sense.
Regulations that limit air pollution, for instance, are Draconian?
You don't have to to be progressive, much less dogmatically so, to recognize common sense.
when this bubble bursts, it will make 2008 look like a minor correction
13
Even stockbrokers are smart enough to know that Trump's deregulations are a free pass to pillage the US economy... until it goes bankrupt like a Trump casino. Trump and his billionaire clique will get richer, and his voters and the rest of us will pick up the tab. It's going to be great. Believe me.
17
I wonder what people with pension funds are thinking today whom the administrators of those pensions divested those funds from bank stocks and other financial sectors funds ....
1
Ha. 3 days after the election I told my financial advisor to rebalance my portfolio for aggressive growth. He agreed, even though both of us are liberals in deep mourning.
I thought the run would last a year; his sources said 18 months. We shall see.
I thought the run would last a year; his sources said 18 months. We shall see.
2
The billionaire class and others have feathered their hidey hole nests in New Zealand and where ever. This should be a telling sign of the future of America.
What is it that they know that we do not?
The results of the inevitable next crash will not be fun at all.
What is it that they know that we do not?
The results of the inevitable next crash will not be fun at all.
9
Did you give the fact-checkers the night off, instead of having them read Mr. Irwin's tissue of inaccuracies? He ignores the fact that the stock market has been on an eight-year bull run, and that one year ago the Dow was already in record territory, at 18,000.
10
Too bad Trump International is not a publicly held corporation. That's where the smart money would be going. Or maybe Russian oil stocks.
2
Nobody wants to interrupted an extravagant and perhaps short-lived rise in expectations for more wealth...if only it would include the least among us. Capricious and irresponsible Trump, with an attention span of fish Dory, is no guarantee that his unscrupulous actions won't tank the economy and our standing in the world sooner than later. Thus far, the rambunctious empty talk of our "Ugly-American-in-Chief", with its empty promises, has done nothing for the poor, and 'his forgotten' hapless and duped folks (by a globalized economy, free trade and the digital technological revolution)....who might still rise and call this fraudster to account. The rise in the stock market benefits whom, exactly? Perhaps it is a tribute to a capitalistic society, dangerously dangling on a rising inequality. Let's remember that 'no chain is stronger than its weakest link'.
3
Stock markets are a forecasting mechanism not a retrospective view of the economy. This is axiomatic. To deny that Trumps policy prescriptions are viewed far more favorably than the Obama policies that kept the dynamic US economy in a prolonged period of secular stagnation is denialism at best and, more likely, just more partisan lies from a major outlet of fake news.
Trumpism, no matter what you think of the man, are likely to be very very good for the economy and that is what the stock market is saying.
Trumpism, no matter what you think of the man, are likely to be very very good for the economy and that is what the stock market is saying.
4
[[To deny that Trumps policy prescriptions are viewed far more favorably than the Obama policies that kept the dynamic US economy in a prolonged period of secular stagnation is denialism at best and, more likely, just more partisan lies from a major outlet of fake news.]]
Look around the world and see what blanket "de-regulation" has gotten people...air quality, water quality and worker protection. Overheated economies with unsustainable growth. The people suffer while corporations get rich and the super wealthy ship their money off shore (into luxury real estate in this country, so watch what happens when that bubble bursts).
Go ahead and play with your shiny new "fake news" toy. I wont waste a second trying to take it out of your hands.
But this is serious business, so the adults in the room will take over the conversation from here.
Good day.
Look around the world and see what blanket "de-regulation" has gotten people...air quality, water quality and worker protection. Overheated economies with unsustainable growth. The people suffer while corporations get rich and the super wealthy ship their money off shore (into luxury real estate in this country, so watch what happens when that bubble bursts).
Go ahead and play with your shiny new "fake news" toy. I wont waste a second trying to take it out of your hands.
But this is serious business, so the adults in the room will take over the conversation from here.
Good day.
4
Steve you are spot on however as you also know when viewing the future what we think will happen and what really happens are not the same thing. Markets are only rational over long periods of time. During any particular period they are extremely irrational because we don't know the future and at some point prognostication meets reality.
"It is getting to the point where a cycle of rising wages and higher inflation necessitates higher interest rates."
Wages have risen for many of the higher-income, skilled sections of the work force, but real wages have declined for the vast majority of workers. Nearly all the new jobs created during the "recovery" are low-pay, non full-time, and without benefits. Fluctuations of energy prices are behind the alleged concerns about inflation. The primary source of funds driving the stock market has been from corporate share buybacks, amounting to several trillion dollars since the "recovery" began. That's an enormous amount of money, sufficient to move markets in a big way and support the false belief that the stock market is reflecting the growth of a vibrant economy.
Wages have risen for many of the higher-income, skilled sections of the work force, but real wages have declined for the vast majority of workers. Nearly all the new jobs created during the "recovery" are low-pay, non full-time, and without benefits. Fluctuations of energy prices are behind the alleged concerns about inflation. The primary source of funds driving the stock market has been from corporate share buybacks, amounting to several trillion dollars since the "recovery" began. That's an enormous amount of money, sufficient to move markets in a big way and support the false belief that the stock market is reflecting the growth of a vibrant economy.
6
It's absurd to think the current rise in stocks is actually indicative of the so-called president's effect on the economy. It's only been 5 weeks, and his administration has not, as yet submitted ANY legislation to Congress. Making a big show of signatures on executive orders is becoming tiring and irritating.
Undoing environmental protections may be just great for polluters, but horrible for the citizens of this country. That there is nothing of substance forthcoming, in the form of actual legislation, is the real story. The "showman" (actually conman) may think he's doing "great" ("I'd give myself an A."), but his delusions cannot mask his incompetence.
The obvious danger of his diminished mental state should be a national concern ("Obama is behind the leaks"). Time for some serious medical intervention.
Undoing environmental protections may be just great for polluters, but horrible for the citizens of this country. That there is nothing of substance forthcoming, in the form of actual legislation, is the real story. The "showman" (actually conman) may think he's doing "great" ("I'd give myself an A."), but his delusions cannot mask his incompetence.
The obvious danger of his diminished mental state should be a national concern ("Obama is behind the leaks"). Time for some serious medical intervention.
17
Is this a false boom?
The average price (of stock shares) to earnings (EPS) is not at 29 times. That means that stocks are valued at 29 times their earnings on the S&P index. But during the recession they were as low as 7 times earnings. On historical average they float between 10 and 17 times. This means the average stock is valued at almost four times what it was in 2008. This also means that companies have to do about four times as well to justify their valuation. But these companies are doing nowhere near this well. By any means we are presently seeing a bubble of expectations that is bound to crash. Good luck investors and hang on to the SS and medicare benefits with your very lives. They will depend on it.
The average price (of stock shares) to earnings (EPS) is not at 29 times. That means that stocks are valued at 29 times their earnings on the S&P index. But during the recession they were as low as 7 times earnings. On historical average they float between 10 and 17 times. This means the average stock is valued at almost four times what it was in 2008. This also means that companies have to do about four times as well to justify their valuation. But these companies are doing nowhere near this well. By any means we are presently seeing a bubble of expectations that is bound to crash. Good luck investors and hang on to the SS and medicare benefits with your very lives. They will depend on it.
14
Claims by the Wall Street and the Republicans that deregulation and tax cuts will boost the economy", has never been proved, according to some of the top macroeconomists like Krugman. However, when every participant of the stock market believes this lie, it will become a reality since uplifting the sentiment is very important for the economy as explained as "Animal spirits have been unleashed," by William Dudley, president of NY Fed and a former partner at Goldman. However, since Trump and his Republican congress want to cut taxes for the rich (corporations) and secretly to cover the cut by the tax increase from the middle class with the elimination of all the tax breaks, our consumption-centered economy will stop growing sooner or late unfortunately.
14
"Making a mockery of economic forecasts"? I believe most reputable economists admitted in December that there was a high likelihood of short-term gains, as businesses looked forward to a relaxation of policies that serve to protect the American people.
I am not interested in gains; I'm interested in stable, ethical gains. The economy is somersaulting to higher and higher platforms, but it looks like the platforms give smaller and smaller footing. That shimmering on the horizon looks like a bubble.
I am not interested in gains; I'm interested in stable, ethical gains. The economy is somersaulting to higher and higher platforms, but it looks like the platforms give smaller and smaller footing. That shimmering on the horizon looks like a bubble.
22
If the market is in fact reacting to the election of bandump it is proof that the market is neither efficient nor rational.
11
Just shows that in the end, whether there's a raving lunatic or thoughtful person in office, as long as he or she guts regulations and lowers taxes, the market will boom. Pretty sad that no one seems to care about the long term. And it surely doesn't bode well for those delusional Trump voters who think they will actually see the return of low skill, high paying jobs. Now they'll have no jobs and no healthcare. This has been an economy of the wealthy for the past 40 years and it won't change unless constituents demand it. So far, they remain comfortably numb from opioids and a computer screen.
31
Well, there's the "rich people's economy", where people with lots of money and resources get to speculate and use their money to make more money, and there's the "economy of the rest of us", where what little money we can put aside sits in banks at uselessly low interest rates; where the costs of childcare, college tuition, home ownership, vehicle prices and insurance rates steadily become more and more onerous; where investment mechanisms with even the lowest reasonable yields require amounts and commitments far outside of our means.
Sure, it's lovely that the stock market is showing signs of activity. If you can afford stocks and bonds and funds, I'm truly happy for you. I have no urge to see anyone do poorly. But "the economy" isn't synonymous with "the stock market" for most Americans. For many of us, our horizons only stretch as far as we can make our paychecks go. Frankly, that's a very, very near bound.
The sad fact is, while moneyed investors quite reasonably wax eloquent about the improvements in their fortunes, tens of millions of American families are in extremis. Food-insecure, unhealthy, even homeless. For anyone with even a modicum of compassion and awareness, this raises a huge red flag that our money-over-all mindset has generated a national class divide of canyon-esque proportions. Unfortunately, what a surge in stock market value actually means in practical terms is that said divide is simply growing wider and deeper.
Sure, it's lovely that the stock market is showing signs of activity. If you can afford stocks and bonds and funds, I'm truly happy for you. I have no urge to see anyone do poorly. But "the economy" isn't synonymous with "the stock market" for most Americans. For many of us, our horizons only stretch as far as we can make our paychecks go. Frankly, that's a very, very near bound.
The sad fact is, while moneyed investors quite reasonably wax eloquent about the improvements in their fortunes, tens of millions of American families are in extremis. Food-insecure, unhealthy, even homeless. For anyone with even a modicum of compassion and awareness, this raises a huge red flag that our money-over-all mindset has generated a national class divide of canyon-esque proportions. Unfortunately, what a surge in stock market value actually means in practical terms is that said divide is simply growing wider and deeper.
54
perhaps saving money and investing it would be wise. The savings rate in this country is simply way too low. Three generations ago we all made due with much less, now we all feel entitled to 3 flat screen TVs, smartphones, cable and Uber while not saving much (in general)
7
Exactly. NYT, more information and analysis please! Wall Street has been known to be wrong in the past (to the point of depression), and our government is currently overrun and over represented by the interests of Wall Street. The financial sector does not a full economy make.
Joe: Three generations ago the average worker made a living wage and had pensions. Now people try to live and support their families on a ridiculously low minimum wage. Even a pious hypocrite like you would have trouble saving money 8.75 an hour
2
Stock market values have gone up.
The Trump plan to cut corporate taxes has been enunciated.
So stack speculation is looking like a good way to make money because a company with the same income will now have more money to distribute to investors.
However, this says nothing about the economic issues that matter to most people. Companies with higher stock valuations try to cut costs by eliminating jobs, not adding them. Companies what to sell products at high prices and pay the lowest wages that they can.
So the so-far short-term stock market surge is a bit of a smoke screen, not a resounding validation of the Trump team's economic plans and prospects.
The Trump plan to cut corporate taxes has been enunciated.
So stack speculation is looking like a good way to make money because a company with the same income will now have more money to distribute to investors.
However, this says nothing about the economic issues that matter to most people. Companies with higher stock valuations try to cut costs by eliminating jobs, not adding them. Companies what to sell products at high prices and pay the lowest wages that they can.
So the so-far short-term stock market surge is a bit of a smoke screen, not a resounding validation of the Trump team's economic plans and prospects.
18
A finite planet cannot sustain permanent growth.
Rather than continual economic growth, we should aim for sustainable systems, in which employment is valued over maximizing profit, in which wealth is far, far more fairly distributed, in which well-being is valued over consumption, and in which sufficiency, and not excess, is the desired state. Our economies must change and shrink if we are to survive. If we continue to the insanity of permanent growth, then in a few years or decades the natural world upon which we rely is going to turn around and to swat us flat.
Rather than continual economic growth, we should aim for sustainable systems, in which employment is valued over maximizing profit, in which wealth is far, far more fairly distributed, in which well-being is valued over consumption, and in which sufficiency, and not excess, is the desired state. Our economies must change and shrink if we are to survive. If we continue to the insanity of permanent growth, then in a few years or decades the natural world upon which we rely is going to turn around and to swat us flat.
32
Malcom, we have mass surpluses of many foodstuffs, copper, oil, and other resources. The doom and gloom fearmongers have been wrong countless times.
6
Malcolm, at least scientists have discovered several new earth-like planets recently. I'm sure as soon as possible capitalists will be looking at ways to exploit their resources starting in the year 2200.
Relax. It's all good. I'm sure by then there will be members of the Trump dynasty wearing space suits with the logo " Make the Universe Great Again."
Relax. It's all good. I'm sure by then there will be members of the Trump dynasty wearing space suits with the logo " Make the Universe Great Again."
Go Malcolm! NYT, how about it, can't we begin to talk about the real, systemic issues, in depth?
1
Americans are never happier than when they are spending taxpayer's money, especially when the taxpaxpayers are the nation's children. The infrastructure boom will go on for awhile, until it doesn't. Then comes a great deal of grief and a long period of hard, cold rain.
13
Except failing to keep a sound infrastructure and locking a whole generation out of career opportunities with a chance to add to their skills could also accelerate the rate that the U.S. resembles a developing nation.
It's great that many conservatives have finally jumped onto the infrastructure bandwagon under Trump, but his plan looks more like corporate handouts instead of a real plan that would create more and more jobs from the resources that a sound infrastructure supplies to workers and businesses.
It's great that many conservatives have finally jumped onto the infrastructure bandwagon under Trump, but his plan looks more like corporate handouts instead of a real plan that would create more and more jobs from the resources that a sound infrastructure supplies to workers and businesses.
8
My only meaningful observation is that we are in uncharted territory. Artificially low interest rates have been pumping money into the markets for nearly a decade. That's a long time. Obama also spent money like a drunk sailor and ran the printing press for the last decade - essentially kicking the can on down the road. As a 40 year old I am always buying but I am shorting my 401K and stock trading in favor of personal business investments. Never underestimate the power of the American economy and the power of fear and necessity.
3
Yeah, Obama spent money: cleaning up Republican messes.
The same messes will occur again under Republican borrow and spend policies, tax cuts, and deregulation that tip the playing field toward investment banks, parasitic private health insurers, and the fossil fuel industry.
The same messes will occur again under Republican borrow and spend policies, tax cuts, and deregulation that tip the playing field toward investment banks, parasitic private health insurers, and the fossil fuel industry.
36
Obama spent money cleaning up Clinton messes. Banks forced to loan to people with no means to repay, in order to be "fair and equitable" in low income areas. The liar loans were mandated by bank regulators, creating the mess. This was magnified by the bubble blower, Greenspan, another Clinton mess.
6
Yawn, in 2009 Obama backed up the US Treasury truck to the Wall Street investment banks and unloaded a Trillion dollars. He then had his lapdog avoid any meaningful prosecution of the Wall Street insiders. He then presented the bill to the American taxpayer and fostered a climate of record dependence and untold future liabilities for the taxpayer and working class.
1
The Republicans rejected major infrastructure spending to stimulate the economy when we needed it under Obama. Under Trump Now that the economy is finally picking up, the Republicans are talking about major defense and infrastructure spending along with tax cuts which are likely to cause major deficits, inflation and interest rate hikes.
It is clear the Republicans put politics ahead of sensible economic policy.
It is clear the Republicans put politics ahead of sensible economic policy.
16
That's assuming Repubs would recognize a reasonable economic policy. They think trickle-down has been working. (Actually, I don't think they're that stupid - they know trickle-down has been working, they just aren't honest about who has benefited.)
Wall Street is acting like students who pre-paid $40,000 to attend Trump University, with the expectation that they would cash out big time at the end of the semester. Just like Trump University students, Wall Street will be sorely disappointed before the end of 2017.
16
Before you celebrate check the historical records. The market always booms right before a crash. Ask yourself if you think Trump deserves the confidence of the worlds investors? Is he steering us on a clear and solid course for future growth, or will his policies lead to environmental, and social disasters? Enjoy the sugar high, "everything going to be so great, so wonderful you won't believe it", because it wears off very suddenly.
27
Stocks are way over-valued and due for a major correction. The nature of the market is to return to the mean eventually. This run is being driven by emotion, not fundamentals.
24
It is the triumph of hope over experience.
1
I have read through the comments. I don't understand why the liberal opposition opposes economic growth. The booming stock market reflects an optimism in potential earnings and growth. During the last 8 years, liberals were satisfied with meager growth, anemic growth, resulting in low paying service sector jobs. During the last 8 years, the best the millennials could hope for was working at Starbucks - high end fast food. Now even those jobs are endanger for Americans as the CEO of Starbucks proclaimed those jobs will go to refugees if they are ever allowed in the country. Now there is the potential for more jobs that pay enough to perhaps support a family. Good paying jobs are anathema to the liberal, who see such an arrangement as income inequality. I must however qualify that last statement by saying well-off liberals make certain that they are among society's economic elite, preaching income equality, while reaping the rewards of the investments we are now seeing. If the socialist utopia envisioned by Sanders ever took hold in America, the well-off liberals would make certain they are at the top of the heap, telling their misguided masses to do as I say not as I do. However if the Marxist dialectic plays through, the proletariat will revolt and over throw the bourgeois, including the left wing demigods. Hopefully those days will never come to pas and America will remain a nation in which people are allowed to be free, work, and acquire wealth. Thank you.
11
Dear Southern Boy, methinks you are imbibing a lot of ultra-conservative Kool-Aid. No doubt there are elitist individuals of liberal persuasion around the top of the financial heap but don't believe for a New York minute that the elitist individuals of the conservative persuasion are on the street handing out their coats to those in need; au contraire, these are the game-players who kick and scream to win favors for their own elitist buddies at the expense of the "average joe". And Starbucks CEO may believe he will hand all of his positions to refugees but I'll tell you, I deal with refugees in my work and most of them are completely unable to support themselves for a very long time, if ever, due to language, lack of education and poor health.
2
Why would an accelerated stock growth under Trump be any different from that of Obama's. After all , Obama nearly tripled it as well.
My portfolio is somewhat conservative, always has been, but still over the years decent returns and no big losses ---even in 2008. But, looking at my portfolio now is like fatal attraction---yes, the money is nice, but you are looking over your shoulder for what could be a fatal collapse.
6
Markets to Trump: "I will not be ignored?"
1
I am certain those disgruntled underemployed white voters in small towns and rural areas are watching the stock market closely and cheering the good news their vote for Trump has ushered in as they wait for the "trickle down" to rock their world. I wonder how long they will wait?
29
I asked my broker, the end of January, if he felt there would be a significant correction and if so, should I sell everything, sit back, wait, and re-enter and buy low.
He said no, providing a long reply as to why, according to the chief investment strategist to just sit back and enjoy the ride.
I am just back from a two-week visit to California, LA to visit family, a brief road trip to Las Vegas to see Seven Magic Mountains, the Neon Boneyard Museum, and the Mob Museum and bask in the surrealism of the whole place, TRUMP COUNTRY, and "those people" were out in force and then a drive up the PCH, lovely views, but we had to skip Big Sur, due to mudslides because the drought is over, so we drove through the Salinas Valley, BIG AG, and Trump should seriously rethink his deportation of illegal immigrants, because those are the only people I saw working in the fields, and no Trump voter (American) from the mid-west Rust Belt, who thinks the jobs will come back, because he said so, is going to convert to OKIE-ism and drive there to get a new job, even though some of "those people" that I saw in Las Vegas, at those slot machines, with a free drink, looked like the pictures by Dorothea Lange, and work in the fields. But I digress. I am back in Vermont. It is winter. It is grey. It is ugly. It's cold and very windy, (there was a week we were gone where it was warmer here than in Southern CA, and I am depressed) and still think the whole thing is going to blow up in our faces.
He said no, providing a long reply as to why, according to the chief investment strategist to just sit back and enjoy the ride.
I am just back from a two-week visit to California, LA to visit family, a brief road trip to Las Vegas to see Seven Magic Mountains, the Neon Boneyard Museum, and the Mob Museum and bask in the surrealism of the whole place, TRUMP COUNTRY, and "those people" were out in force and then a drive up the PCH, lovely views, but we had to skip Big Sur, due to mudslides because the drought is over, so we drove through the Salinas Valley, BIG AG, and Trump should seriously rethink his deportation of illegal immigrants, because those are the only people I saw working in the fields, and no Trump voter (American) from the mid-west Rust Belt, who thinks the jobs will come back, because he said so, is going to convert to OKIE-ism and drive there to get a new job, even though some of "those people" that I saw in Las Vegas, at those slot machines, with a free drink, looked like the pictures by Dorothea Lange, and work in the fields. But I digress. I am back in Vermont. It is winter. It is grey. It is ugly. It's cold and very windy, (there was a week we were gone where it was warmer here than in Southern CA, and I am depressed) and still think the whole thing is going to blow up in our faces.
14
NV's electoral vote went Hillary, just so you know. The only Trump country in Nevada is in the rural counties, not in Las Vegas.
The statement, "we have not had as favorable a regulatory climate since the time of Calvin Coolidge" should frighten you all.
The GOP and Wall Street are hyperventilating over deregulation, tax breaks for investors/corporation and the sociopaths could care less how they destroy the US.
Scared yet? I am terrified...and Russian connections to all of this cannot be dismissed.
The GOP and Wall Street are hyperventilating over deregulation, tax breaks for investors/corporation and the sociopaths could care less how they destroy the US.
Scared yet? I am terrified...and Russian connections to all of this cannot be dismissed.
20
Yes, every average American, and average people around the world, must get their money off the gambling casino tables called "markets" and put it in local banks and credit unions. The Robber Barons plan to repeat 1929, 1973, 1987 and 2008.
Take YOUR money and run while you still have some.
Take YOUR money and run while you still have some.
7
I'll gladly take my money rather than give >40% of it to the government. I'm looking forward to the tax cuts.
Also, even with the ups and downs, I wish I invested in the market in 1928, 1972, or 1986. I'd have a pretty hefty return to match my gains from 2007.
Also, even with the ups and downs, I wish I invested in the market in 1928, 1972, or 1986. I'd have a pretty hefty return to match my gains from 2007.
3
Everybody is talking about the market being up so much because of Trumps election,that is not what is important. What is important is where it is in January of 2021.
4
bubbles burst, the duck market suddenly surges for no clear reason, it is almost always just bubbling.
5
Huh. You're reading into 4 months of stock market data to tell us something about the economy. The problem is, in data since 1947 or so (back to where data is publicly available), there is precisely zero correlation between nominal GDP growth, real GDP growth, and stock market returns on 1yr horizons (let alone the 4 months you are looking at). You can easily prove it to yourself, and I suggest that you do. Because in this piece, you are creating a story from noise, and that's far worse than no story at all.
4
Sometimes things go in a particular direction just because they have been. And the direction can turn on a dime.
6
Moderate economic upticks or downticks are normal and healthy.
When you start to get an overheated heated economy like we may be going into now it never ends nice.
Remember the great recession of 2008.
Learn from history or forever be condemned to repeat its's worst aspects.
When you start to get an overheated heated economy like we may be going into now it never ends nice.
Remember the great recession of 2008.
Learn from history or forever be condemned to repeat its's worst aspects.
10
Market forecasts are not the same as economic forecasts. With the GOP congress in disarray -- clueless? -- on their legislative agenda, the Russia scandal yet to hit its stride, and Trump seemingly only another press conference away from confinement to a straightjacket and a rubber room, a giant pin is circling the stock market balloon.
12
When Obama was in office political operatives (Republicsn sympathizes) said the gains in the stock market were good but didn't affect the middle and lower classes. Now they are crowing about the precipitous rise in those same markets. Trump promised to address the problems of those who were in dire straits economically. Judging by Trump's comments and his cabinet appointments it seems that he has forgotten his promises to his base. I wonder how long it will be before his base realizes they have been had. Also, do we forget the history of the 1920s and the Great Depression? Does anyone even remember history anymore?
10
No, they seem not to on average.
Actually better said, they dont know history at all. They really don't.
The Internet has erased the semblance of reality as information doubles every 72 hours ( was told in a speech about 7 years ago by a ucla researcher who ran some kind of institute about this) he was all
Internet and cared less about handwriting in schools which I see as a marker of lower and lower levels of critical thinking.
My students can barely string a sentence together, have to be provided detailed numbered instructions for the simplest of assignments. And they still don't understand what they are being asked to do.
So again in a word, no.
Actually better said, they dont know history at all. They really don't.
The Internet has erased the semblance of reality as information doubles every 72 hours ( was told in a speech about 7 years ago by a ucla researcher who ran some kind of institute about this) he was all
Internet and cared less about handwriting in schools which I see as a marker of lower and lower levels of critical thinking.
My students can barely string a sentence together, have to be provided detailed numbered instructions for the simplest of assignments. And they still don't understand what they are being asked to do.
So again in a word, no.
10
They clearly didn't know history long before the 24 hour news cycle and the Internet either. We started back down the trickle down economics path more than 30 years ago!
Not sure your students are responsible for that and I was only 10 when it started, so perhaps you need to look elsewhere to lay blame?
Not sure your students are responsible for that and I was only 10 when it started, so perhaps you need to look elsewhere to lay blame?
1
Great for Trump's fellow wealthy elite (i.e., the investor 'class').
Pray, how's this "market boom" working out for rust belt America, that is, the "real economy"?
Pray, how's this "market boom" working out for rust belt America, that is, the "real economy"?
3
Market up 200% since nadir in 2009.
What goes up must come down.
What goes too UP, often comes REAL down.
What goes up must come down.
What goes too UP, often comes REAL down.
5
Boom times are back.
This is due to President Donald J Trump effect.The message is positive and forward looking.
The markets anticipates manufacturing boom in USA due to President Trump's " Make in America "Policy.
The markets have reckoned the inevitable and now it's the turn of the PRESS to anticipate the boom time.
Sadly,the press will miss the boom.
This is due to President Donald J Trump effect.The message is positive and forward looking.
The markets anticipates manufacturing boom in USA due to President Trump's " Make in America "Policy.
The markets have reckoned the inevitable and now it's the turn of the PRESS to anticipate the boom time.
Sadly,the press will miss the boom.
3
With the billionaire class and others having feathered their hidey hole nests in New Zealand or where ever, this should be telling of future America. What is it that they know that most of us do not? It ain't gonna be much fun after the next big collapse.
4
This is very simple what goes up must come down. The only thing I would like to know is when the crash will occur.
6
I smell a bubble.....remember, you heard it from me. The exuberance of financial institutions and polluters who think their future is going to be bright. Not happening.
7
There has been much talk lately about the markets being on a sugar high that won't last. I used to agree but now believe it's more like a crack cocaine high with predictable consequences.
6
Obamas policies were a failure, this rally reflects a return to optimism, and not a return to redistribution
4
The only actual legislation he has signed allows coal companies to resume dumping waste into waterways used for potable water, proscribed after disastrous cases in NC and WV, and refusing to make it hard for the mentally ill to procure guns.
That optimism is based only on an assumption about what will happen, not on actual government as we complete the sixth week of our sentence.
It is the triumph of hope over experience.
Obama takes office, Dow 7000. Obama leaves office, Dow 19000. Nothing says failure like 250%+ augmentation in the market over 8 years. In order to match that, Trump would have to get the Dow up over 47000. Good luck with THAT.
That optimism is based only on an assumption about what will happen, not on actual government as we complete the sixth week of our sentence.
It is the triumph of hope over experience.
Obama takes office, Dow 7000. Obama leaves office, Dow 19000. Nothing says failure like 250%+ augmentation in the market over 8 years. In order to match that, Trump would have to get the Dow up over 47000. Good luck with THAT.
2
"Obama's policies were a failure?" The stock market did very well under Obama, as did job growth, the unemployment rate and a return to a realistic real estate market. I am worried about our country with so many not recognizing or grasping reality.
It is only real money the day you sell if you are a little guy (not a hedge fund or institutional investor in lightening trades). And it is still gambling.
Remember Trump didn't do well when he owned the casino which ought to be a warning in itself. The house lost instead of always winning. The market is up and I am much more nervous.
Remember Trump didn't do well when he owned the casino which ought to be a warning in itself. The house lost instead of always winning. The market is up and I am much more nervous.
6
The civil religion of a nation whose religion is money.The biggest cheating economy in the world.Most big US corporations are not based in the US ,but in Europe to cheat and abuse the EU,whose ideology is against the abuse of capitalism and the defense of cultural diversity and humanities. With the help of the dishonest British and their offshore banks who rapatriate the cash .A giant maffia scam.No analysis of global economy in the US press.The markets...
I'm curious how many people and institutions today opposing President Trump will take this opportunity to have a Steve Miller moment and "Take the Money and Run"....
3
Are you blithely unaware that in that song, antiheroes Billy Joe and Bobbi Sue end up in Mexico, right?
2
Trump has done nothing but talk so far and sign a couple of executive orders removing some constraints on consumer protections.
