In this complex situation, your best tool is Occam's razor. What simple things do we know? Trump and the Publicans pushed through an unread tax bill that benefits ONE group in the US, the oligarchs and the wannabes. And they throw the deficit burden onto the productive classes, which do not include themselves. This isn't how you create an optimally productive society, this is how you create a society reminiscent of Louis XIV, and that did not turn out well.
19
Actually folks the rest of the world may be waking up to the scam that Trump and the Publicans are working. Tax cuts for the oligarchs, financed by more and more debt. Sounds pretty third world banana republic and Greek to me. When you pile on debt and debase your currency you can fool some of the people all of the time, and a lot of people some of the time, but NEVER all of the people all of the time. Is the rest of the world is bailing on the US stock market ?
10
When you when you elect a clown you get a circus.
25
Here comes the republican economy. Remember 9 years ago when Bush left the stock market at 8000? Get ready for the next financial collapse.
14
Ah
the full flower of the Trump Economic Goldman Sachs Economic Miracle!!!
Hey
How's yer 401K doing today
This completely vindicates Chancellor Trump in the collusion/conspiring/cooperation with Rusherr and proves no obstruction.
No obstruction!!
5
I have a cartoon in mind.... it involves a spade.... Republicans throw a tantrum and get the spade and immediately start digging a hole. When the country realizes we are in a ditch they hand it over to Dems who try to dig us out of the ditch. Republicans then complain that the spade is not being used correctly and throw another tantrum. They get the spade and now start digging twice as fast... I am not sure we will ever surface!
7
So much glee here from a correction that most could see was coming. Blaming it on the tax cut is just silly - from people that believed Venezuela was going to be the place for the next American Dream. Looking at you Sanders...
4
You're looking at Sanders? Get real. Focus on the chaos that has taken hold and those who made their money choose to not speculate further. Wake up.
18
So Trump get's no credit when the market is going up and all the blame when it goes down. Typical of Democrats hypocrisy and biased media reporting.
4
can't win for trying I suppose.
Sir, the government's fiscal year ended in October, now it IS Donald's economy! He owns it!
4
I think the point is, if you take credit for the rise you also need to take credit for the fall
14
I have had a little account with T Rowe Price for years. $3500, a fortune to me, now. The market just dumped - and I'm in trouble,
I had scrimped and saved and sacrificed to amass almost $150,000 in an account - so very hard earned - before the recession. I wish that you knew how hard that was. It disappeared. I lost it, not because I hadn't earned it, or had stolen it from others, or invested it in wild speculation - but because rich people took advantage of us and robbed us of our money and not one - ever - went to jail.
So here I am now. 65 years old, arthritic, after a lifetime of work as one of the newest female professionals to break into the male world - and I have almost nothing - due to their incompetence.
I have a check for a little less than $1200 a month. No savings - see above. I made the mistake - in hindsight - of taking the bulk of my take home pay to pay off my mortgage - what I was supposed to do right? Tobe in the position that I now own my home.
But that asset keeps me from being eligible for any financial assistance - even though it does not pay bills or put food - excruciatingly expensive food - on the table.
What to do? Sell my house? And then live where at what cost? And how long will the proceeds support me? Then what?
I am one of the people the GOP does not want to help - but I worked hard all my life - and I deserve it.
They are robbing us of the American Dream.
1350
Nancy...
How did your 150,000 dollars disappear?
I, too, scrimped and saved to amass around 200,000 dollars in a stock account before the recession. Well, it was worth 200,000 dollars in 2007... by the end of 2008 it was worth less than 100,000 dollars. But I did not lose anything. I left it alone, it came roaring back, and recently topped out at around 360,000 dollars.
What horrible thing did you do when your 150,000 dollars went to 75,000 dollars? Surely you stayed the course that historically, regardless of ups, and downs, delivers the highest percentage returns?
Had you done so, like me, your 150,000 dollars would be pushing toward 300,000 now.
32
Since you have 100% equity in your home, you might consider a reverse mortgage if things get too dire for you. I am not a financial professional. This is something I've explored for my own situation if I should need it.
6
Nancy Parker, So sorry to hear of this, (and your arthritis). It does not pay to be a honest and hardworking citizen anymore. There are too many white collar crooks wanting to pilfer and rob you, all the way to your grave and beyond.
8
It's curious that once it appears that the average person might get a raise, the oligarchy panics. They'd rather have a lower stock market than see anyone else benefitting. They were enjoying near zero interest rates for a number of years. I'm still waiting for a reduction of my mortgage rate.
554
Why did you not refinance that mortgage over the past 2 years? That ought have been a no-brainer. Or did the oligarchy force you to sit on your hands and miss that bus over and over?
3
Great comment!
Our 1% ers have gone beyond mere greed, with their insatiable desire for wealth for themselves.
Now they are guilty of avarice, or extraordinary greed that is often accompanied by the desire to keep others from obtaining wealth.
1
"While investors have been excited about the prospects of the tax cuts, they are also fretting that the government may be spending too much to pay for them."
You think? Thanks Republicans, congrats on that unnecessary tax bill you rammed through in the dark, with no debate, and which many of you didn't even know what was in it. $1 trillion in lost value in the market today, almost as much Friday, I guess those tax cuts will pay for themselves, or oops, push us into recession or worse. Just don't you dare come for my social security or medicare, we will be in the streets.
886
YES we will be in the streets!
I an still waiting for the Tea Party's reaction to Deficits. The marched on Washington under Obama and made Town Hall a screech fest. All the time crying about Obamacare and its deficits. Where are you folks. I would love for one of the Tea Party big wigs to explain there silence. Are Republican Deficits less of a Problem than Democratic Deficits.
4
Does anyone think Trump will brag about the stock market now?
Everything Trump touches turns to dust. Some how he will find a way to bankrupt the stock market. Beware.
11
Yes and of course blame President Obama, the democrats, the immigrants, the climate control people. You know everyone and anyone but himself.
11
When the stock market goes up it must be due to Trump's whatever - his hand size, his mouthing off, his know-nothingness, and his lack of policy - foreign, domestic, or economic, his tax cut bill, etc.
When the stock market goes down, as it did during the past couple of days, it is not his fault and it has nothing to do with his replacing Yellen with Powell but, you guess it, it must be the fault of President Obama!
2
The Trump effect...catching up with it all.
"If you claim the rise, you own the fall." [Jay Carney]
And, boy oh boy, did Trump ever claim the rise...All of the rise.
1
It's time to call a spade a spade. The economy is NOT all that well despite the hype to the contrary. It has been surviving on over-leveraging since 2008 - firing all fours on rising levels of debt, and yet we see troubling signs of consumption pull-back in some key sectors. Consumers are topped-out. Income distribution is too skewed to rely on increased consumption as an engine of growth. High leverage increases the sensitivity of consumption to higher interest rates, creating volatility. Add to which the tax cuts that will increase public debt by another trillion in one year - that's 5% of US GDP which has to be financed, hence rising interest rates on government debt - money moves out of equities into debt and bingo - the equity markets plunge. On top of which, as Robert Schiller put it this morning, the US market is highly over-valued. The market movers are large institutional fund managers. They like stable, predictable governance. If they see reason to believe the government is dysfunctional threatening economic stability, they will vote with their feet. I predict this will go down in commercial history as the Trump Business Cycle. We should all hold on to our guts. It's only the beginning.
2
No one has factored in the numerous algorithms that have triggered profit taking by the “chosen few” that are the real beneficiaries of the markets and providers of dark (pack) funders that will continue to shape the country’s democracy and perhaps continue to widen the gap economic between groups.
Power elite just gathered in Davos with opportunity to securely confer and perhaps form a consensus on some common plan, action, or view. Those were not theoretical philosophers. They were practical, realistic, responsible prime movers. Post hoc, ergo propter hoc. Maybe. If so, there may be some inteligent design to try to discern.I prefer that speculation to global mass hysteria.
Danger signal #1: On Friday, a memo was released by the House of Representatives that gave cover to the leader of its party, Donald J. Trump. Trump—despite warnings from his own DOJ and FBI—allowed it to be released. Everyone knows the purpose of the memo was to obfuscate if not obstruct. This seems like dangerous new territory for the U.S. and the world.
Danger signal #2: That day, the DOW dropped 666 points. In Christian lore, 666 is the sign of the beast, so what must Trump’s ardent evangelical base be thinking? If they're looking for the identity of that beast, you can bet they won't be looking toward DJT.
Danger signal #3: The DOW dropped 1,175 yesterday alone. That means it’s down 1,841 over the two days, Friday & Monday.
Think about how unsettling it is to a global stock market when it becomes evident that the leader of the free world—and those who are supposed to be supplying checks and balances to keep his power in check—have lost all rationality in their desperation to hold onto power.
This poses a very real danger to the whole world, not just the USA, because it indicates imminent chaos. Markets do not like chaos.
The business columns want to blame the rise in interest markets for the drop in the market, but we rode through the last increase with barely a blip. Also getting some of the blame is the healthy economy, which means fears of inflation. I don’t think either of these would prompt a roughly 5 percent drop in the overall stock market.
2
As I see it, two main reasons for the slide, 1. the problems with getting the government financials [debt increase] worked out by Thursday. 2. a new Fed chairman that is not an economist, the market is concerned that he will be dancing to the tunes played by Trump, starting a free for all by the fed.
Trump will blame stock market downhill slide on his three favorite culprits. Yup you guessed it: HOD.
1
Anybody ever wondered what couldn't one do to bring down President Trump, including wrecking the stock market and our economy?
The price of slapping Trump's face? 3 Trillion dollars in two two days!
Sorry, but the article’s chart is poorly done and misleading. It implies that the market’s losses of the last week have more than eliminated the gains of the last year which not so coincidentally was Trump’s first year in office.
An accidental graphic portrayal? I don’t think so. You don’t have to be a Trump fan to recognize this as biased reporting. Fair and unbiased reporting of the facts would be welcome.
The NY Times should do better for its readership.
2
Er, not to me they don’t. Unless you see totally different graphs they show a wipe out of 2018 gains (a few weeks) not the gains of either the last 12 months nor 2017. But then why spoil a fake news claim with facts?
2
There are a lot of wildly speculative explanations for the stock drop. The reporter on this article is new but knowledgeable. He tells us that the transition to a high interest, steady inflation economy is creating market uncertainty and driving stock prices down. That’s the best explanation out there. I’m going with it.
I'd feel a lot more confident if Janet Yellen still had a hand in running the Federal Reserve
4
This sudden market sell off ( and the up and down swings which will continue dramatically over the next few months) is just the PROLOGUE to the forthcoming constitutional crisis that will envelop our country. This is all an uneasy reaction to President Trump's obviously unstable mental condition, his erratic inept leadership, and his reaction to the fact that Mr. Mueller is gaining ground on him and his politically corrupt administration, helmed by a Republican congress of fawning sycophants and, like him, outright liars.
Who was it in Hollywood who, years ago, said," You ain't seen nothin' yet !"
3
The charts are very misleading because the scales are different. The not so subtle implication is that the losses of the last week erased the gains of the last year (which was Trump’s first year in office).
What happened to the importance of unbiased reporting? I’m not a Trump supporter but would like to see a more balanced and factual view of current events.
The NY Times should do better.
3
We need our great president to give us comfort with an explanation of what is going on. Where is the tweet about this?
I read this morning that Sean Hannity is blaming Obama for the drop in the stock market claiming Obama had a weak economy. This is the modern day version of Rumpelstiltskin.
“Because the Obama economy was so weak all of these years, we had just artificially cheap money,” Hannity said, referring to a Fox News analysis he had seen on the cable network. "
https://www.yahoo.com/news/yup-sean-hannity-found-way-043952694.html
Nevertheless when Obama took office the Dow average was 7,949.09 in 2009. When he left office in 2017 the Dow average was 19,732.40. So to blame Obama for a drop in the Dow 12 months after he left office is disingenuous and caters to a low information audience.
https://www.investopedia.com/ask/answers/101314/where-was-dow-jones-when...
3
Trump will need a scapegoat. How long until he fires Steve Mnuchin?
1
Trump is bankrupting the US.
3
And now Liberals-Democrats-The Media will cheer for the market to go down even if it costs them money.
Why?
Trump Hate.
A sad day.
2
Futures turn positive. 6:10 am ET
Nothing surprising in this.
Whilst Trump has been boasting of his impact on the stocks, most of us have long know the economic reality is that there is about a one year delay in what (if any tbh) impact a President has on the market.
And so here we are, one year into the presidency and chaos on the markets.
Trump was a terrible businessman and now it seems a terrible politician.
10
Trumpaholics won't care about the stock market slide. For the most part they're uneducated and don't own stocks.
As for the fat cats who thought they'd be feeding at the trough after the $1.5 trillion tax cut whose benefits went mostly to them, they DO own stocks. Lots of stocks. So now the benefit of their tax cut is winging its way into oblivion. Couldn't happen to a nicer bunch.
1
Isn't that something? Under the GOP's Star President, Ronnie Ray Gun, the market dropped like a lead ballon, as it did under the other Republican presidents after him. Trump's first year actually looked good, but let's be honest, he hadn't done anything until they passed their grifter tax bill last month. And already, the castle made of sand is falling. I'd laugh if my pensionless job didn't require me to tie myself to the market.
2
Ouch, people! Speaking as a working mathematician, there's no excuse for showing such a mismatched scale on a comparison graph for public consumption. That's what climate change deniers do. Grr.
2
If markets are so sensitive and mysterious, could the chaos of the Trump universe and his inevitable downfall be a causal factor?
1
Psychology 101. The GOP is in power, had its tax cut, and the market no longer needs you.
Its the same game on a much larger scale they used to play with the price of gas.....dip around election time to stay away from the ire of the voters, then after GOP is elected, bump that price goes......up up up.
Time tax cuts to hit around the Democrats, rinse repeat...
There NEVER was a real recovery under Bush Jr., Obama and Trump so far, the stock market just reflects a MASSIVE bubble of speculation fueled by Wall Street gambling and trillions in Federal Reserve "QE" funding to try to paper over the hopelessly bankrupt casino of a financial system!
I have been in the market for 40 plus years - rarely trading but always accumulating - and riding up and down.
It has been said by many down below and in other stories, what goes up does come down - not withstanding tweets from a certain fellow.
And remember, he has been a real estate guy with very little faith in stock investments if you believe those few leaked tax return pages.
Nevertheless, you can't blame him for taking credit, for surely - he would have been hanged (so to speak) if markets had gone south.
In dot com craze, some one had designed a hype index.
Basically, it counted number of times a certain stock (Amazon was a big dot com darling) was promoted by how many analysts and rise in its price. When the hype index far exceeded a Dow Jones industrial - you knew there was really no underlying value.
Remember that certain history major analyst with no finance background - posted Amazon price of $500 when it was trading may be $100. And when it did hit $500 - they were ready to nominate him for a Nobel.
But it was all nonsense.
This time, it is less so - but still similar hype.
We need to have a tweet index of counting number of self congratulatory tweets and rise of Dow Jones industrial average.
When the tweet index far exceeds Dow - you know we are headed for a fall.
Please have the market crash. Please have another Great Depression 2. Only when people are desperate enough will we finally get the unity/desire and force of the citizens rise up and put a stop to the wealthy pillaging the country. Every citizen in favor of a majoring restructuring of the government. No more Electoral Collage. No more Citizens United. Term Limits for all members of Congress and the Supreme Court. No private campaign contributions, only public funded. No more IRS, substituted by a national sales tax. No more endless wars. But all this will only happen when the people are hurting so much, they finally rise up. So please bring it on
When the recession kicked in during the Fall of 2008 - during the McCain/Obama campaign for president - there came a period of days when the contagion of failing financial institutions threatened to collapse the world economy into a panic of no confidence in established financial systems.
It was almost catastrophic.
Conservative policy makers were telling President Bush and members of Congress that in days there might not be an economy. No money to lend, no liquidity, a seizing up of the flow of funds and financial instruments that work silently in the background so that you can go to the grocery store and see products that a trucking company delivered that day.
To restore confidence to these panicked markets and financial institutions, the government had to pitch in almost a trillion dollars in relief and guarantees. The US government (your taxes and mine) had to take a heavy hand and pay a heavy price to keep the economy from a domino crash.
I recall Republicans, some even crying, unwilling to back a government bailout, even though it eventually righted the ship and saved us all. The market crashing 777 points convinced them. Sometimes you do what it takes.
Imagine this crisis today.
An interloper president who I wouldn't trust to walk my dog and Radical Republicans who would probably let the system melt down while they railed against a "deep state" or some other nonsense.
No food on the shelves.
Civil unrest. No job.
Losing your home.
Republican chaos.
2
Politics have become so tribalistic that you have huge swaths of Americans feeling schadenfreude when their own market crashes.
These same people who commented to swear up and down that the rise had nothing to do with Trump, now, with zero sense of irony, loudly proclaim how this is on him, and mock the fact that he will take credit for the rise and none for the fall.
What a country
1
Trump took credit for the recent market gains.........will he also take credit for these losses?
Don't worry folks the central bank who used to have just one mandate now has three.
1, Price stability,
2, Full employment,
3, Stock prices.
They will continue to shill the prices high until even a fool knows they price level is a bubble.
Oh, wait...we are there.
You can't borrow your way to prosperity. The debt clock alarm is ringing loudly.
1
This has nothing to do with the earnings report, inflation, the interest. Everybody is selling because everyone else is selling — it’s obvious there was an irrational exuberance and no one wants to be the last man standing.
It happened 2 days after Greenspan once again reminded us of our irrational exuberance.
When I read his comment, I got out of equities that same day.
If he’s still around the next time everything seems too good to be true, if you hear a sobering comment from Greenspan, SELL!
Markets do what they want presidents come and go markets care not about presidents .
Sobriety finally returns after a year of
total and complete "irrational exuberance".
1
Welcome to the GOP Prosperity.
Hoovervilles by Trump will be going up soon.
Thank you Paul Ryan, Mitch McConnell and Donald J Trump.
There is an accountability coming in November and it will all be readily apparent by then.
3
Trump will blame something or someone else for this, while three big points are made in this article: (1) he replaced the Fed Chairman, injecting huge uncertainty into the markets while Janet Yellen is lauded for being the real reason the economy has slowly and steadily improved during our political crises, (2) he and the GOP can't get a budget or agree on the debt ceiling, both cited as significant factors in past stock plunges, (3) the tax cuts are likely going to lead to inflation and increasd investments by corporations, meaning they will stop buying back stocks. I could not be more exhausted from the gang that couldn't shoot straight and their short-term, narrow-minded policies, fueled by their own greed and egos. I can only hope that voters figure this out and boot these losers out of office.