Nothing has changed except the positive spin put on by the media whatever Trump says. His immigration policies, not good for the economy, but those issues seem so removed from the lives of the brokers, traders and investors in the Wall Street gold bubble. The Great American mirage is the investment world.
The business media was all doom and gloom about Obama because he was not a friend of Wall Street.
He was a party pooper.
Without an adult in the room to keep an eye on those overgrown babies, the biggest infant of all is in control along with his loyal pals from Goldman Sachs and the multi millionaire class. The business media love it, much more fun when the infants are in charge. Writing stories about raising the minimum wage that would narrow the wealth gap and help the small consumer buy a new car just doesn't have the panache of covering Trump and the mar a lago crowd.
The business news sets the mood in the tone but provides little of substance.
Nothing has changed except the positive spin put on by the media whatever Trump says. His immigration policies, not good for the economy, but those issues seem so removed from the lives of the brokers, traders and investors in the Wall Street gold bubble. The Great American mirage is the investment world.
The business media was all doom and gloom about Obama because he was not a friend of Wall Street.
He was a party pooper.
Without an adult in the room to keep an eye on those overgrown babies, the biggest infant of all is in control along with his loyal pals from Goldman Sachs and the multi millionaire class. The business media love it, much more fun when the infants are in charge. Writing stories about raising the minimum wage that would narrow the wealth gap and help the small consumer buy a new car just doesn't have the panache of covering Trump and the mar a lago crowd.
The business news sets the mood in the tone but provides little of substance.
8
Revolutions in commerce come from cities and pockets of smart people in corporate think tanks. Rural areas are left behind (a new variety of corn doesn't raise the Dow Jones). Remember Econ. Wonks.... the Dow Jones doesn't represent anyone except the 1%. Just because you've got a 39.5 hours a week job at Walmart doesn't mean you are happy. The booming markets tell me the 1% are happy but that Democrats must still to learn their lesson. Keep listening to Bernie.
10
While the participants in the stock market, me included, look forward to a near-term boost from potentially looser regulations and favorable corporate tax policies, those changes do nothing to ease the income inequality that presses America's middle class. Until we create jobs and policies that provide a larger share of income to the middle class, America will not be Made Great Again. And this near-term boost will be unsustainable; it runs out of gas when there isn't enough demand for goods and services. I hope that the economists in the Trump administration, not just the businessmen, have the wisdom to see the longer term picture and get to work on it. I doubt it, because the good of the middle class is not a typical Republican concern.
3
If I'm a landlord, I can make all kinds of money by raising rent, not fixing plumbing problems, and never upgrading the units. Eventually, I'll lose renters but if I do it right, I'll have made my money and will be long gone. My short term investments will be great!
Unfortunately, I think we've been here before. What's good for the market is not always good for Main Street America. The 1% make a killing and will be long gone when the rest of us suffer the consequences of their actions.
Unfortunately, I think we've been here before. What's good for the market is not always good for Main Street America. The 1% make a killing and will be long gone when the rest of us suffer the consequences of their actions.
5
"But there is also some real improvement in the economic data underneath the shifts,"
What improvements would these be? Irwin doesn't specify. I'm something of an optimist but there has been no substantive change in most leading indicators from the fall of 2016. We've seen a the long expected move up in long dated government debt as the Fed proceeds on its long signaled increase in rates and an almost entirely expectations driven stock market surge which has a fair amount of irrationality built into it.
What improvements would these be? Irwin doesn't specify. I'm something of an optimist but there has been no substantive change in most leading indicators from the fall of 2016. We've seen a the long expected move up in long dated government debt as the Fed proceeds on its long signaled increase in rates and an almost entirely expectations driven stock market surge which has a fair amount of irrationality built into it.
2
Why does every NYT article read like an editorial? When happened to unbiased reporting of "just the facts"? It's getting boring, even for Democrats - and so soon after the Editor published an apology for failing their mission.
4
Dare I say the reason stocks are up is white men have a white man in the White House? Their fragile egos are no longer "hurt" because Obama is not saying there is greed on Wall Street, but doing next to nothing to change or challenge the system. Some would even say with Geitner and Daly, he coddled them. Trump and Bannon certainly said it, rhetorically at least.
Trump says awful things about Wall Street, then hires a bunch of Goldman Sachs folks and billionaires and now Wall Street is ecstatic. But it is based on nothing concrete about the actual economy. We are in a new equity bubble. The very thing Trump said was a problem as a candidate, but now thinks is great. This will not end well.
I am 55 and biting my nails that the next market crash doesn't take my 401k down with it. I don't have the "luxury" of time to recover from another crash.
Trump says awful things about Wall Street, then hires a bunch of Goldman Sachs folks and billionaires and now Wall Street is ecstatic. But it is based on nothing concrete about the actual economy. We are in a new equity bubble. The very thing Trump said was a problem as a candidate, but now thinks is great. This will not end well.
I am 55 and biting my nails that the next market crash doesn't take my 401k down with it. I don't have the "luxury" of time to recover from another crash.
6
huh?
pretty sure market went from 7800 to 20000 under Obama. No white males bought stocks in those 8 years?
pretty sure market went from 7800 to 20000 under Obama. No white males bought stocks in those 8 years?
2
Mission Accomplished? If only! Where are the jobs? Where the fattening paychecks of the workers on the floor? What's that? Wait and see? OK, let's wait and see before declaring a Trump miracle. In 2015, US corporations distributed $1 trillion in dividends and CEO compensation, without a penny extra to employees. In April last year, the WSJ announced that "McDonald's profit climbs, showing turnaround is sustainable." Great big jobs at big Macs?
The soaring Dow calls to mind Alan Greenspan's warning about irrational exuberance, and it reminds me of the Daily Telegraph story on the average lifetime of US trades: 12 seconds. This is a form of madness. Greed is not good. When do we get the Trump recession/crash?
The soaring Dow calls to mind Alan Greenspan's warning about irrational exuberance, and it reminds me of the Daily Telegraph story on the average lifetime of US trades: 12 seconds. This is a form of madness. Greed is not good. When do we get the Trump recession/crash?
6
Journalists in favor regulation and view big government as the cure for all ills, will continue to misunderstand the financial markets
2
The stock market rise may also indicate that our economy is about to become even more extractive under a Republican administration.
2
the markets have become only short term barometers..they expect, with total Republican control, lots of money flowing out of Washington until the inevitable bust.they want to get in on the gouging, and hope to get out before the crash.
2
The markets? I remember the markets and their incredible insight into the direction of the US economy. I learned all about that in 2008 when overnight the bank at which I worked went belly up, its stock plummeting 78% in a single go. Happy days are here again, again.
8
Gust Avrakotos: There's a little boy and on his 14th birthday he gets a horse... and everybody in the village says, "how wonderful. the boy got a horse" And the Zen master says, "we'll see." Two years later The boy falls off the horse, breaks his leg, and everyone in the village says, "how terrible." And the Zen master says, "We'll see." Then, a war breaks out and all the young men have to go off and fight... except the boy can't cause his legs all messed up. and everybody in the village says, "How wonderful."
Charlie Wilson: Now the Zen master says, "We'll see."
(Scene from the end of "Charlie Wilson's War")
http://www.imdb.com/title/tt0472062/
Charlie Wilson: Now the Zen master says, "We'll see."
(Scene from the end of "Charlie Wilson's War")
http://www.imdb.com/title/tt0472062/
3
I read in Bloomberg News recently that the very rich are sitting out this rise in the stock market, but money from smaller investors is moving back in. Makes me wanna' go hmmmm.
Sounds like what usually happens before a stock market crash.
Just last year at this time the markets across the world were down by 10% or more. The business fundamentals have not changed. China, Russia, Brazil's, and India are not growing any where near the rate they were in 2000-2010 timeframe. I don't see this current run-up being based on improvements in the business climate sufficient to sustain this run-up.
Sounds like what usually happens before a stock market crash.
Just last year at this time the markets across the world were down by 10% or more. The business fundamentals have not changed. China, Russia, Brazil's, and India are not growing any where near the rate they were in 2000-2010 timeframe. I don't see this current run-up being based on improvements in the business climate sufficient to sustain this run-up.
5
What do booming post-election markets reveal about the economy [while average Americans struggle to make ends meet]? They reveal that democracy in America is failing most of us.
"[The] economic model of many "conservative" politicians today, [is] based, in part, on the ideology of Ayn Rand, rather than on the ideology of a democratic republic and elected representation." ***
"The failure of our economy today [for average Americans] is a symptom of the failure of our democracy, not a cause of it."
Source . . . https://casetext.com/posts/economic-democracy
"[The] economic model of many "conservative" politicians today, [is] based, in part, on the ideology of Ayn Rand, rather than on the ideology of a democratic republic and elected representation." ***
"The failure of our economy today [for average Americans] is a symptom of the failure of our democracy, not a cause of it."
Source . . . https://casetext.com/posts/economic-democracy
4
This boom is inflating a bubble. Prices are going up for no (good) reason. In this case, it seems to be an incompetent president who says random things. I'm not quite ready to mock "savvy economic commentators". One real bad day for the index funds and this is all moot. Additionally, and I can't put my finger on exactly why, I find it very difficult to trust the financial establishment regarding just about anything. The numbers being up doesn't preclude the possibility that people are buying crap (risky debt was once a hot topic).
3
And of course, we have the chorus of partisans claiming that Trump has nothing to do with anything positive and that Obama deserves all such credit.
There is no difference between liberal partisans and conservative partisans. You guys are all singing from the same silly hymnal. What a joke.
There is no difference between liberal partisans and conservative partisans. You guys are all singing from the same silly hymnal. What a joke.
4
But Trump has not enacted any economic policies yet nor has he given anything but vague hints and projections as to what those might be. Quite a difference to attribute one thing to actual policy changes over 8 years and another to the anticipation of policy changes that have yet to materialize -- and come with a double-edged sword of protectionism that could wreak havoc on international trade cycles.
2
Booming Markets is just a confirmation, that financial markets are totally disconnected from the real economy.
The fundamentals of the U.S and World economy has not changed. Oil price is still around $52. The European economy besides Germany is still stagnant. China is not doing better.
What the booming proves is that the financial market is all about PERCEPTION, not REALITY.
When REALITY comes knocking, we will all pay a steep price even though we were not invited to the party.
The fundamentals of the U.S and World economy has not changed. Oil price is still around $52. The European economy besides Germany is still stagnant. China is not doing better.
What the booming proves is that the financial market is all about PERCEPTION, not REALITY.
When REALITY comes knocking, we will all pay a steep price even though we were not invited to the party.
5
Hot air makes balloons go up as well. Economic fundamentals and valuations based on solid performance do not warrant such irrational exuberance.....be very careful and if you have some recent capital gains from equities, it may be time for cashing out.
4
Because predicting and explaining the stock market is strictly the realm of shamans (Kramer!), and serious sounding econ major types (who study linear algebra, least square estimators, and Gaussian distributions with undeserved seriousness) I will take a shot at this one:
Americans are giddy with joy that: (a) black dude, who secretly aimed to foster anti-business communism in the country has left, and (b) a dangerous (as in intelligent) woman is all but history. They know Trump is unmoved by evidence or information; he is engaged in a single minded pursuit of an economic environment that will benefit the business owner and the religious leader - obliterating anyone in the way.
Hence stock market shoots up.
No there will be no reality check as some predict (i.e., when profits tank, the stock market will come down blah blah). It all depends on the believability of crackpot announcements coming from the White House, and the similarly crackpot preaching on hate radio and hate church that day.
Kalidan
Americans are giddy with joy that: (a) black dude, who secretly aimed to foster anti-business communism in the country has left, and (b) a dangerous (as in intelligent) woman is all but history. They know Trump is unmoved by evidence or information; he is engaged in a single minded pursuit of an economic environment that will benefit the business owner and the religious leader - obliterating anyone in the way.
Hence stock market shoots up.
No there will be no reality check as some predict (i.e., when profits tank, the stock market will come down blah blah). It all depends on the believability of crackpot announcements coming from the White House, and the similarly crackpot preaching on hate radio and hate church that day.
Kalidan
4
Tax cuts for business and the wealthy and simultaneous increased spending seem to lead to inflation and recession.
2
We need more sensible reporting on the economy and less breathless, pearl clutching over where the Dow is.
Most "reports" on the Dow (approaching TWENty One THOUSAND) use the same cadence and breathless anticipation as reports on the powerball (ONE point SIX BILLion dollars!) and most people have no idea what either means.
I remember talking to a pretty smart guy about what a waste the lottery is and he said, yeah, the more people who enter the higher the odds get. And I said, no, the odds are set by the number of possible combinations.
Most "reports" on the Dow (approaching TWENty One THOUSAND) use the same cadence and breathless anticipation as reports on the powerball (ONE point SIX BILLion dollars!) and most people have no idea what either means.
I remember talking to a pretty smart guy about what a waste the lottery is and he said, yeah, the more people who enter the higher the odds get. And I said, no, the odds are set by the number of possible combinations.
2
I wish I, too, could get paid simply for making wild guesses when I really didn't understand what's going on.
2
People like to think that gravity doesn't exist. When the air comes out of the big stock market balloon will Number 45 take credit for that , I think not. This time is no different than all the other market bubbles. Enjoy the party folks but the champagne is going to run out on the "Trump effect"
In the Wall Street casino the house rarely loses.
In the Wall Street casino the house rarely loses.
3
The price/earnings ratio of the S & P 500 is more than 27 times earnings, and is accelerating. This has happened only a few times in history. Inevitably there will be a crash. No one knows when, and no one knows how long it will last. In history, stocks have remained undervalued for many years, so the bounce back might not occur in time to finance personal health care or to put food on the table.
Who benefits from a boom-and-bust stock market? Not the pensioners or the people saving for retirement. Research clearly indicates that these people tend to buy at the top and sell at the bottom. Who benefits are the professionals who run this shell game. Never give a sucker an even break, that would be their motto.
Who benefits from a boom-and-bust stock market? Not the pensioners or the people saving for retirement. Research clearly indicates that these people tend to buy at the top and sell at the bottom. Who benefits are the professionals who run this shell game. Never give a sucker an even break, that would be their motto.
6
I'm wondering why Neil Irwin wrote this myopically one-sided article and why the Times published it. To anyone who lived through 2008, clearly the stock market is going through another round of "irrational exuberance." As most of the comments indicate, it's eventually going to crash and burn and hurt many.
4
Even on their way down, Trump would short his own companies.
3
It's a relief rally; people are thrilled that Trump has not gotten us into a major war either trade or conventional. Yes, some of his policies will be good for business but of course we will have people dying earlier and less clean water and air so ultimately, bad for business.
3
I know this article is not serious because it doesn't mention the real and only cause of the growth of the stock market since 2009: buybacks.
1
We are in for a yuge profit taking, and there's nothing the 401k sheep can do about it.
2
Funny.......Trump has no reservations about denouncing Obama's policies as stagnating the economy. Yet, it's unlikely he'll acknowledge Obama's contribution to the current uptick. By analogy: he disavows responsibility for the botched special forces mission in Yemen as Obama's fault. Yet he sent them in on his watch. Bucks don't stop in Trump's leadership model. Let's talk in a year about economic Trumpism and see how much "winning" we're doing then. Obama held the country together, fiscally, often against staunch and destructive Republican opposition. All the oars were not rowing in the same direction. Wall St. bumps are often the 'tail waging the dog.' How Trump treats Main St. will tell the tale. But, the banksters never lose. Who is your money on this time around?
7
Hee! Hee! "No assurance pattern will continue" Trump Admin? Ha!
Pivot after election is significant! After a President who instigated appx. 300% addition of Federal Debt and flooded USA w/Questionable immigration; we now bemoan a pattern changing??
One must question what you thought was right about Obama's pattern?
Pivot after election is significant! After a President who instigated appx. 300% addition of Federal Debt and flooded USA w/Questionable immigration; we now bemoan a pattern changing??
One must question what you thought was right about Obama's pattern?
2
That debt was largely the result of a stock market crash and two wars the incoming President Obama had quite little to do with. As for "flooding USA w/ questionable immigration," we will need elaboration. What kind of immigration is so "questionable" that it affects the economy at large? How many people came in to constitute this "flood"? And, pray tell, where is the data to back up this flood of off-colored unmentionables?
3
When it all comes crashing down again will they be saying this? Sorry this is the exact conditions we had during the depressions of 1908, 1929 and 2006. Failure of regulation being kept is a disaster.
8
The "market masters" call it speculation. It is gambling. With OUR hard-earned taxpayer and 401K money. When they crash the "markets" and get it all it's called STEALING.
Get your money out.
Get your money out.
3
Do we need to wonder about things when a company that lets us post cute pictures of cats and selfies has a market cap of over $350 billion? Or is that just the new normal?
1
So, I've learned here that the stock market surge does not necessarily mean anything good or bad. However, if it does result in good then it was because of Obama. If not, and something bad happens,Trump did it.
1
I'll believe it when companies stop sitting on cash and buying back stock and start investing in capital improvements and hiring workers.
3
Optimism with hope for infrastructure spending along with careful spending, not bloating gov't and federal employees, companies bringing jobs here, etc. The democrats did nothing for the U.S. economy except talk and think tankers who thought about it. Coastal people maybe be liberal as there are jobs in LA and NY but not the middle of the country. People wanted a change. The stock markets responds to the environment and this one is on track fro big things, change and opportunity whether the liberals like it or not. Too bad it will be a very long four yeasrs for them.
1
The phrase "last blow-off" comes to mind immediately.....
1
Funny how during the dark economic days of Obama, the left went right to their number one talking point - how well the Dow was doing. Now that we are seeing the "Trump Bump" these same lefties dismiss the surge out of hand
Perhaps the surge is due to the handcuffs being taken off the private sector. Perhaps it is hope that folks like myself will be able to keep more of the money I earn. (I know -with liberals just because I earn my money does not mean I am entitled to it)
The "Trump Bump" has caused nearly unlimited OT at my job, and I was PO'd over the massive increase in taxes taken out of my last check. Liberals do indeed punish achievement and Pres Trump will try to curb that. Or perhaps Pres Trump will indeed bring jobs back to the US and get private companies to bring trillions they have sitting outside the US back to the US
First the left was so confident Hillary would win. Then they were shocked when she lost. Then they played Wheel of Excuses to explain why she lost. Now they are simply having a non stop temper tantrum dumping cold water on the good news coming form the White House
By all means keep it up. Dems have a lot of seats they can lose in 2018
Perhaps the surge is due to the handcuffs being taken off the private sector. Perhaps it is hope that folks like myself will be able to keep more of the money I earn. (I know -with liberals just because I earn my money does not mean I am entitled to it)
The "Trump Bump" has caused nearly unlimited OT at my job, and I was PO'd over the massive increase in taxes taken out of my last check. Liberals do indeed punish achievement and Pres Trump will try to curb that. Or perhaps Pres Trump will indeed bring jobs back to the US and get private companies to bring trillions they have sitting outside the US back to the US
First the left was so confident Hillary would win. Then they were shocked when she lost. Then they played Wheel of Excuses to explain why she lost. Now they are simply having a non stop temper tantrum dumping cold water on the good news coming form the White House
By all means keep it up. Dems have a lot of seats they can lose in 2018
1
Lot of Americans are buying up large chunks of NZ and NZ businesses as we don't have any property speculation or capital gains tax in NZ and most probably a back up investment just in case the markets crash in the USA. Someone called Matt Lauer, a television journalist from the USA bought a 6468ha sheep and cattle station for $13 million dollars. It's called Hunter Valley Station and is the largest lakefront property in NZ. It's in one of the most beautiful parts of NZ and in a very sought after area.
4
But what will Wall Street do with all this money? Recent history suggests they'll spend it doing company acquisitions, stock buy backs, and other financial deals. What they won't do is build new factories and hire workers. Too risky.
1
Feels like 1985
I recall how fast the leftist media were to blame President Trump when the markets dropped on his victory election night ... pity they are now so slow to give him credit. Liberals must be wringing their hands at their 401(k)s going up so much.
Winning again.
Winning again.
1
@Richard Luettgen
I remember a time not so long ago when everyone knew that the value of a home could only increase, and no matter that you borrowed more than you could ever pay back to buy one, all you had to do was to own it for a year or two and you would be able to sell it for much more than you paid for it, money for free with no risks. The flaw in this was that the loans were being sold based on fraudulent assessments of their risk.
Now its stocks and bonds, sold on the wishful thinking that if the already bloated corporations are allowed to extract more profit from the economy, leaving even less for the workers, then there will be money for free, no risks.
So when the consumers find themselves with less to spend what are they going to do to fuel the economy, borrow more at higher interest rates to continue buying things that they can do without?
Your projections on what Mr. Trump thinks about and can accomplish are grossly exaggerated. What Mr. Trump thinks about is where and what he is going to eat next, what television show he is going to watch next, and where he is going to sleep tonight. There isn't much time left for him to think about anything else. He concerned himself with being elected but gave no thought about what he was going to do afterward except that he would give other people the responsibility to figure out what to do. He lied every time that he claimed to have a plan of any kind to do any thing and you believed him.
I remember a time not so long ago when everyone knew that the value of a home could only increase, and no matter that you borrowed more than you could ever pay back to buy one, all you had to do was to own it for a year or two and you would be able to sell it for much more than you paid for it, money for free with no risks. The flaw in this was that the loans were being sold based on fraudulent assessments of their risk.
Now its stocks and bonds, sold on the wishful thinking that if the already bloated corporations are allowed to extract more profit from the economy, leaving even less for the workers, then there will be money for free, no risks.
So when the consumers find themselves with less to spend what are they going to do to fuel the economy, borrow more at higher interest rates to continue buying things that they can do without?
Your projections on what Mr. Trump thinks about and can accomplish are grossly exaggerated. What Mr. Trump thinks about is where and what he is going to eat next, what television show he is going to watch next, and where he is going to sleep tonight. There isn't much time left for him to think about anything else. He concerned himself with being elected but gave no thought about what he was going to do afterward except that he would give other people the responsibility to figure out what to do. He lied every time that he claimed to have a plan of any kind to do any thing and you believed him.
2
I think that business is glad to have a President who has had a job and made a payroll.
1
All the rally really means is that the 1% moves much further ahead and the wealth-disparity gap keeps widening. Oh joy! While average Joe and Judy make $10,000 on their investment, Rich and Tish pocket $10 million.
5
What amuses me about so-called Republicans is that they are all about reducing government spending. Yet they applaud Trump when he talks about building a $20 billion wall that isn't needed; vastly increasing military spending (why, exactly, when it appears the biggest threat is cyber warfare from Russia and 'lone wolf' attacks from radicalized US citizens) and then somehow finding the money for trillions of dollars in infrastructure spending. This after he is going to cut corporate taxes by a huge amount. Where is all the money coming from? None of it makes any sense and is clearly impossible to realize. Wake up America you are being conned!
6
It looks to me that the plutocrats are drying up the securities available for public purchase.
2
After reading today's NYT, one can add that there may also be a flight out of the renmimbi into US securities markets.
There is an old stock market adage to the effect of "buy on the rumor (of possible future good news when things look bleak) and sell on the news" (news of good economic performance and Fed plans to raise rates to hold down inflation). We are certainly near the point of "sell on the news". People who buy today believe that Trump has the magical economic answers. He doesn't. The market has already met or exceeded most prognosticators predictions of gains for all of 2017. Prudent investors: BEWARE!
3
It just shows how crushing Obama's policies were to any vibrant economic activity.
2
The US is as good a bet as any right now.
Investors primarily seek security. Will they be able to get their money back. Right now, they like what they see in the US. The top 10 corporations in the world, as ranked by market capitalization, are all American. At the end of 2010, there were only three. The $ has strengthened against, say the £ or the Euro and interest rates are low. Combine these factors with a stable Government and the absence of any serious world wars and the US has strong appeal.
Could the Dow have a serious correctIon? Always possible. But let's not think for a moment that a plunging Dow will, not be reflected in the indices of other countries' stock markets.
Investors primarily seek security. Will they be able to get their money back. Right now, they like what they see in the US. The top 10 corporations in the world, as ranked by market capitalization, are all American. At the end of 2010, there were only three. The $ has strengthened against, say the £ or the Euro and interest rates are low. Combine these factors with a stable Government and the absence of any serious world wars and the US has strong appeal.
Could the Dow have a serious correctIon? Always possible. But let's not think for a moment that a plunging Dow will, not be reflected in the indices of other countries' stock markets.
Really not hard at all to believe that the markets are doing so well. Trump is about to open the flood gates of "Operation Money Suck" and deregulate nearly everything. It's going to be a hay day for the rich and famous in the industrial defense, oil and banking communities. Things are looking rosy... if your rich.
Say goodbye to clean air and water and national parks and public schools and social services and...
Say goodbye to clean air and water and national parks and public schools and social services and...
4
I have a hard time believing a lot of these analyses in the NYT recently. One of the analyses this writer links to, about the economy being near "full productive capacity," mentions, "It’s nearing that level of activity in which nearly everybody who wants a job has one." That statement alone is just obviously wrong to millions of Americans. I guess the question is whether you're referring to a PT or FT job. I've been stuck in part-time jobs in my field since 2010. I have a bachelor's and master's degree, graduated with a 4.0 in both, with internship experience, awards, etc. I have been told to my face multiple times, and also in writing, that my situation has nothing to do with my abilities. My abilities are exactly what they want! It's just the finances, the budgets. It's just more cost effective to hire more people PT than it is to hire FT people and have to provide benefits. The NYT recently ran a news story on this phenomenon in Europe, where finding a FT job is nearly impossible. I mean, yeah, if I'm willing to work for minimum wage at the gas station down the road, selling people lottery tickets and cigarettes, sure I'd probably be FT. But I'd have to lie on my resume by hiding my higher education, because such employers don't want "over-qualified" workers. But it'd be a total waste of my skills and what I could be adding to the knowledge economy. We are no where near full productivity and potential. Meanwhile... The stock market situation just screams bubble.
6
@L
Connecticut
There are roughly 5.5 million job openings available in the US. Not all of them are PT or involve working in gas stations. And yes the US economy is fairly close to optimum performance. Nor is the stock market in a bubble. Yet! Although it's moving in that direction.
Connecticut
There are roughly 5.5 million job openings available in the US. Not all of them are PT or involve working in gas stations. And yes the US economy is fairly close to optimum performance. Nor is the stock market in a bubble. Yet! Although it's moving in that direction.
1
In the simplest analysis, with all other factors being equal, if the Trump corporate tax cuts and deregulation are expected to add 10% to S&P 500 earnings, we would expect the S&P 500 to be up about 10%. That is approximately what has happened.
Ergo, it may be mainly the expected tax cuts and deregulation causing the rally rather than a stronger economy at this point.
Reading these comments is interesting. The one thing I have learned in life is that when you see money lying on the ground, bend over and pick it up.
2
The market is rallying for one simple reason:
Regulations are being removed from Wall Street under the new administration.
A lot of people will get filthy-rich on some new unregulated scheme. Just like a lot of people got rich all the way up until 2008 when Lehman Brothers had to declare bankruptcy and everything came crashing down.
If you are riding this wave of stock market increases, here's hoping you know how to time the markets, and get out at just the right time.
Regulations are being removed from Wall Street under the new administration.
A lot of people will get filthy-rich on some new unregulated scheme. Just like a lot of people got rich all the way up until 2008 when Lehman Brothers had to declare bankruptcy and everything came crashing down.
If you are riding this wave of stock market increases, here's hoping you know how to time the markets, and get out at just the right time.
1
funny how we had 100% increase in S&P under Obama that was routed as economic growth - but we switch to Trump and now it's a bubble.
if we have a stock market collapse, it's going to fall way through the level that Trump took over - will the NYT and commenters admit the bubble started Obama? doubt it.
if we have a stock market collapse, it's going to fall way through the level that Trump took over - will the NYT and commenters admit the bubble started Obama? doubt it.
2
Funny how a 100% increase under Obama is touted as [crony capitalism, luck of the draw, forced by the Fed] take your pick, - but we switch to Trump, and now it's a Trump miracle. Glass houses anyone?
2
We're going to look back at this article and laugh when this bubble bursts. At least, I will.
3
I have been dollar cost averaging into the market for 30 plus years never selling, always avoiding the noise, never wondering where it was going at any particular moment in time. It served me particularly well when I stuck to it during the collapse in 2007 and 2008 and during the entire Obama Presidency. Buying shares all the way down and all the way up. For the first time in my life I'm selling into rallies. Tax cuts and deregulation along with repatriation may be good for corporate earnings and stocks. Unpredictability isn't good for long term investors. This President and Congress is going to put new economic theory, new border policy and a new world view into play. I suspect much of that including more corporate liability because de-regulation may create unintended liability and huge losses when people are poisoned by toxic dumps, toxic food and drugs and other unforeseen catastrophes that regulations were designed to prevent.
I'm willing to miss some of this rally to hopefully invest later at lower prices. I hope there is something to invest in. When people push, other people push back. Sometimes that doesn't end the way you think it will. I think unpredictability means that returns need to be much better to take on risk. We are getting outside returns right now and that indicates that risk is increasing.
I'm willing to miss some of this rally to hopefully invest later at lower prices. I hope there is something to invest in. When people push, other people push back. Sometimes that doesn't end the way you think it will. I think unpredictability means that returns need to be much better to take on risk. We are getting outside returns right now and that indicates that risk is increasing.
12
fashion your seat belts,it's gonna be a rocky ride
2
An attempt by the NYT to report one positive aspect of the Trump administration? Maybe they'll be let back into the White House? Hahaha, not!
1
Racism and capitalism, friends forever.
8
It really makes you think the American political system is rigged.
5
Another great recession in the making once the lemmings are loaded up with overpriced stocks.