3
If the stock markets don't like uncertainty, then with an impulsive, uninformed, unadvised President promising to make some kind of big changes, how has the market been rising till recently??? With "no drama Obama" it rose more steadily during the first year. But it was recovering from the Bush banker debacle thanks to bipartisan and Fed action. How can Congress and the Fed respond now, with many indicators positive but with huge infrastructure and income equity issues unresolved and Republicans actively destroying the limited regulations on banker/corporate predation?
1
Greed drives inflation a higher minimum wages or wages does not. That is a fact in history.
The stock market is about 6 - 12 months ahead of the real economy. So the secretaries will an extra $1.50/wk and Hostess workers get a one-time bonus plus a year worth of ding dongs. Then what?
2
Our economy collapsed in2007.
Obama is elected and turns the ship around, creating the most consecutive months of job growths, and the market rebounded to all time highs.
So what does the GOP do? It revereses every Obama era law that benefitted our country.
Why should we expect a new result from GOP policy other than failure?
All 38 states run and controlled by the GOP are welfare states, every one of them. Can someone identify any GOP economic success anwhere at any time?
Their policies failed with the Great Depression, the Great Recession, and currently in three quarters of our states.
There is no great GOP economic plan. Their tax cuts were to benefit their donors and ensure they are monied through the next election cycle.
Their is not a single GOP long term economic success on record.
13
Computer algorithms, tax cuts and accompanying deficits are certainly part of the problem causing this massive drop in the stock market, but also, anyone notice the rise in the cost of oil lately? That's what happened the last down turn, as I recall. This is all Trump and his gang's doing. The economy might be ok for the 001% but ordinary folks out in the netherlands aren't doing so hot. Jobs are paltry and expenses keep going up. Life is a struggle for most people. I'm an artist, and galleries report to me, with the exception of those in pockets of extreme wealth, that sales are not so hot for the past year...just as poor as they were in 2008. I remember that year! And in 2009, 5000 galleries closed across this nation. Artists are the canaries in the mind shaft.
5
I hope Mr. Trump's supporters are now consistent with themselves: When the stock market was high, they gave all the credit to Mr. Trump, so now they should blame Mr. Trump for the stock market tanking. Let's see if they are consistent with themselves.
5
Has it occurred to no one else that the stock market crash followed by only a few days the crash in Bitcoin value?
Could it be that some of the exuberant trading in stocks was based, at least in part, on the supposedly rising crypto-currencies?
2
Correlation, not causation.
The "Corporate and Wealthy Tax Gift Act of 2017" is having its effect. It was a temporary means of overly inflating the markets so the wealthy could make a windfall in a sell off. And as they make their fortunes, the portfolios of the middle class, which the act was "supposed" to help most, will vanish.
The crash and burn effect of this ill conceived GOP plan has begun and will be with us for years and will take longer to clean up the mess.
11
It's certainly interesting to read the comments, because I am not the least savvy on the stock market. I have some venerable stocks that are holding pretty steady, like Boeing, but as I am not employed right now, that is my only money.
I guess if it all crashes, I'll have to throw myself off a building, like in the Great Depression. (That won't work too well, as I live on the first floor of my apartment complex.)
5
It will be interesting how well Trump manages a big disconnect from being a booster for Wall Street in order to preserve supporters who believe in every detail of his ideology during this volatile swing.
Very powerful political sentiments surfacing on this sell off that seem to be correlating downward pressure with Trump.
6
I see lots of commenters trying to downplay a nearly 10 percent plunge over two days. They say it’s just a blip, or a healthy correction. But they ignore a slew of alarming facts about the economy which the markets are just starting to sober up to: the inscrutability of the untested new Federal Reserve chairman; a ballooning deficit paired with slacking demand for US bonds; inflation risks from the tax cuts and from prolonged easy money; and the Fed’s looming interest rate increases, which will cut off the past decade of easy money and could cause major withdrawal symptoms around the world.
Then there are the daunting political variables: a possible government shutdown; uncertainty over the debt ceiling; NAFTA negotiations that are going nowhere; and a president who this year could be indicted or, alternately, start a constitutional crisis.
When you take all those factors into consideration, it becomes clear that the 25% stock run-up over the past year was irrational. There was little to justify it, and now the piper must be paid.
18
The common wisdom that the stock markets are not the true indicators of the real state of economy is proving correct when there's slow but sure signs of global economic recovery following a decade of slowdown in the wake of the great recession that began in 2008, while the world stockmarkets from the US to Asia are on a downward spiral. This also proves that whatever tax bonanza the corporates might succeed to extract from the state at the cost of middle and lower classes, they would prefer to invest wealth in high value speculative ventures but not in productive economic side that also help creating new jobs. The boom phase of the stock markets seems to be over and it's perhaps entering the bust situation. May be a sign of yet another financial crisis in making.
5
Anything that happens or fails to happen on Trump's watch is HIS responsibility.
Not Obama's, not Hillary's, not the Democrats. The buck stops here.
Maybe all the chaos and disarray in the White House is finally catching up
with the initial market exuberance caused by Trump's election.
Trump needs to show some real leadership and accomplishment not just no brainer stuff any President could do like appointing Judges and tax cuts.
Expect more "corrections" if Trump fails to start being a real leader.
12
We've all seen this movie before: a republican president enters office, he along with the congress lower taxes on the super wealthy, the stock market at first hits record highs....then job growth slows, then stops, and then the stock market plummets.
Why should we think it would be any different this time around?
19
Still waiting to hear from Trump who has been uncharacteristically silent after trumpeting about his creation of his bull market for the last year, which has lost all gains from the last year starting last Friday and Monday.
15
The richest 10% now own 84% of the stocks. I don't plan on letting them widen the gap. I've got my best poker face on and I'm holding (and looking at potential bargains). Many passengers on the Titanic probably said the same thing, but I'm confident that this is just a correction.
6
Perhaps the markets in the US are recognising that it's POTUS cannot forever go around insulting other nations and expect life to carry on as normal. So, to the global dislike of said person, add reckless tax legislation; relaxation of regulations that will make its produce less attractive; an unknown new Fed chairperson and continual media attention on the pathetic and feckless political elete, one could see a change in mood is approaching
13
Lemmings, one and all. Mindless greed on a rampage. A perfect symbol of where the country has gone; off a cliff.
17
Honestly, the most worrisome thing is the very fact that the NY Times felt this was big, headline news. A 4-5% drop shouldn't be that big of deal. Maybe it makes the front page but it shouldn't be a lead headline.
Is our economic well being really that dependent on the stock market? If it is, that is not a sign of a healthy economy.
6
A 4-5% drop in say, the Uruguayan stock market on top of a similar drop the previous session would not be headline news in the NYT. But in the US stock market? I am sure most readers know the difference between the economy and the stock markets, but still ... Many people have 401k's that are invested in the market. Don't they deserve to know when the market appears to be plunging.
Well...he can't blame Janet Yellen, that's for sure. She was good. Too bad he didn't decide to keep her.
15
Like all financial journalism, the Times tries to make sense of the latest stock rout, using portentous explanatory sentences like: "investors are concerned that tenuous signs of inflation could mean central banks around the world will start to remove their support even faster."
This is, of course, after-the-fact nonsense. These "tenuous signs of inflation" were present two weeks ago -- and then, investors thought the sky was the limit.
No, the only factors that really drive the market -- any market -- when it makes big moves are the same age-old factors: greed and panic.
10
Remember that quaint day when the ABC reporter caused so many people to lose their investment dollar?
1
Greed is one of the seven deadly sins. It gets the better of man all the time. It has got the better of investors for a long time now; and they know it. That's why they're taking fright. They know the stock market is on shaky ground. There's little to back up the exuberance. That's why the party is coming to an end – for now. Take cover! The worst is yet to come.
7
Everyone getting worked up right now: immediately sell your stock investments and buy Bonds. You can’t stomach stock investing, which is fine, but stop panicking because you’ll have a stroke before retiring.
5
Sweet irony. It was Obama's market until now it's Trump's market, when the reality is that business finds a way to route around all sorts of government interference. It's a million owners and multiples of millions of investors generally getting it right, but sometimes getting it wrong. The government didn't make people invest in tulips, people decided that on their own. Remember, the folks who sold tulips at the top made tons of dough. To assign political values to any of this is farcical.
2
Except on Hannity. In his world, it was Trump's market right up until yesterday, when Sean pontificated on his show yesterday how this downtown is all Obama's fault.
As I recall, it was Mr. Trump taking credit for the high stock market in his boasting tweets, contrary to what any other president has ever done! Have you ever heard Mr Obama taking credit for the strong stock market? No! So, now I expect Mr. trump to take the blame for its tanking and humbly apologise! Show consistency!
Aren't you being a little naïve? The government may not force people to do something but they can certainly influence their decisions.
Has any one noticed when US wage growth is finally being discussed by the business media and going into Average Joe's wallet the market crashes?
13
You've heard of irrational exuberance? This is it's cousin irrational fear. Fear that cheap money may be ending. Fear that labor pressures might increase wages, even slightly. Fear that the peons might realize that all those $1000 bonuses not only aren't raises but that they're also no where near $1000 for most employees.
1
Dow futures down 600 now. Economy's got a good foundation, but we're introducing another variable - a ballooning deficit is expected to hit $1T for FY2019. Spending cap ($20.5T) is supposed to get hit sooner than expected (in March) with lower withholding revenue ($10-15B per month) after the tax cuts... Mnuchin wants to remove the cap since we always have to raise it anyway. Government's going to have to borrow money from China to keep things going - this is likely to raise interest rates beyond an increase due to 'normal' inflation/rising wages.
There are no longer any true FISCAL conservatives - I sense Mitch Daniels and Tom Coburn were the last two. It's good the economy is in decent shape. This is the opposite of when Obama started... he spent $1.4T his first year to get us through the meltdown, and Trump's spending $1T to mess things up.
21
QE, artificially low interest rates, underfunded tax reform, and tepid relative company earnings should be a sufficient tip off that this (and more to come) is long over due. It's worth noting that the aforementioned triggers are broadly non-partisan.
4
the "increasing inequality" folks must finally be popping their champagne (or, more likely, bottled water)... but in fact, almost all of the supposed "increasing inequality" was based on the extraordinary, multi-year rise in the markets and not a single penny of the "increasing inequality" was taken from the poor and given to the rich- as the socialists would have everyone believe... investors got richer and others just stayed the same... and now that is (temporarily) reversing... no big deal, happens all the time
4
"Investors got richer and others stayed the same" is the exact description of income inequality. People who have enough money to let their money earn money for them get richer, while people who do physical work to earn money haven't had a pay increase in years. Meanwhile, inflation has made every hard earned dollar worth less.
2
No big deal. Oh how the tiny folks imitate the proverbial headless chicken at the slightest worry.
A real crash would be 22%. This is simply two things: 1) A new Fed Chair took over from Janet Yellen today, and the market doesn't like change of any kind. No worries though -- his policies will continue in much the same footsteps as Yellen's; and 2) concern that our rapid economic growth will push prices upwards. This one is also unfounded and silly. Competition will keep prices and costs down as the economy booms, tax revenue rises, wages rise and it just isn't anything to worry about at all.
What I see is a buyer's market -- bargains you won't see again once the correction stabilizes things. But if you bought low, keep your securities. There's a lot more growth coming and this may be the ONLY chance you'll get to scoop up some bargain.
No worries.
4
Hey Gideon, ever hear of a 'bear trap' ?
3
"A real crash would be 22%."
Patience my friend. Patience.
6
Could be. But the market is still up 35%
The Dow drops 666 points on Friday. You know what that means... It means the antichrist is either Donald Trump or Adam Schiff.
My money is on Schiff since Trump (despite his cloven feet, high titers for all known STD's, penchant for water sports, and Forbes magazine spanking) has an official mulligan from evangelical Christians (retroactive for 71 debaucherous years, and counting - lying is still a sin, right?).
9
Good evening Mr. President. The DOW futures are pointing to another 1000 points loss tomorrow.
Have a good Tuesday.
12
What a great buying opportunity.
4
The market went up because there was easy money being printed at the Fed and in Europe, interest rates were lower than any time in history for 10 years and we had a level-headed president who eschewed drama.
When Trump got elected with Republican majorities in congress, everyone thought others would pick up the pace so everyone picked up the pace -- a business friendly political environment was in the offing.
But a funny thing happened the other day in Trump's SOTU speech: it occurred to everyone at a visceral and non discursive level that that's all there is, there's no more there there, and for a moment, we all stopped for a second, looked around and saw we were somehow out at the precipice. Huh...Uh, hmmm...
Ummm, guys, why isn't there more room out here? It feels crowded and they're still pushing from inland...Why isn't there more space where'd all our room go! People are falling off the edge! Stop pushing!
We have all come to notice that there's no more room to go, and we need to retract and back up. Here comes the Great Withdrawal.
8
I see a television commercial. There is Trump on camera constantly bragging about the stock market as if his coming into office magically lifted it to new heights. Behind him, is the market ticker going down, down, down. Trump keeps bragging. Fade to black.
These lower prices, however, are not of historic proportions even though the media constantly talked about Monday as being the biggest fall in history. That's in dollar terms, but since the market is so high, 1,100+ points is not that much measured against the current level.
The misstatements about the market remind me of when the Republicans constantly say, "It's the biggest tax increase in history." Well, yes it is because the country and the economy have grown. In both cases, it is the percentage, not the dollar figure, that matters.
However things go, Trump will have to face the music since he insisted over and over that the music was playing for him and no one else. He deserves every bit of discredit that comes his way.
14
Was this market taken as far as they thought they could before Trump really had to under oath start answering to higher powers? Seems suspicious just now? I wonder how many bailed before today? Or don't we go after insiders any more?
5
As they say in the Trump Bar in Wash. D. C. 'IT'S THE MEMO STUPID'. He will fire the Asst. Attorney Rosenstein and appoint someone who will fire Mueller. And 3000 down points will feel like a you are bathing in a sauna- when you are 5000 more of spiked ice.
4
Taking credit only for the upside is never a winning or sustainable position. Trump brought this criticism on himself.
9
Why doesn't the worlds most fantastic president do something about it. He is the only one who could make stocks and employment rise. We are waiting for you. Do your magic.
6
this is when someone is supposed to say, "Let them eat cake".
5
Is it possible that the market is beginning to realize that the country in being effectively destroyed by an ignoramus who is actually more dangerous than a monkey with a gun? Bad for business.
15
What you saw over the last year was called an "exit pump".
Dow market makers didn't just wake up to this, they saw it coming when they started the pump in November of 2016.
The president is shown boasting about the stock market surge-- mentioning it 25x in the last month according to the Times. From the picture, it looks Iike that's also how many chins Trump has.
He is obviously growing obese, a health problem often linked to stress. If things are going great, why does Trump appear to be eating himself to death? Seriously, he does not look like he will last out the 4 years. Doesn't he at least have fitness/medical coaches to keep him in some semblance of health? Can't the WH chef and nutritionists keep his diet in reasonable bounds?
I ask these nutrition questions because when you have literally endless resources, it's not that hard to have exquisitely satisfying meals that are also healthy, no matter what sort of cravings one's subject to. And even if he's taking in big calories, he should be able to swim or otherwise exercise them off without extreme discomfort.
His appearance suggests someone really losing control, verging into self-destructiveness. I'd kind of like to see a medical report, particularly his cardiovascular condition.
5
And I would rather just buy him as many burgers and shakes he can eat!
I’m sure he believes that it doesn’t impact him.
4
They are selling to preserve gains for their new tax cut.
3
Ignore the drop. Invest long-term in low fee equity indexes. Never try to time the markets, since you won’t win doing that in the long-term. Relative to the SP500, almost all (active) mutual funds underperm in the long-run.
4
Trump, who is credibly accused of colluding with a hostile foreign power, is a patriot, and Democrats are traitors because they didn't clap? Oh, and that last bit caused the stock market to nose-dive. Trump's doctor should have his license revoked for certifying this man as mentally sound.
19
Trump said he made the market jump!..He dismissed Obamas great efforts to pull us out of Bush's failure..Now Trump brought us inflation...more debt and quite frankly a huge mess...Remember he had to declare bankruptcy 4 times...and now is over his head..
12
Ha ha ha ha....interest rates! Oh yeah right! How about the real economy is not doing well. How about people who stopped looking for work? How about the underemployed? How about a tax scam bill that will just put more money in the 1% pockets? How about people in blue states realizing they are going to get pummeled in taxes? How about those same people cutting spending? How about the fact that they won’t find the growth they need when all of the money is in the 1% greedy hands? How about those poor blue collar workers that are getting $1,000 bonuses will ultimately amount to nothing? How about the fact we have a criminal as a president? How about the fact that congress is aiding and abetting a criminal? How about the fact that Russia is destroying our country without a a single bullet? Oh yeah, it’s the interest rates.
21
Ha ha ha ha ha ha ha...
I know now what Trump will say--- it is all because of Obama for stock market going down.
So, when the stock market goes up, he will again give himself the credit.
Since the market is unpredictable and often turbulent, Trump will be very busy in responding to the market while golfing, bullying, badmouthing, lying, womanizing and using presidency to enrich himself.
17
Where's trump, the pitchman? Will he come out like Bush jr and explain why the plane is crashing?
6
In Las Vegas - they call it "Gambling" --
On Wall Street - they call it "Investing" -
Choose your poison...
7
When Wall Street books Cher for 6 months, I will consider investing:)
2
Thanks, Trump! You took all the credit for the market gains. Now it is your turn to take the blame. You owe me over 80 grand!
6
Down drops 666 points!
What is the Universe trying to tell us?
8
The Trump Slump! Go ahead, Mr. So-Called President... Take credit for this.
7
The heck with economics.
Why doesn't every POTUS simply pour fuel on fires (cut taxes while maintaining spending)? Because they understand sound economic principles.
Trump doesn't care. He understands the principles of the Roman Empire: please the mob with entertainment and give away wealth to the rich.
10
The Dow slide might be the result of the rhetoric of Donald Trump. Americans hear Trump claim that the Nunes memo totally clears him and his campaign of any wrong doing, when this is clearly not accurate. Americans Hear Trump claim Democrats are treasonous.
Americans wonder if Trump is unhinged and/or is the frequent liar he seems to be. Very disturbing to the confidence of Americans. The DOW is a measure of citizen confidence.
5
THIS will be the president's undoing.
7
The Trump Bump is over and the Trump Slump is upon us.
As the saying goes, Donald: "You grown it, you own it".
And it's about time reality bites us. You can't have a maniac running the country and keep betting that everything's A-OK.
Now maybe the corporate tycoons will have second thoughts about how great it is to be living in Trump's World, despite their Tax Windfall.
Because, maybe rational, equitable policies to promote the general welfare weren't such a bad idea after all.
4
Bloomberg has a live blog on what’s happening right now in Asia. As well as the S&P futures, which don’t look good at all:
https://www.bloomberg.com/news/live-blog/2018-02-05/asia-markets-open-af...
3
Hmmm....I'm sure the market drop is somehow connected to Obama or Hillary or both.
This drop is true transparency. There's really no way to pin this on Obama so Trump is left without a paddle.....time to look at the man in the mirror.
2
We have to decide whether the US exists to make rich people richer, or to make the country work for all Americans.
If it's just for the rich, we need to make some serious cages to the Constitution's Preamble starting with "We the People".
That needs to be changed to "We the rich people".
4
Reality check what goes up must come down tuesday could be 10000 drop in bucket.
1
You own it, you broke it Donny.
4
Let us hope the market stabilizes. But what does the twitter-in-chief have to say about the market now? Will he readily accept blame just as readily he accepted credit for last year.
3
Anyone bet Trump will not own this drop the way he has owned the rise?
4
I hope this market keeps falling until people can no longer say
"I don't like what Trump says or how he acts but my stocks are doing well"
5
S&P futures down 3 1/2% as of 10:15 pm ET.
2
With luck, the market will come back but Trump taking credit for it will not. I hope all his supporters are still compulsively checking their 401k's and panicking.
As for me, I managed to buy a security I've been trying to pick up and in general will stay the course.
2
Although I wouldn't be surprised to see the market resume it's climb or stay high I also think there's a good chance it could keep declining.
One doesn't need to be an economist to realize that the Republican's deficit increasing tax cut for rich folks would requires the government to borrow more and that interest rates would likely need to rise for those bonds to sell.
Average folks will have to struggle to pay off those bonds in the future.
That increased borrowing combines with the fact that there is less demand for new bonds from the Federal Reserve which needs to fix its balance sheet before the next major recession hits.
Add in Mnuchin talking about letting value of the dollar fall and the possibility that China and countries may be more wary of financing our debt and hold on for the ride!
5
I understand stocks rise and fall. But the fall has seemed incredibly swift.
5
i think short selling is now amplifying drops. shorts jump on drops the way momentum traders jump on upswings. some traders just short the volatility index, which creates more downward volatility.
2
Stock market goes up, stock market goes down. It goes up more than it goes down. That's how it works. I retired and closed my 401K last month and transferred the money to a Stock IRA account. I should be okay, I was expecting this correction for over a year. I was fortunate in the timing. I began moving to fairly or under- valued stocks that paid dividends. I have real estate, guaranteed annuities and certificates of deposit. Always diversify. Stocks will rise and fall based on investor confidence in the market and consumer expectations. The market does not care about politics and the economy but you can bet that companies will start using their cash to buy their own stocks at bargain prices. The panic will be exacerbated by all of the programmed sell-offs. I'm looking for some bargains in the next few months.
6
Stocks trade In an auction market, are priced by bids to buy meeting offers to sell. When more sellers sell at offered prices than buyers bidding to buy, stock prices fall. When bids for stock offered rise, and there are more buyers than sellers at rising offered prices, the price assigned to that stock rises. That's it. All else about why prices rise or fall is speculation.
When stocks plunge as they did today and 2 days last week, it likely means that traders bidding for stocks, i.e. those who would buy stock at offered prices, simply withdrew their bids. While this largely explains why prices fall or rise, the reason traders--institutions and individuals--might withdraw their bids is altogether another issue.
There was a major piece of financial news last week that markets reacted to but has been largely ignored in the reporting. The office at Treasury that estimates the size of new cash needs to fund government announced that uncertainty over revenues' collections caused by recent dramatic lowering in the marginal tax rates likely requires a minimum of $1 Trillions of NEW MONEY Treasury will have to borrow NOW. This announcement had an instant impact in the debt markets and rates rose. This government borrowing, necessitated by a hasty and ill-thought out tax bill that immediately reduces government revenues by at least a Trillion Dollars, inevitably squeezes private investment necessitating higher interest rates and creating a new government obligations.
13
The world is rightly concerned that Trump seems bent on starting a nuclear war.
7
"The Little People"---Retired workers, veterans, and all people living on fixed incomes from "the government"--have steadily lost ground for decades due to decisions of Congress and the Federal Reserve Board, most of whose members represent major banks and are appointed by the President and confirmed by Congress. Social Security retirees have had virtually NO cost of living increase for many years. This year it was 2%, about enough to buy a daily 53-cent cup of senior coffee at McDonalds.
Meanwhile, Congress has given themselves and federal employees generous annual cost of living raises.
The "cheap money," almost zero-interest policy of the Federal Reserve Board has gradually decreased the value of our US dollar, which is no longer backed by gold or silver. Each dollar has less purchasing power than years ago. This "cheap money" policy of The Fed has contributed to large increases in housing prices, rents, medical costs, and college tuition.The record-breaking stock market indices reflect the cheap dollar policy, not an increase in actual intrinsic value of the corporations themselves. Banking and credit card fees and penalties have skyrocketed. One of my banks recently charged me $35 for a 33-cent overdraft, and $10 each time (over 6 per month) I transfer small amounts from my own savings account to my own checking account at the ATM. This "Bankers' Tax on the Poor" hurts low-income people.
When we talk about "The Economy," whose "Economy" are we talking about?
7
How much of this about the unholy knitting together of sectors with ETFs and index funds? My guess is that babies are routinely tossed out with the bathwater. People buy and sell baskets of stocks the way they used to sell individual stocks. Thus many stocks are contaminated by one stock's failure. This could cause sector wide and market wide swings, when only a few stocks are targeted. It's like a fire sale in the market that's created by index funding.
3
Traders make their money by trading. They like to buy low and sell high. Who doesn't?
That said it was traders who are painting the otherwise bright economic outlook to make it appear as if there is major negativity out there so that they can sell their inflated stocks for a hefty profit and buy them back again once they've influenced the market to decline.
6
we won't lose money if we don't sell. we hope.
but, i agree that one of the most serious causes of the s&p fall is the dramatic loss of revenue--and increase in the debt--caused by the tax cut. we will be in serious trouble soon, because we won't be able to pay for expected social services and military needs.
meanwhile, exxon will realize a four billion dollar windfall from the tax bill. so, republican policy is to give four billion dollars to exxon (and similar amounts to other large corps) and slash necessary spending--or increase debt to a very dangerous level.
is this today's "republican"/"conservative" policy? who benefits?
15
How much different would the S&P chart comparing the market performance under presidents look if the start date was the day after the election, rather than the start of the term? Markets react immediately after elections based on candidate policies. I think it may be enough to change the rankings you show.
1
The solution:
1. Repeal the tax cut
2. Repeal the quotas and tariffs on solar panels and washers
3. No more meddling with the economy or Obamacare for a while (at least until Novemeber).
This has to be done quickly, before the economy goes into a recession, or worse yet, a depression.
13
I think it's time to start writing "the stock market dropped for unexplained reasons." Central banks can mess up sometimes, but interest rates are kind of like band-aids for the economy or little surgeries. They can go wrong, but they're always intended to do good, and thus unlikely to cause lasting damage.
We're always trying to explain market prices with some kind of clear narrative, and I know traders will always come up with one that they all eventually believe by the end of the day. This doesn't mean that the narrative is the truth.
3
The Dow plummets. Putting the three reasons Trump will react to it in one sentence: "Fake Democratic news about the Russian investigation."
5
oops! that's what happens when you deregulate.
14
Oops! Sorry to gloat, but I tried to warn you. Told everyone to get out of stocks three weeks ago. Amazed all of you didn't see it coming...
5
Doesn't that make you the problem?
1
Trump- is desperately trying to avoid the stock market plunge with his usual silly deflections: name calling, accusing Demos for not clapping during his SOTU speech. So pitiful. But so disappointee Trump is not taking credit for the plunge. He will eventually blame it on Demos, Hillary and Obama and maybe even his cat.
10
funny how your political affiliation seems to dictate your rationale....
Female on female attack... huh Laurie? I see you didn't jump on any of the others comments.
Why not address the ELEPHANT in the room? We have a President nearly indicted. At the very least he will have to resign to stay out of jail......and to blame the Dems or Hillary is just pure ignorance. Republicans might fool themselves (for a while....they're leaving Congress in groves) but they will NOT fool the stock market. BAM!!!
15
Trump accepts responsibility for market crash ... now THAT'S how you do "fake news".
7
Hello,
Does anybody know how far will this one go???
back to 18000???
I am one of those 'Losers' with a paycheck and a 401B plan.
Definitely, not a 1-percenter :(:(:(
9
From the 'Trump' bump to the Trump slump
7
Don't worry. Trump will blame the drop on the Democrats and his base will believe him.
10
Trump will get back to us on falling stock markets, train crashes, AWOL agri workers in California soon. Once he finds out what to say from Putin, he'll explain everything to everyone's satisfaction. Like he always does.
7
Money isn’t everything. To Trump, it’s the only thing.
So what gives, if the economy tanks? What does Trump and the GOP have to hang their hearts on?
Well, I’ll tel you...
Scandal, mayhem and moral bankruptcy.
Making America great again...
6
This isn't fair. Businesses should pay a greater tax, and greater than tax, for it is business who can stir up the honey pot of the economy, the rich, stocks, other countries, the middle class, the poor, should pay taxes to AMERICA. Tax ciuts no Bueno
1
Remember about a week ago President Trump "crowing" about how the stock market was up to "record levels" all due to him? Now those awaiting for him to step up and claim credit for this precipitous-record setting drop are greeted with the sounds of crickets.
12
It's all about interest rates in expanding economies. This is a good. Sorry Trumpophobes, you lose again.
1
@bob: Oh. I guess everyone is racing to pull their money out of stocks and hustle it on over to a nice savings bank return of two, rather than one, per cent. Or maybe they're going to buy T-bonds, because we're going to have to borrow another trillion dollars a month before anticipated. So: yay, tax cuts! They brought us average Joes and Janes fabulous interest rates! Gee, too bad it'll be more expensive to borrow money. But who does that anyway -- except for people with credit cards, mortgages, and student debt? And people who like to short the stock market?
2
Looks like stocks have gone on sale.
3
The Federal Reserve Chairman Powell starts his job today.
Ouch!
May call-in sick tomorrow.
12
Call in sick??? You need to look at what stocks have gone on sale (dropped) so you can BUY MORE!!! That's how you get rich!
1
The graphic at the top of the story would be more honest if it showed the same range of values for the index in both sections of the graphics.
1
Donald appears to much more engaged with his party's candidates than Obama. Donald speaks (and acts) in a pretty consistent manner, for better or worse. I thought the world of Obama, but he lived in an ivory tower, and he was a loner. Donald supports his party and truly reaches out to the middle class. He really seems to like interacting with others (once again, for better or worse). I like that. Wish he wasn't a cad, but what politician isn't? 2018 may not be the cakewalk democrats think. BTW, this is Laura's husband,Mike.
What does this have to do with the article? (And whom has he actually engaged, outside of Mall Creep Roy Moore?)
3
"Stocks Plunge as Sell-Off Enters 2nd Week" Really? Come on. As a title it's intent is not to inform but miinform. Reading it implies we had a sell off most or all last week, which we did not, just Friday. Monday is the second day. A two day loss of some 4.6%? Hardly anything to panic about. Just another thinly disguised attack against the current administration.
Donald Trump: business genius.
Wanna bet tomorrow he tells us with a straight face that he sold all of his stocks on Saturday?
6
It's those Democrats fault why the DJ industrious dropped 1000 points today This man has no shame.
5
Or could it be that random acts of craziness from the White House tend to undermine confidence? Just sayin'.
6
What, and all the bragging and chest thumping about the Trump 'Tax dividend' (which ,BTW, just went up in smoke in just the last two weeks)? Surly, this is some kind of record for a tanking of the stock market, that can be linked to our periodic national romance with that half baked notion legitimate economists call, Trickle Down Theory.
So, despite the constant drone of happy talk coming from the Trumpians about the benefits the vast unwashed can expect from the GOP's latest Tax scheme, it seems the wisdom of the market is telling the rest of us to hold onto our hats (and wallets) and expect a rather bumpy ride. Oh well, we can at least look forward to the spectacle of the GOP, Trump and Fox News attempting to explain to the rest of us just how this stock crash is , of course, Obama's fault!
5
Certainly this drop is all Obama’s fault somehow. Or maybe the deep state is operating on Wall St.
Maybe Devin Nunes can launch an investigation. You know, to protect the American people.
9
Here's why it happened; Investors are sobering up and realize Trump may destroy the greatest money making machine in the history of the Milky Way.
4
No matter how well the markets are doing, it’s always a good idea to have some of your portfolio, 10 to 15%, parked in cash or CDs. Bonds are not an attractive alternative due to their low rates, and Treasuries may be ok but as demand surges yields go down.
On top of it all, we now have a Federal Reserve Bank without many tools. Actually, it’s quite the opposite. As their huge balance sheet (from Quantitative Easing) comes due, the money supply decreases.
But cheer up. We’ve had a great run, and markets will right themselves regardless of the tiny-handed vulgarian in the White House. (Unless of course, he tries to give North Korea a bloody nose, in which case our investments are worthless anyway and soup lines return.)
4
This seems reasonably straight-forward. The stock market went up because of Trump, and it's Obama's fault its going down.
5
I agree with A SANE PERSON, the Democrats always have to clean up after
the Republicans' reckless spending. They are like little rich kids who have
never held a real job or managed a tight budget. Imagine where the U.S. economy will be with three more years of this. As for the stock market,
let it slide, let it slide...
3
investors grow wary? hardly i.e. it is called a correction and computers triggered most of the trades not investors
4
It is going to be an ugly week at least for the stock market. Too much uncertainty with this administration and congress. The debt ceiling and budget continue to loom over an otherwise robust economy.
4
Yes, the stock market is plunging because investors are wary about interest rates. I'm sure it is mere coincidence that the crash happened right after the President and his cronies in Congress commenced an assault on the FBI and the Department of Justice, telegraphing that they intend to undermine the rule of law in the United States if that is what it takes to stop the independent counsel's investigation. Why would that make investors nervous? It's definitely the interest rates. Yup.
6
In the name of fair presentation, use the same y axis for your graphs, which are stopped on top of one another, suggesting you can compare them one to one. But you can't, so at a quick glance your graphs exaggerate last week's dip.
2
No one should be too concerned. In the long run, you've done quite well.
1
I have followed the market over the years, sometime closely, sometimes casually. The day after Trump was elected, the futures dropped precipitously and that was reported in all the newspapers. By the end of the day, there were huge gains, and the market has been very strong ever since. This article says that we have now lost the gains for the year. What that means is that we have lost the January gains, nothing more. All the rest of the gains since that day in November 2016 remain intact. If you know that the present trend will continue, sell short. If you know it will turn around, stay long. And don't bother telling other Times readers what only you know, because when you consistently are right and everybody else is wrong, you become rich and famous. The odds of that are slim, and yet there is no shortage of people who know just where the market is going.
3
I couldn't help but notice the rapid drop began the day Trump took all the credit for the stock market rise during his State of the Union speech. If this continues into an outright crash, we should call it the Trump Crash.
5
Thank God I had the foresight to sell everything I owned weeks ago and put it all into Bitcoin.
5
Who knew the stock market could be so complicated?
6
Folks, this isn't about Trump or Obama or anything to do with your view of politics. This is over-valuation pure and simple, finally beginning to correct itself, as no more delusions are left to sustain it. Low rates, higher and higher corporate margins, 4% growth, lower corporate taxes...all excuses like a drunk makes to keep on drinking. The drunk finally took a long, hard look in the mirror and got a grip on reality.
3
Maybe having the majority in Congress rally around a piece of propaganda intended to debase federal law enforcement as a way to help the president escape justice was not seen by the market as a good sign for the economy. Maybe it is just a coincidence that the market really started to tank as soon as that happened, but I doubt it.
14
The modern securities marketplace bares little resemblance to the stock market of yore where valuations were based on numbers and sense. Quants and social scientists work alongside the masters of our universe in designing a perfect system that works precisely as designed. The market functioned exactly as designed enriching some while impoverishing others. Wether you've lost or "made" a lot or a little, you've actively participated in the greatest wealth development system devised by man.
You made or lost money, you didn't "earn" it in the traditional sense. As a passive participant your gains or losses are like gambling money. I cannot celebrate or pity your gains or losses. I do, however, envy your courage.
4
The jury's out whether in today's environment bonds are "safer" assets, as the article states -- yes they have been for the past 30 years as interest rates have been declining, but it's a whole different era of rising interest rates now. Additionally, since the market fears rising inflation, the correct thing would be for Trump to forego the infrastructure spending plan he's planning on releasing soon, until the time the recession finally hits, perhaps in a year or two from now.
3
@RSSF: That would anger a rather large portion of his base, which still expects massive infrastructure investment and the manual labor jobs that go with it. Has he got the guts to stand up to his base? How will he try to sell "no infrastructure projects" to his loyal cultists? This will be interesting.
1
While the focus of Trump and Congress has been on the dueling-memo drama, they have neglected a few minor matters. How about trying to pass an annual budget that lasts more than a few weeks. How about steering away from our present course toward a second govt shutdown? How about battling Trump efforts to mount still-greater debt for a wartime buildup of military and nuclear capacity so we can crush not just earth, but 3 or 4 other planets at the same time? And for God's sake, how about electing a president who doesn't take credit for the sun's morning rises, its evening settings and our ability to inhale oxygen from the air?
Our country is not on the right political path and that has sobering consequences on everything else. This may very well be a correction. Certainly, Trump's advisers should have foreseen that cutting taxes, with its attendant surge in debt, had the potential to overheat the economy and inflation. But if we don't correct our political trajectory -- a market in correction will turn into an entire economy in free flight.
16
Trump likes to brag that whatever he has is the biggest. Where is his self-adulation for the biggest single day drop ever in the the Dow?
16
Biggest single day drop? Around 2.3%? That's nothing.
The nature of markets is that they simply do not move in straight lines, this downward movement is to be expected after a long period of climbing and lately a rapid climb. People who sell out in panic are going to lose if they don’t reinvest soon.
9
The fire in the wood stove was catching and building nicely until someone threw in a pailful of gasoline and blew the doors off. Hope the house doesn't catch on fire.
14
Trump bragged a lot about the market last year and last week. His ranting served as a strong reminder not to forget the annual portfolio rebalance. And no I didn't forget.