5
But Trump voters have zero dollars in the stock market.
10
Not true... you still believe the illusion created by the media that all Trump voters are people left behind in this economy. I assure you that most of the well-to-do, educated people I know -- including me -- voted for Trump.
1
Trump said "You print the money" and "sometimes you have to fuel the well". I'm not saying it won't come down, but it might not come down for 8 years.
It's all rigged.
5
A polished turd is still a turd. Bigly.
1
Trump is a businessman. Obama was an ideological dork. It makes a difference.
2
Let's say a prayer for the "efficient market hypothesis." Apparently it is dead. Or are you secretly still in the market?
1
Anyone heard of a bubble? FYI, there were economic crashes the last three times the GOP had unified control of federal government: 1928, 2001, and 2006. Yesterday, Reagan's Budget Director, David Stockman, said this: “There is going to be a debt ceiling crisis like never before this summer and that’s what people don’t realize. They’ve burned up all the cash that Obama left on the balance sheet for whatever reason.” Sell high right now, buy low later after the crash.
4
Can you imagine how loud the booming would get if there were a real, and realistic, infrastructure effort? Twenty cents out of every dollar paid as wages would come back to the government. Fifty cents or more would be circulated back into the economy by the wage earner. The skilled workers would gain employment in the skill positions Trump is always talking about. This ideally would be directed through Federal, State, and Local governments, NOT hired gun corporations looking to maximize profits (read CEO's ransoms). The nation could build a high speed rail line on the EXISTING right of ways; just one good example. The LONGER we wait the more EXPENSIVE these projects get. BUT!! Did your hear the Republicans bellow last night when Trump mentioned the Dakota Pipeline? It didn't sound much like they want to employ the laid off aerospace engineer; or skilled carpenter out of work. It sounded like they want to give a few billion of our tax dollars to the energy companies. So we can all buy a pipeline for those companies that already profit billions each year; and PAY NO TAXES.
2
Some people might call all this a speculative bubble, which it surely is.
2
There is a term for this. Irrational exuberance. 1929 all over again if you follow Trump s plan.
3
Value investors are heavy in cash. Poor slobs with 401ks are going to get sheared.
3
The markets are telling us that businesses have hope again - plain and simple. After being hamstrung by Democrats for eight years, Trump is setting a tone to help untangle the bureaucratic morass of D.C. and unleash American innovation and progress at work. If you're in the capitalist game, sit back and enjoy....if you're a side observer waiting for the dole, keep waiting.
1
I can tell you exactly why the stock market is booming.
( highly selective from the overall general economy )
Every one ( the top 1% \ conglomerates ) are getting ready to be paid.
Of course things are booming when the tax payer ( and the minority of republican rubes that voted for this ) are going to pick up the tab. Couple that with the TRILLIONS sitting in numbered bank accounts and non-tax paying companies offshore that having been waiting for years for their tax amnesty.
The bubble bursting is not far off when this administration collapses in on itself from the investigations coming over Russia collusion, and the American people finally realize the bill for it all is too high a cost.
Sell short.
( highly selective from the overall general economy )
Every one ( the top 1% \ conglomerates ) are getting ready to be paid.
Of course things are booming when the tax payer ( and the minority of republican rubes that voted for this ) are going to pick up the tab. Couple that with the TRILLIONS sitting in numbered bank accounts and non-tax paying companies offshore that having been waiting for years for their tax amnesty.
The bubble bursting is not far off when this administration collapses in on itself from the investigations coming over Russia collusion, and the American people finally realize the bill for it all is too high a cost.
Sell short.
9
Do I sense the phrase "irrational exuberance" on the horizon?
Nah. They'll just trash the economy and get bailed out again.
Nah. They'll just trash the economy and get bailed out again.
4
It means fire-sale in the U.S.!!! Everything public will be ON SALE!! Get yours today!
3
The stock market remains the biggest scam in town but, at least, President Trump has made Americans feel good about themselves and the Country. The manipulation will continue and the real villains will eventually extract their bounty as always. Daily reporting, along with articles such as this attempting to explain the ups and downs, should be banned for they have no informative or financial value. Kudos to the President for lifting our spirits by trying to be a real leader but this run is nothing more than emotional froth which will soon drastically deflate when the phonies on Wall Street and the complicit, clueless media conjure up a reason to make it happen. In the meantime, please support the Office of the Presidency by seeking the truth, contacting and holding your government representatives accountable and combatting hate and ignorance.
1
Trump's already taking the credit for Obama's efforts, and his fanatics will believe him when he says that he made investing great again. True, the Dow is about 1500 points higher than it would've been with Clinton, but the bump is based on ridiculous expectations, and it will correct itself in the next few months.
3
So the NYT is finally going to report on this historic stock market surge - Nothing like burying the lede: "Much of the buoyant optimism on Wall Street is driven by investors’ expectations of corporate tax cuts and deregulation under the Trump administration."
1
The stock market is every bit a bubble like in 2000 and 2007. There were similar rallies leading up to the top in both years. Instead of being concentrated in Tech Stocks or Housing like before, this time a wide variety of assets are severely overpriced. This author himself noted that in his 2014 article
https://www.nytimes.com/2014/07/08/upshot/welcome-to-the-everything-boom...
The only thing that has changed since 2014 is that some overpriced markets have become even more overpriced. But there is nothing unusual about that. Markets can go higher than anybody expects and the reversal can come as suddenly and severely. Some other markets such as Commodities, Farmland and Luxury Real Estate have indeed crashed. Every major retailer has announced store closings in recent weeks. The stock market is still bullish but that can turn on a dime.
https://www.nytimes.com/2014/07/08/upshot/welcome-to-the-everything-boom...
The only thing that has changed since 2014 is that some overpriced markets have become even more overpriced. But there is nothing unusual about that. Markets can go higher than anybody expects and the reversal can come as suddenly and severely. Some other markets such as Commodities, Farmland and Luxury Real Estate have indeed crashed. Every major retailer has announced store closings in recent weeks. The stock market is still bullish but that can turn on a dime.
2
One thing is certain, the business world loves Trump and everything he is saying. The stock market is up almost 3,000 points in 3 months! This is historic. Makes you think how screwed up politicians are and why haven't we elected a real CEO like Trump before. I know there are a lot of liberals that are having heart palpitations right now but they should check their IRAS right now and hopefully that will calm them down.
In my view this is a post OBAMA bounce! Basically, now that there's not a person of color in the White House, the markets don't see a reason for the obstructionist behavior of the last 8 years to continue. Thus this is an expectation that no matter what the current administration proposes it will not meet the same hyper partisanship we've just lived through simply because as Mr. Trump showed last night, governing can be done if the parties want to!
1
Anyone still reading this paper will have a negative reaction. I'm not buying the advise here.
Who is the guy who claimed that the stock market was in a huge bubble in September 2016? Let's see, he was running for president. Who was that guy?
8
So, we have a room with a bunch of kids in it, and when the biggest bullies get all the lunch money, they count it up, and if it's a real lot, they call it 'growth'.
OK, got it.
OK, got it.
6
Oh, boy. The greedy train is cranking up and gaining steam.
Mr. Irwin, this was all set about by "steady as he goes" President Obama, not Old Yeller. Remember what Bill Clinton managed to accomplish before the same thing occurred with "W?"
Are we headed for another crazy high before another devastating bust?
Mr. Irwin, this was all set about by "steady as he goes" President Obama, not Old Yeller. Remember what Bill Clinton managed to accomplish before the same thing occurred with "W?"
Are we headed for another crazy high before another devastating bust?
3
This time we won't be rescued. I'm just wondering what will start the bust.
Yup. Now just gotta wait for interest rates to jump, which ought to check asset prices long enough to cash in equities and buy real (non-paper) assets at a discount relative to true value in the market.
Look at the graphs published with this article. The upturn didn't start on November 6. It started in September, when nobody in his right might thought Trump could win. The upturn isn't because of Trump; it's either in spite of him, or the post-Trump downturn is just lagging a few months behind. We'll see...
4
A booming market means that whatever Obama did was brilliant and he can claim credit. If the market is down means its Trumps fault
This analysis is ridiculous.
Don't get seduced by facts and figures. This type of positive fact-based nonsense will ruin the sophisticated anti-Trump narrative Democrats and media have been working on so hard for the last month. I would recommend getting back to the drawing board and rework the article to include some of the obvious talking points any progressive three years old and younger could've figured out for themselves. If they don't fit in just squeeze them in anywhere, like everybody else does. Don't waste a month of hard worked propaganda because of something as nonsensical as facts. Don't you realize that the recent speech plus the positive economic news is coalescing into a turning point: people are starting not to be afraid of him!! It's not working anymore! Ahhhh! The horror!
Let's review the agreed upon sacred points so you don't mess this up again: 1) Trump bad bad
2) Trump scary boogie monster
If none of that works just make fun of his hair.
Don't get seduced by facts and figures. This type of positive fact-based nonsense will ruin the sophisticated anti-Trump narrative Democrats and media have been working on so hard for the last month. I would recommend getting back to the drawing board and rework the article to include some of the obvious talking points any progressive three years old and younger could've figured out for themselves. If they don't fit in just squeeze them in anywhere, like everybody else does. Don't waste a month of hard worked propaganda because of something as nonsensical as facts. Don't you realize that the recent speech plus the positive economic news is coalescing into a turning point: people are starting not to be afraid of him!! It's not working anymore! Ahhhh! The horror!
Let's review the agreed upon sacred points so you don't mess this up again: 1) Trump bad bad
2) Trump scary boogie monster
If none of that works just make fun of his hair.
1
They see in Trump a model of tax avoidance. What patriots!
2
Old story with new twist: Billionaire's 2017 all-u-can eat lobster special at Trump's Grill. Market goes boom-boom, until America runs out of lobster. Where theres no rules, theres no credible market, then theres quickly no lobster (or even jello).
It may last 2 months or two years. Then all T. Boone Picken's men and all Jamie Diamon's horses will not be able to put Donald's/Mnuchin's economy together again.
It may last 2 months or two years. Then all T. Boone Picken's men and all Jamie Diamon's horses will not be able to put Donald's/Mnuchin's economy together again.
1
U.S. consumer spending rose less than expected in January as the largest monthly increase in inflation in four years eroded households' purchasing power, pointing to moderate economic growth in the first quarter.
The Commerce Department said on Wednesday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2 percent after an unrevised 0.5 percent rise in December.
Economists polled by Reuters had forecast consumer spending gaining 0.3 percent in January.
The Commerce Department said on Wednesday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2 percent after an unrevised 0.5 percent rise in December.
Economists polled by Reuters had forecast consumer spending gaining 0.3 percent in January.
2
First comes the stock market euphoria brought about by colossal government overspending, then comes several years of government by whim, caprice and executive order featuring widespread social disorder throughout the country, wild inflation and military engagements overseas galore; finally ending up in some form of modernized Fascism headed up by him or one of his future acolytes.
A dark prognosis to be sure, but given the low character and unstable mentality of the man with delusions of grandeur we chose to honor with the Presidency, how could it be otherwise?
It was a grand experiment while it lasted, but nothing great lasts forever.
A dark prognosis to be sure, but given the low character and unstable mentality of the man with delusions of grandeur we chose to honor with the Presidency, how could it be otherwise?
It was a grand experiment while it lasted, but nothing great lasts forever.
3
Is anyone buying cars, appliances, or furniture? Buying stocks and bonds is one thing. Getting the middle class wage earner to shop is another. If this is about overfunding the military then that doesn't help the average person in the least. I need a new washing machine not a bomber in my laundry room.
5
No mention of what happens to overly optimistic markets when the current president threatens NATO , the EU or destabilizes the world in short order.
Which seems not only possible under King Trump - but highly likely.
Which seems not only possible under King Trump - but highly likely.
3
I liked the economy under Obama, in which slow, steady growth and low inflation went hand-in-hand. I remember that you and your colleague Justin Wolfers wrote a few panicky columns in which, after examining this or that month's date, you'd announce in sepulchral tones that the future looked grim.
And yet the economy, having the audacity to ignore your Delphic pronouncements, continued to grow. For that it deserved a good spanking, don't you think?
Under Trump the chances of market turmoil are higher, and so too the chances of a bust - because deregulation almost always encourages fraud and excessive risk-taking. Remember the S&L scandal under Bush I? Or the housing bust under Bush II?
But I'm sure that when that happens you'll publish yet another sage column.
And yet the economy, having the audacity to ignore your Delphic pronouncements, continued to grow. For that it deserved a good spanking, don't you think?
Under Trump the chances of market turmoil are higher, and so too the chances of a bust - because deregulation almost always encourages fraud and excessive risk-taking. Remember the S&L scandal under Bush I? Or the housing bust under Bush II?
But I'm sure that when that happens you'll publish yet another sage column.
3
If a Trump investment bubble creates rising prices, well, gosh, the rich will get richer -- and the delusional poor who believed his fascist, jingoistic propaganda will spiral ever downwards.
2
Trump has given Wall Street the green light to do whatever it wants.
The swamps of DC and NY are deeper than ever before.
What vision.
The swamps of DC and NY are deeper than ever before.
What vision.
3
I just watched the full Trump speech, bring tissues. This presidential speech brought real people and real situations into the spotlight of the American people and told their stories. PS, I tried watching on CNN there was no good feed which kept freezing. The New York Times Feed was awesome and reliable. Thanks NYT
This is all going to create a bubble and then when reality sinks in, it will crash hard. Historical data points to a crash within the next year to 18 months.
4
What goes up must come down....and so too will the markets.
Hang on, it's gonna be a bumpy ride!
Hang on, it's gonna be a bumpy ride!
3
You're conflating the stock market with the economy. Those are two very different things.
6
As the author states “the pivot point since election day is huge” or as Trump would say “it’s YUGE and I alone have done it”. Now, on the other hand it could be a natural bump that markets take when a new administration takes over a stable economy. Key word here is “stable”.
No one can predict the future of the markets. However if Trumpism takes hold on immigration deportation, and millions are deported, and the tax cut flounders because of potential deficit increases, or the $1 trillion infrastructure legislation bogs down, and the ACA can’t get a footing, etc. etc………
Good luck to all in their predictions as to where the markets will be in a year. Looks like a little instability to me.
No one can predict the future of the markets. However if Trumpism takes hold on immigration deportation, and millions are deported, and the tax cut flounders because of potential deficit increases, or the $1 trillion infrastructure legislation bogs down, and the ACA can’t get a footing, etc. etc………
Good luck to all in their predictions as to where the markets will be in a year. Looks like a little instability to me.
4
Great, more Bentleys clogging up the road. Who knew America's virtual money was lighter than air.
2
From 11/4/2008, the day of Obamas election victory to March 1, 2009 the stock market fell 30%. Since then the stock market has tripled. Before we draw any conclusions about what the markets are now telling us, lets wait a few years.
8
"I sort of hope that (the housing markets collapse) because then people like me would go in and buy." -- Donald Trump, 2006. No-one said that to Make America Great Again wouldn't require some sacrifice, on somebody's part.
6
NYT, this is truly embarrassing. The author goes to great pains to point out that the handful of positive economic developments are (drum roll) `... all taking place during Donald J. Trump’s presidency.' This grotesque administration has been in place - partially, anyway - for less than two months. For much of that time, the NYT has gleefully - and correctly - chronicled the spectacle of the Trump WH. Now we're being told that all that is good in the world is `... all taking place during Donald J. Trump’s presidency.' Talk about whiplash. There's has been a decent post-election move in the stock market. No doubt. But the Dow rose some 12,000 points during the Obama administration, moving away from the carnage left by Bush-Cheney. The NYT is loaded with world-class business reporters. And every single on of them will tell you that the positive movements outlined in this article began long before January 20.
9
So if this statement is true:
"And every single on of them will tell you that the positive movements outlined in this article began long before January 20.",
then there must also be some credit given to the Bush Administration for the 12,000 point increase.
"And every single on of them will tell you that the positive movements outlined in this article began long before January 20.",
then there must also be some credit given to the Bush Administration for the 12,000 point increase.
Thank you.
When you say 'bond market investors' you mean central banks, right?
Who knows what market activity says or doesn't say anymore as the largest participants are global government entities in the form of central banks and sovereign wealth funds.
Who knows what market activity says or doesn't say anymore as the largest participants are global government entities in the form of central banks and sovereign wealth funds.
1
Folks, this is just the by product of the greed machine swinging into high gear. Believe me, it won't end well.
7
And this guy complains to the nation that he "inherited a mess"? Well, I guess he has high standards for inheritances.
7
Just another instance of irrational exuberance in anticipation of lower taxes and regulations pushed back to the days of silent spring. Profit takers will claim the day soon enough as Republicans vote for higher deficits, higher interest rates and higher earnings for the 1%.
3
Once again Americans and average people around the world are being set up for a big fall.
The Top 1% Global Financial Elite Robber Baron/ Radical Religion Good Old Boys' Party are making out like the bandits they are. There were reports that Goldman-Sachs boys, the swamp dwellers on The Con Don's cabinet and in charge of OUR governments, got 25% of the proceeds to the 20,000 run-up. Carl Icahn, Warren Buffet, Roger Stone have all made BILLIONS of $$$.
]
They will crash the market, pay themselves bail-out money, steal at least another one-half the wealth accumulated by average people since they did it in 2008 and hide the money in their tax havens around the world. At the same time they will use OUR hard-earned taxpayer money to give themselves corporate welfare "infrastructure" money and put us in debt that we will never recover from. That is their grand plan.
I will have no sympathy for anyone who leaves their 401K dollars in the "markets" or refinances their home to get out the cash and loses it all this time. How many lessons does America need? The Robber Barons will destroy it all for their insatiable GREED if we let them.
Not me. Not now. Not ever.
The Top 1% Global Financial Elite Robber Baron/ Radical Religion Good Old Boys' Party are making out like the bandits they are. There were reports that Goldman-Sachs boys, the swamp dwellers on The Con Don's cabinet and in charge of OUR governments, got 25% of the proceeds to the 20,000 run-up. Carl Icahn, Warren Buffet, Roger Stone have all made BILLIONS of $$$.
]
They will crash the market, pay themselves bail-out money, steal at least another one-half the wealth accumulated by average people since they did it in 2008 and hide the money in their tax havens around the world. At the same time they will use OUR hard-earned taxpayer money to give themselves corporate welfare "infrastructure" money and put us in debt that we will never recover from. That is their grand plan.
I will have no sympathy for anyone who leaves their 401K dollars in the "markets" or refinances their home to get out the cash and loses it all this time. How many lessons does America need? The Robber Barons will destroy it all for their insatiable GREED if we let them.
Not me. Not now. Not ever.
8
The stock market is easy to predict. Now, as always, the stock market will fluctuate.
4
Not much is mentioned about the resulting deficits and expanded national debt many of Trump's policies will generate. The Republicans love to ask "How will you pay for it?" when dealing with proposals from Democrats. I hope that continues now, with a Republican president.
If deficits don't matter, why do they collect taxes?
If deficits don't matter, why do they collect taxes?
7
The rally is the fulfillment of the expectations of some that the only thing between them and economic nirvana was Obama or a Democratic president and/or congress. Enjoy the ride but it is built on false hope, not sound fundamentals, and probably obscures the real challenges and work that needs to be tackled. Champagne and roses often end in tears and broken glass.
10
None of this should be a surprise. Democratic administrations tend to depress financial markets with their gloom-and-doom (who can forget Jimmy "Malaise" Carter wrapped in his cardigan, admonishing you to turn down the thermostat to 68 degrees because all the oil would be gone by 1990), over-regulation and increased taxes on earned income and investment income (e.g., Obama's 2012 income tax increases and Obamacare's 3.8% surtax on net investment income). Republicans (Reagan; Bush Jr; Trump) get into office, and suddenly Uncle Sam isn't looking over your shoulder, wagging his finger, and sticking his hands deeper into your pockets. People begin to believe again it is worthwhile to work hard and prosper, without fear their income won't be redistributed to the Democrats' favored client constituencies. The financial markets are quickest to pick-up on that societal optimism.
"Democratic administrations tend to depress financial markets with their gloom-and-doom (who can forget Jimmy "Malaise" Carter wrapped in his cardigan, admonishing you to turn down the thermostat to 68 degrees because all the oil would be gone by 1990), over-regulation and increased taxes on earned income and investment income (e.g., Obama's 2012 income tax increases and Obamacare's 3.8% surtax on net investment income). "
This quote from your post is a popular Republican myth or meme or whatever.
Google how the "financial markets" did under Republican Presidents in the 20th century and so far in this century. Check the Dow, for example, at the start of the Republican administrations and at the end of their administrations. Then, check out how the Dow did under the Democratic administrations. It's not even close. I have been putting up with this Republican myth making all my life (I'm 73) and I'm not taking it any more. Today's Republicans live in a fact free world where their opinions are treated as facts and the real facts are treated as just 'other opinions."
This quote from your post is a popular Republican myth or meme or whatever.
Google how the "financial markets" did under Republican Presidents in the 20th century and so far in this century. Check the Dow, for example, at the start of the Republican administrations and at the end of their administrations. Then, check out how the Dow did under the Democratic administrations. It's not even close. I have been putting up with this Republican myth making all my life (I'm 73) and I'm not taking it any more. Today's Republicans live in a fact free world where their opinions are treated as facts and the real facts are treated as just 'other opinions."
4
Richard can you explain what was happening in 2008? Why do free market conservatives always over look their failures? In 1992 we were in a recession, 8yrs later the economy was booming and we had a surplus. While I agree that getting the government out of the way helps our economy grow, there is a need for restraint and not all Democrats squash economic hope.
1
Richard, you need to look at the actual historical record of how the market has done under Republican Presidents versus how it has done under Democratic ones. The record is the exact opposite of what you say. The difference is astounding -- 900 basis points better under Democratic Presidents, according to one calculation. You may recall that the market did far better under Obama than under Bush. Or look at Roosevelt versus Hoover.
It is the last supper of capitalism. It is based on nothing. A handful of chosen disciples get to sit at the table before the Crucifixion.
Where are the innovations? Where is the productivity? Where is the great savior (Trump?).
A return to normal valuations would appear as a collapse. This is pure madness waiting for some event or other to begin the destruction. All unnecessary. Which event will it be that starts off the collapse? It does not matter really. Things are not really bad. It is the loss of a moral and intellectual compass that is at work.
Irrational would be putting this mildly. It is trading on trading of vast amounts of cash doing nothing, going nowhere.
Where are the innovations? Where is the productivity? Where is the great savior (Trump?).
A return to normal valuations would appear as a collapse. This is pure madness waiting for some event or other to begin the destruction. All unnecessary. Which event will it be that starts off the collapse? It does not matter really. Things are not really bad. It is the loss of a moral and intellectual compass that is at work.
Irrational would be putting this mildly. It is trading on trading of vast amounts of cash doing nothing, going nowhere.
16
There are a lot of fundamental reasons for this exuberance in the stock market. Its still not the time to think about inflation - as Fed is taking steps sooner than later. 50% Americans are directly or indirectly connected with the stock market, so this should fatten the booty little bit of many people - not just top 1% - and that should spur consumption in a positive sense. So, this is not the time to think about inflation and related issues - as Fed will take care of the emerging situations - as also indicated in Mr Dudley's interview...
3
Any positive reaction to the recent growth in my portfolio has to be tempered with my previous decades in the fickle world of investing. I have lived through some epic down turns that took years to recover from. I can only assume that this current level of the DJIA is not sustainable (it never is, no matter what). As an individual on the verge of retirement, I don't have years to wait out the cycle. There are too many in our country who are not engaged with the financial markets enough to benefit at all from the current stock market boomlet but will be affected when it tumbles. A rising tide raises all boats. Until we achieve some higher level of equity in income distribution that does not include entitlements for the rich disguised as tax cuts and penalties for the poor disguised as tax credits, economic distinctions will continue to divide us. Equally important, I know that that the person in the White House currently has such a limited understanding of micro/macroeconomics that he can't effectively understand the proposals of all of the advisors who are pushing toward a disastrous tax cut for the richest of Americans. Sad and completely avoidable.
31
“There’s no question that animal spirits have been unleashed a bit post the election,” Mr. Dudley told CNN."
Animal spirits? Or "irrational exuberance"? Since investors trade on future bets, I'd be careful how far they go. I'm not on the side of realistic expectations.
Because a year of two of animal spirits can come crashing down in a year or two, especially if banks resume greed where they left off in 2008 and trigger another financial crisis, or Trump gets impeached, or starts a war to divert public attention away from internal policy blunders.
Animal spirits? Or "irrational exuberance"? Since investors trade on future bets, I'd be careful how far they go. I'm not on the side of realistic expectations.
Because a year of two of animal spirits can come crashing down in a year or two, especially if banks resume greed where they left off in 2008 and trigger another financial crisis, or Trump gets impeached, or starts a war to divert public attention away from internal policy blunders.
14
Cite the new data on inequality, Neil. It is worse than ever, in part because of the equity market being slanted so heavily towards the top 90% of investors.
Remember, everybody, we don't necessarily have a growth problem. We have a distribution problem. And that distribution problem is one of the major factors--if not the singular factor--in our extreme political dysfunction.
You think Trump and his clown cabinet will address inequality? The dysfunction is exactly what they want.
Remember, everybody, we don't necessarily have a growth problem. We have a distribution problem. And that distribution problem is one of the major factors--if not the singular factor--in our extreme political dysfunction.
You think Trump and his clown cabinet will address inequality? The dysfunction is exactly what they want.
16
I don't get this "full productive capacity". If we do not have enough warehouse space, that's an opportunity to build more warehouses. The only things that really inhibit growth are shortages, of raw materials & people &, most importantly, money, & I'm not so sure about the first two.
It seems that raw materials exist in abundance, We just have to go after them. We used to think there would be an energy shortage as oil ran out, but now we see ways to get almost unlimited energy from other sources, e.g. the sun. We just have to think big. We need iron? There are whole worlds in the asteroid belt which are 90% iron.
What about people? In the short term there are those who would go to work if there were decent jobs for them. Instead of cutting immigration, we could increase it. While the evidence is that robots and AI's have not increased productivity much yet, in the long term, they will. They will allow us to produce more with fewer people.
Now we come to money. Why has growth been so slow since 2008? For that matter, what caused the crash? The answer to both questions is lack of money from the federal government. In both periods, the flow of money FROM the federal TO the private sector was reduced. In the 90's we made up for this by a huge increase in private borrowing & produced a huge bubble. Since 2008, the deficit, which measures this flow, has been cut 75%.
We need more money in the private sector, money to build warehouses, money to provide decent jobs, etc., etc.
It seems that raw materials exist in abundance, We just have to go after them. We used to think there would be an energy shortage as oil ran out, but now we see ways to get almost unlimited energy from other sources, e.g. the sun. We just have to think big. We need iron? There are whole worlds in the asteroid belt which are 90% iron.
What about people? In the short term there are those who would go to work if there were decent jobs for them. Instead of cutting immigration, we could increase it. While the evidence is that robots and AI's have not increased productivity much yet, in the long term, they will. They will allow us to produce more with fewer people.
Now we come to money. Why has growth been so slow since 2008? For that matter, what caused the crash? The answer to both questions is lack of money from the federal government. In both periods, the flow of money FROM the federal TO the private sector was reduced. In the 90's we made up for this by a huge increase in private borrowing & produced a huge bubble. Since 2008, the deficit, which measures this flow, has been cut 75%.
We need more money in the private sector, money to build warehouses, money to provide decent jobs, etc., etc.
4
Lack of money? Check the Fed balance sheet. 0% interest rates, stimulus plans, multiple QEs and asset purchase plans have expanded the money supply to extraordinary levels. When that money gets into circulation (see the pending budget issues), the inflation people are talking about here will be unleashed.
5
For Russ - There's this little equation:
P = (MV)/S
where P is prices , M is the amount of money in the economy, V measures the frequency that money changes hands usefully, and S is the dollar amount of the amount of stuff, goods and services, we can produce in some time period.
A word on V. If the government gives Scrooge McDuck a Billion for advice on the comic book market, M increases by a Billion, but if Scrooge puts the bucks in his basement, and forgets about it, that doesn't affect P at all. That Billion has a V of 0. Also, if Scrooge lose a bet to Daddy Warbucks, and the Billion moves from Scrooge's basement to Daddy's, that is a change, but the V does not change because it is not a useful change. It doesn't affect commerce.
Obviously I am just talking qualitatively here. I want to stay out of the weeds.
Inflationistas cannot understand an equation with more than 2 variables. To them it looks like:
P = M.
You print more money, you debase the currency, prices go up. End of story. Of course this might happen if S and V remain constant, but in point of fact, the causes of most, if not all excessive inflations since WWI has been S getting too small--shortages, The anchovy harvest failed in 1972. There was a shortage of livestock feed. Then came the oil embargo. Prices rose.
With QE, M goes up, but the new money sits in the coffers of banks or chases itself in financial bets. It has a very low V. P rises only a little.
Rocket science it ain't.
P = (MV)/S
where P is prices , M is the amount of money in the economy, V measures the frequency that money changes hands usefully, and S is the dollar amount of the amount of stuff, goods and services, we can produce in some time period.
A word on V. If the government gives Scrooge McDuck a Billion for advice on the comic book market, M increases by a Billion, but if Scrooge puts the bucks in his basement, and forgets about it, that doesn't affect P at all. That Billion has a V of 0. Also, if Scrooge lose a bet to Daddy Warbucks, and the Billion moves from Scrooge's basement to Daddy's, that is a change, but the V does not change because it is not a useful change. It doesn't affect commerce.
Obviously I am just talking qualitatively here. I want to stay out of the weeds.
Inflationistas cannot understand an equation with more than 2 variables. To them it looks like:
P = M.