8
Let's face it folks,this is the TRUMP SLUMP .From all the reading I've indulged over the years markets hate uncertainty and most assuredly the rantings ,raves and bizarre economic and political practices of our Dear Leader, Comrade Trumpski, are leading to doubts about the viability of upward market trends. One should not be surprised to see a large correction over the next few weeks.I am waiting with baited breath and anticipation for him to contrive a way,,as always, to blame both Hillary and Obama for his failures and shortcomings.
12
Mr Trump where is your twitter post bragging about the stock market now?
22
No need to panic. Our esteemed leader has it all under control . We’re in good hands with him. I can’t imagine or more unstable man for these unstable times.
16
What? President Trump doesn't understand basic principals of managing the nation's economy?
I am shocked. Shocked, I say.
19
Not Trump's fault! Trump and his policies, and his "tax reform" are only responsible when the stock market is going UP - get it right, Failing New York Times! Just watch how fast Trump's business genius fixes this little glitch.
11
Trump claims the stock market is tanking because Democrats didn't clap?
Hilarious.
39
The truth is that the stock market has never been as scientific and reasoned as those who work in it tell you it is. Investors, even professional ones, can let emotions get the best of reason and the first few points of a swing always clears the room. That said, the policies of late are like shots of adrenaline—one-time boosts in the form of tax cuts and deregulation that looks like higher earnings. But once the smoke clears, long-term investors see this for what it is, a one-off gift, which is very hard to replicate year-over-year. Once the adrenaline shot wears off, what's next? A correction. When you mess with the rules, the market will react—but possibly not in the way you bet it would.
My "get the popcorn" moment though is going to be watching trump come up with new Democrats to blame.
8
Maybe we need a new ritual in our country, like painting the President blue and making him walk naked down Wall Street if our 401ks are in placed in sufficient peril. Our retirement anxiety could bring us together as a nation at last.
12
Coming soon in a tweet near you from the president: "It's Obama's fault".
15
Looks like everybody here is ignoring Neil Irwin's article in The Upshot a couple of "sections" over.
https://www.nytimes.com/2018/02/05/upshot/context-matters-the-stock-mark...
The comments section could really use more hysteria.
1
The stock market dropped 2.8% on the day of John F. Kennedy's assassination, but recovered two days later, largely because the country had an experienced hand like Johnson to follow him.
The Dow and the S&P dropped by more than 4% today. This time the drop will last much longer. Trump has no intention of going away and the country has no one but Pence to follow him.
28
That's the scary bit. Pence is up to bat. So even if some miracle would manage to depose Trump from his American throne...
It's far too simplistic to blame this crash all on Trump, though the instability he has brought to government is surely a part of the cause. But there was also the Republican (not just Trump) tax cut which freed vast amounts of liquid cash among the very wealthy, leaving the market vulnerable to the slightest inflationary indication such as the latest report of modestly rising wages. And before that there was the failure of the Obama administration to address the causes of the 2008 bank collapse which almost tanked the American and world economies. As a band-aid, the Fed flooded the economy with easy money, and then foolishly destroyed this band-aid by successively raising interest rates. And even before all of this there was repeal of Glass-Steagall by the Clinton administration in the 1990s which turned the big banks into speculators on the grandest scale. Now, as in 2008, the entire neoliberal economic order looks to be teetering on the brink of collapse.
6
During his first year, Trump took full credit for rising stocks and employment, though he'd passed no major legislation nor implemented many policies that would actually affect the economy.
The last couple of months have seen actual action by the Repubs. Trump has caused my health insurance to go up 10% as a direct result of withholding subsidies. I'm told to expect another 10% next year due to elimination of the individual mandate. This is a combined $350/mo bite out of my household budget as a direct result of Republican policies. Then the tax bill, which destroyed the federal budget while doing little to help the middle class. The market is now rendering its verdict.
Based on the above, it's no hypocrisy to say that Trump deserves no credit for the rising economy he inherited, but should be blamed for any declines from this point forward.
32
The stock market raced ahead without looking back to see if the economy is following. Guess what. The economy is not following. The wage growth is essentially flat. The consumer spending is 60-70% of the economy. Consumer borrowing went up without wage increases. The future interests will go up because our government borrowed 1.4 Trillion dollars and gave to the people to have fun. When bills are due, the music starts. For stock market it just started and for people it will start soon as interest rates go up on their credit cards and home loans with variable interest rates. My advice save the money and pay off debt as fast as possible. Keep wallet at home when go for shopping.
8
This comment board is downright bizarre. A rapid decline with no obvious dramatic news but lots of bot-trading, and people on both sides of the aisle are trying to turn this into a political issue and believe that a couple of days drop is an indication that the wheels have fallen off the wagon. Those who are dumb will panic, sell, and only reinvest once the market materially exceeds where it's currently at. The smart money will stay in and add selectively add more cash (the time to sell isn't when the market tanks) - while the overall market may have been over-heated based on speculative future performance, there are still many stocks that from a fundamentals standpoint are a good value. Go ahead and bicker about Trump, Obama, Hillary, Yellen, etc., etc. and the rest of us will make prudent investment decisions based on factual information and logic, not emotion, and make money off the volatility.
7
Sound advice if all you care about is making money
This decline appears to be completely normal. Sometimes the stock market goes up, and sometimes it goes down. The fact that it is now going down isn't really news. Historically, net, our stock market has gone up, and it will again, some day. Wish I could blame it on the Trumpster, but, to be honest, I cannot.
4
I assume this will be blamed on Obama and crooked Hillary by our Blamer-in-Chief Trump--and his base will buy it.
12
It's not just Americans investing in the American Stock markets. People seem to forget that. A lot of foreign governments (who can hold a huge portion of a country's wealth in some cases) as well as foreign investors large and small put their money in our stock markets.
Trump has done nothing but retreat from the global stage in every way (other than the random bullying about how big his "button" is). The US cannot go it alone in a global world and, therefore, under this administration and the influence of isolationists America will continue to melt and slide off the world stage, including financially.
Remember Merkel announcing to the EU -- we can no longer rely on America, it's time to make other plans. She was just giving voice to what people and governments all over the globe feel. The US has become an unstable country ruled by a really unstable man who just called the democrat party all "traitors" because they didn't applaud for him during his state of the union address.
The US has always been considered the safest place to park global money. Now? And let's not forget we borrow all our money from China and they do nothing but make public announcements they're stepping up their own game on the global stage . . .soon enough we'll see how interested they are in financing the US going forward. Now they prop us up because they want their money back. Later on, we shall see . . .
Trump has upended the entire globe in one year. The world is moving on.
9
This is a good point. Would be interesting to see how much of the fluctuation is due to international investors pulling out. If I had a large investment, I would have done it immediately last November. A more conservative approach would have been after the last few weeks of completely chaotic, unethical, bizarre behaviour from your "leader in chief"
Because the Demos didn’t applaud, the market tanked. The infantile rambling of the megalomaniac continues.
19
Trump claims credit when stocks rise but blames Obama, Hillary and Democrats when stocks fall. He forgot about his cat.
12
Not "The weakness built off...". The weakness built ON.
At least it wasn't written as "built off of", or "based off of", which are abominable and increasingly common. It makes me itch to hear or see either one.
Just one man's opinion. Back to considering other, more serious, threats to the country and the world.
4
Come on Donald...take credit for this plunge! If you own the uptick you inherited from President Obama, then this must be your's, too. Oh, that's right, you only take credit where you didn't earn it and place blame where it doesn't exist.
Paul Ryan, the fiscal guru is a fraud, Trump is a con man and McConnell is a bigoted huckster selling a worthless bill of goods to the uninformed.
When will these guys learn real fiscal responsibility?
13
It's called a "correction" and it is long overdue. Santa has returned to the North Pole.
4
You'd think that by now the so-called "experts" on Wall St. would know what to expect of republican fiscal idiocy.
3
Things come in threes.
The crash of 1929 - Hoover was President
The crash of 1987, Reagan was President
The crash of 2018, Trump is President.
Three crashes, three Republican Presidents.
Be sure you take correct ownership of this, as you have claimed the last 12 months of stock rises Donny!
19
@ Uncle Fester "Three crashes, three Republican Presidents"
Make that four.
You left out the biggest crash since the Great Depression, the crisis of 2008 and the ensuing Great Recession.
Cheney/Bush own that one.
3
No worries - normal market action - the markets have gone straight up for so long .... flat for the year now ... no big deal - after last years incredible run . The 30 T bill over 3% spooked some people .
1
Is America great yet? What's to be expected with a bunch of thieves led by a con man running the country?
12
The "Fake it 'til you Break It" 'presidency' is exposed for what it is. Get out while you can.
11
What I find surprising is that this has taken this long. Considering the divisive rhetoric and the fear in which most of the population currently live in because of the nausea inducing things the president keeps saying. The turmoil he is creating day after day by treating this country as another app for expressing non-sense and hate, this and worse can be expected.
5
The Rs were so determined to pay off their big contributors that they rammed a huge corporate tax cut through with almost no analysis of its consequences. The Rs have the firm conviction that tax cuts always make the economy grow. They made big promises that this tax cut wouldn't just go into fat cats' pockets but that big wage increases were on the way. It turns out the wage increases were already happening in the pre tax cut market. Now inflation fears are rising and interest rates going up. The huge increase in Pentagon spending are turning the deficit spending money valve even more. The Rs are faced with making unpopular cuts in popular programs like Medicare and Social Security. Trump promises even more spending for much needed infrastructure repair. So the overpriced market has gone into a abrupt downturn.
8
George Soros had a lot to say about this.
1
I remember all he "respected" media and the commentators in this forum telling us that the stocks doing well all last year was due to Obama and it had nothing t do with Trump. Now the stocks are not doing well, suddenly it is all Trump's fault?! How come Obama suddenly vanished?
26
Obama didn't initiate these insane and unnecessary tax cuts.
29
Sri You are not only right but it's a blatant example of biased liberal media reporting. It's more propaganda than news.
I remember Trump saying the increase was due to him. Has Trump suddenly vanished? (If only...)
20
My mistake, the White House did say something about this.
According to KUSA, in Denver, a White House spokesman indicated that "the fundamentals of the economy are string". The last time a Republican said this line was John McCain, when the DIJA dropped 777 points, on October, 2008. Right before the market crashed ushering the depths of the Great Recession.
Meanwhile, Trump was in Ohio praising his large tax cuts to the middle class.
Like, McCain, Trump is completely out of touch with reality. And, like McCain, said their line, on the day of the two largest point losses, in history, of teh DJIA.
7
This is squarely on Trump and his Robber Barons. Inflate and deplete. Nice.
13
Your graphs use two different scales on the Y axis, with the bottom one shrunk by 240% and four times as many grid lines to exaggerate last week's losses.
Unfortunate that the Times resorts to such obvious, timeworn techniques to skew the presentation of their data. A better description might be, "Standard & Poor's 500-stock index over the last year...and over the last week, distorted to look two and one-half times worse than it was."
4
Oh, nuts. The lower one is merely expanded to show detail. If that panics or confuses you just focus on the upper one. Broader context is probably better here than detail anyway.
5
Anyone with a smidgen of investment acumen saw this coming from a mile away...if your invested for the long term, no problem, if you were trying to play the market...chances are you had a big problem the last couple of days.
Lesson learned hopefully.
7
Wonderful tax cuts for the rich during a (possibly ending) 9 year strong recovery. Hope tanking the economy again was worth it. Heaven knows the ultra rich needed some more money in their pockets.
10
Has he blamed it on Obama yet?
6
Republicans have always been the party of big booms and busts. Their governance leads to chaos.
12
Trump especially likes big busts.
7
The stock market crashes on the prospect that there might be inflation and rising interest rates in the future? The prospect? Just wait until those two things happen!
4
Why would anyone think that adding trillions to the deficit and creating constitutional, national security and environmental crises would have any effect on the US economy?
Would Putin think that? Would Hannity think that? Would Donald Trump think? Ok the last two are not plausible.
WELCOME TO THE TURMP ECONOMY!
12
Hannity makes me laugh he is such a ham actor playing a serious show host sadly there are repercussions for real people.
7
Putin might be in trouble. The guy he is propping up is making mistake after mistake.
4
The graphic depicted by the Times is a little misleading at first glance, because the y-axes are at different scales in the top and bottom plot. By visual comparison, this exaggerates the past week's losses by a factor of ~2 compared to last year's gains.
6
Everybody relax. The stock market is flat for the year and everyone panics? It should go down another 10-15% just to keep things fair. Now go back to drinking beer and watching TV.
3
it's only the hysterical knee jerk reactionary lib dems who are panicked and disparaging trump. according to those standards, if it rains it's trumps fault too. as an independent moderate, I am so tired of the arrogance. you actually believe that you know what's best for everyone and because you know, it's within your right to make everyone acquiesce to what you want. difference of opinion? those don't exist anymore because you are always right and everyone else is just plain wrong.
Let's see headlines everyday about the Stock Market dropping and people's IRA's losing half their value and then let's see how popular Trump is. People tolerate the nonsense when they have a full stomach. Let's see what happens when credit rates shoot up and retirement accounts shoot down.
11
I know there will people that tell me this is nuts, but I am just not super confident in investing in my retirement IRA for the next few years. We have a regular old savings account. We will be stashing away our funds there until we feel confident in the future of this country to do business, employ people while being stable.
8
It's not nuts. I pulled my Obama-era gains out of the market in December, when the tax law passed. No way am I going to lose them in whatever is nonsense is coming. Just wait until Mueller starts serving the politicians that some of these investors - and Russians - have bought. Then you'll see some real fun. At least you and I will have reserves we can use to buy back in, at a nice low price.
3
Good to know I'm not alone. Cheers
The scary part of what happened today is thinking about this continuing. That if this isn't simply 'the market readjusting itself" and turns into a real financial crisis, who is he going to blame? The Mexican's? The transgendered? The Democrats, who earlier today at a rally, someone yelled "treasonous democrats' and he repeated it. It's scary to think about.
His supporters, when the market drops, they'll be broke and angry and they'll come for the ones to blame... us.
4
That crummy "state of the union" (Ha!) teleprompter recitation written by Stephen Miller, et al., is what brought reality into focus.
5
Repeat of Reagan era. Brace yourself for higher interest rates to keep economy and inflation from overheating.
Can hardly wait to see who Trump tries to blame.
8
Sad it appears most of the readers comments are glad markets are falling.
3
Most of us knew this would happen. It happened with Reagan, with Bush and I so commented that Trump was following their pattern. The Democrats take care of the poor and middle class,the Republicans spend, on the rich and on themselves.
16
No one is "happy" that the markets are taking a nose dive. It's what we've all been fearing since this so-called "tax cut". They are just puzzled as to how Trump supporters couldn't see this coming? They are more frustrated than anything that they've tried to reason with his base, but there is no reasoning when it comes to a cult worship mentality.
11
ummmm, the dems DO NOT take care of the middle class. they take from the middle class and give it to the poor. and look at all the most outspoken dems, rich politicians, Hollywood celebrities, gimme a break.
1
Like the song says, "You Can't Buy Me Love". After giving businesses 1.5 trillion in tax cuts, you'd think the tycoons of industry could have at least stalled the market crash until after Valentine's Day. One of history's most remarkable "Dear John" letters in recent memory.
2
Americans have some 6 1/2 trillion dollars in 401k's, mutual funds, and other "savings" for retirement. When stocks tank, they can panic. An Institutional investor has a longer investment time horizon, and more assets, and while it hurts to lose profits, it's not the same as suddenly retiring with half the money you had a week ago.
Volatility in the Market is a composite of the risk behaviors of several classes of investors. The small fish sell first, but eventually the big fish have to decide what to do as well.
5
The Market it just a big gambling game,The Wolf of Wall Street is exactly how it works.
4
Has to be Obama's fault.
11
Trump will blame her, Obama, Benghazi, and the Gulf Stream. Grow up!
4
I am certain that part of the explanation of the sell off is that we have an unreliable President . The tax cuts are excessive . A smaller tax cut probably would have been a lot better . They come at a moment that the economy does not need stimulus and are adding to the deficit in an irresponsible manner . But probably the most important part is that nobody knows what the future holds with Trump at the helm of the ship .
30
Thank Goodness we are seeing a good correction in the market. Its shot up so fast during the 1 year of the Trump Presidency that it was getting a little scary. Its time for a correction. Also the economy is roaring and we are switching over from the Federal reserve ZERO interest rate, funny money economy that kept Obama's disastrous policies from throwing us into Depression to a normalized economy which means the FREE ZERO Interest rate money is over. As people realize that the economy is more than strong enough to handle normal interest rates the market will start reacting to business and economic fundamentals instead of funny money and zero interest rates. This is a good transition folks. It means we are transitioning from the sick miserable economy of Obama, back to a strong and growing economy under Trump.
4
Wow, who knew? "Funny money." Got it.
7
Except for the interest on the national debt.
8
I suppose the $1.6trillion in instant debt from the "tax cut" had nothing to do with this?
5
It's raining debt.
11
Bored: Trump just got the GOP to add 1.6 trillion to the debt. That debt.
10
thank the dems for debt.
This presidency, if allowed to continue for it's obligatory 4 year term will see the worst economic decline since the Great Recession that Obama was handed. Why? Because Republicans left to their own devices enable fast cash for the uber wealthy and always forget the key foundational participants: the Working Class. I guarantee you they were far more behind offshoring and money stashing abroad then rank and file Dems.
This 1% tax reformation gift can only give so long before everyone remembers that the rich almost always only seek more riches. Wherever they lie. Usually, in the last many years, beyond our shores.
Expect China to reap mass reward from many of this administration's and it's puppet's greedy and shortsighted policies.
20
donTHEcon should take credit for the market loss, too!
8
This is all Clintons Fault. Believe me. I'm telling you. Lock her UP.
12
Yes, had she let Sanders win legitimately without manipulation, we would not have seen this day.
1
I'm not in the investor class. I'm living on a fixed income consisting of social security and a pretty good union pension (I escaped Saint Ronnie). I want to go on record and say that, if Trump's cock-eyed policies increase inflation, I (and a lot of others) won't be happy. Personally, I already can't stand Trump so he can't go down in my estimation any further.
26
Let's watch now as Trump blames the Russia investigation for the slump, and goes on a firing spree.
10
It's called a correction, folks. And it's much needed.
2
No, it's generally called "a plunge". Panic selling. Corrections are a longer-term and smooth sell-off of overvalued assets.
28
Really? The biggest drop in history?! A correction?
2
not panic selling by investors. computerized algorithms that kick in and make the sales. and as the market drops, more and more of these kick in to increase the selling. technology, you can have it. imagine driverless cars? no way no how. I'd like to be in control of my own life thank you.
Well, Well, I guess we can't blame this one on President Obama, it looks like we have to give Donald Trump all the credit for this one.
28
Oh, DJT will find a way. That you can take to the bank, assuming it hasn't failed yet.
12
Trump was happy to take credit for the market's rise; who will he blame for its fall because he never would ever own anything which makes him look bad. Obama? Hillary? The Russia Probe? Whatever it is, count on it to be be false.
14
Isn't the market about even for 2018 -- and it's just February 5th?
I don't recall front page headlines and hysteria for the large run up in January. So why the hysteria now?
1
A historical DROP....it's something to pay attention to!
7
I interviewed at the beginning of my career as a bond trader on October 19 1987 BLACK MONDAY. The market dropped 22.6 PERCENT that day. There are THOUSANDS of incidences of a 4% daily move. Yes the number of points is larger the larger the value of the index. That is just math. 4% down and still up 21.4% year over year is nothing to write headlines about without least putting it in perspective in the body of the story
3
A 4.6% drop in the Dow and a 1.5 trillion tax cut for rich folks that everyone gets to pay for by definition = "hysteria".
2
There is one FIA on the market from an A+ rated company that allows you to be linked to 150% (age 65 and under) of what an index gains without the risk minus a 1% spread. This is called a participation rate so if the index gained 10% the contract would gain 15% minus the spread. Use your age as a percentage and that's the percentage that should be in things that have guarantees of principal or income or both. http://www.chamberlinfinancial.com/blog/reducing-risk-in-a-volatile-market
Rene Descartes was known for his experiments with optics and his love of geometry. He developed a "system" of rational analysis based upon a combination of features of the two. He was a disciple of certainty. Centuries later, Heisenberg arrived with his uncertainty principle that jolted Einstein and the rest of the world of physicists. Now, we have people writing about rational markets and the "invisible" hand.
Most people buy and sell things on impulse rather than careful, rational deliberations. Our president has made a career out of exploiting people's greed and money to advance his own investments. He has a history of "winging it". Today, we see that the world's stock markets are adjusting in a rather abrupt way and fear of inflation seems to be a driver in the sudden drop in market values.
Perhaps the president will try to "time the market" to score points with his base, but for those who are long-term investors, the sudden volatility of the markets is nothing new. Will he take credit for the losses on Wall Street? I'm not holding my breath.
6
"The weakness built off the previous week, when stocks had their worst performance in two years." How will Trump blame this on Obama?
7
Isn't most of this trading volume and price drop from big banks and hedge funds? It seems likely this is computer-driven algorithmic trading, not small investors. Can that be estimated from the size of the trades being made?
2
It can be estimated from the fact that small investors are not sitting at their trading desk ready to act.
However, if the broad S&P sells off tomorrow, retail 401K holders may have put in trades from the S&P 500 fund to the stable value fund. They are entitled to the closing price, even if their fund takes a bath tomorrow morning when they have to sell the underlying stocks.
1
There is a strong case that we are entering a new period of financial crisis or at a minimum that we are at peak bubble and ready for a massive reality check.
1) Asset prices have increased dramatically since the bottom of the financial crisis
a. Case Shiller Index is near peak pre-crisis levels
b. Stock markets are well above pre-crisis levels
2) A lot of the consumption that has fueled growth is funded by huge increases in debt
a. Credit card debt - U.S. households collectively have more than $1 trillion in credit-card debt
b. Total Consumer credit is now at 3,827 billion – almost 50% more than at the peak of the financial crisis
3) There are signs that the nation is over-leveraged
a. Auto lending delinquencies are increasing
b. There are other signs that mortgages are more sound than last crisis - but this may be due to the fact that home-ownership rates are still at the lowest level since 1965
c. Maybe evictions have replaced foreclosures?
6
“Erase the gains for the year”, the year is only 36 days old, is there any hope in the coming days to regain the lost gains of the year?
2
It's going to get worse before it gets better.
6
I'm sure, but is does sound alarming. No reason to want to make anyone feel secure, what with the maniac in the WH to perpetuate.
5
Donald's "economy" is a sham just like his businesses! Unfortunately, we are stuck with him!
5
It's become clear that we're entering a Trump market since everything Trump touches goes bankrupt or fails.
31
Who wants to claim credit for this? The president saw it coming for sure.
3
We were warned, every Trump venture eventually goes bankrupt.
Before, he scammed the government to get out of his bankruptcies, what happens now he is the government?
No way out.
14
Remember that Donald Dotard Trump wrote off $916,000,000 on his 1995 tax return for business losses. Why would anyone trust his business ability -- or his compliance with tax laws? That write-off probably caused about a $300,000 loss of income to the United States.
8
Interesting historical fact: Nine of the last ten recessions began with a Republican in the White House.
28
I am a 23 year veteran of wall street (not in any way in the big bucks category) as a former business analyst and technical writer. My late husband was a 50 year veteran of the street, and we'd periodically get laid off. EVERY SINGLE TIME we were laid off was during republican administration. We got jobs back when a Dem was in the House.
50 years ago, the youth (I was among them) ended a war, got a president out of the White House, paved the way for nationwide legal abortion; encouraged gays to come out of the closet; started Earth Day, and generally had a much more positive impact on the world view. What is the youth doing now? Thumbing tweets.
Forty Five is destroying us, and Donny Deutsch said the other day, what I've been saying since Jan 20 2017 -- we need a revolution. https://www.theblaze.com/news/2018/02/02/msnbc-guest-says-revolution-is-...
15
You and your husband should write a book or a blog. I’ll bet you have great stories to tell.
1
He was there from 1958 to roughly 2007. His great uncles started a business -- (Salomon Brothers Hutzler). It was a very exciting time, seeing the business evolve and mature.
You're right... a book would be a great thing to do. Sadly, I'll have to do it solo. He died in 2011.
If the tax cuts are a stimulus the economy "doesn't need", and the investor class is "fretting" how they'll be paid for given the current level of government spending, guess who will carry those buckets of water? Can you pronounce that euphemism "entitlement reform" ?
9
Anybody know what Renaissance Technologies does? How do they operate and with how much leverage? How about Bridgewater Associates? Same questions for them and I'll bet no one on here has a clue.
The robots have taken over the stock market. As long as it went up, they only had to keep buying more. Now that it's going down, they have no idea what to do. The public, all of who bought "index" funds in the past few years will be left holding the bag. They don't know it yet, but there is no exit.
1
Nonsense. If you are worried, you can sell. If you think prices are too low, then you can buy more.
But the people who know nothing, they'll sell at the bottom. You're right about that.
Remember that these computerized traders trade thousands of times a minute. They may generate only pennies per trade but they make their money built being milliseconds ahead of other traders.
This means that they can always make the right move as they have advance knowledge. So do t worry about them: it is the retirement pension stripping that will cause the most harm
4
There was a lot of hot air causing a run up in stock prices. Investors have begun to realize that cutting billionaires' taxes will do much to increase the national debt and raise interest rates but little to spur broad-based demand for products. Less hot air, more reality, no reason for the bubble to continue.
9
Who owns the economy ?
People stayed in from Friday thinking buy back on Monday....we have seen this story before eh ?
Could this be froth ?
The Dot CoM crash was just like this . I think Alan Greenspan may have said something about "irrational exuberance".
3
Trump Slump anyone?
11
Everyone take a chill pill - it's only a matter of time before the Whitehouse Economic Savant's predictions come true and we'll all be tired of winning.....
2
Donald Trump made a huge miscalculation letting Janet Yellen go; that was a signal that there's lots of instability ahead. And the GOP tax package basically ruins everything for everyone going forward, except for those who already have way more than enough money. November voting can't come soon enough but so much damage has been done it may not even matter, not in my lifetime anyway. Sad.
22
Waiting for not-my-president to tweet that Hillary Clinton caused this severe market sell-off.
20
I'm sure we'll get a tweet from his highness proclaiming the drop in the market to be fake news.
15
I'm tired of winning.
19
There is tremendous unease – even world unease – with the entity known as Trump, and this is reflected in the nation’s “blood pressure“, the stock market.
12
Standing around the trash fire years from now, we'll all tell stories about the Trump economy.
9
At the exact time the stock market was crashing to a record daily low, Trump was making a speech bragging about his tax cuts and calling Democrats treasonous.
What an idiot
24
A 27% rise in stocks one year after Trump's election was completely unwarranted. It was clearly some kind of mania built on Ponzi-style euphoria. In fact, I would feel more comfortable with Bernie Madoff in the White House. His Ponzi scheme was built for long-term stability. Trump's con is more in line with a mafia takeover of a casino -- instantaneous looting of receipts, liquor and food with some sexual harassment of the waitresses thrown in for good measure. Of course, it all ends in bankruptcy, where Trump makes out like a bandit.
19
A reporter for CNN said to Wolf Blitzer, that they were waiting to hear from Trump, about the drop in the stock market today. I don't want to hear from Trump. What would a guy who has 4 corporate bankruptcies, and failed to pay many, many vendors know about financial steadiness? Nothing!
25
Let's see his tax returns. We already know that he wrote off $916 million in his 1995 Federal tax return. Only an idiot (like Trump) wouldn't think that he's continued to abuse the Federal tax system to his benefit.
11
We heard from him today. He said anyone who doesn’t stand up and clap for him has committed “treason.”
12
If this is winning, I want no part of it. Oh how terribly I miss fiscally responsible Mr. Obama!!
25
Amen!
4
That big, beautiful tax cut and was designed for corporate windfalls, which were largely already priced into the market. The actual fundamentals of the GOP Tax Scam were always folly, either through deliberate dishonesty or a foolish belief in supply-side dogma. Government shutdowns and skyrocketing deficits during a period of rising interest rates will increase government borrowing costs, and put a strain on the creditworthiness of the United States Government.
The economic impacts of actual organic growth, rising wages, and high quality jobs from top-heavy tax cuts were always overstated. To the extent they turn out to be at all real, they will pale in comparison to the costs associated with Republican fiscal mismanagement. This sell off is market-makers cashing in, while us plebs will move too slow before realizing the emperor has clothes.
7
Wonder how much of this new crisis is the resultant of our "loose cannon, loose twitter and completely unqualified president. he trashed several international trade agreements, attacked heads of state, showed the world that he has a massive ego and is so thin-skinned that he attacks anyone who disagrees with him in a viscous and uncivil manner.
No one is certain what he says because many statements have to be re-interpreted a by different people and what he twweets in early morning can be changed by late morning.
He is a bully and most certainly, not presidential.
3
This is how reckless Keynesian economies propped up by nothing but debt and sentiment die.
3
There is nothing Keynesian about huge tax cuts for business and the investor class when an economy is in good shape. In fact, that's the opposite of Keynesian economics.
1
Let's see...is it Obama's fault? Or Hillary's? Or is it a deep State conspiracy? For if Trump took credit for the rise, shouldn't he be accountable for a correction? Taking credit for the market rise is a mistake of someone unfamiliar with, and ignorant of, financial markets. Will he and Jr now stop their ridiculous opining? We can hope.
12
Like Trump's reputation, stock prices over the past year have been blown way out of proportion with reality. Maybe folks finally cottoned on.
6
Fear not America, we are in good hands with the PhD., experienced economist, Mnuchin, leading the Treasury Department.
3
God help us!
4
Trump bragged about being the reason the stock market has been up. Is he going to accept responsibility for it being down now?
7
The markets are corrupted, aided and abetted by HF trading. Americans are being held hostage by Wall Street that is siphoning off everything good about capitalism to fill the already overflowing coffers of the wealthy. Too bad the dim-witted masses refuse to awaken to this reality until we repeat 1929 and 2008 ... over and over and over again.
5
There is a simple fix for high frequency trading and that is a transaction tax.
3
I have held more cash than I would prefer since Mr. Trump was elected while the stock market surged. I believed that there would be a correction or a crash during his tenure. What goes up goes down again. When the dust settles, I hope to be able to invest wisely in a few mutual funds I like.
Thank goodness, meanwhile, for bond funds balancing my account.
5
You mean to tell me that even wealthy investors are worried that the tax cut to the 1% and large corporations was too much? Did ANYONE support the GOP tax cut bill?
7
Sigh. Trump doesn't get credit for the rise in the stock market. Neither does Obama. Trump shouldn't be blamed for this pullback. Again please look at the big picture. The stock market has soared since Trump took office. He did nothing.. NOTHING!! The markets soared before the tax cut were finally passed. This "flash crash" has more to do with the fear of rising interest rates in the face of rising wages and rising inflation. And most of the indicators are set by auto trade algorithms. There is nothing to fear if you truly understand the market and evaluating company fundamentals.
Take home message: Wall Street, not 1600 Penn Ave, controls the direction of markets. The FED may have a hand but ultimately the markets are independent of DC
7
Really? Go check impact of Watergate and Zippergate on the market. The worst is yet to come, thanks to Trump and his corruption. Too bad if you can't see it.
4
Never said I didn't or couldn't see it or that the worst was yet to come or not come. Just putting perspective on how one's investments will weather the storm with due diligence and a little understanding that moments like these are not born out of single events (ie memos, zippergate, watergate, etc etc) but are largely directed by the market's reaction. Did North Korea singularly cause this? No. Memos? No. Trump's tweets? No. Tax reform? No. Trump himself? No. You can look to the FED partly through QE and ZIRP. Storms come and go but stay the course.
Who to blame in the next twitter outburst from the Oval Office?
Obama?
Democrats?
How about Hillary??
11
Definitely democrats, he's going to say its because the democrats didn't applause during his SOTU.
7
So, where is DJT now that the economy is going south for all his rich brethren and sistren? As I have posted before, this is probably not his doing, just as any improvement isn't due to him either. It is his hypocrisy that is the point.
1
Hillary and her emails did it. Or was it Benghazi?
4
Trump treats any odd cold winter day as a proof that the global warming/climate change is a hoax. So how does this market sell-off figure into his narrative of US economic growth under his shower of tweets and de-regulations?
4
Radical liberal democrats and the liberal media are such hypocrites. A couple weeks ago they claim Trump had nothing to do with the stock market going up. Now it's all his fault that the market went down. Fake news at it's best.
3
I believe the point is that if you take credit for the rise you also have to take responsibility for the drop
2
Obama's Federal Fiscal year ended in Oct, 2017, and Trump's Federal fiscal year started then. So Trump can take credit from Oct. 2017 onward, both upswings and downswings.
All you have to do to understand these "market crashes" is to follow this rule of thumb: after every market crash, when everything is said and done, when the dust settles, there would have been a huge transfer of real assets from the 99% towards the 1%, and mostly, the .01%. Every single time.
In a way, this can be seen as a form of neo-feudalism, as more land, more homes, more real assets are stripped away from the working and middle classes, by the oligarchy.
6
Remain calm. A correction is typically defined as a 10% decline from the 52-week high. Historically, they happen once per year. The Dow hasn’t had one since 2011. Secondly, don’t just look at last week – look at the last year. Compared to one year ago the Down is still up over 20%, including today’s losses. The S&P is still up over 15%.
Likewise, look at the longer term. Since 2008 we have been in a prolonged period of historically low interest rates. At the same time the Federal Reserve was supporting the economy by purchasing over $4.5 trillion worth of US Treasuries and mortgage-backed securities. The Fed only started to unwind these in September 2017.
The low interest rates and the extraordinary measures taken by the Fed have continued so long that the abnormal has come to seem normal. At today’s 2.85% the 10-year Treasury rate is still at a low not seen since the 1950s. I look forward to returning to a 'normal' economy where the Fed is no longer actively subsidizing financial markets.
7
Great Answer!
2
Well Mr President, you took credit for the market up to your State of Union, now you have to step and take the blame for the fall since the SOTU.
5
Well, maybe we can hope that investors are waking up and realizing that bully baby Trump in the White House is not good for the country or the world.
3
not a chance:)
1
True, we’re just going to have to live through this period of history like the poor citizens of the 19th century had to live through the era of the Know Nothing Party.
When looking at the stock market, the Dow is not where to focus since this index only has 50-60 stocks. The areas to look at are the S&P 500 and NASDAQ.
Also the P/E ration is a good indicator of bubbles forming. A lot of this did star under Obama. For example, Amazon's P/E ration was so high they didn't even show it.
The insane tax cut which benefit the wealthy and ( a lot of whom are so-called liberals) will lead to inflationary pressures next this year and the stagflation.
OF COURSE, it won'e be the top 10% that will be affected (conservative or liberal) but the middles class and poor.
The time has come for a true revolution and not replacing one rich person with another because, in the end, Wealthy liberals are as bad as wealthy conservatives.
Sheila here: Takes 8 years to turn it around, but no time at all to unravel all that work. Not only that I haven't seen an extra penny in my pay and I'm probably going to see an increase in my tax accountant bill. Thanks a lot GOP. #losers
6
Sounds like China has had enough of 45
good to go
3
Who will Trump blame now? When you overspend and can no longer pay your debts as the GOP has done with the irresponsible tax plan something has to give. The stock market gurus wanted the Christmas fairy to give them a tax cut. which was given to them. Now it seems that they should have been careful what they wished for.
2
So how does Donald make this a good thing? Oh right, it's Obama and his deep state at work.
Trump, financial genius and GOP, always spending our future, then wondering why we have these consequences. A correction was due, but huge tax cuts fueled enough inflation along with oil prices down hurting our energy dominance...enough to be a trigger.
It's not the end of the world, but hopefully the beginning of the end of Trump's and his GOP sycophants.
The market and common sense parted company a long time. Reagan/Laffer started the rot, and Bush II didn't help, but Trump was off the charts. Conscienceless greed is not a good rule for living.
5
"The biggest market drop ever -- Ever, ever. Biggest. Ever. -- was me." - Donald Trump
9
I'm gonna guess the declines in the stock market will end up being Obama, Hillary, Schumur, and/or Pelosi's faults.
5
So is this the Donald's fault? Somehow he will blame Hillary. Wait for it.
4
I'm betting on option B: Trump will completely sidestep this moment. At least for now. I don't see him acknowledging this drop has having taken place.
Who is Trump going to blame this on — Millard Fillmore?
9
He probably doesn't know who Millard Filmore is.
3
I would caution Democrats from proclaiming "I told you so!" too early. It'll bounce back shortly, maybe grow a bit more, then we'll all look like we were shouting about the sky falling down and won't be believed when the real crisis hits.
1
Somebody call Nunes; we need a memo showing Wall Street is conspiring against Trump.
It would be LOL if so many near-retirees weren’t in peril.