You print more money, you debase the currency, prices go up. End of story. Of course this might happen if S and V remain constant, but in point of fact, the causes of most, if not all excessive inflations since WWI has been S getting too small--shortages, The anchovy harvest failed in 1972. There was a shortage of livestock feed. Then came the oil embargo. Prices rose.
With QE, M goes up, but the new money sits in the coffers of banks or chases itself in financial bets. It has a very low V. P rises only a little.
Rocket science it ain't.
3
PS Russ. Look at https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-dec... to see what has happened to V, the velocity of money.
Historically, "Animal spirits" denoted an adolescent attitude to authority that resulted in energetically and deliberately acting on advice, opinion, or exhortation to the point of stretching the letter of any regulations involved to the limit. The aim was to maximise short-term disruption of what was considered to be 'normal' behavior. Restoring equilibrium subsequently required a firm sanction from those in authority and possibly also a re-casting of the regulation to prevent repeats of the actions undertaken.
In this case, qualities such as dynamism and leadership coexist with less constructive traits such as recklessness, heedlessness, and in-caution, attributable to fluctuations in hormonal balances; abnormally high levels of testosterone may create individual success but also collective excessive aggression, overconfidence, and herd behaviour, while too much cortisol can promote irrational pessimism and risk aversion. The remedy for this is to shift the employment balance in finance towards women and older men and monitor traders' biology.
In this case, qualities such as dynamism and leadership coexist with less constructive traits such as recklessness, heedlessness, and in-caution, attributable to fluctuations in hormonal balances; abnormally high levels of testosterone may create individual success but also collective excessive aggression, overconfidence, and herd behaviour, while too much cortisol can promote irrational pessimism and risk aversion. The remedy for this is to shift the employment balance in finance towards women and older men and monitor traders' biology.
2
Look, this isn't a difficult question. The reason we have had slow growth since 2008 is that the deficit was cut 75% This is exactly the opposite of what we should have been doing. As a percent of GDP, debt service was and is the lowest in 60 years. We could have locked in ultra low interest rates to get money to invest in worthwhile projects like infrastructure repair, education, research, a new power grid, etc. which would put people back to work now besides the obvious long term benefits.
Heck, since there was absolutely no sign of inflation, we could have even printed the money the private sector needs to have provided good jobs.
Once we got the economy growing again the debt would have faded in insignificance as the larger debt (as a percent of GDP) after WWII did.
Or we can keep cutting the deficit until we get surpluses as we did after WWI when we got the large war debt down to 16% of GDP in October of 1929. And how did that work out?
Heck, since there was absolutely no sign of inflation, we could have even printed the money the private sector needs to have provided good jobs.
Once we got the economy growing again the debt would have faded in insignificance as the larger debt (as a percent of GDP) after WWII did.
Or we can keep cutting the deficit until we get surpluses as we did after WWI when we got the large war debt down to 16% of GDP in October of 1929. And how did that work out?
7
"Those numbers followed positive readings on retail sales, industrial production and the job market."
Uh, Neil, industrial production in January, the latest numbers we have, was down 0.3% MoM, when it was expected to be flat. And December was revised down at the same time, from 0.8% to 0.6%. Sentiment surveys like the ISM and the PMI and the regional Fed surveys are definitely coming in strong, but again, they indicate optimism about the economy. Hard data has not improved significantly at all. Let's stick with the facts, shall we?
Uh, Neil, industrial production in January, the latest numbers we have, was down 0.3% MoM, when it was expected to be flat. And December was revised down at the same time, from 0.8% to 0.6%. Sentiment surveys like the ISM and the PMI and the regional Fed surveys are definitely coming in strong, but again, they indicate optimism about the economy. Hard data has not improved significantly at all. Let's stick with the facts, shall we?
9
Higher wages? I certainly haven't seen that in my area. The only change I have seen is gas prices increase by $0.15/gallon in the last week, JC Penneys announced closing 100s of stores on the heels of Macy'smaking a similar announcement recently. MC Sporting goods is going belly up. Our roads in Michigan are crumbling after the governor gave a $2 billion dollar tax cut to businesses. And the Michifan Republicans just tried to lower and phase in the elimination of the state tax which would result in an additional billion dollar a year loss in tax revenue. They foisted another gas tax on our already obscene gas tax even though we resoundingly (Dems and Republicans) voted it down on the ballot. This trickling down doesn't work. We are all out here trying to live the American Dream giving each other haircuts and pedicures. That economic base only works as long as people are in debt up to the hilt. The only ones with any job security are government employees and healthcare professionals.
32
Cindy, it's a little better here in VA, but the politicians' incentives to enrich their friends remains exactly the same. We need to somehow--somehow--Amend the US Constitution to make politics a service to the public, not a lucrative career. We need firm term limits for legislators, an end to Gerrymandering, and a reversal of Citizens United. Until then, we are a Plutocracy, not a Republic or a Democracy.
As for the jobs in this new economy? What you describe is the same here. I don't know that for workers without higher education there will be much beyond giving pedicures, waiting tables, and working in the unskilled part of the healthcare industry. In other words, working poverty. A recent shopping center here featured not ONE store selling a durable good: there's a Pilates studio, a manicure place, a dentist's office, and a Starbucks. Okay, the metal coffee mugs you can buy are durable.
Modern manufacturing is more likely to require computer skills than wrench-turning skills. So if we cannot bring 1957 back, how can we employ everyone in a way that respects their dignity and provides a living wage?
As for the jobs in this new economy? What you describe is the same here. I don't know that for workers without higher education there will be much beyond giving pedicures, waiting tables, and working in the unskilled part of the healthcare industry. In other words, working poverty. A recent shopping center here featured not ONE store selling a durable good: there's a Pilates studio, a manicure place, a dentist's office, and a Starbucks. Okay, the metal coffee mugs you can buy are durable.
Modern manufacturing is more likely to require computer skills than wrench-turning skills. So if we cannot bring 1957 back, how can we employ everyone in a way that respects their dignity and provides a living wage?
13
How's that "Kansas Experiment" working out?
What does the DJIA indicate about the economy and economic forecasts? Nothing. But thanks for pretending it does. BTW, more than 60 percent of trades on Dow are high frequency computer scam trades. And that part just measures lawless greed.
20
So true. Just because Wall St is excited about (possible) bigger profits for rentiers doesn't mean there will be prosperity for anyone else. Most likely, this will just lead to greater inequality between rentiers and workers.
I wish Trump had not excluded economists from his close circle of advisors. He understands marketing, and he mistakenly believes that means he understands the macro economy.
Yes, many of his supporters have felt excluded, pessimistic, and increasingly poor. However, when you take the economy as a whole, things have been far from dire. Growth has been steady at a modest level, inflation has been low, unemployment has steadily declined to a level now approximating what is known as "full employment", mortgage rates continued to be lower than ever, and the stock market had been performing well for several years which means retirement investments were increasing in value.
Everything Trump boasts that he wants to accomplish will light a fire under inflation, subject retirement investments to another bubble burst, eventually create an unemployment rebound to high levels, and saddle the US with a massive increase in federal debt.
We have forgotten how bad inflation can be because we haven't seen it for so many years. If you are too young to remeber living through a combination of double-digit unemployment combined with double-digit inflation (a pattern dubbed "stagflation"), you don't know pain.
In his hubris, Trump is placing us at risk for pain we haven't seen for decades.
Yes, many of his supporters have felt excluded, pessimistic, and increasingly poor. However, when you take the economy as a whole, things have been far from dire. Growth has been steady at a modest level, inflation has been low, unemployment has steadily declined to a level now approximating what is known as "full employment", mortgage rates continued to be lower than ever, and the stock market had been performing well for several years which means retirement investments were increasing in value.
Everything Trump boasts that he wants to accomplish will light a fire under inflation, subject retirement investments to another bubble burst, eventually create an unemployment rebound to high levels, and saddle the US with a massive increase in federal debt.
We have forgotten how bad inflation can be because we haven't seen it for so many years. If you are too young to remeber living through a combination of double-digit unemployment combined with double-digit inflation (a pattern dubbed "stagflation"), you don't know pain.
In his hubris, Trump is placing us at risk for pain we haven't seen for decades.
21
CS seems to believe that increasing the federal debt must lead to inflation. First we have the example of 1946-1973 when the debt increased 75% and we had Great Prosperity.
People usually say that inflation, rising prices, happens when you have too much money chasing not enough stuff. There are 3 parts here:
The amount of money you have in the private sector.
The dollar amount of stuff (goods and services) you can produce.
How much money is "chasing" the stuff, i.e. being use to buy stuff.
So you can have more money if you can produce enough stuff to soak it up. If you have shortages of stuff, or material or people to make more stuff, prices will rise. Conceivably one could continue to add money to the economy until you run out of the ability to produce enough stuff, and that would produce severe inflation. In point of fact, James Galbraith has shown that all severe inflation since WWI in has been produced by external sources which prevent the production of stuff, e.g. shortages.
Today, QE has added a lot of money to the private sector, but it is not chasing stuff; it sits in the coffers of Banks and the Rich or is used in financial speculation to chase itself. We could add money to the private sector in the form of federal spending on worthwhile projects like the interstate highways which would not only reduce inequality, but also have long term benefits WITHOUT producing severe inflation because we can produce a lot more stuff.
People usually say that inflation, rising prices, happens when you have too much money chasing not enough stuff. There are 3 parts here:
The amount of money you have in the private sector.
The dollar amount of stuff (goods and services) you can produce.
How much money is "chasing" the stuff, i.e. being use to buy stuff.
So you can have more money if you can produce enough stuff to soak it up. If you have shortages of stuff, or material or people to make more stuff, prices will rise. Conceivably one could continue to add money to the economy until you run out of the ability to produce enough stuff, and that would produce severe inflation. In point of fact, James Galbraith has shown that all severe inflation since WWI in has been produced by external sources which prevent the production of stuff, e.g. shortages.
Today, QE has added a lot of money to the private sector, but it is not chasing stuff; it sits in the coffers of Banks and the Rich or is used in financial speculation to chase itself. We could add money to the private sector in the form of federal spending on worthwhile projects like the interstate highways which would not only reduce inequality, but also have long term benefits WITHOUT producing severe inflation because we can produce a lot more stuff.
The quality of jobs has been poor and that is what a lot of people do not get. Quality and Quantity not just Quantity.Growth has been below historic lows and there are still a lot of people not participating in the labor force. 43 million on food stamps and how many of those are working? A bunch
Conservatives (and Trump) are claiming credit for something that started long before the election but what else is new. The self same whiners during the Obama administration were claiming the government data was fake news or inaccurate are now claiming the data produced by the same methods is evidence of the Trump effect.
22
Ahh angry mindless liberal partisanship? Verified commenter!
No, just pointing out the facts.
Ahh, those are "facts". As I was saying....
I have an idea. For every ten dollars investors make in profits one dollar must be given to a charity.
Here is another one, not related. Jeff Sessions "Lock Him Up."
Here is another one, not related. Jeff Sessions "Lock Him Up."
18
The liberal opposition can not stand the fact that the economy is doing well since the historic election of Donald J. Trump to the Presidency of the United States of the United States and his magnificent defeat of HRC. The election of Trump, one of if not the most successful businessmen in the history of the USA if not the entire world, sent a signal to the business world that its time to get to work. The past 8 years have been the most business hostile climate in the history of the USA if not the entire world. Every day new regulations would be introduced that basically stopped the private business sector in its tracks, while the public - federal government - sector grew at an unprecedented pace, adding more and more useless phony baloney jobs. We have stood patiently by for the last 8 years, waiting for a man to enter the WH who knows a thing or two about business, about making money. Its time to drain the swamp! Thank you.
11
Enthusiasm is great, but facts are better. Actually the largest growth in the federal workforce occurred under Bush and a GOP congress. Government shrank under Clinton and Obama came in somewhere in between.
Business will prosper with fewer regulations, but that's because those costs will be passed on to the public. When a coal plant expands and does so with fewer environmental controls health costs increase. But those costs don't show up on the corporate ledger. The public pays for that with lost income, lost work days and increased respiratory illness that increase hospital costs.
The same is true for oil drilling or fracking. The EPA, which Trump plans to cut actually spends most of its budget on clean up sites that private businesses have polluted and abandoned. The same is true of Dodd/Frank regulations. How quickly some forget the costs of the savings and loan bubble and the 2008 bailout.
Trump is a con man. One of his specialty's as a businessman was getting someone else to cover his expenses. With the federal government that 'someone else' is John Q. Public.
Business will prosper with fewer regulations, but that's because those costs will be passed on to the public. When a coal plant expands and does so with fewer environmental controls health costs increase. But those costs don't show up on the corporate ledger. The public pays for that with lost income, lost work days and increased respiratory illness that increase hospital costs.
The same is true for oil drilling or fracking. The EPA, which Trump plans to cut actually spends most of its budget on clean up sites that private businesses have polluted and abandoned. The same is true of Dodd/Frank regulations. How quickly some forget the costs of the savings and loan bubble and the 2008 bailout.
Trump is a con man. One of his specialty's as a businessman was getting someone else to cover his expenses. With the federal government that 'someone else' is John Q. Public.
46
Southern Boy, per data directly from the office of personal management, federal employment peaked in 1990 and has declined since then, including year over year declines in all branches of government since 2012. Source: https://www.opm.gov/policy-data-oversight/data-analysis-documentation/fe...
Furthermore, Mr. Trump benefits immensely from the healthy economy that he inherited from President Obama. Lest we forget that when Obama took office, his first job report showed employers shedding 598,000 jobs.
President Obama then presided over an economy with 75 straight months of job growth out of the ashes of the worst financial crises since the great depression. On January 8th, 2017, unemployment was 4.7%, the lowest at any point in his presidency. By all measures, the US economy has been nearing full employment for the last three months- and this would not change regardless of who is president- Mr. Obama, Mr. Trump, or Mr. Vermin Supreme.
I would suggest that you argue based on the facts rather than simply demonizing your opposition.
Furthermore, Mr. Trump benefits immensely from the healthy economy that he inherited from President Obama. Lest we forget that when Obama took office, his first job report showed employers shedding 598,000 jobs.
President Obama then presided over an economy with 75 straight months of job growth out of the ashes of the worst financial crises since the great depression. On January 8th, 2017, unemployment was 4.7%, the lowest at any point in his presidency. By all measures, the US economy has been nearing full employment for the last three months- and this would not change regardless of who is president- Mr. Obama, Mr. Trump, or Mr. Vermin Supreme.
I would suggest that you argue based on the facts rather than simply demonizing your opposition.
3
Once again, I don't know if Southern Boy's diatribe is sarcasm. Apparently, having an unemployment rate going from 10% to 4.9% during the last 8 years is a sign of a poor economy. After 6 weeks, though the economy is booming again. No, the stock market is booming, not the economy. It's still pretty much the same as in December of 2016. If this is not sarcasm, I'm concerned for the future of our country.
2
An uptick in the US stock market does not necessarily reflect strong economic conditions. In the late 1920's, the stock market boomed while the fundamentals of the economy were weak. It is likely that this little Trump boomlet reflects the new administration's goals of gutting laws and regulations aimed at preserving the environment and protecting consumers. Speculators thus see an opportunity for short term gains at the expense of sustainability and fairness.
21
Let's look at post WWI.
1. Inequality has been bad for the economy. It reduces demand and encourages wild speculation. Just compare the post WWI period with high inequality with the post WWII period with low inequality. The first led to disaster, the second to growth and prosperity. So we should take measures to reduce inequality.
2. Balanced budgets have been bad for the economy. Again after WWI we had ten years of balanced budgets and surpluses and paid down the debt 38%. In fact, on Oct 25, 1929, the debt was only 16% of the GDP, In fact all 6 times we have had surpluses for more than 3 years, we have immediately suffered a depression.
On the other hand, after WWII we had mostly deficit spending and the debt went up 75% from 1946 - 1973, but we had great prosperity and growth--real median household income surged 74% and GDP growth averaged 3.8%.
See that wasn't so hard.
1. Inequality has been bad for the economy. It reduces demand and encourages wild speculation. Just compare the post WWI period with high inequality with the post WWII period with low inequality. The first led to disaster, the second to growth and prosperity. So we should take measures to reduce inequality.
2. Balanced budgets have been bad for the economy. Again after WWI we had ten years of balanced budgets and surpluses and paid down the debt 38%. In fact, on Oct 25, 1929, the debt was only 16% of the GDP, In fact all 6 times we have had surpluses for more than 3 years, we have immediately suffered a depression.
On the other hand, after WWII we had mostly deficit spending and the debt went up 75% from 1946 - 1973, but we had great prosperity and growth--real median household income surged 74% and GDP growth averaged 3.8%.
See that wasn't so hard.
If we are indeed in a period of slow or stagnant growth, income inequality would be a leading cause. As the world's rich become richer, they siphon off more of the wealth production, which decreases world consumption of goods and services, so the economy grows more slowly. A better distribution of the wealth produced would result in higher growth because the less wealthy tend to consume more and save less.
Query whether we are in a stagnant growth era or if we have returned to a new normal. The rapid post-WWII growth was probably an anomaly.
Query whether we are in a stagnant growth era or if we have returned to a new normal. The rapid post-WWII growth was probably an anomaly.
1
fjb - As Piketty has pointed out, the post WWII period was, indeed, an anomaly, but as he also points out, it was one because of a great increase in government influence in the economy, in particular, deficit spending (the debt increased 75% in 1946 - 1973). In addition, inequality was low (the Gini was half of what it is today). Inequality was low because unions were supported and taxes on the Rich were high which discouraged them from taking obscene compensation and using the money to speculate.
There is no reason we could not reinstate those policies which worked instead of the policies of post WWI and today which do not work.
There is no reason we could not reinstate those policies which worked instead of the policies of post WWI and today which do not work.
1
Any of the economic indicators showing improvement this early in Trump's administration must be attributed to Obama's administration, which created millions of new jobs and got no credit for it in the Republican Congress and the media.
And a market move of this magnitude would probably have been expressed by Greenspan as irrational exuberance.
Aside from the stock market, it's difficult to see how massive tax cuts for rich corporations will help the working class who helped vote Trump in. The increased profits will go to executive salaries and stock buybacks, and cash.
Manufacturing may make small gains (as businesses try to curry favor with Trump), but if you believe manufacturing (and recovery in coal mining) are coming back, I have some ocean beach property here in Wyoming to sell you.
And a market move of this magnitude would probably have been expressed by Greenspan as irrational exuberance.
Aside from the stock market, it's difficult to see how massive tax cuts for rich corporations will help the working class who helped vote Trump in. The increased profits will go to executive salaries and stock buybacks, and cash.
Manufacturing may make small gains (as businesses try to curry favor with Trump), but if you believe manufacturing (and recovery in coal mining) are coming back, I have some ocean beach property here in Wyoming to sell you.
22
It continues to annoy me and many others that he takes credit for things that he has not done - and then pushes the blame on to others for the epic failures he is responsible for.
In full support of dave's comment:
"The economy is closing in on its full productive capacity. It is getting to the point where a cycle of rising wages and higher inflation necessitates higher interest rates. That, in turn, reflects policies from the Obama administration and the Fed that long predate Mr. Trump’s election."
"big part of the improvement has resulted from expectations that the new president’s policies will help 'corporate bottom lines' (and that some of the risks of his trade agenda 'won’t' materialize)."
In full support of dave's comment:
"The economy is closing in on its full productive capacity. It is getting to the point where a cycle of rising wages and higher inflation necessitates higher interest rates. That, in turn, reflects policies from the Obama administration and the Fed that long predate Mr. Trump’s election."
"big part of the improvement has resulted from expectations that the new president’s policies will help 'corporate bottom lines' (and that some of the risks of his trade agenda 'won’t' materialize)."
7
No one seems to be talking about the inevitable impact that rising rates will have on budget deficits and the national debt. Every increase in rates will result in billions more in debt repayments. The costs of Social Security, Medicare, Medicaid and interest on the debt is already over 50%. Rising rates--along with huge increases in military spending and substantial tax cuts--would result in a massive increase in the national debt. Not good.
9
Social Security has never added one dime to the Federal deficit. Our contributions have financed the government and as the Washington Post says,
"Social Security loaned the money to the U.S. government, which used it for other things. In exchange, Social Security received interest-bearing Treasury securities. The value of those bonds is now about $2.6 trillion."
Of course, Republicans now want to default on that obligation. It's their business model--drain the cash reserves out of a business and then declare bankruptcy.
"Social Security loaned the money to the U.S. government, which used it for other things. In exchange, Social Security received interest-bearing Treasury securities. The value of those bonds is now about $2.6 trillion."
Of course, Republicans now want to default on that obligation. It's their business model--drain the cash reserves out of a business and then declare bankruptcy.
6
Some facts, Glen:
1. What are we to conclude from the debt ratio?
It was 16% in October 1929 followed by the worst economy we have ever seen.
It was 109% (public) in 1946 followed by 27 years of prosperity. BTW that was 47% larger than the public debt ratio today.
2. Why do we worry about the debt at all since we can print our own money and our debt is in our own money? Since we are running way below potential, do we have to worry about inflation?
3. Why do we even want to pay down the debt? Counting the interest returned by the FED on the bonds it holds, debt service is running at 0.8% of GDP, the lowest in about 60 years.
4. All 6 times we tried to pay down the debt and had a surplus for more than 3 years, we got a major depression. Depending on your definition of depression, this could account for ALL of our depressions.
5. Please tell me when in all of US history has the debt or deficits or debt service impacted the economy.
6 After WWI we had a lot of debt and followed it with 10 years of balanced budgets and and reduced it by 38%. And then what happened?
6. After WWII we had even more debt and followed it with deficit spending 21 out of the next 27 years and increased the debt by 75%. And what was the economy like during this long period?
1. What are we to conclude from the debt ratio?
It was 16% in October 1929 followed by the worst economy we have ever seen.
It was 109% (public) in 1946 followed by 27 years of prosperity. BTW that was 47% larger than the public debt ratio today.
2. Why do we worry about the debt at all since we can print our own money and our debt is in our own money? Since we are running way below potential, do we have to worry about inflation?
3. Why do we even want to pay down the debt? Counting the interest returned by the FED on the bonds it holds, debt service is running at 0.8% of GDP, the lowest in about 60 years.
4. All 6 times we tried to pay down the debt and had a surplus for more than 3 years, we got a major depression. Depending on your definition of depression, this could account for ALL of our depressions.
5. Please tell me when in all of US history has the debt or deficits or debt service impacted the economy.
6 After WWI we had a lot of debt and followed it with 10 years of balanced budgets and and reduced it by 38%. And then what happened?
6. After WWII we had even more debt and followed it with deficit spending 21 out of the next 27 years and increased the debt by 75%. And what was the economy like during this long period?
Typical Republican party. Make the grandkids pay for it.
There's evidence that what the federal government of the USA does has less impact than we might want to believe. Presidents get credit and blame for things that are way beyond their control.
So far, this administration has done nothing but promise solutions. It seems people resolutely believe promises that will benefit them and think that the promises they don't like won't come to fruition.
It's also important to remember that the economy is not the same as the stock market. There's also great regional variation. Some places are doing very well and others are still struggling. People who look only at national figures will continue to be misled.
So far, this administration has done nothing but promise solutions. It seems people resolutely believe promises that will benefit them and think that the promises they don't like won't come to fruition.
It's also important to remember that the economy is not the same as the stock market. There's also great regional variation. Some places are doing very well and others are still struggling. People who look only at national figures will continue to be misled.
9
The trend is your friend. Until it isn't. Stock valuations are high, but we have seen higher in the past. Still the speed of the run-up based on possibilities of dramatic deregulation and tax reform trouble me. The betting proceeds at a fever pace, with so many potential landmines with the current elected folks, extreme caution is warranted.
Fixed income seems to be vacillating between reflation and deflation, depending on where one looks.
Too, the market surges don't lift all ships equally. There is still a large part of the middle and lower classes still concerned about the current month versus ten years down the road and many have most likely missed the so-called easy money of the past few months. Late comers tend to wind up taking a loss.
The times warrant being safe versus being sorry...
Fixed income seems to be vacillating between reflation and deflation, depending on where one looks.
Too, the market surges don't lift all ships equally. There is still a large part of the middle and lower classes still concerned about the current month versus ten years down the road and many have most likely missed the so-called easy money of the past few months. Late comers tend to wind up taking a loss.
The times warrant being safe versus being sorry...
6
The market responds to any thing instigating brief episodes of euphoria for those with the most to gain ( reduced taxes on huge profits! No one looking to tax the income of traders! Lifting those inconvenient rules on investment banks meant to prevent another financial crash!)
Infrastructure spending if approved will contribute to the economy in real ways across the country: if approved and funded by Congress. The lack of a clear path for medical insurance means that sector is anything but stable, as no one knows what this will look like in 2018 or 2019.
Lifting multiple environmental protections may aid a few industries in the short run, but in the long one will cost the country.
Increasing the weight of the industrial military complex at the expense of domestic programs --potentially leads us further along a course favored by China and Russia --allow important domestic needs to grow unmet while military industries get even more bloated, exercising more and more pull.
What happens if Trump gets his protectionist trade restrictions passed? I do not see this as any sort of a positive fro the economy at large.
My thoughts are all over the place; but in the end I see inflation, but am not so sure about a commensurate leap in the GDP, or in income for most workers ---
Infrastructure spending if approved will contribute to the economy in real ways across the country: if approved and funded by Congress. The lack of a clear path for medical insurance means that sector is anything but stable, as no one knows what this will look like in 2018 or 2019.
Lifting multiple environmental protections may aid a few industries in the short run, but in the long one will cost the country.
Increasing the weight of the industrial military complex at the expense of domestic programs --potentially leads us further along a course favored by China and Russia --allow important domestic needs to grow unmet while military industries get even more bloated, exercising more and more pull.
What happens if Trump gets his protectionist trade restrictions passed? I do not see this as any sort of a positive fro the economy at large.
My thoughts are all over the place; but in the end I see inflation, but am not so sure about a commensurate leap in the GDP, or in income for most workers ---
5
Yes, your thoughts are all over the place, but since you are a staunch liberal, you are a verified commenter.
What booming markets are telling is that for now markets are rising and average Americans sitting on their cash reserves should invest wisely and smartly in the Stock market as fixed income investments pay diddly squat. A dollar is worth only a dollar when in fixed income investment nowadays and in the past 8 years. Investing the same dollar smartly in the stock market could become $2 before the end of the year if the upwards trend that began after the election of Trump continues. Does that mean happy days are here again and that all the predictions of gloom and doom if Trump was to be elected are wrong again? Maybe. But my advice to people who are jumping back on the gravy train of stock market rise need to know that stock markets are fickle and a single adverse incidence can bring the stock market tumbling down. So do keep cash reserves and fixed income as a cushion and invest in robust high dividend stocks that can sustain long term value through thick and thin. Be cautiously optimistic and stay vigilant every day.
5
Thank you for caring, good advice. Unfortunately, most people's investments are 401ks and they have zero choice. They are sheep to be sheared at every profit taking opportunity. Please, people. Don't sell when the market crashes. Hang on and let it grow again. If you are thinking about retiring, do it soon while the market is high and get your 401k into an annuity.
Blue state. You are right most people are sheep and let portfolio managers handle their retirement savings, cash reserve investments in 401Ks. But it is time for people to take the bull by its horns Most 401Ks and retirement plans allow for individuals to take control of their own portfolio and exercise stock selection and distribution into Stocks, bonds, fixed income, gold and cash reserves based on their age and time to retire. So there is flexibility and control for those who are invested in 401K. Buying and selling stocks have several options nowadays. Fidelity just reduced their fee by a third for buying or selling stocks to $4.95 and I am quite sure others will follow.
1
Mr. Irwin, the critical points raised by Larry Summers in 2010 about our economy caught in a cycle of secular stagnation was not that economies cannot rebound from downturns. What was most disturbing is that recent downturns in the U.S, during the past 30+ years revealed that each successive recovery from a downturn in the economy no longer followed the historical V-shaped recoveries of the past. Instead, each new successive economic recovery was U-shaped and taking much longer to rebound and with it the rehiring of the unemployed than the previous downturns. The 2008 economic collapse was the most severe example due to the magnitude of the meltdown. Summers also caused quite a buzz when he said that U.S. economic rebounds would be propelled by one bubble to the next and not by sound underlying factors to sustain prolonged growth. I think valuations in the stock market are way over priced and will take a nose dive. I recently emailed Paul Krugman, who had fully accepted Summer’s analysis, if the issue of secular stagnation has fallen out of grace due to the current strength of the economy. He responded (9-16-2016) by saying, “Lots of interest still.”
10
Paul, look at how long the recovery took after the panic of 1937. We did not even get out of the ensuing depressing until 1843 and full recovery took longer than that. Hardly V-shaped,
2
I belive Paul Krugman said the market would crash if Trump was elected. Wrong again Krugman. Why on earth would you ask Krugman ? Is he ever right ?
Sorry, I meant the Panic of 1837.
2
Last fall all you read about was how the market was overpriced and a major correction was long overdue. Now it seems the sky is the limit. Average incomes are not rising fast enough to result in big surges in consumer spending. And all Trump's major programs will result in huge deficits. As you note this will result in inflation and higher interest rates for mortgages and such. At some point the rich will get cold feet and sell to cement their gains. If you think this will go on much longer. The real data to watch is how much the wealth of the top 1% has soared compared with how much the wealth of the bottom 99% has stagnated or fallen.
14
I think it's the help focused on the little guy. Trump ignores his critics and gets to the core of issues which directly affect the middle class. The wealthy care about non important non economic things like gun control, abortion, transgender stuff the 99 percent don't really care much about one way or another.