13
I wonder since this "so-called" was taking credit for the climb upward in the stock market, if he understands he now owns the largest decline in history(1100 points) in a single day. Be careful what you wish for #45. Let's see who he blames, I am going with Obama first, after that anybody else but him. Or he could just say its fake news.
4
Come on folks, we all know this stock market downturn is the fault of Obama, Hillary, and the Democrats.
How, I'm not sure but Fox and friends and their audience don't need facts.
6
Is the 3 week extension before the government shuts down again coming soon?
2
Aaaaand, this is why presidents shouldn't point to the stock market to tout the efficacy of their economic policies.
Also, as we see here, bad economic policy is much more likely to cause negative stock market activity than good economic policy is likely to cause immediate, large, and stable rising stock market activity.
Next, will we hear Trump say, "Boy, no one knew the stock market was so complicated!"?
11
With my extra $1.50 this week I think I just might bail out the New York Stock Exchange. I’m not sure what I’ll do next week, I could bail out the coal industry, or perhaps Atlantic City, abandoned by a New York real estate investor who took the money and ran.
30
Bitter fruit and true! Thanks for "telling it like it is".
5
The 10% lost were gains being captured by the big players and that gain is not coming back. Further, cnbc suggests that a lot of heavy hitters were shorting the market which of course will bring it down. Don't forget, Trump proudly slayed that dragon called Dodd-Frank so the banks have been loosed.
10
They are shorting the VIX, not the market. That's why they lost out big and got margin calls; if they were shorting the market, they would have made money.
So much for bragging rights Mr. President.
13
I was going to take a total cash position on Jan 30 in my 401k. I wished that I had listened to myself.
12
When did you plan to go back into the market?
1
This my friends, Is the Trump economy and the Nunes memo effect.
Are we great yet!?
18
It happens again. The GOP gets into power and runs up deficits, ignites inflation, gives tax breaks to the rich and the economy tanks. Now they are going to want the middle class to bail them out again.
There ain't no middle class left.
Get smart America, register to vote and vote the parasitic GOP out of office.
39
If you boastfully claim the credit, you must be willing to take the blame. So much for the businessman president.
16
Where’s the tweet blaming President Obama for this one? Or will it be Hillary? Or Janet Yellen?
12
What worries me more than the stock market correction, which most investors knew was coming, is the rise in interest rates on treasuries. We have borrowed trillions of dollars to finance tax cuts and wars since 2001 (with no apparent downside so far). If interest rates rise too much our very high debt load will cause a large problem for the federal government and US economy. As more of the federal budget goes to finance debt payments, social services, money to states and other expenditures will have to be cut and taxes raised.
The downside to all this debt will come eventually - perhaps sooner than anyone imagines.
And let's be clear, the previous two Republican administrations and Congresses are responsible for most of the current debt load and budget imbalances together with the 2008 financial crisis, which both parties had a hand in creating.
15
If there’s another government shutdown this weekend, the market is likely to go down some more. It dropped off a bit on the last shutdown.
4
We had the Trump Bump. Now we have the Trump Slump.
22
Will they credit Obama for the sell-off?
9
If the Republicans can think of a way, yes.
This sell off just means that a lot of investors believe that the market had reached a high where prices would more likely drop than rise because there was no longer any expectation for higher growth in the market, for now. The slow growth of the global and domestic economies with good profitability amongst most bigger businesses indicates a stable situation where all demand is being satisfied, for now. While it might be desirable, politically, to see greater growth, it's just not wanted for now. The tax cuts might show some small change next quarter but the vast majority of consumers are unlikely to find any surplus income to spend beyond that. If investors had any concerns about that, then the sell off would have been a lot more that it has been.
3
If the sell-off had been any worse, it would have triggered the NYSE's "circuit breakers." When the markets closed the stocks were still going down after a brief recovery, prompted, no doubt, by short-sellers hoping for a session-ending lift.
4
Well Trump promised everyone a gilded palace. people are finally realizing the Gilded Palace is a Potemkin Village of most Americans.
13
OMG. the market dropped. I can't believe it, this has never happened before, ever...
9
It's never happened before with con-man Russian agent in the White House. Let's see how this Stable Genius manages to curb the fear cycle.
2
I wish I were kidding about this, but…
I would say that there is a better-than-even chance that Trump will use this market downturn to fire Mueller, or at minimum hobble his investigation, under the pretense that, “This investigation is causing turmoil! Causing the markets to fail! I must put an end to it, because I love the American people, I love stability, and I love prosperity! The best prosperity!”
That level of crass opportunism sounds just like him, doesn’t it?
15
When you say "crass opportunism," are you referring to his or yours?
1
Funny, within the last few days I have seen several articles that describe the tax cut as the stimulus the economy does not need right now. I do not recall reading such statements before the tax act was passed. What happened since then?
7
I do not know what articles you were reading but I read and heard a lot of commentators saying that the tax cut was not necessary.
1
All the articles I read prior to the passage of the GOP Tax Scam warned of dire consequences. Look them up, I am sure you can still find them. And...nine of the last ten recessions, a Republican has been POTUS!
One year in, we begin to move out of the Obama boom into the Trump Slump. The full impact of his election will now take hold.
28
Recall business analysts who credited Trump with freeing the "animal spirits" of the market. They didn't mention that the "animals" were chimpanzees.
5
That's what I'm saying, "Dow down 30% by 10/1/18. Surprise!
The WH and republicans want to stem the flow of illegal immigration but they allow wealthy oligarchs from Russia, China, middle east to churn our markets. It would be better to not allow these "immigrants" to manipulate our markets, along with our elections. Some of them are trying to crush this country and we'd better beware.
20
From the Trump Bump to the Trump Bust in a couple of trading days. A perfect analogy for a failing presidency.
27
Trump will Tweet out that, 'the Stock Market had another great, great, day! One of the biggest in history!' He'll just keep ignoring reality and living in his Trump world. 'The market drop is just fake news!! Believe me!!'
15
Unbelievable as it can be, a comment down below suggests that the downturn on the stock market may have been caused by the Democrats refusal of applauding Mr. Trump's State of Union speech. Wait! I hope Mr. Trump doesn't read it and get Twitter ideas.
15
So there is full employment and the "market" goes down.
So poorly payed workers are good for the "market" ?
So if you allow in immigrants and refugees then you´ll have a margin of unemployed seeking jobs, good for inflation and the economy ?
So you see how this "market" goes against the welfare of most citizens.
2
Oh, ok. You give us points up and levels broken when going up but not when going down, you give us percentages. Is there a reason for this??
2
Trump needs a war more than ever!
1
Will the buffoon take responsibility for this massive slide like the way he took credit for its rise? Remember when he would call Labor Department statistics fake news because real unemployment was over 50%, but now brags about the unemployment rate based on the same source? Such a fool. Just like his voters.
13
If this day becomes a trend, I guess we can expect nasty tweets about fake numbers and deep-state/Democrat manipulation. He’s disparaged and accused every American institution, so why not Wall Street itself if it no longer makes him look good? Maybe then (maybe only then?) his truly powerful allies will finally stop supporting this dangerous, stupid poseur.
13
let's hope so.
1
Wall Street is going to take Trump down!
3
I'm sure he is poised to point his tiny fingers at someone else as the cause for all this.
7
Let’s take measure of my “trump winning” today: In the lowest tax bracket demographic, I get a statutory 2% increase on tax I pay on a pension I worked 30 years to earn and on the required disbursement on savings. And now a 4% across the board loss on what’s left. Why? Because the blunderbuss in chief has no clue how macroeconomics works when it comes to placating his low information base.
13
The people who should be truly panicked by this recent sell-off are the ones living in North Korea, South Korea and Japan.
5
Not to worry, Trump will blame Obama and Hillary, not getting his Wall built, ISIS, North Korea, rinse and repeat. He has no blame in anything, just kudos for accomplishing greatness which only happens in his head. If you watch him lately, you'll see he actually answers those voices in his head he hears. Trump and his Circus Carnival.
6
Still and all, there have been no plane crashes!
2
I suspect that this is nothing more than taking advantage of the new tax laws and the fact that over the past year, the Dow has gone up about 25%. So if you bought your stocks over a year ago, why not sell at a high point. Everyone knows that what goes up eventually falls--it cannot go on forever. Just investors playing it smart. Take your profit and buy some of those lower priced stocks.
3
What is often missed is that as interests climb so doe the cost of borrowing to the Treasury. Given the enormous debt just added to pay for the Trump tax cut to billionaires the rising interest rates will add enormous additional debt, and once the fear of rising interest rates set in investors will increasingly sit on the sideline of both the bond market and the stock market resulting in even higher borrowing costs and potentially collapsing stock market. At this point a stone has been started falling down hill and will likely pick up momentum that is nearly unstoppable.
5
While the reason for a stock market plunge is never just one single issue alone, the most significant cause for today's plunge is due to the Republican/Trump tax bill. It is the realization that it paints for the country's economic future.
The Republican tax law re-allocates more money to the rich via a great reduction in their tax liability. In many cases, like mine, it causes a hefty increase in tax payment as the deductions for home mortgage interest and local taxes is slashed, and this lessens middle class disposable income..
Such is my case. The rich don't spend their tax savings, the middle class does. This withdrawal of disposable income from the economy will inevitably lead to a reduction in economic activity within the United States.
As consumer spending is then reduced and with it tax revenue, governmental entities cut their budgets and reduce their spending also; sales income to commercial entities also reduced. Less money circulates in the economy, and a recession is inevitable.
I just now reduced my monthly (retired) payment from my IRA by 50% in order to avoid the large tax increase I'd see at my present monthly income. Don't think I'm the only one doing this -- this will occur widely and trigger the Trump/Republican recession.
12
Every month in 2017, the market went up substantially. Then, last month, it boomed like a house on fire. The gains in January have now been reversed. But the large 2017 gains remain intact. That's the truth, the whole truth, and nothing but the truth. And there isn't much more to say.
1
We'll all be fine!
We have that $1.50 per week raise in pay that Paul Ryan tweeted about last week to cushion us.
19
$78 more per year! Sadly, only something minimum wage workers might be truly happy about.
Every Republican president for the last 40 years has caused a major economic crisis. And, as the president's intelligence level decreases, the crashes get worse. The Trumpocalypse will prove to be the worst, no doubt. I'm scared.
6
Trump: "When good things happen, they are because of me!!! When bad things happen, it's your fault!"
I say, Trump will cause Great Depression II.
5
It’s the Trump Crash! The biggest most beautiful one day drop ever. Believe me, people, believe me.
6
Trump's businesses went bankrupt about 5 times, and the government bailed him out. Who is going to bail the government- that's us, the taxpayers- out now that Trump is steering us to crash and burn.
5
"Since the global financial crisis a decade ago, a few simple guidelines have helped investors make sense of the markets.
Global growth and inflation will be perpetually low. Central banks will help by keeping interest rates low. And stocks will almost invariably rise."
It is always easy to identify rules after the fact. I suppose you are just as certain about the simple guidelines investors can follow for the next ten years.
1
The Trump speculative bubble continues to leak.
1
Is that the sound of air being let out of the bubble I hear, or are they war drums?
3
You don’t defy basic law of economics by giving tax cut to ultra rich in already growing economy. Own up to the results of Your illogical voodoo economic assumptions.
2
Trump and his "financial advisors" need do nothing about the stock market downturn.
His followers believe that:
a) The market isn't actually falling, and reporting of such is fake news, and/or
b) It's the Democrats' fault
What this means is that the falling Dow and Nasdaq will have absolutely nothing to do with electoral politics. Those who have willfully blinded themselves about this administration and this Republican-led Congress will continue to vote Republican.
We could see another October 1929 in the next several months, and neither chamber of Congress will flip next November.
Democrats, understand this. Your losses have nothing to do with your messaging. Your message is fine. It's just not the message Trump voters want. They don't care if they never get their manufacturing jobs back. They don't care that their communities are hit by the opioid crisis. And they certainly don't care whether this country is plunged into another Great Depression.
When you start telling Trump voters that straight, white Christians are better than the rest of us, then you'll start to get their votes. We could see soup lines in every major city in this country, and Trump's deluded followers would worship him even more.
So Democrats, save all your talk about your party being the best able to help America. We know this is true. But the half that supports Trump really doesn't care. They're content to suffer, as long as they think their brown-skinned neighbors are suffering more.
7
Now that's "telling it like it is"!
2
I bet those people who wouldn't vote for Hillary because they didn't want more of the same, would appreciate more of the same now.
5
Now, we just need a preemptive nuclear attack on some hapless country, I don’t care which, to really blow the socks off of the world’s economy.
Come on Mr. President make my day. I double dare you. Let’s get the world really suffering now. And let the people of the USA join in the suffering. I am feeling left out.
Isn’t that what you got elected for?
I also suggest that you build that wall so that we keep all our suffering to ourselves and not share any of our suffering with Mexico.
1
Here's my prediction, if the Dow continues to plummit, wealthy republicans will finally turn on Trump. It's been easy to stay silent and look the other way (as he tweets this country's reputation away) as long as he lines their pockets.
2
No, I don't think so. Why. Let us assume that your wealthy Republican has a nest egg that is worth just $10 Million. These days that is barely middle class in their mind. Even if that wealthy Republican gets a 50% hit, he/she still has $5 million left. Unless he/she is living beyond their means, he/she wont be affected. Just saying.
Trump was not responsible for the bull market, nor is he responsible for the downturn. But it may be that reckless policies undermine confidence.
2
Is our fearless leader somewhere blaming everyone except himself??
Tweet away fearless leader!!
13
Dow when Obama took office: 7,949.
Dow when Obama left office: 19,732.
28
Who knew that managing the US economy could be so hard?
15
Trump has been giving himself all the credit for the booming stock market and economy. Will he now blame the Dems or Obama for this week's tumble?
5
He'll find someone to blame, and I guarantee it won't be himself. I'm short he'll start politicizing the fed in an attempt to manhandle that too.
I wonder how the stable genius will try and blame this on the Obama Administration?
9
Maybe this market instability has something to do with our country's unfit president and his Republican enablers who are disregarding the rule of law and weakening our democracy, and in doing so causing the world to lose trust and confidence in us.
6
Next step: Huuuuge Distraction. Iran or North Korea. BEWARE.
16
We know who took the credit for the market at last weeks State of the Union.
7
Not too long ago when the economy and the stock market were doing well there were many "Thank you Obama" comments in this very paper. Now that the market is down it's the Republican's and Trump's fault. When it bounces back up again will it be "Thank you Obama" time? Really?
2
I have some advice. When markets crash take some time to give your bathrooms a really good cleaning. The worse the crash, the more you clean.
At the end of the day you might be a lot less rich on paper, but at least your bathrooms will be clean.
This also reduces the chance that your wife will yell at you.
11
Undoubtedly Trump is taking credit for this too, right?
5
And every Wall Street pundit is bashing Bitcoin while they scam millions out of their hard earned money.
1
The party is over. The rich got their big tax break but they not going to pay anyone's clean up bill. Nor will Trump admit any responsibility for the crash.
7
164/5000
The oligarchs who played their cards for Trump will take their responsibility when the market falls and the debt goes up? or the American people will return to pay for their cause...
But of course with an idiot in charge - if it goes up, it's because of him, but if it goes down it's because of them. No problem as far a Trump is concerned. Just watch the propaganda machine throw blame is every direction but home. 2+2=5, left is right, down is up, wrong is right, and 2016 is 1984.
1
When the going get tough , the tough hang tough. When you sell at a loss you lose.
1
It's all Fake News directed at discrediting the L-I-C. Americans should be happy that the guy with the orange-blonde hair is running the show. I mean, why would you want someone who actually understands economics when you can have the greatest, smartest president in the history of the world? And he performs his magic whenever a live mike appears. Who would have known that the Billionaire who became president was the reincarnation of Andrew Jackson? Jackson's hair style and political observation that "One man with courage makes a majority" provides the evidence. It is a matter of time that Robert Mueller will be tossed into the dust bin of history. Will Jackson, er, Trump do it? To quote another great politician from the party of geniuses: "You betcha!".
3
Well, what is your response to this 45? Tweet, tweet, tweeting our 401k's away. I can't wait to hear how this is Obama's fault, or fake news. OrMaybe there is another market in a galaxy far, far away that is benefiting for all your winning. Impeach him NOW!
4
This is Trump's stock market to own now. Maybe he is already floating the idea to -- once again -- declare bankruptcy, this time by defaulting on the full faith and credit of the USG. Meanwhile, he could hold us all hostage to his dream of building a really, really nice wall on the border with Mexico.
2
From Trump Bump to DUMP in just a few days....gee, who knew?
3
A correction has been needed since before the Dow hit 26000. There was never a good reason behind the rise of the market since the election of Donald Trump other than the fact that business felt his policies would be better for corporate America. The slow but steady growth we saw throughout the Obama administration is more in line with how the market should be moving and offered much more of a feeling of security to investors.
The fact that Trump is a live wire is not making anyone feel secure and it may be possible that, although no one is saying it, his actions are having a negative effect on confidence in the overall market.
8
OK let’s lay some odds if Trump will ever tweet that he owns this one just as he seemingly owns job growth, the highest markets ever etc. I suspect it will turn out he has “foot spurs”, which will prevent him from taking responsibility. No doubt his supporters will blame the usual suspects.
7
There is only one "pattern" here.
The continuing and frightening number of exponential growth curves that are always in the background but never discussed.
Exponential growth curves shoot up by definition and cause major disasters whether its population growth, commodity growth, economic growth, energy demands and availability, etc. And with all those come exponential pollution curves and crashes of various kinds. Climate change is on us and even Republicans are now realizing it. Human population growth is causing refugee and conflict problems everywhere. China tries to feed its people as does North Korea and many poor countries. Conflict, pain, suffering, denial and new problems every day.
1
What happened to that nice Janet Yellen?
Oh. Never mind.
Donald is in charge now.
But maybe this little "correction' will be the straw that breaks his hump. One can only hope.
4
Janet Yellin was terrific. We know that in Alabama!!
Okay, well we begin to see the reaction of traders to Donald Trump's State of the Union speech. I guess he can take full credit, just like he has ever since his inauguration.
1
Oh you mean the State of the Union that absolutely had super low ratings regardless of their lie.
Let's get obama on the phone. After the SOTU all I heard from dems is that all the good news was because of obama, and that Trump was wrongly taking credit. Surely now it is all obama's fault, correct?