If Republicans fix healthcare and immigration, Trumps approval rating will be in the 80 percent
If Republicans fix healthcare and immigration, Trumps approval rating will be in the 80 percent
11
99%? Why lie? If YOU feel that way, say so. Don't lie and say 99%, it's unsettling to know that so many people think nothing of lying.
Growth doesn't happen, of course, under an administration such as the failed Obama administration. Obama increased debt like no other president and we pay and pay for that with a sinking economy.
Trump is a breath of fresh air bring in growth and growth to all sectors. Trumpian elimination of Obama's failed endless regulations excites the markets. The new tax program is not even in place and makrets are soaring, jobs are being created and there is new life in manufacturing.
Trump is a breath of fresh air bring in growth and growth to all sectors. Trumpian elimination of Obama's failed endless regulations excites the markets. The new tax program is not even in place and makrets are soaring, jobs are being created and there is new life in manufacturing.
11
Oh, and amid all of the noise and nonsense since his election, one of the few specifics that Trump has accomplished? Removal of part of Dodd Frank; The fiduciary rule, which said that advisors must have the financial interest of their clients as their priority. The reason I heard was that it would limit 'growth'.
I guess 'growth' means different things to different people.
I guess 'growth' means different things to different people.
23
Well, they haven't banned fiduciaries. If you wish to hire a fiduciary to advise you, then go ahead and do it! You will find that there is a cost to it, but it you think it is worthwhile to pay for impartial advice, then that's your call.
Things look rosy. For how long?
The explosion of growth and investment in the U.S. after ww2 was the result of long term investment in the interstate highway system and big industry which spanned decades, administrations, generations. The interstate highway system generated a huge building boom as an optimistic America built suburban sprawl, hollowing out cities as an unfortunate by product. It created, for the most part, well paying union jobs that enabled workers to give their children a better life and a college education. Another unfortunate by product was that black people were excluded from the party; if they did better it was more coincidence than intent.
In the 70's or 80's America became complacent. 'If it ain't broke don't fix it' was our motto. This was clearly illustrated by the oil industry. We knew the pollution and other by products were unsustainable. But we didn't use even a small part of this wealth to invest in a future of alternate energy, more modest housing, transit, universal education and health care.
Some of this happened, tho not at a scale necessary. We could have been the leader in alternate energy. Instead we are a leader in arms sales, while more modest, hungrier nations have embraced clean energy and a leaner, healthier lifestyle.
It's not too late. But if we flock to the siren call of cheap, polluting energy, reckless growth, less education except for the rich, it will be.
Do we really want to return to the 50's?
The explosion of growth and investment in the U.S. after ww2 was the result of long term investment in the interstate highway system and big industry which spanned decades, administrations, generations. The interstate highway system generated a huge building boom as an optimistic America built suburban sprawl, hollowing out cities as an unfortunate by product. It created, for the most part, well paying union jobs that enabled workers to give their children a better life and a college education. Another unfortunate by product was that black people were excluded from the party; if they did better it was more coincidence than intent.
In the 70's or 80's America became complacent. 'If it ain't broke don't fix it' was our motto. This was clearly illustrated by the oil industry. We knew the pollution and other by products were unsustainable. But we didn't use even a small part of this wealth to invest in a future of alternate energy, more modest housing, transit, universal education and health care.
Some of this happened, tho not at a scale necessary. We could have been the leader in alternate energy. Instead we are a leader in arms sales, while more modest, hungrier nations have embraced clean energy and a leaner, healthier lifestyle.
It's not too late. But if we flock to the siren call of cheap, polluting energy, reckless growth, less education except for the rich, it will be.
Do we really want to return to the 50's?
20
Upshot?
Let's not get so greedy that we fail to recognize that this administration is promising tax cuts, no regulations, and a total free ride for corporations at the expense of providing for the general welfare. Even cutting out programs that educate the nation's children. Ready to take away health insurance from millions.
And let's not forget we have a Republican Administration with a dangerous link to a foreign power, and a gang of House and Senate Republicans engaging in cheerfully energetic denial. As this entire administration approaches perjury.
Let's not get so greedy that we fail to recognize that this administration is promising tax cuts, no regulations, and a total free ride for corporations at the expense of providing for the general welfare. Even cutting out programs that educate the nation's children. Ready to take away health insurance from millions.
And let's not forget we have a Republican Administration with a dangerous link to a foreign power, and a gang of House and Senate Republicans engaging in cheerfully energetic denial. As this entire administration approaches perjury.
24
If Podesta is as deviant as he appears and Clinton was indeed charging for state department meetings, visits with Russian by Flyn to me does not compare.
The Trump Administration has numerous campaign staffers linked to Russia. The CIA and FBI concluded the Trump campaign colluded with Russian officials. Paul Manafort is among at least 3 Trump advisers w/ links to Russia under scrutiny. Others are Carter Page, businessman/former foreign policy adviser, and Roger Stone, a Republican operative long tied to Trump. Stibne was tweeting upcoming Wikileaks, and said Mr. Podesta was going to be brutalized next. He had inside information. You must know Russia controls Wikileaks. Ask Malcolm Nance, retired CIA spy.
Jeff Sessions is currently under the microscope.
Big difference. No proof Hillary charged for meetings.
Trump's people are audio-taped and wiretapped. And Russian officials confirm dates and times of meeting.
Jeff Sessions is currently under the microscope.
Big difference. No proof Hillary charged for meetings.
Trump's people are audio-taped and wiretapped. And Russian officials confirm dates and times of meeting.
Fair enough, but the free market is more than one dimensional. Currently we have negative interest rates in northern Europe; France, Holland and Germany with national elections where they can elect their own "trump", and if they do, they may pull out of the EU too. We have a gov't committed to deporting millions out of the country who do work that Americans will not. We have a White House that believes in "Economic nationalism" - which by definition could by itself cause a recession, and last but not least, we have an incompetent Congress who insists on making chaos of a health industry that represents 15% of national GNP. How could we not go into a deep tailspin? It seems we are designing it ourselves. "Froth" ? The economy is so thick with Froth and alternative facts that when the crash comes, some of us won't see it coming and some of us will be prepared, because we have stock piled cash and gold. Good luck everyone - you'll need it!
15
The market was up over a hundred percent during the Obama administration, but wages were not increasing (until the very end) and many people were still discouraged from job seeking, or unable to find full time work or a better job. That fueled the discontent that helped elect Trump. Once again, surging stock prices are not a an indicator of broad economic health for the average American. If we get the usual Republican nostrum of tax cuts for the rich and growing inequality there will be more restive voters and continued demands for 'change'.
The average American is not benefiting from a surge in stocks. The one percent are loving it.
The average American is not benefiting from a surge in stocks. The one percent are loving it.
44
GDP projections for the first quarter of 2017 were just slashed. The dismal 1.9% growth recorded in Q4 of 2016 was about half driven by a build up of inventories (often a sign of a weakening economy). Tax receipts are falling (pretty much always a sign of weakness). Many real indicators of economic activity show that we are worse off than we were one year ago.
Where the positive news shows up is in matters of optimism. Consumer confidence is up. Purchasing manager optimism is up. And the stock market is up.
We shall see if all this optimism, these animal spirits, eventually translate into real growth. I suspect there might be some irrational exuberance at play.
Where the positive news shows up is in matters of optimism. Consumer confidence is up. Purchasing manager optimism is up. And the stock market is up.
We shall see if all this optimism, these animal spirits, eventually translate into real growth. I suspect there might be some irrational exuberance at play.
16
It tells us that the 30 year cycle of interest rates is on the upswing, that the price of oil has held above $50 a barrel, and that Trump's agenda of disruption has not been priced in yet.
In other words, if 70% of the agricultural labor force is undocumented, what happens if they are all deported?
Does your economy grow if you deport the labor force?
Does your foreign trade grow if you insult foreigners and tear up your trade agreements?
If you force millions of poor Mexicans into starvation by taking away their daily bread, do you get foreign troops on your Southern border?
What happens to interest rates on the 10 year note if the foreigner holders of Treasuries sell trillions of their holdings because they think the US government is incompetent, racist and unstable?
So the real question is when do the chickens come home to roost. When does the rest of the world decide the US needs to pay much more interest to fund its debt?
What happens to your stock market if the world decides your Treasury notes are not a safe haven?
When will the bond market price in Trump's insanity?
In other words, if 70% of the agricultural labor force is undocumented, what happens if they are all deported?
Does your economy grow if you deport the labor force?
Does your foreign trade grow if you insult foreigners and tear up your trade agreements?
If you force millions of poor Mexicans into starvation by taking away their daily bread, do you get foreign troops on your Southern border?
What happens to interest rates on the 10 year note if the foreigner holders of Treasuries sell trillions of their holdings because they think the US government is incompetent, racist and unstable?
So the real question is when do the chickens come home to roost. When does the rest of the world decide the US needs to pay much more interest to fund its debt?
What happens to your stock market if the world decides your Treasury notes are not a safe haven?
When will the bond market price in Trump's insanity?
17
Feh. Trump is not going to deport anything more than a handful of easy to find suckers. That would be bad for business. He just deports enough to make a show of it. His whole life has been a show, why should this be different.
The bubble is stretched further than I imagined it could be. Told my broker to Trump proof my investments as well as possible. Her response was to laugh an join the crowd, their forecasts expect 2008 to look like a picnic.
It'll be awesome! No 401, no SS, no healthcare!
It'll be awesome! No 401, no SS, no healthcare!
11
Mine did the same. I'm pulling out cash, investing in a bunker.
Booming markets tell us absolutely nothing about the global economy. I’ve been an investor for almost 20 years. Most of my net worth is in the equity markets. I’ve done very well during the Obama administration and I’ve been doing well lately. In 2012, I couldn’t buy enough stock. But, I haven’t made any new stock investments lately. I remember the crash of 2008 all too well. It would be nothing for the S&P 500 to drop below 1800 during Trump’s presidency. It would also be no big deal for the S&P to advance to 2800. It might do both of those things in either order. I don’t know what will happen, but I’m always prepared for a 50% drop in the market. If you can’t stomach a drop like that tomorrow, then you have too much money at risk. Read Jack Bogle's books to learn about asset allocation. There is no one better than him to teach you about long-term investing.
15
Just make sure you have some money ready in case the market drops 50%. Then....buy, buy, buy.
Thanks for your lesson in mysticism, complete with the reference to some guru of fantasy.
This article says that data trends for over a year suddenly on Nov 8th were interpreted differently. The market is just people gambling on what they think other people will do. This has nothing to do with the real underlying economic reality. Nothing much to do with most people's lives.
29
From a government of the wealthy, by the wealthy and for the wealthy.
11
Let's be clear. Q1 2016 was not good in the markets, but Q2, Q3, and Q4 were. Q1 2017 is continuing the trend. So CY 2016 turned out pretty well, but it was no 2013. It has nothing to do with any elections.
2
What the booming markets how in the face of this administration is that capitalism does not work. It will implode - but what fun the richest of the rich will have until it does.
3
Using the market to gauge the vitality of the economy is like judging the robustness of a host by the health of its tapeworm.
13
Many seem to forget that most workers indirectly own stocks, not just the top 1%. Teachers, Municipal workers, workers at corporations that have 401's most with matching employer contributions, and self employed who have to fund their own pensions all own stocks, directly or indirectly.
When you look at charts exploring the rise and fall of wealth in America, it's tied into the stock market. I myself thought you had to be rich to invest in the market. Thankfully, my accountant in 1972 advised me to open up a Keogh plan, (the IRA for self employed), and put in at least $500 to get started. Every year since then I put in about $500. Today I have a secure retirement.
It's a pity the lack of financial education in America.
The comments so far indicate a lack of this education. They just show the anger, at those who have more. You can have more if you educate yourself. This doesn't mean spend thousands, it means go on line and read about investing. Look up low cost S&P mutual funds, dollar cost average every year. Look up a chart of historical S&P averages. Forget all the political "noise" Take care of yourselves and your family finances first, then others. Remember, your success pays for help for others. (Your income taxes, state taxes, sales taxes, payroll taxes, and capital gain taxes.
When you look at charts exploring the rise and fall of wealth in America, it's tied into the stock market. I myself thought you had to be rich to invest in the market. Thankfully, my accountant in 1972 advised me to open up a Keogh plan, (the IRA for self employed), and put in at least $500 to get started. Every year since then I put in about $500. Today I have a secure retirement.
It's a pity the lack of financial education in America.
The comments so far indicate a lack of this education. They just show the anger, at those who have more. You can have more if you educate yourself. This doesn't mean spend thousands, it means go on line and read about investing. Look up low cost S&P mutual funds, dollar cost average every year. Look up a chart of historical S&P averages. Forget all the political "noise" Take care of yourselves and your family finances first, then others. Remember, your success pays for help for others. (Your income taxes, state taxes, sales taxes, payroll taxes, and capital gain taxes.
7
Here's my bottom line, as a 40-year-old married female: Do I think the S&P will break 3,000 in my lifetime? For sure. 4,000? Quite possibly. So, I continue to invest every month, knowing that it will always be a roller coaster, but trend upward over time.
5
It's a global capitalist consensus that they don't have to help the less fortunate any more. So everything will be roses.
7
I feel sorry for the man who posted on the NYT's article about Trump winning the Presidency on the morning of November 9, that he was going to cash out that morning and go 100 percent cash. If he was in the S&P 500 he lost an easy 14 percent run. Timing is everything. Yes we may well be extended here and it will end one day but when a 10 year Treasury is yielding 2.45 percent what other options are there? Warren Buffett basically said the same thing on Monday morning.
6
Jack: Not to mention that guy probably has capital gains taxes to pay by 4/15.
Markets are greedy? Who knew? I thought Wall Street was perfectly rational -- an officious indicator of public confidence in the economy.
Now, of course, I think Wall Street salivates on the news and sells on the disappointment.
If any Republican is good for the average IRA, I'll eat my portfolio.
Now, of course, I think Wall Street salivates on the news and sells on the disappointment.
If any Republican is good for the average IRA, I'll eat my portfolio.
6
In simpler terms, investors believe that they will make a lot of money under our snake oil salesman in chief.
12
That is because the wealthy, who are the ones who are invested in the stock market, know they've hit pay dirt in Trump. The stock market does not predict nor create jobs. Few on Main Street benefit.
8
Wall Street (i.e. money) has no party affiliations, no scruples, or no loyalty. Investors believe corporations will make more money under Trump and GOP control of the congress and senate, so the stock market keeps going up. It doesn't matter that overwhelming number of Americans don't benefit directly from the rising stocks while the rich get extremely richer.
In our capitalist country the stock market has built in bias to go up in the long run; average Americans be damned.
In our capitalist country the stock market has built in bias to go up in the long run; average Americans be damned.
12
Well, in that case, the thing to do is to scrape together some money and open an account, right?
Yes. Invest at regular period for many years. Don't trade.
Using the stock market as a proxy on the economy can work both ways...Rhe S&P hit an all-time high in Oct. 2007, several months before the start of the great recession.
And while I'm not saying that will happen now, I think it's more important to concentrate on the data rather than trumpgas.
And while I'm not saying that will happen now, I think it's more important to concentrate on the data rather than trumpgas.
6
Hey all, please realize that the endless parade of bad forecasts by elite institutions -the Fed, the IMF, etc spills over to support the climate change denialists. You know, it's just possible that the racist rhetoric will placate the base without much actually needing to happen on the border closing front while at the same time enough stimulus gets through to actually help a bit. This way Trump becomes president for life like his boss Putin while the (failing) NY Times editorial page continues to foam at the mouth over the number of white males in his cabinet. The new political equilibrium, everybody's happy. Ivanka Trump shoes, anybody?
2
How many Economics Nobel Laureates have been celebrated for their research proving that the markets were irrational. Trump's bribing of corporate CEOs with tax-cuts and de-regulation will cause more harm than good. Accelerating depreciation will rely shift profits forward, causing a drop in write-offs in future years. And corporate tax holidays merely result in stock buy-backs and furth4r egregious executive compensation--but, little hiring.
https://thetruthoncommonsense.com
https://thetruthoncommonsense.com
14
Trump could still blow things up, as Neil points out, but these developments are to be expected after the departure of a left-wing, anti-business Administration that loved regulation more than tax hikes. The substantial rise in bank stocks is the most emblematic development. The Obama Administration squeezed $104 billion out of the banks to satisfy its inherent class warfare instincts, and to deflect from government's role in the 2008 crash. It also used some of this cash to fund left wing activists. Taking the shackles off the financial sector and allowing capital to flow to productive uses as opposed to, say, ACORN, can only help the economy.
7
Your roll call of moldy cliches from right-wing talk radio (ACORN, really?) fails to account for the fact that it is essentially Obama's economy we are enjoying today. Since no one has, in fact, removed the shackles from the financial sector yet, we'll have to wait and find out the extent of the resulting catastrophe.
1
Thanks, now it's all clear as mud.
Now Trump will get credit for Obama's economy. In office 30 days and all the world's problems are ending. We need to start calling Trumo dear Leader and amend the constitution so he can serve until until his death and allow Ivanka to assume the presidency. Giving Trump any credit for this is madness.
29
All of the good news is President Obama's good news.It takes not weeks or even months but years to create the conditions in which the economy thrives. If they actually pass their tax cuts and reduce the ACA, but above all if they do those preposterous tax cuts again, they will as they have every time they have done it, plunge the economy into recession. Tax decreases produce recessions. Tax increases produce a growing economy. Just look at the record the last 70 years. And remember that Dwight D. Eisenhower, a true conservative, decided when he was president that the top marginal rate was just fine and did not need to be changed. Know what it was when he was president? 91%. It should be put back there and we could pay for everything
Trump has promised but can't deliver - including a big tax cut for the middle class and let's generously say that's everyone with adjusted gross income of $300,000 per year or less. But no one else. Ike's top marginal rate would pay for it all, you bet it would. Meantime, the economy we have today was built over the last eight years under the Obama watch. End of story.
Trump has promised but can't deliver - including a big tax cut for the middle class and let's generously say that's everyone with adjusted gross income of $300,000 per year or less. But no one else. Ike's top marginal rate would pay for it all, you bet it would. Meantime, the economy we have today was built over the last eight years under the Obama watch. End of story.
40
The 91 percent was in an era when there were many more tax deductions than today. No one paid an effective marginal rate of 91 percent.
And it might be worthwhile to mention that your icon, Kennedy, saw the need for tax cuts, implemented them, and was rewarded with a good economy.
And it might be worthwhile to mention that your icon, Kennedy, saw the need for tax cuts, implemented them, and was rewarded with a good economy.
1
Kennedy is not my icon, not hardly. Those would be FDR and Barack Obama. And "Here", a suggestion. Put your name where your money is, which is to say if you are going to comment in and on this world, own up to it by identifying yourself and don't be anonymous. That was also a time when the spread between the average salary and CEO pay was maybe 40x. Now it's typically 400 times. That top 2%? The can and should be paying a top marginal rage in the neighborhood of 71%, which is where the Kennedy tax cut took it. Then we can afford health coverage for all, $1 trillion in infrastructure investment -- although you know Ike insisted that the NHDA pay for itself through a federal tax on motor fuels -- and whatever increase anyone really thinks the $540 billion DoD really needs. And of course no one ever pays an effective marginal rate except the working class.
the market is a ponzi scheme. when 87 percent of stocks are owned by 13 percent of the people that own stock, it can and will always be manipulated to their advantage.
16
Well, look at the hedge funds - they represent the holdings of the rich, don't they? Over the past 8 years, they have made significantly less money than the S&P 500 index. So if the rich are manipulating the market, they're doing a mighty poor job of it.
That is a fake news statistic that does not take into account ownership of mutual funds.
Even Trump was predicting a major stock market drop just weeks before he was elected. The liberals were predicting a drop the day he took office.
5
Legalizing child labor would probably cause an up swing too. Markets like the extraction of profit from workers and materials at the lowest possible cost. This should not be mistaken for a public good.
10
This is great news for only a tiny percentage of the American people. I fail to see how this translates to income growth and better quality of life for the other 99%.
16
All this stock bubble means is that there is a lot of loose cash sitting around doing nothing any many wealthy men's (and women's) pockets, and Trump's promises to deregulate, and cut taxes means the market is naturally going to go up. There is money be made in an up market, and a down market for folks who have the time to read their tea leaves and enough money to place their bets. That is what's going on. Rich people are placing their bets against one another in this bubble, and our economy is the pot. Whoever in the wealthy class wins, the working people will lose. You can bet on that.
16
Yessiree, the definition of 'economic growth' is a rise in the Dow Jones.
"In the past 1000 days, our economy has grown on 500 days and shrunk on the other 500."
"In the past 1000 days, our economy has grown on 500 days and shrunk on the other 500."
5
So when can we expect Venezuelan type inflation? The great leader even said we could use some inflation, just how much no one knows. But I'm betting on a market correction, how big is the only doubt. But you can rest assured the billionaires won't get hurt.
5
Both legendary investment guru Jim Rogers and Reagan CEA member Laurence Kotlikoff have warned of massive losses in the stock market that are possible if Trump trade actions result in American exports get widely blockaded by our long time trading partners.
As Mr. Trump was keen to take credit for the bump in stock market gains, will he step up to the table to take the blame when markets tumble, with trillions of capital evaporating?
His character and history suggests that there is not a chance of his taking any of the blame.
As Mr. Trump was keen to take credit for the bump in stock market gains, will he step up to the table to take the blame when markets tumble, with trillions of capital evaporating?
His character and history suggests that there is not a chance of his taking any of the blame.
15
Under Obama, the national debt doubled but the market also more than doubled. So the soaring market does not mean the country's financials are improving.
4
Ah, but you forgot to mention that under the Obama administration the annual budget deficit was cut by a record $800 billion dollars.
21
True but mostly because he put Shrub's little temper tantrum war on the books. More magical republican book keeping.
This goes so far beyond irrational exuberance that it is terrifying. What sense does it make to inflate another stock market bubble when an unstable narcissist is "in control" of the US government? What happens when there is any type of issue or crisis that this ignoramous and his team of ideologues and sycophants cannot manage? What happens when this man sparks a trade war or a real war? What happens if the promised infrastructure spending and tax cuts don't materialise? What happens if Trump and his Republican cohorts blow a huge hole in the budget? What happens if Trump's friend Putin decides the time is ripe to invade Latvia, Lithuania and Estonia? These systemic risks are not being factored in at all, and that spells trouble. So the market rallies because Trump can read from a teleprompter? Seriously!
27
After the boost of deregulation, and after the realization that military and immigration budgets can't be funded without stripping education and medicare, will a downturn be called a Trump Bust?
9
As usual Republicans deregulate, a lot of cash changes hands, then follows a crash. Democrats get re-elected to clean up the mess, put rules and regulations and the cycle continues.
43
Almost without fail, the Dow goes up when things for ordinary people go down. It is a marker of the health of the Corporate Titans, not the economy in general. We are hypnotized to believe that what is good for the Dow is good for all Americans. With so many retirement funds tied to the fortunes of the market, maybe it is a positive, but it is a pyrrhic gain, and something of a devil's bargain.
19
Why is it that the worsened income disparities from more "trickle down economics" combined with ballooning government debt and damaging trade barriers make so many people in Wall Street so excited is beyond me.
The real question should be : what will the markets do when they discover that the light at the end of the tunnel is that of a freight train coming toward them ?
The real question should be : what will the markets do when they discover that the light at the end of the tunnel is that of a freight train coming toward them ?
14
It's the Obama Fed which keep flooding the economy with money in the form of programs such as QE2 that has created such a pool funds. In other words, Obama's failed policies meant the government had to subsidize the economy and they hedge fund managers knew how to capture that sloshing money. Obama is the source of the increasing income gap.
6
If the GOP was working actively (as they were) to make sure that President Obama's policies failed, then why isn't the GOP responsible for the failed policies? After all, they blocked Obama from doing anything.
Regarding the power of the president, do you think the president is an autocrat? if you voted for Trump because you thought that President Obama was a failure, then maybe you do believe that the president is or should be an autocrat --- because that's how Trump ran, as an autocrat. But you (and he) will see that that is no how our government is meant to work. We have divided government, and I belive the Congress has much power, like the power of the purse.
Regarding the power of the president, do you think the president is an autocrat? if you voted for Trump because you thought that President Obama was a failure, then maybe you do believe that the president is or should be an autocrat --- because that's how Trump ran, as an autocrat. But you (and he) will see that that is no how our government is meant to work. We have divided government, and I belive the Congress has much power, like the power of the purse.
Except income gap dropped for the first time since the '90s under Obama. Oh bummer, your narrative deflated....
Pundits and experts have been confidently predicting Trump's imminent implosion since one second after he announced his candidacy.
I may not be a huuuge Trump fan, but the look on Pelosi'so face last night revealed a dawning of the utter bankruptcy of remaining plays in the Democrat bag of tricks.
We tried her way, maybe his will actually move us forward.
I may not be a huuuge Trump fan, but the look on Pelosi'so face last night revealed a dawning of the utter bankruptcy of remaining plays in the Democrat bag of tricks.
We tried her way, maybe his will actually move us forward.
17
His way being what, exactly? Transparently thin on actual policy, the only consistent trends established by the buffoon in chief are xenophobia and billionaire cronyism. Is that supposed to move us forward?
"savvy economic commentators"?
You mean like the same ones who forecasted catastrophe if Brexit passed?
Is that Krugman hiding under his desk?
The market is going up because Trump is perceived as friendly towards business, as opposed to Obama who was anathema.
Whether the market continues its trajectory depends on how well Trump and the Republicans handle the future tax, health and other legislation.
You mean like the same ones who forecasted catastrophe if Brexit passed?
Is that Krugman hiding under his desk?
The market is going up because Trump is perceived as friendly towards business, as opposed to Obama who was anathema.
Whether the market continues its trajectory depends on how well Trump and the Republicans handle the future tax, health and other legislation.
14
Well Obama was putting the economy back together from the people who broke it.
I’m confused. If a rally that’s now in its sixth week means the market likes Trump, how can one that lasted eight years mean Obama was “anathema”?
Mr. Irwin tells us our economy is at "full employment" in terms of full productive capacity. But millions of Americans have lost real income since the 2008 crisis, at much lower real incomes.
The fact that they often worked in what is called the "Old Economy" is not a good counter-argument to rebuilding our industrial sector in a deliberate, planned fashion. Trump is right in saying that we should add to extra productive capacity - in our manufacturing sector.
That's also what Harvard Business School professors Gary Pisano and Willy Shih suggested in 2012, in their book "Producing Prosperity." (Not a book by political extremists.)
Inflation could be a problem, but please remember: the last president to introduce price controls was Richard Nixon (a Republican).
Also, today we read in the Times that Snapchat's IPO values a company that lost more than a half-billion dollars last year at $24 billion. We also read that the world's largest hedge fund, Bridgewater, which manages $150 billion in assets, has given its boss the heave-ho.
Back in August 2011, David Leonhardt, in an Economix blog post,"Stocks Are Still Expensive," implied that, with the S&P P/E ratio then at 20.7, "stocks would have to fall another 6 percent from their current level to return to the 50-year average." Today that S&P P/E ratio stood at 26.89.
Add to all that Trump's inflationary "Promise the Moon" goals, and it all portends a burst asset bubble and a financial crisis - managed by Donald Trump!
The fact that they often worked in what is called the "Old Economy" is not a good counter-argument to rebuilding our industrial sector in a deliberate, planned fashion. Trump is right in saying that we should add to extra productive capacity - in our manufacturing sector.
That's also what Harvard Business School professors Gary Pisano and Willy Shih suggested in 2012, in their book "Producing Prosperity." (Not a book by political extremists.)
Inflation could be a problem, but please remember: the last president to introduce price controls was Richard Nixon (a Republican).
Also, today we read in the Times that Snapchat's IPO values a company that lost more than a half-billion dollars last year at $24 billion. We also read that the world's largest hedge fund, Bridgewater, which manages $150 billion in assets, has given its boss the heave-ho.
Back in August 2011, David Leonhardt, in an Economix blog post,"Stocks Are Still Expensive," implied that, with the S&P P/E ratio then at 20.7, "stocks would have to fall another 6 percent from their current level to return to the 50-year average." Today that S&P P/E ratio stood at 26.89.
Add to all that Trump's inflationary "Promise the Moon" goals, and it all portends a burst asset bubble and a financial crisis - managed by Donald Trump!
6
I know that people are very interested in the equities market, but really the market as a whole is not stable enough in the short term to be evidence of much of anything.
2
On Dec 13 the WSJ published an article, "Big Futures Trade Fueled Stock Surge" on the front page of their Business & Finance section. "A $1.8 billion futures trade that fueled buying...on Dec 7..." It was the biggest futures buy of 2016. The initial margin would be $83 million.
Large purchases or sales trigger algorithms that lead to more instant purchases or sales, which lead to more action as investors notice and pile in (or dive out). The effect of such a massive purchase is similar to the flash-crash of 2010, except that the inadvertent sale in 2010 led to a crash, and this deliberate purchase led to a market boost that is still continuing.
Who made the initial $83M purchase? In 2010 there was an investigation into market manipulation, but other than that one WSJ article, I've seen nothing about who or what decided to artificially boost our stock market. I believe that if the market were to do as most had predicted--tank under a Trump presidency--we'd be deep in committees and investigations of Comey's involvement, Trump's tax returns, and Russian hacking. Who or what made that Dec 7 purchase?
I wish everyone could read that WSJ article (Dec. 13, B1-2). Please look into this NYT!
Large purchases or sales trigger algorithms that lead to more instant purchases or sales, which lead to more action as investors notice and pile in (or dive out). The effect of such a massive purchase is similar to the flash-crash of 2010, except that the inadvertent sale in 2010 led to a crash, and this deliberate purchase led to a market boost that is still continuing.
Who made the initial $83M purchase? In 2010 there was an investigation into market manipulation, but other than that one WSJ article, I've seen nothing about who or what decided to artificially boost our stock market. I believe that if the market were to do as most had predicted--tank under a Trump presidency--we'd be deep in committees and investigations of Comey's involvement, Trump's tax returns, and Russian hacking. Who or what made that Dec 7 purchase?
I wish everyone could read that WSJ article (Dec. 13, B1-2). Please look into this NYT!
9
"Secular stagnation" was always a euphemism for "I got my advanced degree from whatever Ivy League school, no nothing about business and can;t understand why regulation would affect markets, but hey look at this regression analysis I did!"
1
Beware upcoming asset bubbles and crashes, the inevitable result of unrestrained supply side, trickle down economics. There will soon be too much money from the 1% chasing too few investments with the rest of the herd following right behind if they can. Instead, the pie needs to be expanded by higher minimum wage laws and broader sharing of productivity gains with workers around the world. That's how you socialize the gains, not just the losses.
10
The day after the election the market briefly sold off. CNN quickly embraced that to suggest Trump voters had hurt themselves and their retirements. A couple days later they got off that. They, and Krugman, look pretty foolish now. If only Obama hadn't saddled the country with $20 trillion of debt, we'd really be rocking. Moderate inflation, normalized interest rates and a relaxing of 8 years of corporate shakedowns at scale are just the thing to get America moving again. In the meantime, we get to watch Democrats root against the economy, market and our President.
7
You should get with the program -- the Rs do not mind debt as long as it's debt for tax breaks for rich and building up the miltary. They do it every time. Reagan tripled the debt and then Cheney famously said, "Reagan proved that deficits don't matter.
Trump wants a wall, space travel, tax cuts, and to build up the military (probably for a war) -- don't think that he, like his recent GOP predecessors will not also add trillions of dollars of debt -- because they will. The concept of "fiscal conservatism" has been meaningless for several decades now.
Trump wants a wall, space travel, tax cuts, and to build up the military (probably for a war) -- don't think that he, like his recent GOP predecessors will not also add trillions of dollars of debt -- because they will. The concept of "fiscal conservatism" has been meaningless for several decades now.
5
Fiscal conservatism.
The last Presidential candidate to adhere to such a philosophy for government was Barry Goldwater in the 60s. No one has come even close since.
The last Presidential candidate to adhere to such a philosophy for government was Barry Goldwater in the 60s. No one has come even close since.
Just say: irrational exuberance. I too like how my portfolio looks, but what goes up can come down. Trump is just in the first 60 days of his presidency—he has little to do with the present state of the economy. We owe that more to Obama and the Fed. There's always time for the Republicans to mess things up (refusal to raise the national debt, congressional gridlock, and so forth). So let's not break out the party hats yet. Wait 2 years, and we'll see.
8
After watching the Trump address and the swooning stock market response, I plan to buy wooden stakes, string, a sturdy shovel and vegetable seeds. And no need to buy extra manure for fertilizer. There seems to be plenty around. Victory garden, here I come!
11
The markets are hopeful! They have one of their own in Mnuchin who threw them tax reform for August.
Consumer confidence is good. But I'm waiting to see how long this will ride it out. I was taught when it comes to investing don't get too high in optimism and low in depression--- be Switzerland, be quick, be neutral and not led by emotions.
Where is Main Street in all of this by the way?
Consumer confidence is good. But I'm waiting to see how long this will ride it out. I was taught when it comes to investing don't get too high in optimism and low in depression--- be Switzerland, be quick, be neutral and not led by emotions.
Where is Main Street in all of this by the way?
2
It is mostly bad news for the average American. Retail prices will go up. Interest will go up. Taxes paid by corporations will go down, and, eventually, someone will have to pay the difference. Either socialized benefits will be cut, or non-corp taxes will go up. No sliver lining for middle American and below.
10
Are we going through a Reagan Redux, where deficit spending goes unchallenged and the middle class gets bamboozled for the last scraps of their pension funds, and where the retired with some assets all have to resort to reverse mortgages.
Seems as though the traders and big investors are genuine sadistic pigs.
Why, oh why did Obama let these guys get off so easily?
Seems as though the traders and big investors are genuine sadistic pigs.
Why, oh why did Obama let these guys get off so easily?
6
I think the stock market reflects shareholders' expectations that a larger percentage of GDP will be in the form of corporate profits. This is good if you are an investor - not so much if you are a consumer or a worker.
5
This would be great news except that growth on Wall Street is disconnected from growth in the general productive, working economy. Wall Street has devolved into a financial trading game.
So an increase in the stock market doesn't really say much about the economy as a whole. It doesn't mean the economy is bad, but it also doesn't mean the economy is good.
So an increase in the stock market doesn't really say much about the economy as a whole. It doesn't mean the economy is bad, but it also doesn't mean the economy is good.
3
Anyone remember the 1.3 trillion dollar tax cut for corporations and the wealthy that George W. Bush put through after getting elected? How long after that did it take the economy to sink to near bankruptcy?
There's money to pay for what Trump wants to do unless we borrow it and raise the deficit level to where the money owed cannot be paid and we WILL get to bankruptcy.
And the result of that will be no more Social Security or Medicare and all the entitlement programs that are out there.
Trump made his money by not paying what he owed and having his debts dissolved by 4 separate bankruptcies. He obviously thinks that what worked for him will work for the country.
Bread lines here we come.
There's money to pay for what Trump wants to do unless we borrow it and raise the deficit level to where the money owed cannot be paid and we WILL get to bankruptcy.
And the result of that will be no more Social Security or Medicare and all the entitlement programs that are out there.
Trump made his money by not paying what he owed and having his debts dissolved by 4 separate bankruptcies. He obviously thinks that what worked for him will work for the country.
Bread lines here we come.
4
I think it is tradition to give the first few months of the economy to the person who set it into play. Trump will have plenty of time to take credit or blame in July. He inherited a booming economy.
6
This article fundamentally misconstrues the nature of markets. It is a common error, a susceptibility to the narritive, when in reality there is none. The assumption that developments or news of developments "move" interest rates or markets has been debunked by some of the great thinkers of this century. In fact, what actually happens is that markets move and journalists or ananlysts or economists retrospectively look for news which they rationalize as having accounted for the move. As an example, Nassem Taleb noted in "The Black Swan" that on the day Saddam Hussein was captured, US interest rates initially moved up. Bloomberg News cited his capture. By early afternoon US interest rates reversed and in a new headline, Bloomberg News cited his capture as the reason for the downward move. Bloomberg changed only the conclusion of their headline regarding whether his capture made treasuries less or more attractive.
The evidence strongly suggests that news does not move markets, it is market moves which produce the "search" for reasons or causes. There is no credible evidence, of which I am aware, that market moves can be linked to particular precedents the way crimes can be linked to forensic evidence.
I do not support any credible media source (of which the NY Times is certainly one) asserting that a particular development or developments causes particular market moves.
The evidence strongly suggests that news does not move markets, it is market moves which produce the "search" for reasons or causes. There is no credible evidence, of which I am aware, that market moves can be linked to particular precedents the way crimes can be linked to forensic evidence.
I do not support any credible media source (of which the NY Times is certainly one) asserting that a particular development or developments causes particular market moves.
2
James, thanks for giving a better rationale than the economy or politics for why markets move. News media retroactively look for a cause. Markets move up because people see that they can make money and put money in. That makes markets move up more. Markets then draw even more money and so on. But history shows that there is great risk. The Wall Street Journal on February 24, 2009 headlined a 50% drop in stocks from their peak. And it got worse. Put all your retirement money in the stock market if you can afford to lose half. But be forewarned. You just might.
As someone who first purchased a relatively small set of shares in the early 1990's of Starbuck's, Apple, etc. I find this market utterly terrifying and completely irrational. Every day I think the bottom will fall out, and that I will be proved just another greedy fool who hung on.
7
This article generalizes from scattered and mixed data to say that "a vicious economic cycle isn't looking quite as scary and may even be ending."
This is not a strong recommendation to purchase securities. In the first place, the linkage between the stock market and the economy is loose. As Paul Samuelson said, "the stock market has predicted nine of the last five recessions."
Second, economic growth depends on investment in new plant, equipment, and R & D. Investment in turn depends on demand. Mr. Dudley says that "animal spirits have been unleashed a bit post the election" But presumably he is referring to business people and not consumers who are the ultimate drivers of demand in the United States. Until someone can show that consumers are buying homes, autos, and other durables at much faster rates, I would be cautious. The stock market may be experiencing one of its occasional bubbles.
This is not a strong recommendation to purchase securities. In the first place, the linkage between the stock market and the economy is loose. As Paul Samuelson said, "the stock market has predicted nine of the last five recessions."
Second, economic growth depends on investment in new plant, equipment, and R & D. Investment in turn depends on demand. Mr. Dudley says that "animal spirits have been unleashed a bit post the election" But presumably he is referring to business people and not consumers who are the ultimate drivers of demand in the United States. Until someone can show that consumers are buying homes, autos, and other durables at much faster rates, I would be cautious. The stock market may be experiencing one of its occasional bubbles.
5
Total Market Value is right now (March 1) is $24.990 trillion. This is 132.5% of GDP, crazy high. We are approaching the 2000 dot-com frenzy peak of 150%. Warren Buffett uses this measure to get his overall investment perspective, and it seems to work. Buying opportunities begin when Market Value divided by GDP is less than 70%, which was 1990 and most recently 2009.
The Fed will be meeting this month (March 14-15) and may likely raise interest rates.
Then there are the unfortunate possible events like an oil disruption or, who knows, instability in the governments and international institutions here and around the world (as we are reading about in the headlines daily).
And I read the phrase "buoyant optimism on Wall Street" here in the Upshot and remember all the talk from those suspects back in 2000 and in the mid-2000's - it's the same story.
Most of us are not heavy investors, but many of us have retirement money that can be shifted from stocks to cash. Think about it. And disclosure - I am not in the financial industry nor do I have a newsletter or such nonsense to sell. I'm not shorting or into put options or other derivatives. It's just that I see lots of risk ahead.
The Fed will be meeting this month (March 14-15) and may likely raise interest rates.
Then there are the unfortunate possible events like an oil disruption or, who knows, instability in the governments and international institutions here and around the world (as we are reading about in the headlines daily).
And I read the phrase "buoyant optimism on Wall Street" here in the Upshot and remember all the talk from those suspects back in 2000 and in the mid-2000's - it's the same story.
Most of us are not heavy investors, but many of us have retirement money that can be shifted from stocks to cash. Think about it. And disclosure - I am not in the financial industry nor do I have a newsletter or such nonsense to sell. I'm not shorting or into put options or other derivatives. It's just that I see lots of risk ahead.
12
Wage growth (jobs and pay rates) are nearly ignored in this article and many like it. Economic growth seems to be calculated in a way that corporate profits alone can be an indicator of growth. Jobs and wage stagnation continues to be a problem, particularly since an alarming fraction of consumer spending is based upon credit (credit cards, refinances, etc.) and not upon income or wage growth.
Ignore that issue at our peril. Taking comfort in stock market growth rather than blue collar wage growth was the major issue behind the angry underemployed blue collar workers that elected Donald Trump.
Ignore that issue at our peril. Taking comfort in stock market growth rather than blue collar wage growth was the major issue behind the angry underemployed blue collar workers that elected Donald Trump.
12
David, I am not an angry, underemployed blue collar worker, but yet I voted for Mr. Trump. I don't know where you get your talking points, but maybe consider expanding to other sources?....
First comes the stock market euphoria brought about by colossal government overspending, then comes several years of government by whim, caprice and executive order featuring widespread social disorder throughout the country, wild inflation and military engagements overseas galore; finally ending up in some form of modernized Fascism headed up by him or one of his future acolytes.
A dark prognosis to be sure, but given the unstable character and mentality of the man with delusions of grandeur we chose to honor with the Presidency, how could it be otherwise?
It was a grand experiment while it lasted, but nothing great lasts forever.
A dark prognosis to be sure, but given the unstable character and mentality of the man with delusions of grandeur we chose to honor with the Presidency, how could it be otherwise?
It was a grand experiment while it lasted, but nothing great lasts forever.
6
First comes the stock market euphoria brought about by colossal government overspending, then comes several years of government by whim, caprice and executive order featuring widespread social disorder throughout the country, wild inflation and military engagements overseas galore; finally ending up in some form of modernized Fascism headed up by him or one of future acolytes.
A dark prognosis to be sure, but given the unstable character and mentality of the man with delusions of grandeur we chose to honor with the Presidency, how could it be otherwise?
It was a grand experiment while it lasted, but nothing great lasts forever.
A dark prognosis to be sure, but given the unstable character and mentality of the man with delusions of grandeur we chose to honor with the Presidency, how could it be otherwise?
It was a grand experiment while it lasted, but nothing great lasts forever.
8
Trump's policies make things worse, but to be honest, the economy has been run on smoke-and-mirrors since Bush's years of ruination. This sort of racket could have been easily predicted the day that Bill Clinton signed the repeal of the Glass-Steagall Act.
The result will be a Crash so loud that it makes '08 sound like a cheap firecracker. A lot of notional wealth will vanish once again among white-collar folk and dupes will be underwater again in their homes. In my area housing is again above assessment and new-fangled lenders, unburdened by any reforms after the last crisis, are looking for chumps to get a mortgage. The DOW soars...and it has soared like this before, just before a Recession.
President Obama, a purported agent of change, did not really deter the scoundrels of Wall Street, many of whom should be behind bars now. That he failed to do much showed me how completely Oligarchy runs this country. Until the next Depression they will continue to run it, no matter which party occupies the Oval Office.
The result will be a Crash so loud that it makes '08 sound like a cheap firecracker. A lot of notional wealth will vanish once again among white-collar folk and dupes will be underwater again in their homes. In my area housing is again above assessment and new-fangled lenders, unburdened by any reforms after the last crisis, are looking for chumps to get a mortgage. The DOW soars...and it has soared like this before, just before a Recession.
President Obama, a purported agent of change, did not really deter the scoundrels of Wall Street, many of whom should be behind bars now. That he failed to do much showed me how completely Oligarchy runs this country. Until the next Depression they will continue to run it, no matter which party occupies the Oval Office.
6
The market anticipates a loss of value of the dolar, hence stocks goes up.
Someone will have to balance Trump’s plan of increase expends and lower taxes.
And the Federal Reserve have all the lottery tickets to be that one. Just Trump have to figure out how’s to by-pass laws and rules and “kidnap” the Fed.
While everyone is watching Mexican wall, immigration, health care, bad cabinet, foreign trade war, dissolution of EPA, military/nuclear budget; behind the curtains, Trump vs. Fed will be the “Fight of the Night”.
Bumpy road ahead for the world commerce reference currency.
Someone will have to balance Trump’s plan of increase expends and lower taxes.
And the Federal Reserve have all the lottery tickets to be that one. Just Trump have to figure out how’s to by-pass laws and rules and “kidnap” the Fed.
While everyone is watching Mexican wall, immigration, health care, bad cabinet, foreign trade war, dissolution of EPA, military/nuclear budget; behind the curtains, Trump vs. Fed will be the “Fight of the Night”.
Bumpy road ahead for the world commerce reference currency.
2
If the economic recovery "reflects policies from the Obama administration and the Fed that long predate Mr. Trump", and if Trump and Bannon are gunning for an isolationist America and "economic nationalism"- how does that figure?
Are the people who bought Trump's message going to be in the half of America that owns stocks or are they going to be just paying higher interest rates, groceries at inflated prices, more for healthcare as well as paying for the Trump clan's airfare and body guards?
Are the people who bought Trump's message going to be in the half of America that owns stocks or are they going to be just paying higher interest rates, groceries at inflated prices, more for healthcare as well as paying for the Trump clan's airfare and body guards?
9
People hoping for pensions have been crushed by eight years of zero interest, and retirees hoping to live on a modest return on their life savings have been disappointed... on Obama'said watch.
The Trump bump has probably little to do with Trump and far more to do with the fact that new money was accumulating on the sidelines for more than a year before the US election due to global uncertainty about China, Brexit, the US election, and an earnings recession. After the world got past all that anxiety, the accumulated money left the sidelines and piled into the market. Hence the "bump".
In other words, the stock market has a long-term tailwind of about 7% a year, so if the market stalls out for a year or more, it can snap back rather quickly to the long-term trend line once the short-term headwinds dissipate.
In other words, the stock market has a long-term tailwind of about 7% a year, so if the market stalls out for a year or more, it can snap back rather quickly to the long-term trend line once the short-term headwinds dissipate.
6
Private investors burnt in 2008 who got out of stocks and into cash or short term bonds have mistaken Trump's promises for actual facts and are buying high just as they sold low in 2008.
Vanguard reported an enormous influx of cash into their equity funds since the election and inaguration.
I presume Vanguard is not the company of choice for hedge funds or investment banks.
Vanguard reported an enormous influx of cash into their equity funds since the election and inaguration.
I presume Vanguard is not the company of choice for hedge funds or investment banks.
5
"The stock market reached yet another new high on Wednesday, the latest development to make a mockery of what savvy economic commentators thought they knew about the world." I can hardly believe an analyst writes such nonsense. There is no mockery until the economy actually behaves differently from predictions, which it has had no time to do.
This market soar has the appearance of a bubble based purely on (may I borrow the phrase, Alan) "irrational exuberance" due to the belief that profits will go up up up while taxes on the rich go down down down (borrowing a phrase from Robert Hall) -- unless and until proved otherwise, which means a year or more to go. Don't hold your breath.
This market soar has the appearance of a bubble based purely on (may I borrow the phrase, Alan) "irrational exuberance" due to the belief that profits will go up up up while taxes on the rich go down down down (borrowing a phrase from Robert Hall) -- unless and until proved otherwise, which means a year or more to go. Don't hold your breath.
10
Trumpski is not good business person. He saved 800 Carrier plant jobs by getting Indiana citizens to pay $7,000,000 to Carrier. So he's picking winners and losers and making the citizens pay. The ROI is positive only for Carrier.
Same with the $54B defence increase. He's using taxpayer money to boost the defense industry and their workers. But defence spending is always non-productive. Tanks and planes just depreciate, they're not investments. This is just another expensive hand-out to corporations and their investors from the taxpayers that will fizzle with only a temporary benefit.
Just what you'd expect from a business man with six bankruptcies and no credit at any Western bank.
Same with the $54B defence increase. He's using taxpayer money to boost the defense industry and their workers. But defence spending is always non-productive. Tanks and planes just depreciate, they're not investments. This is just another expensive hand-out to corporations and their investors from the taxpayers that will fizzle with only a temporary benefit.
Just what you'd expect from a business man with six bankruptcies and no credit at any Western bank.
93
"Tanks and planes just depreciate, they're not investments."
Not always. The taxpayers have gotten more than their money's work from the venerable B-52 bomber. It's just that so many other weapons systems do not have that sort of longevity or flexibility.
Not always. The taxpayers have gotten more than their money's work from the venerable B-52 bomber. It's just that so many other weapons systems do not have that sort of longevity or flexibility.
2
It's a massive short squeeze; what it means. Nothing more.
Oldest market story in the world. Big money sells short too much too soon and gets caught wrong. Happens all the time, just not usually on this scale.
Massively short, being squeezed mightily by even bigger money; being forced to cover. Timing is everything in life.
Trump's toast, deservedly. Just desserts for the Perfect Con Man, to overplay his game too big once-too-often. Russian cyberwarfare attacks on the DNC and its meddling in our election to assist him, Wikileaks a convenient front, and his secret Russian business partners and connections will take him down.
Resignation. Impeachment. 25th Amendment replacement. Regardless of how it's done he goes. He goes. The stench of Benedict Arnold fills the Oval Office. It's intolerable.
Markets will follow Trump into the sewer. It's only a matter of when.
Oldest market story in the world. Big money sells short too much too soon and gets caught wrong. Happens all the time, just not usually on this scale.
Massively short, being squeezed mightily by even bigger money; being forced to cover. Timing is everything in life.
Trump's toast, deservedly. Just desserts for the Perfect Con Man, to overplay his game too big once-too-often. Russian cyberwarfare attacks on the DNC and its meddling in our election to assist him, Wikileaks a convenient front, and his secret Russian business partners and connections will take him down.
Resignation. Impeachment. 25th Amendment replacement. Regardless of how it's done he goes. He goes. The stench of Benedict Arnold fills the Oval Office. It's intolerable.
Markets will follow Trump into the sewer. It's only a matter of when.
37
Consider that with a tweet he can flush stocks down the toilet. Conversely, with an almost lucid speech he can cause markets to rise. Trump knows what's coming before the markets so he short stocks he's about to trash, and goes long before an accommodating speech.
Can there be a better opportunity for a con man?
Bernie Madoff must be laughing in his cell.
Can there be a better opportunity for a con man?
Bernie Madoff must be laughing in his cell.
2
IF the markets stay high Trump is safe.
I agree with you, Steve, but my question is how to react to it with my IRA? What do I DO and what are the indicators that tell me when to do it?
I'm sure The Donald will be crowing about this but let's bear in mind that Wall Street has been going great for some time now and that the folks on Main Street who ended up voting for him didn't seem to care. If those jobs come back- with good salaries and good benefits- only then will Mr. Trump be entitled to crow.
22
This sword cuts both ways. If he claims credit for the stock market boom he is stuck with blame for its bust. As you point out the stock market is not the real economy of jobs, economic growth, etc.
1
Wall St. is not Main St. and Trickle Down Economics has not fared well historically those cheering are the usual crowd; do not expect Inequality to move in any direction but up. A Trump effect will only follow an increase in investment aimed at job related infrastructure not robots to have a beneficial Main St. effect.
9
One temporary stimulus for greater economic growth rates would be massive infrastructure spending but to lead to long term improvements in growth that spending must enable continued increasing production and consumption of goods and services, or at the end of the infrastructure projects, the economy will drop back to the current level of activity which will not serve Trump's goals. Infrastructure spending must involve changing the ability of the country to create more wealth than it has in four decades. Where will be the opportunities for great economic expansion over the next century? If it's in the U.S. then Trump may be on the right path but if it's globally, then Trump is not.
5
People tend to anticipate the future performance of things based upon the past performance of those things, which sometimes leads to unexpected results. The current economy is reflecting the best performance that it can do under the current conditions. Trump expects that he is going to change this so that economic growth increases to 4%, by means of increased capital from severe tax cuts and opportunities from slashing regulations and eliminating incentives for non-fossil fuel energy systems, restoring the conditions which he thinks will enable the economy to grow. He believes that the supply of capital and the lack of government interference will automatically restore vigorous economic growth, regardless of the needs and ability of consumers to buy goods and services. It's based upon the notion that economies duplicate the gas laws in physics where pressure, temperature, and volume all respond to any perturbing of any one of them. It's an educated guess used for academic studies that has never been proven to describe the economics of real economies, because it doesn't. Economies are complex and only complex mathematics even approaches real world outcomes. In the current situation there is a surplus of capital available for investment but there are few opportunities for sound investments because the domestic and global economies are just not growing fast enough to avoid unacceptable risks. Big tax cuts will just take more money out of circulation.
7
When other economies are featuring negative interest rates, rising interest rates will draw foreign capital to American markets. Bidding up the cost of economic assets. And the movement of capital to the United States will mean that we should see more capital investment.
Perhaps we are repeating what occurred in the late 19th century, when foreign investment powered the growth of the American economy.
Perhaps we are repeating what occurred in the late 19th century, when foreign investment powered the growth of the American economy.
5
Dumb money is finally coming in, mostly through index funds. Do naive investors who have not touched a stock for 8 years know what is in these index funds, and how overpriced it is? I am doing an analysis of QQQ, and the average P/E of the top ten holdings is 43.4.
Everyone knows that the Fed will probably raise rates in March, and again later in the year. When you can get 3.5% on a 10-year T-bill, or 2% on a 1-year CD, how attractive will stocks be then?
Everyone knows that the Fed will probably raise rates in March, and again later in the year. When you can get 3.5% on a 10-year T-bill, or 2% on a 1-year CD, how attractive will stocks be then?
17
Well, so far Trump has not passed one spending bill, nor has he passed one bill of any sort. So based on that, all of the credit goes to Obama.
That said, only about 18 % of Americans own any stock at all. So they keep buying the Dow index assuming they will be getting massive tax cuts. How does that affect the other 82%? The 82% with no stocks are no richer and we are being told inflation and interest rates are going up - along with supposed magical wage increases.
Time will tell if these unskilled, underemployed, unemployed people Trump tells us are out there will negotiate higher wages for themselves, especially the millions and millions no longer in the labor market. Remember, he claims unemployment may be higher than 20%! We shall see if aggregate demand suddenly increases. I see 0% auto loans on TV from every auto maker and I see all the fast food places with dollar menu specials, as well as a check cashing service in every strip mall, usually next to the Dollar Store. Those are pretty sure signs the bottom end of the consumer group is still struggling.
That said, only about 18 % of Americans own any stock at all. So they keep buying the Dow index assuming they will be getting massive tax cuts. How does that affect the other 82%? The 82% with no stocks are no richer and we are being told inflation and interest rates are going up - along with supposed magical wage increases.
Time will tell if these unskilled, underemployed, unemployed people Trump tells us are out there will negotiate higher wages for themselves, especially the millions and millions no longer in the labor market. Remember, he claims unemployment may be higher than 20%! We shall see if aggregate demand suddenly increases. I see 0% auto loans on TV from every auto maker and I see all the fast food places with dollar menu specials, as well as a check cashing service in every strip mall, usually next to the Dollar Store. Those are pretty sure signs the bottom end of the consumer group is still struggling.
68
Anyone with a public or private pension is invested in stocks whether they are aware of it or not.
In normal times, a safe yield would be possible in bonds and guaranteed investments. Not so in a time of artificially crushed interest rates due to Fed policy.
In normal times, a safe yield would be possible in bonds and guaranteed investments. Not so in a time of artificially crushed interest rates due to Fed policy.
4
Well Gee the president does not pass any laws, that is for congress who have way too many resisters, rather than positive individuals.
1
He passed a bill. One allowing the mentally disabled to purchase firearms. Sponsored by one of his biggest donors.
The rich get richer.
The rest get less.
And this is good news? Why?
The rest get less.
And this is good news? Why?
103
About half of all Americans are in the stock market - either directly or indirectly. Gains are good for most folks.
The current buoyancy is the psychological part of the market not tied to actual quantitative metrics. Until actual growth shows up in the measurements, based on solid corporate revenue and profitability trends, the current bubble is nothing but speculation.
Trump inherited an economy in growth mode with economic "full employment". If the US can coax higher GDP (up to the Trump's unrealistic 3%) then real growth could occur -- otherwise there is only one direction to go.. back down to steady state equilibrium.
Trump inherited an economy in growth mode with economic "full employment". If the US can coax higher GDP (up to the Trump's unrealistic 3%) then real growth could occur -- otherwise there is only one direction to go.. back down to steady state equilibrium.
21
Come now only a low expectations person thinks this economy is doing anything other than fair at best, so many not even bothering to look for work due to lack of opportunity.
1
What this tells us is that Wall Street recognizes it has an ally in the White House and that business in the swamp will not only go on as usual but the restraints we had on Wall Street will be removed. Remember that most of those were put in place to protect individual people from being fleeced by large, powerful financial institutions. Of course Wall Street is celebrating!
61
Wall Street firms do not set their own stock prices - it is the present value assigned by individual investors as to the future health of the enterprise.
7
But investors drink the same Kool-aid that Wall Street does.
Wall Street doesn't just have an ally in The White House, it owns The White House.
So much of what moves the markets, and the economy, is emotion and attitude based - yet we almost alway think about it in "fact based" rational terms.
If people believe that Trump will free up corporations and somehow charge the economy - that belief gets turned into investor and consumer confidence and those into investments and spending, then hopefully into an economic up-tick.
Boy am I glad I didn't follow my initial instincts and cash out last summer when it started to look like Trump could happen.
Will be interesting to see what unfolds next.
"We have nothing to fear, but fear itself" continues to carry much truth.
If people believe that Trump will free up corporations and somehow charge the economy - that belief gets turned into investor and consumer confidence and those into investments and spending, then hopefully into an economic up-tick.
Boy am I glad I didn't follow my initial instincts and cash out last summer when it started to look like Trump could happen.
Will be interesting to see what unfolds next.
"We have nothing to fear, but fear itself" continues to carry much truth.
11
I have no confidence in these markets. I predict there will be a very unhappy correction in the coming year.
35
Predictions that come true can be gold mines for investors. In your case, you might want to sell all your security holdings and then find a suitable investment that shorts the market. If your prediction comes true, you will have amassed a fortune.
Guys, is it not a little early to be predicting an end to secular stagnation? We're talking a little more than two months of data, much of which is wildly distorted by what people THINK is going to happen as opposed to what is in fact happening. Believe me, I'm not complaining. I have my life savings pretty much much fully invested in the markets, and my recent earnings statements are off the charts. But forgive me if I wait a few more months before I start looking for yachts to buy.
10
What people sadly don't realize the president has some lead way but it has been the FED that has boosted the economy all along.
6
Here is a simple exercise - look at a chart of the S&P for the past six months and mark a point when Trump was elected - see if you can note any discontinuity.
Since the stock market is more about emotions related to the future it means very little about the state of the US economy currently. The state is fair even though this paper would consider it to be good. Time will tell.
5
I read this paper as telling us that the current state of the economy is only fair but improving. Improvement follows mostly from gradual progress over the Obama years. Trump may bring some additional exuberance, possibly justified in some sectors, but to some extent irrational. And the effect of this additional exuberance on top of a more moderate positive momentum will be what? And that will occur when? You pays yer money and you takes yer chance. (Or time will tell.)