Come on, people, get real! The stock market usually increases by about 7% per year. This past year, it increased by 25%. That's huge! During the month of January alone it increased by 6% which, if continued, would mean an increase of 72% per year. Did you really expect that rate of gain to continue indefinitely? I didn't. People who want to make money in the stock market need to take responsibility for their investments. They can't just stick it in a retirement account and ignore it-- that's when you can lose your shirt. But if you lean to use the online tools that all the major investment companies offer for free, you can move your money from the stocks to bonds to a money market account instantly. No waiting; usually no transaction fee. We got out of the market in 2007 just before the crash. We got out again last week. We're not rich. We're not professional investors. We just watch what's happening and take action when necessary. Don't blame Trump; don't blame the oligarchy. Just take control.
4
I'm not a student of economics, but I am a student of history. We are facing the dire emergency of the rise of a threatening oligarchy, the wealth and power controlled by the few, not the many. While Thomas Jefferson's ideal of an America of yeoman farmers had many problems (like that it was the machinations of a slaveholder), the spirit behind it is in the DNA of the America dream of independence and democracy.
We must expect and demand policies, and justice that support working people, and budding entrepreneurs. The market simply must be regulated to curb greed and excess, monopolies and trusts must be prosecuted, and white-collar criminals need to be shamed and sentenced.
I call this a dire emergency, because time and again, once the money is controlled by the few, the only thing that changes that is blood. I hope that's not where we're headed.
6
Trump, et al gutted Dodd Frank and we are back to the days of the Wall Street casino is my hunch.
6
Is it surprising that Trump's economic brainstrust couldn't see this coming? Low unemployment, upward wage pressure and sustained economic growth were warning signs right up through the end of 2017, even before the absurd tax cut legislation that threw oil on the fire. Between Paul Ryan, Gary Cohn, and Steven Mnuchin, it is shocking but not unexpected that a severe skid in the stock market wasn't foreseen and averted through policy levers. We can only hope that this doesn't signal an economic contraction that will undo the growth and stability of the post-2008 Obama economic performance. But the willful self-blindsigh of this clown car of economic advisors and managers has put the economy on shaky grounds. We've been here before, but one thing about this crowd that makes the current freefall scary is that Trump and his gang have a singular ability to not learn from their mistakes. Woe is us.
5
The impact of repatriated cash and the tax break monies haven't been factored into the market. All the sheep can now come back and lie down and graze contently.
Looks like rhe Trump effect is finally kicking in....
1
Why aren't Democrats calling this the "Trump Crash"? The TED (Trump Economic Disaster).
Because a horse could come up with better messaging then the Folding Card Table Party
This was overdue. expecting a 10-20% pullback. It's a healthy correction, nothing more.
1
Now that the market is plummeting, one can only hope that snake oil sales do too.
2
What goes up, must come down.
Absolutely, southern, “Trump” too. Gonna come down hard.
3
I'm betting on T-bills. But then, I was betting on them a year ago, and have felt a little foolish for the past year.
Perhaps, just perhaps, I was right after all.
As my mother used to say - 'if it looks too good to be true, it probably is.'
2
Brother can you spare a dime.
3
It doesn't exactly lend itself to a smooth acronym but how about "We make the stock market irrelevant again." (MTSMIA!) ? By that I mean let's elect representatives who will pursue public policies which will increase the labor fraction of national income - get it back to the level it was before the financialization of the economy.
Ref = https://en.wikipedia.org/wiki/Wage_share
6
Quick! Somebody check with the Secretary of Commerce! Maybe he's got a handle on this! Oh...wait...it's that Wilbur guy. That guy who sleeps at the cabinet meetings. Never mind.
6
Thanks, Trump.
16
This paper can barely contain its glee at the falling stock market.
2
With little or no competence, trump has presided over the robust economy he inherited from the Obama years, so tending to a rising stock market has been easy. A thoughtful and nimble leader is not needed to navigate bull markets.
A truly strong leader will rise to the occasion when things go south. Let's see how this incompetent president does when there is a real crisis, or stock market meltdown, or an economic downturn. He'll either be personal non-grata, or will blame everyone else. Solve any problems, nope.
20
Inflation? You mean what happens when you unnecessarily pump more money into a solid economy by cutting taxes?
27
8 years Clinton = strong economy & budget surplus.
8 years Bush = surplus depleted & collapse of financial system.
8 years Obama = economy pulled from recession & steady job growth.
Here we go again.
105
This is going to be like watching a car crash in slow motion. This is just the beginning, I fear that the 9/11 of the early Bush years is going to be trumped, easily.
5
I'm sure Don the Con will somehow find an excuse to blame this market correction? crash? on the Democrats, Obama, Hillary, or someone else he doesn't like at the moment, maybe Adam Schiff? Doesn't matter, he and his party of the corporate owners, GOP, thought cramming an unneeded tax cut for their billionaire buddies was a such a good idea, now We the People will have to pay for this yet again, all because some insane Americans thought this guy and his party would be good for our country (again). Will those voters ever learn?
18
Undoubtedly the effects of trumpism. The world bites back, to the detriment of the middle class he so reviles
9
I hope that everyone who thought that picking a different kind of president, got their wish. Mr Trump has often tanked his professional endeavors and allowed the taxpayers to assume the brunt of his losses. Now we will get to do it again since the new leader of our country has not seen fit to seek advice from sane and responsible financial leaders. Good luck to all of us who have investments in the market. I wonder if any of us will for once in his lifetime hold him responsible for our bankruptcies, as we have never held him responsible for his own.
The markets should never have hit 26,000 and those in charge of the fiscal health of this country should have slowed the stampede and taken stock of this unsustainable plateau. I can only hope that this is an adjustment and not the foreboding of another crash in the financial sector.
13
It's weird. I'm experiencing schadenfreude at my own expense. Much of my assets is in the stock market, yet I can't help feeling elated on how bad this makes Trump look, with an egg on his face.
16
This drop is nothing compared to the rally that will occur on the day that Donald Trump is sentenced to spend the rest of his life at Guantanamo Bay.
28
When you have an idiot from the White House saying things like “We got ‘em, we caught ‘em” referring to decimating our country’s intelligence and security agencies, what would we expect?
Put a crazy in the White House for a year and this is what happens.
He got’em all right!
8
Not breaking news for me. Knew this bubble would burst especially with the incompetent president and his Republican supplicants ruining our democracy all in the name of their fat cat donors. I bet they're selling off their stocks as this news is breaking. how many more of these so-called legislators will not be seeking reelection.
7
Former Federal Reserve Chair, Janet Yellen, proficiently managed the economy for four years, during unusual economic times.
But 45, thought that her performance wasn’t good, and let her go. It is unusual for a Federal Reserve Chair to serve one term, especially if they performed well and ready for a second term.
But again, we have an unusual person in the Oval Office.
12
As Donald Trump will tell us tonight, this huge market drop is all the fault of President Obama and, of course, Hillary.
9
It's rather simple if you think about it. Even though there have been record profits, real wages/income has been relatively flat. Now that there is supposedly this great tax cut that will increase wages, it will be followed by increases in product costs rather then taking the increased profits and passing it down to the rank and file. Higher product cost means inflation with the Fed following with interest rate increases to combat inflation and the game begins. Higher inflation begets higher interest rates and stock slippage. What we need is Trump and Congress to behave like grown ups and be fiscally responsible, but that appears to be too much to ask. I'm sure Trump will find some reason to blame this market down turn on Obama.
6
The biggest one day decline in the market I history. The most amount of money ever lost in a day. All on Trump’s watch.
16
I look forward to hearing him call this fake news.
Just wait until he fires Mueller (and he is going to fire Mueller) and we can all watch the bottom drop out. 13 months in - this is all on him, his Goldman Sachs cronies and their enablers in Congress.
12
Nothing instills confidence like a president who is a con-man, and the toady congress his has blackmailed to cover for him when Mueller wraps up the investigation (Do they have the spine to bring charges?--no).
Trump keeps hammering on about "collusion" because 1) he knows it will be hard for Mueller to prove, so 2) he hopes it distracts from what is very likely to be proven: Trumps long-time financial dealings with Russian mafioso.
7
Could be worse, H. Clinton could have won and the stock market would be down to around 10000 as we adopt the Venezuelan model.
Please, stop, this is completely about “Trump” trying to end democracy in the US.
4
Don't worry, Russia has hacked U.S. stock markets and will make everything great again for Trump.
4
Traditionally, the best way to take eyeballs off the stock market is to start a war.
Mr. President, here's your chance.
1
Why is it all the market crashes during the time the GOP are in charge? Hoover, W. and now trump...
9
Just wondering...
Will Trump forego his presidential salary again this year? Or will he use it to cut his losses.
2
Literally going nuts. Have been all cash or sold out at 26000. Here comes the money.
1
Strange that this is a headline now. Trump has been in office for over a year and the countless times the stock market broke records never seemed to be "newsworthy".
Because everyone was making money. Now people have lost lots of money and this has a huge impact on everything.
1
Trumpian economics at its finest. GOP, you own this mess. GOP you broke it, now fix it.
4
I'm a dividend growth investor. My cashflow tomorrow is exactly the same as yesterday, and will be higher later this month with KO raises its dividend. I've seen this before, I don't see it as a huge problem, will be a buying opportunity at some point.
5
Arithmetic. Under Republican presidents, the stock market usually goes up for 1 year, then fizzles. The government isn't investing in the things that are needed for sustained growth: education, environment, social justice, stable international relations. Bill Clinton and Barack Obama each managed to support stable growth for 8 years. Remember this in November.
22
This is bigger than the Eagles beating the Patriots this is the victory of the Hedge Fund managers pulverizing the Masters of the Universe.
Without interest rates that could keep money out of real estate and the markets surplus cash gravitated into the only places it could deliver 6 plus %.
Without the ability of lower interest rates to boost a sluggish economy there is only rising interest rates to slow an overheated economy. With a slowly rising stable economy things have gone well for 9 years. Slow growing and stable are an anathema to the hedge fund managers as much as they are heaven to the Masters of the Universe. Sometimes the greatest quarterbacks in the history of economics cannot succeed in last minute rescues when their best options are out with concussions.
2
“I inherited a mess folks,..”
Well, surely created one, 45.
12
This is clearly the fault of Barack Obama. He set this up to happen just after the one year anniversary of his leaving office. I’m surprised he didn’t set it up for one day before the SOTU speech!
3
Trump twitters while the market burns
22
Our Nero.
3
Obama bull market is over. Get ready for the Trump bear. US almost doubled funding need this year, no debt ceiling accord in sight and financial conservatives became extinct with the tax plan.
18
Call me gullible, but as a sucker, I will believe President Trump when he declares this stock market crash "Fake News!" If it turns out it's not "Fake News," I will blame Hillary. Now, wee, the taxpayers, must cough up $25 billion to build a beautiful wall with the understanding that Mexico will reimburse us. One way Mexico could pay would be with some beautiful murals that would not interfere with the 50-foot-high wall's transparency and solar power generating capacity!!!
7
Does this mean my $1.50 a week "corporate tax cut increase" will buy more or less fries now?
https://www.nytimes.com/2018/02/04/opinion/let-them-eat-french-fries.html
16
American Right puts a grifting con man/business tycoon in charge of the country. Then expect different? The man declared bankruptcy over 5 times. He was and is known for stiffing subcontractors and suing others he grifted out of payments. NO American banks would loan him money for a reason. Thus his Russian mafia/Putin connections.
You knew he was a snake when you took him in.
The gloves are off and the 1% are gaming the stock market. What a shock. Enjoy the ride little investors. The big dogs are feeding, on YOU!
32
"I, alone, can fix it!" _Donald Trumpalone, author "Art of the Con"
4
Oh please, please, PLEASE! Tweet about this, Donald. Come on; just pick up that little finger and tell the world that Robert Muller is to blame.
16
Many jokes about how Trump will blame Obama or Hillary. Nope - the Russia Investigation/Mueller.
6
It's Mindless to blame trump for this.
Giving ANY president credit for Day to Day market action is uniformed at best and absolutely mindless at worst.
1
I once believed that, too. But it was Republican policy under Republican presidents that led to the Great Depression: Smoot-Hawley tariffs, failure to recognize the coming Dust Bowl, complete lack of regulation of Wall Street, Teapot Dome, rampant corruption, isolationism, failure to respond to the market crash and probably other factors. Warpresident Bush's policies and failure to respond to warnings about an imminent terrorist attack exacerbated the first recession, and his reckless promotion of the housing bubble and lack of regulation of markets led to the second. Now, we have the most corrupt and ignorant president in our history, whose utter incompetence and possible sabotage will wreck our economy again.
2
Yet Trump does it all the time, doesn't he?
3
I'll step up and take the bullet on this one. No one should blame Hillary or Pres. Obama. I voted for Hillary, so I'm responsible
3
Oh no! I missed it again. Unlike the president, I am just not a "staple jeanius" when it comes to this stock market thingy.
5
I'm waiting for Trump to blame Obama for this. :-)
5
Just the last vestiges of the Obama economy leaving the system, it's plain sailing from here.
1
Stormy waters actually.
1
Repeat after me: It's the economy stupid! If Dems have any chance of riding a Blue wave in November, they will need outside help. Generally speaking, Dems are weak in creating messages that capture the hearts and minds of people. BUT, if the economy goes into a tailspin, INCUMBENTS look out. Also, keep an eye on oil prices and interest rates. That good feel Tax Cut will quickly disappear, if you are suddenly paying more at the gas pump and on your credit cards.
7
The Dow's nearly 1200 pt. plunge today, alongside the Naz's 270+ pt. cratering represents a come-to-Jesus moment for the GOP, and all the suckers who hitched their wagon to Circus Master Trump's train to oblivion. And, just to add a little more color to today's bloodbath, consider that the VIX - Wall Street's "fear index" more than doubled today (opened at 18.42, closed at 37.32, an increase of 115%--in one day). It's been a long, long time since I've seen anything like that. And the ramifications for this market are not good.
Now, let's consider that we no longer have even a modicum of competence in the White House, or the Treasury, or just about anywhere else within the Executive Branch...
Buckle up, America! We're in for a quite a thrill ride.
434
Of course, Trump will fall back on his limited political repertoire and start tweeting in hopes of diverting and deflecting. Keep an eye on that fear index as he threatens North Korea, makes cryptic and aggressive remarks about Mueller or insults more Democrats in a display of his negotiating skills around the looming budget crisis.
I'm no master business man like the President but even I know that markets hate uncertainty.
5
Don W. A couple of weeks ago people like you were claiming Trump had nothing to do with the great stock market. How quickly and conveniently you change your story and blame Trump. Such hypocrisy.
The VIX is not a fear index, it's a volatility index.
The problem is, institutional investors started trading the VIX instead of stocks. It's the easy way to get rich without those messy companies and their dumb CEOs. Unfortunately, their trades turned on them, they got margin calls, and they had to sell stock. So instead of stocks crashing causing volatility to surge, the surge in volatility caused stocks to crash.
Does this make any sense? Well, if you a quant or a hedgie...
1
Isn't it rather silly to put forth complicated reasons for a selloff? It comes down to this: someone starts selling, then a neighbor notices and thinks he'd better sell, too. The mushroom effect kicks in and voila! — a selloff.
2
I guess since Don the Con has taken credit for the continued upswing left over from the Obama Administration he’s going to take the blame now that the market is collapsing...oh wait, it’s just a minor readjustment Donnie...
So once again if it’s good Don did it, if it’s not so good, well, must be somebody else’s fault.
Let’s see if he takes responsibility for the next domestic airline crash.
11
Maybe investors have the jitters for a different reason. Maybe they have figured out Democracy is in trouble in the USA and we're headed for a constitutional crisis -- AND we are about to abut the debt limit. Combined with creative accounting AND the tax cuts starting to impact the US Treasury, we could be headed for default in March.
8
It took George W. Bush and the Republicans seven years to tank the economy. During the Bush administration, the Dow went from about 10,750 to just over 14,000, before heading down in the Bush Recession to about 8,000 when President Obama took over. The Bush Recession finally ended in March 2009 with the Dow at 6,627. When President Obama left office, the Dow had climbed to 21,271.
During the first Presidential Debate, September 2016, Trump said:
“Believe me: We’re in a bubble right now. And the only thing that looks good is the stock market — but if you raise interest rates even a little bit, that’s going to come crashing down. We are in a big, fat, ugly bubble. And we better be awfully careful.”
He has called the increase in the economy since he took office “one of the greatest [economic revivals] in the history of our country.” He now doesn't see a bubble at all.
14
Hmmm. Isn't this how 2008 started out? I think so, but just not quite as bad.
4
US share market has just has it's biggest fall in two years, will IQ 45 claim it's his doing? Well he should, if he is logically consistent.
1
Trump is out touting the economy and his tax scam while the market tanks. Every day feels like an episode from Veep.
7
I got out early last week. Too many "pundits" and "experts" talking about "new reality" and "new rules" for this expansion.
Sounded just like the Dot Com Bubble. Ejector seat pulled!
Now to wait for the 20% correction to play out. Too bad about all the little guys who finally came back to the market. They are going to run for the hills again, just like 2008-09.
5
Why would they run for the hills? This is as good a buying opportunity as you can ask for.
I started getting nosebleeds when the Dow crossed 20,000. I reduced my exposure to the market. I began bleeding profusely when the Dow crossed 25,000, with valuations sky high, an inflationary tax cut sure to give the Fed conniptions, and cash flowing INTO index funds at a record rate. That's when you know the suckers who are late to the party are about to get fleeced. I bailed out of most shares and index fund exposure, except for low p/e dividend plays that I doubt will fluctuate much, and if they do, that's just a time to buy more.
Amazon trades at 400 times earnings, yet analysts were calling for a 30% runup in price this year. Anyone old enough to remember the name 'Henry Blodgett' undoubtedly began to tremble and quake hearing that news. Amazon at $1450 a share would be $75 a share at a p/e above 20, which is still a pretty rich price per share based on real earnings, past and reasonably projected for the next few years.
And when unregulated 'cryptocurrency' is the hot topic at cocktail parties - when people aren't talking about 'how much money I made on my house' (on paper, of course) - anyone 40 or older senses a balloon is about to pop.
We have no way of knowing whether this is a short term pullback or a more fundamental turn in sentiment. But Dow 15,000 would not be all that big a surprise if that were the news come November 2018.
And hopefully the Democratic Party will remember these sage words: 'It's the economy, stupid!' and leave the culture wars alone.
The rich vs. the poor.
The high class vs. the low class.
This is the best of times.
This is the darkest of times.
Tomorrow will be better.
Hold on to the American dream.
We are also dreamers.
1
This isn't over yet by a long shot! The bottom is still a long way off.
7
Thanks, Trump! And you can't blame this massive sell-off, the largest one day drop ever, on Obama either!