2
I'm not an economist but at 64 and a student of history I can tell you that bad things are going to happen to our economy and soon Current stock market valuation is the absolute definition of an asset bubble...
115
i agree the stock market is a bubble.
However, it is possible for the economy to surge ahead while the stock market stagnates or goes down. Higher interest rates could hit many stocks hard, without impacting business too much.
However, it is possible for the economy to surge ahead while the stock market stagnates or goes down. Higher interest rates could hit many stocks hard, without impacting business too much.
4
What's happening is Wall Street is pumping up the market in preparation for the next Big Dump. They see America as a piggy bank, as do the Republicans.
Which Establishment robber baron group will get in and out fastest with the mostest? This is an 0.01% feeding frenzy. They've hoovered up the citizens, so now they're fighting amongst themselves. They want it all, not just for the money, but so they can reposition for the next grab and deny the competition a leg up.
Wall Street continually eyes investor money, while the Republicans specialize in monetizing citizen taxpayer wealth pools, like healthcare, social security, education, and the deficit.
With Trumpski, they can plunder with no risk. No one will go to jail.
Wall Street (Traders and mostly Liberal) hit the jackpot in 2001, a 50% market decline, and again in 2008, a 50% market decline. Both crashes were manipulated. They came out stronger and rewrote the rules so they could do it again. And no one went to jail.
The Republicans (mostly Investors) pull money out of the American piggy bank by changing laws, taxes, and regulations in their favor and by privatization.
The market has been running up (from 700) since 2009 and it takes about eight years for the investors to refill the piggy bank. So it's just about time for another Wash and Rinse cycle.
Remember that WS traders make money both ways, Republican investors only one way.
Bet on the crash, which will bring Trump and the Republicans down.
Which Establishment robber baron group will get in and out fastest with the mostest? This is an 0.01% feeding frenzy. They've hoovered up the citizens, so now they're fighting amongst themselves. They want it all, not just for the money, but so they can reposition for the next grab and deny the competition a leg up.
Wall Street continually eyes investor money, while the Republicans specialize in monetizing citizen taxpayer wealth pools, like healthcare, social security, education, and the deficit.
With Trumpski, they can plunder with no risk. No one will go to jail.
Wall Street (Traders and mostly Liberal) hit the jackpot in 2001, a 50% market decline, and again in 2008, a 50% market decline. Both crashes were manipulated. They came out stronger and rewrote the rules so they could do it again. And no one went to jail.
The Republicans (mostly Investors) pull money out of the American piggy bank by changing laws, taxes, and regulations in their favor and by privatization.
The market has been running up (from 700) since 2009 and it takes about eight years for the investors to refill the piggy bank. So it's just about time for another Wash and Rinse cycle.
Remember that WS traders make money both ways, Republican investors only one way.
Bet on the crash, which will bring Trump and the Republicans down.
19
Don't forget institutional investors (pension funds of teachers, firefighters, police, etc) When the market crashes their money disappears... Someone gets richer, but that doesn't help the people that have their hard earned dollars invested in corrupt money management schemes that extort the public workers.
That was good. Thanks!
The economy is not at full productive capacity. We have hundreds of thousands -- maybe millions -- of people in this country who are unemployed, underemployed, or misemployed. And we're not the only country in the world where this is happening. Wealth is concentrated in too few hands, and in this country productivity gains go to the people who need it the least. Businesses can replace all of the human workers with robots and slaves, but at some point there won't be any customers, and it will all come crashing down. We need more people in positions of power who see beyond the next quarter, the next election cycle, and most important of all -- themselves.
70
What you say is correct: the wealth is concentrated in too few hands.
But it's not Us against Them anymore - because we already lost. It's now Them against Them. They'll fight among themselves since they've already got all our money.
Remember there are two ultra-wealthy 0.01% Establishment power groups, Democrats and Republicans, and they don't like each other.
This is now a global battle royal, like some War in Heaven; dragons circling above.
But it's not Us against Them anymore - because we already lost. It's now Them against Them. They'll fight among themselves since they've already got all our money.
Remember there are two ultra-wealthy 0.01% Establishment power groups, Democrats and Republicans, and they don't like each other.
This is now a global battle royal, like some War in Heaven; dragons circling above.
3
The astonishing high has one way and one way only to go and that is down. The market is nothing but a barometer based on what Trump promises. With such a bleak and disheartening record of breaking promises daily any confidence in a demagogic nincompoop who has not a clue how governments govern will see this as a high-water mark in the economy. It is the remnants of President Obama's successes combined with the optimism of a new administration. When the rubber finally hits the road at the end of this disturbing journey by Republicans whose sole purpose is to make sure government does not function properly none I repeat none of the major proposals of Trump will see fruition.
There will be no wall, ObamaCares will not be repealed, it will be damaged by Republicans and they will do all they can to blame President Obama for its failure but Republicans have no interest in doing anything that would actually improve upon a decent but flawed program. Republicans are in fact responsible for making ObamaCares less than the success it could have been because they deliberately did all they could to sabotage President Obama so he would not receive credit for a truly historical document.
Republicans are the true evil which lurks among us, out to prevent the poor and working poor from attaining any semblance of a comfortable life for people who they do not value because they can do them no good.
DD
Manhattan
There will be no wall, ObamaCares will not be repealed, it will be damaged by Republicans and they will do all they can to blame President Obama for its failure but Republicans have no interest in doing anything that would actually improve upon a decent but flawed program. Republicans are in fact responsible for making ObamaCares less than the success it could have been because they deliberately did all they could to sabotage President Obama so he would not receive credit for a truly historical document.
Republicans are the true evil which lurks among us, out to prevent the poor and working poor from attaining any semblance of a comfortable life for people who they do not value because they can do them no good.
DD
Manhattan
65
Time will tell, but I bet there will be a barrier and better control of the borders in general. The ACA is a walking dead man, replacing it is the difficult thing since Republicans insist on doing it correctly which is difficult.
Dear Alex:
What the US needs other than a good cigar is what it's always needed: universal health care.
My wife is French. She's had care there and in Canada and swears by it not at it. Despite all the protests one hears from idiotic Republicans, it works.
It's doable if people demand it. That is the problem. Too many have been brainwashed by Republican naysayers and the Idiot in Chief. Of course, they who have great health care plans.
Insurance invented by the Brits (Lloyd's) is based on one solid equation and one only: the size of the insurance pool. Size matters. If Canada, which has one-tenth the US population, and France, which has one-sixth, can provide its citizens with better health care at less cost, then US with a third of a billion could produce a phenomenal plan. If one-tenth of Americans were on a Fed Med Plan, that would equal the entire population of Canada. I guarantee you we would have much more once it was implemented.
My wife, now in her 70's, has the luxury of the availability of the Best Doctors in the US here in Manhattan. She would trade her health care here for what she had in France. Going to the doctor is like when I served in the military: You do not see a bill, there is no insurance middleman, no financial statements to fill out. The Administrative staff of Mount Sinai and Columbia Presbyterian there is run by a skeletal crew because paperwork is minimal. It works. And we are fools not demanding it.
DD
Manhattan
What the US needs other than a good cigar is what it's always needed: universal health care.
My wife is French. She's had care there and in Canada and swears by it not at it. Despite all the protests one hears from idiotic Republicans, it works.
It's doable if people demand it. That is the problem. Too many have been brainwashed by Republican naysayers and the Idiot in Chief. Of course, they who have great health care plans.
Insurance invented by the Brits (Lloyd's) is based on one solid equation and one only: the size of the insurance pool. Size matters. If Canada, which has one-tenth the US population, and France, which has one-sixth, can provide its citizens with better health care at less cost, then US with a third of a billion could produce a phenomenal plan. If one-tenth of Americans were on a Fed Med Plan, that would equal the entire population of Canada. I guarantee you we would have much more once it was implemented.
My wife, now in her 70's, has the luxury of the availability of the Best Doctors in the US here in Manhattan. She would trade her health care here for what she had in France. Going to the doctor is like when I served in the military: You do not see a bill, there is no insurance middleman, no financial statements to fill out. The Administrative staff of Mount Sinai and Columbia Presbyterian there is run by a skeletal crew because paperwork is minimal. It works. And we are fools not demanding it.
DD
Manhattan
2
My sentiments exactly. Except I would wager the majority of the people that voted for him don't have 401ks and thus don't care about the rest of us trying to make sure we can survive a Republican demolition of social security and medicare and any other safety net. I moved my 401k to money market funds before the election. I could've obviously made a windfall if I had waited a few more months. but who of the older almost retired crowd can survive another hit to their 401k after the 2000, 2003, 2007-9 setbacks? Not us. I'd rather sit on it like a mattress for five years than take that chance.
29
Your assumptions on who voted for him might be quite incorrect, after all many Republicans are conservative in their finances and actually do have investments.
3
The deplorables don't.
What the article does not directly contemplate nor does the tenor of the comments section is simply put this: President Trump's polices, often made crystal clear during the campaign, may in fact be just what the doctor ordered so to speak. The anemic recovery during the last 8 years it appears has been jump started. Yes, the proof of the pudding is in the eating and we all want more data but I wonder how many fellow citizens can admit that goodness Trump was right if the numbers are confirmed by job reports? How many, if that occurs, will still say this was all the result of President Obama's policies?
8
Trump hasn't actually done anything yet except talk, so I will still be saying that it is the result of actions initiated during the Obama years. If all Trump does is talk, then the air will go out of this bubble very quickly. If Trump actually takes some action, then we can consider the consequences. I'll give him credit if it is due but blame as well if that's deserved. He'll be taking credit in any case and any blame will be redirected at someone else, but the people will decide for themselves.
3
Obama begged for infrastructure spending and stimulus programs but Congress wouldn't even take votes on it. We could have had what the doctor ordered years ago were it not for the party of NO.
3
The "party of NO" did not control Congress from January, 2009 through January of 2011. The other party controlled Congress and the President was Barach Obama.
1Q GDP forecasts were just cut by the Atlanta Fed, FPM, BOA and others. Reason: weak economic data. All predictting <2% economic growth.
"On Wednesday morning, this divergence was noticed by the Atlanta Fed, which after forecasting Q1 GDP as high as 3.4% one month ago, revised its forecast sharply lower and moments ago reported that its GDPNow model forecast for real GDP growth in the first quarter of 2017 is 1.8 percent on March 1, down from 2.5 percent on February 27. The forecast for first-quarter real personal consumption expenditures growth fell from 2.8 percent to 2.1 percent after this morning's personal income and outlays release from the U.S. Bureau of Economic Analysis."
"On Wednesday morning, this divergence was noticed by the Atlanta Fed, which after forecasting Q1 GDP as high as 3.4% one month ago, revised its forecast sharply lower and moments ago reported that its GDPNow model forecast for real GDP growth in the first quarter of 2017 is 1.8 percent on March 1, down from 2.5 percent on February 27. The forecast for first-quarter real personal consumption expenditures growth fell from 2.8 percent to 2.1 percent after this morning's personal income and outlays release from the U.S. Bureau of Economic Analysis."
9
Great, so 2 consecutive quarters of <2%.
My mother's 5 siblings experienced the full sting of the 1929 stock market crash and resulting depression. One uncle would always tell the offspring generation never, never put your money in the stock market. It is controlled by greedy men, who are infatuated with and addicted to money.
By the time stocks and investments are being "advertised" and touted to the middle classes and pension managers, those investments are outdated, and the money-grabbers are on to some other up and coming investments, he said.
With workers' pension funds and the repeal of Glass-Steagall, the wolves of Wall Street now gamble freely with other people's money, and when they make a mess of it, we taxpayers bail them out. No wonder they rejected rules about feduciary responsibility to clients, a Consumer Protection board, and worked like junk-yard dogs to undo Dodd-Frank regulations.
Trump is like that irresponsible parent who indulges the Wall Street self-serving, hedonistic adolescents with an open bar, free liquor, plenty of drugs, and promises of no adult interference and supervision. What could possibly go wrong?
Turn on the bubble machine; and so it goes....
By the time stocks and investments are being "advertised" and touted to the middle classes and pension managers, those investments are outdated, and the money-grabbers are on to some other up and coming investments, he said.
With workers' pension funds and the repeal of Glass-Steagall, the wolves of Wall Street now gamble freely with other people's money, and when they make a mess of it, we taxpayers bail them out. No wonder they rejected rules about feduciary responsibility to clients, a Consumer Protection board, and worked like junk-yard dogs to undo Dodd-Frank regulations.
Trump is like that irresponsible parent who indulges the Wall Street self-serving, hedonistic adolescents with an open bar, free liquor, plenty of drugs, and promises of no adult interference and supervision. What could possibly go wrong?
Turn on the bubble machine; and so it goes....
32
The general public is free to buy stock at any time, if you have the money. Anyone could have bought in the darkest days of 2009, when good stocks were being given away for a fraction of their value. Very few did.
9
Yes, and anyone can go into a casino and put their money down. The outcome is the same, but at least they get free drinks.
@Fourteen - What happens when you buy stock? You are the beneficial owner of a company that is making money, and the profits belong to you.
Let's say you pay $50 a share for a company that is making $4 a share a year. They might pay you $2 a year in dividend, and use the other $2 to improve the business and make more money. Over five, ten, or twenty years, you are highly likely to be a winner.
Let's say you pay $50 a share for a company that is making $4 a share a year. They might pay you $2 a year in dividend, and use the other $2 to improve the business and make more money. Over five, ten, or twenty years, you are highly likely to be a winner.
Be fearful when others are greedy, right now there are very few companies worth buying in the discount rack and very few investors are inverting the story to second level thinking of what is the possible magnitude of loss vs gain probability. When there is blood on the streets that is the time to be greedy, feels like wine and roses today.
10
To make money in the stock market, you need blood on the streets, yes - but even then you need luck because it can always, and often does, go lower.
Anyone who buys now is hyped with greed, they're buying during a run-up. They are lambs waiting to be slaughtered.
The smart money only buys on dips (which they create) down around the 40 SMA of a trend (which they created) Or at the bottom of a long fall, which they triggered, and will now stop, bounce, and run back up. Only naive investors believe that the smart money gambles. They are masters at controlling market risk.
Anyone who buys now is hyped with greed, they're buying during a run-up. They are lambs waiting to be slaughtered.
The smart money only buys on dips (which they create) down around the 40 SMA of a trend (which they created) Or at the bottom of a long fall, which they triggered, and will now stop, bounce, and run back up. Only naive investors believe that the smart money gambles. They are masters at controlling market risk.
1
I teach 11th grade history using a text called, "The Americans." It cites a common set of factors that caused the Great Depression:
1. Tariffs and war debt policies that cut down the foreign market for American goods (check- starting a trade war with China)
2. A crisis in the farm sector (check- deporting immigrants)
3. The availability of easy credit (check- eliminating the Consumer Protection Bureau)
4. An unequal distribution of income (check, more than ever before)
I'd send Mr. Trump a student copy, except that he doesn't need to read it--he'll just recreate it.
1. Tariffs and war debt policies that cut down the foreign market for American goods (check- starting a trade war with China)
2. A crisis in the farm sector (check- deporting immigrants)
3. The availability of easy credit (check- eliminating the Consumer Protection Bureau)
4. An unequal distribution of income (check, more than ever before)
I'd send Mr. Trump a student copy, except that he doesn't need to read it--he'll just recreate it.
343
And gee the world conditions are just the same as back then. We buy much more than we sell. Now a trade war would hurt the world economy, and increase the price of stuff. That is a deal I would be happy to take.
1
I always enjoyed high school - they would give you these great lists of what caused things - eg: the six causes of WW II.
Then I went to university and found out it was all untrue and a bit more complicated than a simple bullet list.
Then I went to university and found out it was all untrue and a bit more complicated than a simple bullet list.
Thank you. Direct and clear.
The Federal Reserve has been saying continuously for about 5 years that there were limits to what could be accomplished with monetary policy that they influence. They have been pushing for more action in the realm of fiscal policy. All it took was suggesting that it might be forthcoming and the markets popped like the cork out of a champagne bottle. From here, we'll see if the reality comes close to matching the hope.
2
What this boom market tells me is that the 1% aren't worried about the bubble bursting.
They know the other 99% will be there to bail them out, as they did in 2008, and that not one of them will go to jail for any white collar criminal behavior..
They know the other 99% will be there to bail them out, as they did in 2008, and that not one of them will go to jail for any white collar criminal behavior..
29
Selling stock at a handsome profit is hardly criminal. If the guy you sell the stock to loses money, that is not your problem.
3
Jonathan, the problem arises when it's you who cause the market decline. Hedge funds do this every minute of every day, they manipulate the market up then down, down then up. It's easy and they make money both ways. Banks do it. All funds do it. That's how you trade.
All it takes is $10,000,000 plus leverage to "play" the market. When you see traders intently looking at a Level 2 ladder screen, that's what they're doing. It's both fun and profitable.
All it takes is $10,000,000 plus leverage to "play" the market. When you see traders intently looking at a Level 2 ladder screen, that's what they're doing. It's both fun and profitable.
@Fourteen - In the last few years, hedge funds overall trail the S&P 500 Index by about 50%. If they are manipulating the market, they must be pretty incompetent at it. They could have made much more money by just buying a basket of stocks and holding.
We've seen this movie before. Tax cuts to corporations (with small bones thrown to average taxpayers to hush them) in the spirit of "trickle down Reaganomics." Then deregulate industry so they are free to pollute the environment at the expense of all of us in the long run. Speak in tones of fear to justify huge increases in military buildup, while cutting social programs, healtchare, the arts (including public televison and radio broadcasting) and educational assistance, all to pay for the warplanes and more nukes. It is the Republican modus operandi that was given a bullhorn during Ronald Reagan's tenure. And it didn't help us. Nauseates me now just like it did then, when I was a struggling poor kid working his way through college pre-med, while Reagan was slashing school loans. Regressive backwardness is alive and well in America, all while Jeff Sessions plays the background banjo music.
510
Not All Docs--I remember those days, too. Early '80s, graduated from college, accepted a commission in the USAF because there was a recession and I was afraid I wouldn't quickly find a job. Tried to start a master's degree but guess what? My commander in chief guided his Dept of Education to deny me a student loan because I didn't have a credit history! I was on active duty and couldn't get a student loan! I thought all those people who loved Reagan were greedy nuts, and then Iran Contra happened and I left the Air Force, disgusted. Nothing new under the Republican sun.
2
What a lot of people forget is that Reagan sowed the seeds for the inevitable 90s bubble, then 2000s crash. It always seemed strange to me that he gets so much credit as a hero, yet his policies brought us here.
2
You're right, of course. The Democrats' approach of "the floggings will continue until morale improves" is a much better way to get an economy moving!
1
A yuge military buildup is about the least stimulative economic policy possible.
The only two pieces of legislation Trump has signed allow a return to dumping coal waste into waterways, and reversing a regulation making it harder for the mentally disturbed to acquire guns. For this the bulls run wild. Eventually, reality will set in on this speculative rally.
The only two pieces of legislation Trump has signed allow a return to dumping coal waste into waterways, and reversing a regulation making it harder for the mentally disturbed to acquire guns. For this the bulls run wild. Eventually, reality will set in on this speculative rally.
30
Post facto market boosting.
Trump may have brought some bump, but this article doesn't mention much about the terror in bond markets as the uncharted territory of unwinding the Feds ~4 trillion balance sheet, while keeping inflation steady, and preventing the dollar from strengthening rapidly, rising interest on treasuries which will make current debt service increases a multiple of we see now, and the real possibility of hyperinflation. No mention of insolvent Euro banks, continued Russian meddling in european elections, and growing secrecy in corporate financial disclosures.
No mention that a lot of institutional investors are selling into the strength of awakened individual investor enthusiasm. A big contrarian indicator. No mention of irrational exuberance, or FOMO. No mention that China is running low on treasuries to sell to keep the yuan low. Subprime loan delinquencies rising. This market is physiologically driven on the heals of 8 years of post GFC. 3 empty Fed seats Trump may fill with doves or cronies.
The fundamentals have more to do with Obama and QE, than Trump.
I just hope the eventual correction isn't a wipeout that tips the bond derivatives market house of cards.
Lots to worry about. But may as well enjoy a sip of champaign while numbers are green.
Trump may have brought some bump, but this article doesn't mention much about the terror in bond markets as the uncharted territory of unwinding the Feds ~4 trillion balance sheet, while keeping inflation steady, and preventing the dollar from strengthening rapidly, rising interest on treasuries which will make current debt service increases a multiple of we see now, and the real possibility of hyperinflation. No mention of insolvent Euro banks, continued Russian meddling in european elections, and growing secrecy in corporate financial disclosures.
No mention that a lot of institutional investors are selling into the strength of awakened individual investor enthusiasm. A big contrarian indicator. No mention of irrational exuberance, or FOMO. No mention that China is running low on treasuries to sell to keep the yuan low. Subprime loan delinquencies rising. This market is physiologically driven on the heals of 8 years of post GFC. 3 empty Fed seats Trump may fill with doves or cronies.
The fundamentals have more to do with Obama and QE, than Trump.
I just hope the eventual correction isn't a wipeout that tips the bond derivatives market house of cards.
Lots to worry about. But may as well enjoy a sip of champaign while numbers are green.
10
Yes, plan for the future, but yes, acknowledge the present; I will join you in a toast: thanks for our current (contrived, non-informed, possibly false) uplifting indicators. Hey, stop and smell the roses.
Irwin claims that, "Since a stock market rally began on Election Day, there has been plenty of discussion about a Trump effect. And no doubt a big part of the improvement has resulted from expectations that the new president’s policies will help corporate bottom lines.."
But what he doesn't say is that the "rally" began months before election day, as the market headed back up after a summer consolidation. Further, the stockmarket under President Obama rose more than 235%. And Mr. Obama left office with the economy registering 75 straight months of job growth, an all-time record.
So though conservative 'splainers like Irwin try to credit Trump with the improvements in the market, it's pretty clear to anyone with an objective eye that this all came about due to President Obama.
Trump rally, my foot!
But what he doesn't say is that the "rally" began months before election day, as the market headed back up after a summer consolidation. Further, the stockmarket under President Obama rose more than 235%. And Mr. Obama left office with the economy registering 75 straight months of job growth, an all-time record.
So though conservative 'splainers like Irwin try to credit Trump with the improvements in the market, it's pretty clear to anyone with an objective eye that this all came about due to President Obama.
Trump rally, my foot!
179
"Further, the stockmarket under President Obama rose more than 235%. And Mr. Obama left office with the economy registering 75 straight months of job growth, an all-time record."
Both the stock market and jobs market were at the lowest they'd been in decades, making it easier to show signs of growth. Much tougher for whomever was to take office with the stock market at 20,000.
Both the stock market and jobs market were at the lowest they'd been in decades, making it easier to show signs of growth. Much tougher for whomever was to take office with the stock market at 20,000.
5
What's your point? It'd be better if President Obama wasnt able to orchestrate a recovery (albeit a slow one) that pushed the market to 20k? That the financial devastation left by GWB was a favorable setup for OB? Geez ..
But, yes, further growth from here will be tough w/o over-reaching to the point of a crash. Taking the restraints off Wall St pretty much makes that a eventual certainty.
But, yes, further growth from here will be tough w/o over-reaching to the point of a crash. Taking the restraints off Wall St pretty much makes that a eventual certainty.
1
Whose fault was that, Obama's?
Reagan tripled the deficit, Obama didn't. But Reagan started with lower numbers....so? Either look at total numbers or look at percentages. Everyone deals with the hand they are dealt. Compare consistently.
Reagan tripled the deficit, Obama didn't. But Reagan started with lower numbers....so? Either look at total numbers or look at percentages. Everyone deals with the hand they are dealt. Compare consistently.
Unfortunately, the markets are about buying and selling securities, not about capital transactions closely related to real economy conditions, so they can rise or fall without anticipating nor reflecting economic performance that relates to what individuals and nations are concerned. The crash of 2007/2008 ended a long bull market that had turned into a flurry of bubbling financial products that ended in a big wet spot on the ground and lots of lost capital. So much capital was lost and so much business activity inhibited from the loss of credit and the loss of capital that it took seven years for recovery. Trump is a lot of talk and everyone knows it and the market is reacting to his talk, not his deeds, and so I expect a correction in a few months as investors regain their senses of who they are and where they are and realize that growth domestically and globally have no firm reasons to increase significantly for a while, yet.
14
Well no - the markets are the present value of expectations for large businesses in the USA or other worldwide markets in the future.
The present values of all major indices are indicating that the expectations are quite good.
The present values of all major indices are indicating that the expectations are quite good.
1
The expectations say buy equities in businesses that can grow if those expectations become actuality, now, because they are quite good. The outcomes will be confirmed in the future. SInce there are no real increases in the performance of the real economy that indicate any substantial changes apart from the excitement generated by Trump's announcements, it's not based upon any substantial evidence of changes in the economy.
No trader in the world uses PV. Gotta throw out those finance books if you wanna make money.
While the stock market has been going wild in anticipation of a huge infusion of cash, 4th quarter growth was an anemic 1.9%. Trump's 4% GDP will never happen. Anticipate a speculative bubble, massive deficits, polluted air and water, followed by a financial crash. Like the last freakin' time! When the tax cuts pass, I will get back into stocks and get out - but when? One year? Two years? Four years?
5
Pump and dump.
Removing the existing weak regulations will bring short profits. But the push for short term profits will once again make self-regulation almost impossible. And the cycle of boom and painful bust will continue. The only question are when the bust will occur and how Republicans will try to blame Democrats.
Removing the existing weak regulations will bring short profits. But the push for short term profits will once again make self-regulation almost impossible. And the cycle of boom and painful bust will continue. The only question are when the bust will occur and how Republicans will try to blame Democrats.
28
With the S&P P/E at 27, the market is overdue for a correction. Massive tax cuts will postpone this, but the crash will be that much harder.
1
What the "Trump rally" demonstrates is that there are many more speculators in the market than value investors, such as Warren Buffett or Seth Klarman. A lot of talk by Trump about everything will be great without any real effort, but Congress pulls the purse strings and has done near nothing. This is more about placing bets on what stocks will go higher than actual increases in any company value. Also known as minnows among the sharks as decreased regulation, if not anticipated political corruption, drive up the market.
10
Of course there are. Would you like to earn a 10% return a year, doubling your money in 7.5 years, or would you like to make a 100% profit by May? The stock market attracts the greedy and the gamblers, what do you expect?
If everyone were a value investor, there would never be any values.
If everyone were a value investor, there would never be any values.
1
You really don't understand how the stock market works. The price of stocks is based more on what's likely to happen in the future than what has happened in the past. What this means is that investors believe that Trump will succeed in lowering corporate tax rates, promoting infrastructure projects and making trade deals that are more favorable to American companies. And with both houses of congress backing him up they are making the right bet.
2
Buffet was on a number of Financial News Shows (CNBC and Bloomberg) this week. You should listen to what he actually said about the economy and Trump's plans.
This doesn't make sense to me. I'm more than a little puzzled as to why investors think Trump's policies would good for corporate bottom lines. Yes there is talk of corporate tax breaks, but where would that money come from? If it comes from a reduction in spending then wouldn't that have a destimulating effect? And then there is talk of deregulation, but wouldn't that cause various economic harms ranging from increased costs caused by climate catastrophes to more bankruptcies caused by unregulated lenders and medical debt, etc. etc.?
Not to mention that Trump wants import tariffs and a trade war with China, both of which would be disastrous for Wall Street. And not to mention that Trump's foreign policy is highly destabilizing and will surely reduce American corporations' ability to expand into foreign markets.
On a broader level, why wouldn't the investor class want a stable, competent person at the top of the federal government? Someone like Clinton, who was a friend of Wall Street to boot?
Not to mention that Trump wants import tariffs and a trade war with China, both of which would be disastrous for Wall Street. And not to mention that Trump's foreign policy is highly destabilizing and will surely reduce American corporations' ability to expand into foreign markets.
On a broader level, why wouldn't the investor class want a stable, competent person at the top of the federal government? Someone like Clinton, who was a friend of Wall Street to boot?
18
Short-term, the markets are driven by traders & speculators who are bidding up the prices of securitries / commodities / stocks in anticipation of a corporate tax cut and lower government regulations. Long-term, the markets are driven by investors who look at economic fundamentals and company prospects. Investors are not traders / speculators and vice versa.
I'm increasingly skeptical that the stock market reflects the strength of the broader economy. If it is rising now because investors think Trump's policies will help profits (dividends?), how much of that will actually be felt by the less wealthy 90% of the American population? My concern is that higher profits will enrich the infamous 1% even more, and income inequality will worsen. More and more wealth will go to financial traders and other money makers who contribute less and less to real production. At the same time, infrastructure will continue to crumble and truly ground breaking scientific research will wither because of decreased government spending. Corporations can't afford to fund the highest-risk, innovation-driving research. I'm not optimistic about the future (obviously!).
22
Equity investors are speculating that there will be a material reduction in corporate taxes and regulations. What they are not speculating on-- and should be-- is the negative impacts on the economy of restrictive trade and the fallout from the harsh treatment of immigrants. And no one knows what the infrastructure plan is. Last night Trump promised two chickens in two pots that people could eat and still have three chickens in three new pots. Those promises mean a substantial increase in the deficit, which you would have thought would spook the market. Potentially higher interest rates plus the speculative risk premium--which should be much more than 3%-- means to me the equity market is substantially overvalued. The herd mentality is in full swing.
19
Spot on, Joe. The entirety of this rally is based on ASSUMPTION.
Remember, they didn't see 2008 coming.
Remember, they didn't see 2008 coming.
1
Key Facts
Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013.
General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012.
Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.
U.S. corporations officially hold $2.1 trillion in profits offshore — much of it in tax havens — that have not yet been taxed here.
Americans for Tax Fairness —
Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013.
General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012.
Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.
U.S. corporations officially hold $2.1 trillion in profits offshore — much of it in tax havens — that have not yet been taxed here.
Americans for Tax Fairness —
224
Good point and let's not forget that, according to international law, only American companies are allowed to use tax havens.
This is an argument for reforming the corporate tax system. Yes, reduce rates, but also end the loopholes that have been written to benefit businesses who can afford smart lawyers to take advantage of those loopholes. Businesses like Trump, Inc. end up paying no taxes while the people who work for salaries bear the burden.
2
Yes, there has rarely been a better time to be a stock market investor. Stay long until the market shows its top. It always has.
1
Underlying this is a simple premise: what is good for the rich and big business is bad for everyone else. Regulations meant to protect the environment and people and improve quality of life are being cut so that companies can make more profit while hurting the larger society. Tax cuts that make it possible for the rich to accrue even more of the overall wealth of society excite the wealthy but take place at the expense of everyone else. If anything, an economy that is dependent upon "animal spirits" and the sociopathic tendencies of the very wealthy is a symptom of a pathological illness and is unsustainable, over the long run.
92
I once talked to a man who worked with the super rich. His take was that they think that their money will protect them from every kind of difficulty and enable them to enjoy whatever they want, so they do not take seriously concerns about the environment, the living conditions of people who are not rich, nor anything that concerns the rest of humanity.
16
Casual:
The New Yorker had an interesting article a couple of weeks ago about the super-rich super paranoid who are buying bunker type apartments in Kansas where they will live underground with armed military type guards outside and they plan to helicopter in and eat dehydrated food once the apocalypse hits. Some units are already built. They plan to bring the guy who can fix the helicopter and his family too. Sounded like a circle of Hell.
Seems like it would be cheaper to just keep the rivers clean but they didnt sound like the most creative bunch.
The New Yorker had an interesting article a couple of weeks ago about the super-rich super paranoid who are buying bunker type apartments in Kansas where they will live underground with armed military type guards outside and they plan to helicopter in and eat dehydrated food once the apocalypse hits. Some units are already built. They plan to bring the guy who can fix the helicopter and his family too. Sounded like a circle of Hell.
Seems like it would be cheaper to just keep the rivers clean but they didnt sound like the most creative bunch.
If Trump institutes his economic policies, we'll see 16% growth, 25% inflation and booming stock market by time he leaves office. What Trump doesn't understand his anti-multilateral policies will make US mighty dollar less relevant as a global reserve currency and that is by far the most dangerous thing to US as economic power.
It is this triad of military, economic and political power that makes USA a superpower. Political influence is already bumpy, but allies will muddle through. US will remain military power for decades, but with protectionism it will lose its economic power and hence its superpower status. That can happen faster that anyone anticipates.
It is this triad of military, economic and political power that makes USA a superpower. Political influence is already bumpy, but allies will muddle through. US will remain military power for decades, but with protectionism it will lose its economic power and hence its superpower status. That can happen faster that anyone anticipates.
19
Several claims here appear incorrect or exaggerated. The market has climbed steadily since the recession netting investors very good returns. Corporations are holding more cash than ever before onshore and offshore and though the US tax rate is over 35% no one pays that. The average effective rate is 27.1% but many pay far less. While 35% is maybe the highist in the industrialized world 27.1% is the lowist. As for the investor class Warren Buffet pointed out his rate is lower than his secretary's.
Inflation is still near nonexistent and FED interest hikes at small fractions of a single point are not going to have much impact for a very long time. Just because the lemmings panic for a day or two is not a trend. It's a possible buying opportunity.
Our average effective tax rate is 27.1% compared with 27.7% for the other 30 OECD countries, according to CRS. Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010, according to the Government Accountability Office.
Fact Sheet: Corporate Tax Rates – Americans For Tax Fairness
americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-cor...
Inflation is still near nonexistent and FED interest hikes at small fractions of a single point are not going to have much impact for a very long time. Just because the lemmings panic for a day or two is not a trend. It's a possible buying opportunity.
Our average effective tax rate is 27.1% compared with 27.7% for the other 30 OECD countries, according to CRS. Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010, according to the Government Accountability Office.
Fact Sheet: Corporate Tax Rates – Americans For Tax Fairness
americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-cor...
14
Markets have been starved for quality investibles for years.
Inequality caused more and more of the nation's income and wealth to accrue to the top decile, a major portion of it to the top 1%.
Most if it was reinvested, but the stagnant economy did not provide quality opportunities equal to the need for reinvestment. Bonds were not attractive because the Fed kept interest rates near zero, and corporate chieftains repurchased their companies' own shares rather than investing in their businesses. Stock repurchases forced more cash into the hands of those who were already struggling to reinvest it all.
The top ten percent of the population owns ninety percent of stocks, and they are the ones driving up stock prices. The economy began to look better, and a tax holiday on repatriated earnings could provide a windfall. So s rally in stock prices began. Momentum for the continuing rally is still coming mostly from the need to get cash into quality investments.
As stock prices rise, additional investment in stocks justifies itself. This may be a bubble, but it will be a durable one as wealth concentration is not going away.
Inequality caused more and more of the nation's income and wealth to accrue to the top decile, a major portion of it to the top 1%.
Most if it was reinvested, but the stagnant economy did not provide quality opportunities equal to the need for reinvestment. Bonds were not attractive because the Fed kept interest rates near zero, and corporate chieftains repurchased their companies' own shares rather than investing in their businesses. Stock repurchases forced more cash into the hands of those who were already struggling to reinvest it all.
The top ten percent of the population owns ninety percent of stocks, and they are the ones driving up stock prices. The economy began to look better, and a tax holiday on repatriated earnings could provide a windfall. So s rally in stock prices began. Momentum for the continuing rally is still coming mostly from the need to get cash into quality investments.
As stock prices rise, additional investment in stocks justifies itself. This may be a bubble, but it will be a durable one as wealth concentration is not going away.
4
Stock markets are a terrible indicator of how the economy is actually doing.
How about waiting for some actual GDP or employment numbers before patting an administration that hasn't passed any actual economic policy on the back?
How about waiting for some actual GDP or employment numbers before patting an administration that hasn't passed any actual economic policy on the back?
59
I'm a firm believer that markets are efficient. That is, all information is immediately reflected in stock prices and it's virtually impossible to beat the market over the long term.
That being said, efficient does not mean rational. "Irrational exuberance" is a frequent occurrence. Unfortunately, we won't know until after the fact whether the recent boom is based on rational expectations or is merely a bubble.
I wonder if Dr. Krugman is willing to go out on a limb and opine on whether he thinks Trump will be good or bad for the stock market over the next few years.
That being said, efficient does not mean rational. "Irrational exuberance" is a frequent occurrence. Unfortunately, we won't know until after the fact whether the recent boom is based on rational expectations or is merely a bubble.
I wonder if Dr. Krugman is willing to go out on a limb and opine on whether he thinks Trump will be good or bad for the stock market over the next few years.
2
If markets were efficient, there wouldn't be all these booms and crashes, woudl there? The information may be availabe to all, but the wisdom to use it properly is granted only to a few.
Most so-called investors want to make money in short-term trading. They will buy a stock even when the price makes no sense, if they think it will go even higher and they can sell it to stupid buyer. Eventually, they will discover they've been selling it back and forth to each other, and there are no stupid buyers - then, watch out!
Most so-called investors want to make money in short-term trading. They will buy a stock even when the price makes no sense, if they think it will go even higher and they can sell it to stupid buyer. Eventually, they will discover they've been selling it back and forth to each other, and there are no stupid buyers - then, watch out!
4
Indeed the Trump presidency is unleashing America's raw entrepreneurial talent into the marketplace and the world loves it. Further, Steve Bannon's promised to deconstruct the administrative state is creating a surge of optimism regarding American exceptional potential for economic growth. I didn't vote for Trump because I found him to devoid of personal qualities I admire in a leader. Now I'm cheering him with a fully invested portfolio!
5
Raw entrepreneurial talent
Yes Mr Achilles, the same talent, of the losers that has happened in the 1926 collapse. ( ooops The rich bailed Kennedy, Rockefeller.)
2007, the rich bailed .Did you
Entrepreneurs, right you mean winners, while the 99% losses.
We need them but a really nasty nose ring is required.
Riailroad paid by govenment? Cool
Canal paid by oops again?
Canals? Oops again
Roads, oops again
Water sustems in NYC 1800 to 1810 oops again.
( Dare you to read, if you can about Hamilton Burr theft, business plans.)
Adios
Yes Mr Achilles, the same talent, of the losers that has happened in the 1926 collapse. ( ooops The rich bailed Kennedy, Rockefeller.)
2007, the rich bailed .Did you
Entrepreneurs, right you mean winners, while the 99% losses.
We need them but a really nasty nose ring is required.
Riailroad paid by govenment? Cool
Canal paid by oops again?
Canals? Oops again
Roads, oops again
Water sustems in NYC 1800 to 1810 oops again.
( Dare you to read, if you can about Hamilton Burr theft, business plans.)
Adios
You keep doubling down and I'll keep shorting. Thanks!
Sucker !
1
I think investors are probably aware of what many political scientists and economists have told us before: the presidency is more at the mercy or benefit of the economy than they are the master of it, at least from a short-term perspective. My assumption is that many investors are aware of this decoupled nature, and are seeing an economy that will benefit mostly from the incredibly fast pace of technological change, its potential for fatter margins and consumer sales, all sweetened by the honey of Trump's corporate tax policies.
6
The underlying data are highly speculative, but then economic forecasts tend to be highly speculative because they must assume linear progressions, a relatively stable “steady-state” within which probability outcomes can be extrapolated. And reality has a habit of regularly exploding steady-states with new inputs that have dramatic effects. Like Trump winning the election to complete an undivided Republican government. Anyone using economic data from before 8-9 November 2016 is trying to sell something, not trying to understand the new reality.
The truth is that markets and general confidence are up because the indications are all there that we will be moving forward politically again, and in a direction that favors business expansion, jobs, increased demand for goods and services, re-booting of the virtuous cycle and general high-times a’comin’ again. Break out the champers, imported and pricey on Wall Street, domestic in Sheboygan and Scranton.
We can thank Trump for all that, as chary as liberals are to even HEAR such blasphemy suggested.
The likelihood is that it’s sustainable, as well. While nobody in his right mind should underestimate Donald Trump after that historical election, the truth remains that the odds of his securing his entire agenda as well as he’d like are low, even from a Republican congress. But he’ll put enough wins up on the tote-board to reinforce the arc toward a pro-business, pro-growth economy, and that should have confidence legs for years.
The truth is that markets and general confidence are up because the indications are all there that we will be moving forward politically again, and in a direction that favors business expansion, jobs, increased demand for goods and services, re-booting of the virtuous cycle and general high-times a’comin’ again. Break out the champers, imported and pricey on Wall Street, domestic in Sheboygan and Scranton.
We can thank Trump for all that, as chary as liberals are to even HEAR such blasphemy suggested.
The likelihood is that it’s sustainable, as well. While nobody in his right mind should underestimate Donald Trump after that historical election, the truth remains that the odds of his securing his entire agenda as well as he’d like are low, even from a Republican congress. But he’ll put enough wins up on the tote-board to reinforce the arc toward a pro-business, pro-growth economy, and that should have confidence legs for years.
4
Deregulation leads to increased profits, not increased jobs. Increased consumer demand coupled with increased disposable income leads to increased jobs.
If a corporation generates more profits, where do they go? To the employees or to the shareholders? They go to the shareholders. If they went to the employees, profits would evaporate. Labor is a drag on profits. The whole idea is to eliminate anything that reduces profits which are again regulations and labor costs. The entire system runs on profits and nothing else.
That's why the market is rallying. That's why Wall Street is so giddy.
These anticipated increases in profits will not provide jobs for low skilled workers in the rust belt and rural America. Only increased sales spurred on by increased demand will do so.
Furthermore, any new investment made to increase production will be the most efficient use of the funds possible. That means automation and robots. They have to otherwise their competitors will underprice them.
If Trump is successful, the same people at the top will get richer and the disenfranchised will be left out again.
Only high tech, highly skilled jobs will materialize. We need them and I sincerely hope they do happen. But without the training and aptitude to work at those positions, those that need those positions will not get hired.
What is desperately needed are votech schools, apprenticeships, one and two year specialized training programs. Did Trump mention any of those?
If a corporation generates more profits, where do they go? To the employees or to the shareholders? They go to the shareholders. If they went to the employees, profits would evaporate. Labor is a drag on profits. The whole idea is to eliminate anything that reduces profits which are again regulations and labor costs. The entire system runs on profits and nothing else.
That's why the market is rallying. That's why Wall Street is so giddy.
These anticipated increases in profits will not provide jobs for low skilled workers in the rust belt and rural America. Only increased sales spurred on by increased demand will do so.
Furthermore, any new investment made to increase production will be the most efficient use of the funds possible. That means automation and robots. They have to otherwise their competitors will underprice them.
If Trump is successful, the same people at the top will get richer and the disenfranchised will be left out again.
Only high tech, highly skilled jobs will materialize. We need them and I sincerely hope they do happen. But without the training and aptitude to work at those positions, those that need those positions will not get hired.
What is desperately needed are votech schools, apprenticeships, one and two year specialized training programs. Did Trump mention any of those?
281
To your point Bruce Rozenblit, Dallas is a large city with a large public school district and we only have one vocational that teaches woodworking. Your vision is what one might see in Canada where trades people can make a good living and in Germany where tool and die workers and other skilled trades people in manufacturing can make a living wage. These countries train their labor and apprenticeships are common. We don't do that here, do we?
5
I disagree with you on the need for only high-tech jobs. There are many more care-takers needed, and those we have now need to be paid more. There is need for many more construction workers of all kinds, not just for new construction but to bring our infrastructure up to current levels of new construction. One of the greatest wastes of energy is inefficient older infrastructure. Paying people more for their time at any job is the way to spur the economy. And many jobs that need doing are not high-tech. Until we rebalance the value of investment (renters) to labor (workers), less profit and more wages, we are going to continue to decline as a nation.
2
@Bruce - your comment was a light in the forest. Well done!
1
Tax cuts, smart deregulation, and a lessening of self-serving union leadership power make it easier to bring capital back to the United States and to do business here. This will translate into more opportunities for investment in the US and jobs and a public can have job choice and grow their incomes.
People in our country would do well to distinguish this from private equity companies loading debt on companies and ripping them apart by shipping jobs overseas to low cost providers, dumping environmental residue into streams, and removing the requirements of Glass Steagall only to replace them with a monstrosity bill like Dodd Frank that no-one fully understands to this day.
People in our country would do well to distinguish this from private equity companies loading debt on companies and ripping them apart by shipping jobs overseas to low cost providers, dumping environmental residue into streams, and removing the requirements of Glass Steagall only to replace them with a monstrosity bill like Dodd Frank that no-one fully understands to this day.
1
There will be no smart deregulation. There will just be deregulation--the kind that leads to consumers being impacted by shadier businesses that will prey on them to make a quick buck in the Trump era. This will lead to consumers losing trust in certain sectors of the market as they're burned time and time again. I suspect the financial sector will be an especially big concern in the age of Big Data. That's not to mention the environmental problems this will bring when we already haven't fixed our water problems in places like Michigan.
I can't be as optimistic as the rest of you. I think there will be some jobs, since corporations are optimistic that they will make money, which will entail hiring Americans in some capacity to help make that money, but we are in the age of automation now and people are not as needed. Most of Trump voters are not aware that the battles they think they've been fighting are not even the real battles. They think they can solve the energy problems with preserving the dying coal industry. They're fighting old battles. I am encouraged that some places in the country, like Nevada are more forward-thinking in how they approach energy and they will be the bright spots of this era, as they are actually looking forward, not backward. All of this changes, however, if Trump is impeached for his Russian ties.
I can't be as optimistic as the rest of you. I think there will be some jobs, since corporations are optimistic that they will make money, which will entail hiring Americans in some capacity to help make that money, but we are in the age of automation now and people are not as needed. Most of Trump voters are not aware that the battles they think they've been fighting are not even the real battles. They think they can solve the energy problems with preserving the dying coal industry. They're fighting old battles. I am encouraged that some places in the country, like Nevada are more forward-thinking in how they approach energy and they will be the bright spots of this era, as they are actually looking forward, not backward. All of this changes, however, if Trump is impeached for his Russian ties.
3
Jeffrey, actually there is little shortage of capital today. The banks are brimming over with funds to lend. But businesses will not start up or expand if there are not new customers, and there are not. The people who do not need money and use it to speculate have plenty, but the people who need it and will spend it to become the new customers just do not have it. Both income and wealth inequality have reached levels not seen since the 1920's and we know how that decade ended.
BTW 95% of subprime mortgages were not sold by the banks to which Glass - Steagall applied. These bad mortgages were bundled into dodgy derivative securities and sold by investment banks again to which Glass - Steagall did not apply. Then credit default swaps (bets on these securities) were sold by reinsurance companies (like AIG) to which again Glass - Steagall did not apply. This is a much more complicated world than when Glass - Steagall was passed, and that is why Dodd - Frank is so complicated.
BTW 95% of subprime mortgages were not sold by the banks to which Glass - Steagall applied. These bad mortgages were bundled into dodgy derivative securities and sold by investment banks again to which Glass - Steagall did not apply. Then credit default swaps (bets on these securities) were sold by reinsurance companies (like AIG) to which again Glass - Steagall did not apply. This is a much more complicated world than when Glass - Steagall was passed, and that is why Dodd - Frank is so complicated.
3
" .. Both income and wealth inequality have reached levels not seen since the 1920's and we know how that decade ended .."
In the 1920s, there was no Amazon, no MSFT, no Intel, no Apple, no computers.
So much for living in the past.
In the 1920s, there was no Amazon, no MSFT, no Intel, no Apple, no computers.
So much for living in the past.
1
I'd rather have slow growth and preserve our environment, including the air, water and land, preserve the integrity of our food and medicine, and have safety measures in place to protect us from the predatory wall street practices any day.
871
So well put, Joe. Bravo!!
1
steering the economy in a wholesome direction that reflects true American values of responsibility, integrity and fair dealing will not necessarily lead to slow growth. That is a Republican canard.
They tried that on Detroit. My -- didn't that turn out well?
As for this -- " .. Consider how things looked one year ago. The world economy seemed hopelessly trapped in a cycle of low growth and inflation .."
HRC's not president and (thank you, God) BHO is gone. There's the lede.
As for this -- " .. Consider how things looked one year ago. The world economy seemed hopelessly trapped in a cycle of low growth and inflation .."
HRC's not president and (thank you, God) BHO is gone. There's the lede.
We will cut the very taxes that America needs to invest in itself, rid ourselves of regulations so industry may poison the waters and air, gamble our planets entire ecosystem and civilization by ignoring climate change. Do all this and some of us that have money will sleep easier at night as our 401Ks gain 20 to 30% in value. Insane.
26
Low inflation? Only if you use the official definition, which is meaningless. The inflation rate has nothing whatsoever to do with the cost of living, which keeps rising. That includes food, housing, transportation, municipal taxes,and medical costs (insurance, co-pays and out of pocket expenses).
15
All the things you mention are included in the inflation rate.
Talk to me about nearing full employment when anyone wants to hire the 45-59 year old men men and women with 40+ years of business and technology experience. Those whose roles in the economy have been disintermediated by ecommerce, changes in computing habits and customer service automation over the past 15 years or so. For far too many of this generation the recession has never ended.
There are millions of us. Nobody is expecting to go back to the 90's but this near full employment talk is nonsense. For a respectable wage there is a deep well of labor and talent in reserve. Meaningful employment prospects are weak.
ps - May we please see the underlying assumptions on which these claims of full employment are based? They are faulty.
There are millions of us. Nobody is expecting to go back to the 90's but this near full employment talk is nonsense. For a respectable wage there is a deep well of labor and talent in reserve. Meaningful employment prospects are weak.
ps - May we please see the underlying assumptions on which these claims of full employment are based? They are faulty.
87
As a 40 year tech worker, I agree 100%. I have watched our high paying jobs be outsourced for the past 20 years. I work in an IT department that once employed over 600 people and we are now under 60. Those jobs are now in India and pay a fraction of what we were earning. We do have low unemployment currently but that is a false metric for tech workers. Yes there are jobs available at Target for $10.00 an hour, but our jobs are gone.
March 1, 2017
Valuation
The Shiller 10-year price-earnings ratio is currently 29.52, so the inverse or the earnings rate is 3.39%. The dividend yield is 1.91. So an expected yearly return over the coming 10 years would be 3.39 + 1.91 or 5.30% provided the price-earnings ratio stays the same and before investment costs.
Against the 5.30% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.45%.
The risk premium for stocks is 5.30 - 2.45 or 2.85%.
Valuation
The Shiller 10-year price-earnings ratio is currently 29.52, so the inverse or the earnings rate is 3.39%. The dividend yield is 1.91. So an expected yearly return over the coming 10 years would be 3.39 + 1.91 or 5.30% provided the price-earnings ratio stays the same and before investment costs.
Against the 5.30% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.45%.
The risk premium for stocks is 5.30 - 2.45 or 2.85%.
9
Thank you Nancy for your data, but one should remember that what practically ALL long term economic projections like the Shiller index have in common is that they are wrong. Remember in 1999, the CBO projected that we would have 10 years of federal surpluses.
I think we would do just as well with a good shaman, a goat, and a sharp knife.
I think we would do just as well with a good shaman, a goat, and a sharp knife.
PS - Nancy, this just appeared in my mailbox today:
https://www.federalreserve.gov/econresdata/feds/2017/files/2017020pap.pd...
https://www.federalreserve.gov/econresdata/feds/2017/files/2017020pap.pd...
The markets are bearing the fruits of wise stewardship under the Obama administration. Trump's insane budget will make stagflation look like good times while railroading the planet to an environmental catastrophe.
168
The economy is everything. The rest is just noise. Is the travel ban hurting the economy or not? Does immigration help the economy or not. Will processing the 12 million illegal aliens help the economy or not? Will lowering the corporate tax rate help the economy or not? Will renegotiating trade deals help or hinder the economy? Will repatriating the $2.4 trillion to roughly $3 trillion dollars help or hurt the economy?
5
Corporate AMerica has proven time and time again that larger profits--indeed, incredibly larger profits--do not result in much in the way of benefit to the average working American. LIke anything else, these gains are hoarded by the owners, the top 1%, and the speculators.
For eight years, as Obama worked to resolve the fallen economy that Bush left him, we heard the RIght bemoan the stock market gains as "not representing the economy." Now, however, the posit that the mere mention of Trump's name is good for another 20-point rise in the Dow and that we'll all benefit.
This is just more of the long con this president sold enough of the country on to get elected. Let's see some real gains for the so-called average American before we start heaping praise, okay?
For eight years, as Obama worked to resolve the fallen economy that Bush left him, we heard the RIght bemoan the stock market gains as "not representing the economy." Now, however, the posit that the mere mention of Trump's name is good for another 20-point rise in the Dow and that we'll all benefit.
This is just more of the long con this president sold enough of the country on to get elected. Let's see some real gains for the so-called average American before we start heaping praise, okay?
118
Average Americans have seen real gains in that their 401k, IRA and other retirement accounts have substantially increased in value since 2009. All retirement account holders can lock in these gains by switching their investment choices from securities to cash and/or cash equivalents.
2
While the stock market soars and investors like deregulation, those regulations were put in place for good reasons. It is not, contrary to Trump/GOP suggestions just that the Democrats are mean and hate business. Sadly, the ones who usually suffer the brunt of deregulation are the very workers who voted for Trump. It is their streams which will become polluted with coal waste dumping; it is they who suffered most in the financial meltdown of 2008. Banking/investment regulation written after that debacle is something the GOP can't move fast enough (in their eyes) to undo.
106
" .. It is not, contrary to Trump/GOP suggestions just that the Democrats are mean and hate business .."
Eight years of the most viciously anti-small business president in modern history, and investment dollars pouring onto Wall Street.
Democrats know nothing, do nothing, and cannot create sustainable jobs because they never want to make hard decisions. Period.
Eight years of the most viciously anti-small business president in modern history, and investment dollars pouring onto Wall Street.
Democrats know nothing, do nothing, and cannot create sustainable jobs because they never want to make hard decisions. Period.
By now, particularly since the Great Recession, we really have to be specific about what economists mean by "growth".
Tax cuts, de-regulation and destruction of unions means that profits can grow while wages do not. We get an expansion in the number of billionaires, but a contraction in real earnings for the middle class. This type of "growth" is merely a transfer of wealth from poor to rich on a massive scale.
The fact that the de-regulation is accompanied by families going bankrupt under crushing debt, by children being poisoned by their drinking water, and by citizens being slaughtered by automatic weapons only adds to republicans glee.
Tax cuts, de-regulation and destruction of unions means that profits can grow while wages do not. We get an expansion in the number of billionaires, but a contraction in real earnings for the middle class. This type of "growth" is merely a transfer of wealth from poor to rich on a massive scale.
The fact that the de-regulation is accompanied by families going bankrupt under crushing debt, by children being poisoned by their drinking water, and by citizens being slaughtered by automatic weapons only adds to republicans glee.
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I predict that the market will continue to increase, largely because Wall Street knows that Trump will deregulate the market. All of the the checks and balances put in place by the Obama administration after the 2008 crash will be removed. Then the market will crash (just like in 2008), the middle class' retirement accounts will be decimated (just like 2008), and Wall Street execs will walk away with billions of dollars (just like 2008). I hope then that the people who voted for Trump will admit that they voted for a charlatan.
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There are only two significant post-crash regs: rule 48, promolgated in 2007, and the revised market circuit breakers the SEC established in 2012. Rule 48 applies to the announcement of opening prices, and the circuit-breakers allow trading on an exchange to be halted for 15 minutes. Neither one can prevent the market from going down if it wants to go down.
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Spot on Tom ! The only thing I can disagree with is your last sentence - They will never admit that they were screwed , it will be Obama's fault .
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They will not.
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Unfortunately for at least half of the country, that booming economy doesn't translate into economic benefit to them, because they don't own stocks and bonds. And a needless Pentagon buildup is itself economic empty calories in the long run -- it's a costly way of goosing the economy, with long-term issues.
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Since there is no direct threat to the US (neither Canada nor Mexico are any likely threat in the foreseeable future), and starting wars is extremely bad for business, one has to ask what the purpose of this military build up is. One reason would be, for example, to redistribute some of the economic benefits to the ones you mention as not having stocks or bonds, since they are usually the ones who participate in the production of military hardware and its use. The US uses only a fraction of its military during a conflict and most of the hardware and personnel just sits around doing nothing, preparing for conflicts that will never happen, while the homeland is protected by thousands of miles of ocean water. This has for decades been the greatest source of income redistribution from top to bottom, and perfectly legit in the eyes of the GOP. If the US shrank its military to 10-20% of current strength and pulled back to only protecting the territorial integrity of the homeland, the US would be perfectly safe from invasion or attack, but this would result in a social and economic calamity.
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Income redistribution from top to bottom? You mean from the government to the bottom, right? It is the government that purchases the military equipment (in other words, creates "demand") which may provide jobs if the military equipment is made in this country. It is our labor that is taxed at the highest effective tax rates (as capital is taxed at much lower rates) so I cannot help but wonder what debt that laborwill incur as it is the laborer in this country that will have to repay the debt.
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The income distributed to unused military bases and equipment could be used for WPA projects with lasting permanent improvements to both the economy and the infrastructure. There is not enough profit in infrastructure for the private corporations who don't own it, yet. Once they own it, it will be profitable for them and expensive for the rest of us to use.
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I think the investment class is assured, more or less, that when the bubble bursts that it will not only not be held accountable, again, but that it will be protected. Socialized losses follow private gains. This is America.
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No, this is not America, Rosko. This is America under control of The Con Don and his Top 1% Global Financial Elite Robber Baron/ Radical Religion Good Old Boys' Party. They plan to give themselves OUR hard-earned taxpayer treasure as CORPORATE WELFARE FOR "infrastructure", putting us so far in debt we cannot ever recover.
Then they will crash the global economy, steal at least one-half the wealth average Americans and people around the world have gained since they crashed it in 2008, bail themselves out, put OUR money in THEIR tax-evasion havens and party hearty. "We did it again!" is their mantra.
The question is, "Will WE let them?" Not me. Not now. Not Ever Again. WE must fight like hell to stop them in every non-violent way. The best way is to GET YOUR MONEY OUT WHILE YOU STILL HAVE SOME.
Then they will crash the global economy, steal at least one-half the wealth average Americans and people around the world have gained since they crashed it in 2008, bail themselves out, put OUR money in THEIR tax-evasion havens and party hearty. "We did it again!" is their mantra.
The question is, "Will WE let them?" Not me. Not now. Not Ever Again. WE must fight like hell to stop them in every non-violent way. The best way is to GET YOUR MONEY OUT WHILE YOU STILL HAVE SOME.
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I would not gamble that theory will continue to work. How does one trust a Donald J. Trump, whether President or not?
I'm pretty sure we do not disagree. Color me confused by your response.
The booming markets seem to be the US markets, partly based on the improved US economy but also based on the expectation of corporate tax cuts. The latter will boost companies' bottom lines and dividends but it remains to be seen whether it will benefit anyone except stock holders.
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No one knows what moves markets, they just think they do.
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Yes, it's just a legal form of gambling. There's just as much science behind it as there is in betting on football, horse racing etc. As Mark Twain said "it's difference of opinion that makes horse races".
1
Dont put your money into a 2 month "trend" of the stock market.
All I see is market value "hopefulness" boosting stock values. That doesnt last.
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