3
The rulebook is changing, but not in the ways described here. The Treasury just announced need for massive borrowing to offset losses owing to the business/billionaire tax cut. Congress has shown itself, in the form of the Nunes memo, willing to sacrifice honesty and the institutional norms that stabilize our society for cheap political gain. And the President continues to display obvious personal and political instability. Any of these things could cause markets to become shaky, but the confluence of them is bound to lead to panic.
7
So is Trump going to take credit for the market dropping 4% like he did when it was doing well?
29
Hardly, must be those pesky Dems and that "fake" investigation. Or maybe Obama's fault, even better, Hillary Clinton, since they're not investigating her nefarious deeds. Oh, so many to blame, so little time to tweet it all.
He will blame it on someone else for sure. Maybe it was Comey's fault, or Adam Schiff's!
1
The rate of return this last year has been close to 25% - that was fake: stoked by the allure of profit from corporate-tax reduction. Now the reality of higher national debt (and perhaps unwarranted optimism at the Federal reserve) is causing a correction. If we drop back to a rate of return of only 10%, it will still be a good year - just not the election win Trump wanted for the mid-terms.
Of course, this could all be a deep-state conspiracy ...
8
It could be argued, and time will certainly tell, that once the Tax reform bill took effect, the stock market turned bearish within 30 days.
Waiting for that tweet blaming the Democrats.
21
If you are 20-40 yrs old, pay this no heed at all.
If you are 40-60 hold off on new investments and be cautious, but hang in there
if you are over 60, pray that this isn't the next "Big One". It probably isn't, but you won't have much chance of recovering if it is.
This is why they advise us oldies to have a 70/30 split between cash/bonds & equities.
If the market collapses and loses half its value. then the 70/30 oldie loses half of his "30" and still has most of the remaining 85%.
30
Received my Medicare card in August. Sold most of my stocks in September. Feeling pretty good right now.
5
Ann - Are you assuming that Republicans won't destroy medicare?
Not at all, just stating that turning 65 seemed like a good time to pull out of the stock market and move the money in to something more secure.
2
The market goes up,
The market goes down.
Hang onto your holdings,
It's only a frown.
8
It's just a frown!
(Drums)
1
But you have heard of bear markets. 20% plus down.
The market rises,
The market falls,
If you're a senior,
You're screwed. That's all. :-(
2
Note to Trump supporters: Are you tired of winning?
50
The bulk of Trump supporters are unlikely to have much in the market and the way they protect Trump he'll sell it as draining the swamp and they'll swallow it. The super wealthy, that soared with the tax cut will now be able to swoop in and buy up more stocks on the downside, thereby maxing out even more. More than one way to play a con.
3
Here’s a question to ponder. Would you allow Trump to manage your retirement investments? Just wondering.
85
No. Nope. Nah. Nah-uh. No way. Now how. Never. No, sir. NO NO NO.
1
Oopsie. Shoulda re-appointed Yellen as Fed Chair.
37
I expect President Trump to take 100% of the "credit" for this tanking. Nothing else will be acceptable.
43
I can’t believe Obama did this to the stock market. Oh wait... he’s not President anymore???
59
Obama? No, no, no. It's all Hillary's fault.
2
Well folks, I guess this is what winning looks like.
I'd say that maybe Trump supporters with 401Ks should take a good look at them right about now, but I'm sure they'd blame any loss on Hillary, Bill Clinton, or Obama. And if they don't, Trump probably will. As for the rest of us, we'll be waiting for the Tweet-whine heard 'round the world about how all of this is unfair fake news.
479
Trump will send out an appropriate tweet as soon as Fox and Friends tell him what to say.
4
Only because I've heard so much lately how all the good news was just a delayed reaction to all the wonderful things obama did, and that he deserved all the credit, not Trump. So now it's all Trump's fault? Can't have it both ways.
You Trump haters have been insisting that all the stock market gains since President Trump's election should be credited to Obama. Does that mean you want to give Obama the blame for the drop? I somewhat doubt it.
1
Everything King Midas Trump touches turns stone cold. We should have known the markets would experience trouble when Trump started bragging about the impact of his Presidency on markets.
The truth is that markets are concerned more about economic overheating from stimulus of the big corporate tax cuts just as the economy is reaching full employment.
17
At least W. didn't crash the market for 8 years.
Way to go Donald...trying for the hugely biggest crash ever.
28
W gave us the great recession.
3
What are you talking about? W crashed the market in his 7th and 8th years, giving us the worst economic collapse since the Great Depression. W was terrible.
OTOH, Trumpkins somehow manages to be even worse. Thanks, Republicans!
2
This has to be President Obama’s fault.
45 used to call the unemployment and new jobs figures generated under Obama as fake, hoax, made up, but later on, his numbers were great,..and on and on,...
Boy! Market closed 1,175.xx points down, or 4.6% off its opening, at 4:00 PM ET.
13
Gee, our wealthiest president ever and self-proclaimed hugely successful businessman - President Donald Trump - apparently is learning a basic and painful lesson of Wall Street: Stocks also go down.
Who didn't see that one coming?
The huge slide in the stock markets Friday and today comes alongside growing concern that an economy juiced by a massive tax cut that inordinately favors corporations and the wealthy, and already at full employment, could overheat and require forceful action from a new and untested Federal Reserve chairman — installed by Trump — to cool things down.
On top of concerns about rising inflation, the tax cuts are already increasing the federal government’s need to borrow and accelerating the date by which Congress must raise the federal debt limit.
And guess what? There is still no plan in DC to raise the limit and avoid a catastrophic default. No wonder the markets are spooked.
Punting on a budget isn't a credible plan. It's a helluva way to run a government.
Trump tossed aside traditional presidential caution in cheerleading the stock market. He now stands poised to take the blame for any correction.
Of course, Trump never accepts responsibility for anything and will blame others for the stock market's huge decline. Then again, Trump is a pathological liar and he's just as likely to proclaim that the stock market is beautiful and is still roaring higher and higher since he was elected.
551
Trump doesn't deserve most of the credit he claims for good things that happen in the world, so it's only fair that he receives more blame than he might be due when things go wrong. And I do blame him. But, as a practical matter, I think the Republicans in Congress are the ones who have really dug the economy into a hole. Let's not forget to blame them.
1
First off I am an active investor/trader/speculator who has lost quite a lot in the downturn. We should all try to cooperate and lay aside aside our differences and quit blaming Trump or Obama and live in the present. The markets are reality and are intimately connected to the day to day world we all live in.
Don't kid yourself-if this thing keeps on within a few months we'll be knee deep in a recession. Many people will be out of a job-some will never have it as good again.
For some reason my mind goes to the recent State of the Union speech. Basically, I liked it and President Trump made several large commitments but he didn't offer a viable way to pay for it-neither taxes or debt (bonds). On the other side of the aisle the Democrats very rudely (I thought) refused to applaud or stand for several occasions calling for sympathy and empathy. They have no respect for the Office of the President or of positions not their own. Did the "Big Money" people see this spectacle and say to themself "This isn't good. I'm voting with my feet. Sell before this spectacle implodes!"
This should serve as a wake up call. Quit with the bickering and small town politics carried out on national level. Let's work together. This is bigger than Trump, Obama, Yellen, and Powell.
3
"On the other side of the aisle the Democrats very rudely (I thought) refused to applaud or stand for several occasions calling for sympathy and empathy. They have no respect for the Office of the President or of positions not their own. "
You mean like the Republicans did for the 8 previous years?
5
"They have no respect for the Office of the President or of positions not their own." Ummm....where were you during the Obama years? You think "Birther" Trump showed any respect? McConnell? Ryan? You can't have it both ways - you created this mess and as usual we will have to fix it for you.
Did you say that last week or last year . Were you so bipartisan when Obama was elected.?
1
I started investing in market forty years ago and I've seen lots of bull markets and corrections. The market never goes straight up. Trump took office over a years ago and we had one of the strongest bull markets I can remember. This down turn is a healthy correction considering how far we've come. I have every confidence prices will come back. It always does.
190
I'm thinking somewhere in the s&p 2000 - 2200 figure for a settle. It's fun to speculate without real money.
Except that the market was far stronger the first few years of the Obama administration and continued to grow nicely until Trump took office. Let’s see how far this correction goes. Im gusting a few more thousand points. ,
2
This maybe true some of the time, but not every time ... each closing bell is a unique event. One percent at present volumes doesn't scare ... 4% in one day will shake things.
2
Here's my conspiracy theory--it's all now manipulated by computers operated by the people to whom all the money has gone. Sell off, take it down, buy back take it back up--yes, the traditional scenario in the Big Casino. Now, the computers are programmed to do it. The House always wins. Ugh.
7
Throw gasoline on an overheated market and then wonder why it explodes and collapses on inflation fears?
President Trump and his advisors know as much about economics as he did about operating casinos, airlines, or universities.
1122
He was very happy to claim credit for all the good things happening in the market. Will he now be as quick to accept the blame for a falling Dow on his watch? I doubt it.
1
Football teams??
1
This isn't a collapse but a correction. However I am sure Trump will Tweet this is the fault of Democrats.
1
Did anyone else think this tax cut was too good to be true? Well, here's our answer.
11
The US stock market is a house of greed built on sand. Inequality is everywhere in this country, the federal deficit is ballooning due to the GOP's idiotic tax cut for the wealthy, and our president is a Herbert Hoover-esque nincompoop. What do you expect, fools?
17
As much as I loathe DJT, this has very little to do with him. I do hope the ignorant American people don't realize this and attribute the blame to him and the Republicans and vote accordingly.
6
Yeah we knew that. It was him who was taking responsibility for the market in the first place when it was going sky high (Though that was mostly Obama's doing). So by his own branding - it's on him.
Notice what happened the virtual day Janet Yellen, who kept inflation low as people (Republicans) cried about "slow sluggish growth". this is in hindsight the best sort of growth - "honest growth".
2
Trump has performed some of the largest tax cuts and debt increase - ever.
How could it not be related?
3
Sorry. It's all Trump. It is all about incompetence, cluelessness and corruption at the highest level of government.
This is clearly Obama's fault.... if he had just had the smarts to leave the
economy in the toilet bowl... the markets would not be crashing... also...
the markets just figured out that Paul Ryan's Secretary has an extra $1.50
per week to spend.... and are just facturing that good news into the earning..
( consumers with no cash = no future earnings ) but ... coffee stocks are up...
seems like every has an extra $1.50 to spend...
10
The stock market is being rigged by those who bought low and sold high. Those who are in stock for a long term and those who are adequately diversified portfolio may be okay. No need to panic. Time to buy good company stocks 5% less than there peak price.
3
And now, those fools who declared themselves geniuses because they could make easy money during good times will get a lesson we will all remember for some time to come.
The markets closed down well over 4%, and during the final hours of trading there were repeated swings of hundreds of points in fractions of a minute.
There was no shocking economic news to explain this; there was little consequential news at all.
This is not about rational markets and the invisible hand. It is not about thoughtful investors intelligently assessing companies and commodities, rewarding the good and financially punishing the bad, thereby helping to grow the economy.
This is about computer-based program trading, the algorithmic high frequency trading designed to make billions for Wall Street masters of the universe, using methods that border on sophisticated market manipulation. Human directed trading could not produce this unearthly volatility; only computers could. The problem is the games Wall Street plays threaten to undermine the confidence in markets that is fundamental to a healthy American economy.
The answer is to end high frequency trading, perhaps through a simple tool like a tiny transaction tax. What happened today, which will likely continue tomorrow, is a major threat to our recovery and the jobs of tens of millions.
We need cannot command markets to rise or fall, but we can insure that they function fairly and with some semblance of rationality. It's long past time to end high frequency program trading.
856
Nonsense. Look at the drop in 1920s. Unlike humans, computer programs have built in rational responses like "Buy stocks when the price drops X%". The computers don't get scared at the last second and lose their nerve.
Fear and panic are human emotions and they are more dangerous to markets than computers ever will be.
1
Alex: "This is about computer-based program trading, the algorithmic high frequency trading designed to make billions for Wall Street..."
Please. This kind of thing happened all the time, long before computers. The stock markets are not a reliable indicator of overall financial health when looked at in short time spans - short meaning even one or two years, or less. The Stock Market Crash of 1929, for one example? No computers.
In fact, information and communications technologies, while making small dips and bubbles happen more frequently, probably make it harder for a 1929-style crash to happen without some series of hard catastrophic events (like war) triggering it, events too powerful for market based corrections to fix.
Stock markets have always been prone to irrationality. They always will be. They are, by definition, a measure of how humans FEEL about economic prospects, not necessarily ACTUAL prospects. Like free market forces ideology in general, they carry a certain unavoidable level of unfairness because humans are often not fair, or able to see the long view. They can panic, sometimes just from the wrong word at the wrong time from the wrong person. In fact, capitalism - a pretty fair model of survival of the fittest - (including stock market behavior like this) is arguably completely rational. One can be perfectly rational and still end up making mistakes if the information one goes by for justifying behavior is incomplete, misleading, or just plain wrong.
2
Trump slump?
1
I rode out the last two bubble burstings. Things have gone well...until now. I haven't been able to log on the Vanguard to move most of my stock fund to bonds or to cash. If I can get out before the Dow falls to $17K, I'll still be in reasonable shape. IF....
5
Trump can shoot someone on 5th Ave and not lose supporters when the economy is good. When the economy isn't so good it might be another story.Sadly, if we lose this clown there are several villains happily waiting to take his place.
13
I know this may be considered to be borderline insane, but ...
Okay, the Dow Jones Industrial Average is taking it in the teeth and my wife and I are losing a boatload of money — well, not "money," of course, but instead potential mazuma airily valued in this crazy casino known as "The Market."
I should be disappointed, but I'm not. There are, in fact, two reasons that I'm not. The first is rather straightforward, in that the DJIA has been in a rather obvious bubble, and the sooner the inevitable correction occurs, the better (and perhaps the less precipitous).
The second reason is less logical — and perhaps less self-serving. Y'see, Donnie Two-Scoops has been rising in popularity as the economy hums along, the unemployment rate dips, and a few companies make big noises about gifting bonuses to their workers and airing possible hiring plans. If the DJIA continues to slip — or at minimum to moderate — perhaps Joe and Jane Sixpak will realize that Agent Orange's "feed the rich" economic scam may not be quite as marvelous as he tells them it is. And if they see their fortunes fading as the market contracts and employers tighten their purse strings, perhaps the midterm elections might more easily and more emphatically roll the Democrats' way, and perhaps the GOP's stranglehold on our government might be loosened.
That's easily worth five figures in non-existent "on paper only" wealth, methinks ...
6
Yup. Getting tired of all this winning!
4
maybe wages had to be brought back under control and maybe the new nuclear policy is for future debt collateral (while allowing a bit of accumulation in a strange form of simil insider trading) but maybe not.
1
I blame the President. And the GOP who voted for this crazy tax plan.
A teacher gets an extra buck fifty in her paycheck. But inflation robs her paycheck, her retirement is in the toilet. And no relief in sight.
Grab them by the midterms!
9
In our upside down world, I would like the responsible media to begin highlighting when Trump doesn't tweet.
As when he ignores conflagrations and floods in California or disasters in blue states.
As when he ignores school shootings.
As when he ignores casualties in our overseas eternal wars.
As when he ignores good news that makes him look bad.
As when he ignores bad news that make him look worse.
Having taken credit for the mile high Dow, will he now find a way to blame Yellen, Obama, Pelosi, Schiff, the Deep State conspiracy and the black NFL players for the sky about to fall on his watch?
4
All of you complaining about "rich people taking my money at video poker" seem to have forgotten that you were the ones who chose to play the game in the first place. If you don't want to be exposed to losses then you should just keep your money in a DDA.
3
Gee, I wonder if Trump will take any 'credit' for these market losses.
Certainly he took credit for the bullish market of Obama's policies and the lower black unemployment rate and the unemployment rate and creation of jobs.
Guess he doesn't understand how tax breaks work and what impact they have on rising rates.
Surely he missed that history of the job growth and continuous market surges while he was dealing with the Russians.
Somehow it will all be Obama's fault in Trump's mind. Fox will no doubt put that concept into his brain during Executive Time.
Can't wait for the tweets.
2
Given that the economy is healthy, this correction is good for the market.
3
Janet Yellen, "Miss me yet?"
4
Dear Donald Trump,
The stock market is not an indicator of health.
Yours,
We Don't Golf
1
If President Trump takes credit for stock market growth, he then owns a sell off. But, how many of us are secretly gleeful about today's huge loss, even though it hurt millions? Come on, be honest.
1
I cannot tell a lie. I can only speak for my losses which are a small price to pay for outing a braggart. He exceeded his right to claim fame and is now getting his much-deserved payback. I am sorry for anyone who could not afford to lose, yet the old adage of there is no such thing as a free lunch is alive and well.
The Trump Bump is becoming the Trump Dump.
1,666 points down in two trading days.
Goodbye, my fat 401k: You grew so fast,
but died even faster. We need a new D.C. master.
Happy days are not here again.
Brother, can you spare a dime?
3
Mr Mueller I am sure by this time wouldn't put anything past the Trumpet man. He must be taking note that the President in his Address To The Nation drew unusual attention to the performance of the stock market. Trump glowed with pride that, thanks to him, everyone - even market investors- are getting rich. No matter that on the very day he spoke that markets were beginning to tumble. Could it be that Foxy Donald, with his sketchy mob-connected Russian friends as proxies, has outdone himself by engineering a mammoth short-sell scam to make him rich beyond his dreams?
3
Everyone is wondering who Trump is going to blame.
3
One of the longest economic expansions on record. For a long time more and more experts have been predicting it couldn't continue. As predicted, it appears it may be the end of the current expansion. Also as predicted, Trump will be blamed.
2
Trump took credit for a bull market he had nothing to do with...
1
Democrats do at least 10 times better with the economy than Republicans:
http://politicsthatwork.com/graphs/dow-jones-performance-by-party
7
After the election, I rebalanced my portfolio, as I was getting heavy in stocks. My reasoning was that the Republicans were in charge and historically they hurt stocks. However the market kept going up as the Republicans didn't do anything. Now they have done something.
21
Few things:
1. The stock market looks forward, not back. People always make the mistake of thinking the stock market is doing well because the economy is. This is ominous
2. This may be a bear head-fake. It could recover
3. Gold/silver are areas to consider. Silver, in particular, has formed an incredibly strong base. As a gold bug you get a sense of where to enter/exit precious metals. I would buy silver.
2
Predictions are difficult as we are talking about the future.
Yogi Berra.
1
Thanks so very much Mister Trump for your stock market dump! You own this one baby! You claimed that it went up because of you, but who you gonna blame for it tanking, Obama?
28
Of course he'll blame Obama. And Hillary as well.