Markets crashing?

[Silence]

that's always been the easy way out for a liberal hasn't it. Blame the one sitting right now in the office. aaaaaaaaaaaaaaaaannnnnnnnnnd then someone a lib I think posted just the other day that if Obamalama fails it won't be his fault. after all everybody knows "he can't do it alone" I went out and bought me some depends cause I keep peeing in my pants laughing at you left wing loons.

how can you blame a man who hasn't even made ONE decision as President yet? that makes zero sense which is the way of the con

The markets have not recovered and weren't recovering even before the election and to say otherwise is just ridiculous but typical con nonsense.

 

[frazzledgear]

Sarge, we've gotta put you on CNBC - your expert financial knowledge could really be beneficial for the millions of people watching the show. Because, somehow, amazingly, before Obama got elected, the housing crisis ended, the GDP increased and didn't decrease, the global recession ended, GM, Chrysler and Ford wound up having AMAZING quarters last quarter, unemployment is virtually non-existent, and our economy is doing AMAZING - only up until that horrible guy got elected and then BOOM our market tanked just because of him and for no other reason whatsoever. I tell ya', your expert knowledge comes in really handy.

I realize you are under the impression that nothing different is going on with the stock market since Obama won -but something different is going on. The stock market appeared to have bottomed out in response to the housing and credit crunch and had been more stable and making fairly steady gains the week prior to the election. But upon Obama's win, the stock market lost some 500 points on Nov. 5th and today it is down yet another 400+. There is frequently a big sell-off right before closing, so its possible today's drop could be way more than that.

If I were a political idealogue, it would be all too easy to say it is entirely in response to Obama's win which has scared off investors who are getting their money out before Obama raises capital gains taxes. But I think that isn't true at all.

1. There are no capital gains here to be taxed in the first place -those pulling their money out are doing so at a loss.

2. Retail reports on several major companies came out today and they were DISMAL -one company after another reporting major losses.

3. The drop in unemployment was less than half of what had been predicted -while it did drop, it wasn't a significant one at all.

These are all significant recessionary indications and fears of a recession played very little role as part of the stock market drops last month. Those drops were nearly entirely due to the housing/financial and credit problems. But the stock market is responding to these strong indicators of a serious recession in the last two days -that happened to emerge just as Obama won.

Just ask McCain how it feels to have the economy make a strong bigtime negative move during the most inopportune time -the difference is at least Obama doesn't have to worry it will affect his chances of winning the election, huh? McCain had been leading Obama when that hit and it tanked his chances of winning after that because he never led again. (I think his response to it was poor and had he responded in a totally different way, he could have overcome this. The proper response to that market nosedive and financial crisis/bailout should have been ANGER -just like all Americans were feeling anyway. With promises to go after those most responsible for it -including the CEOs and CFOs enriching themselves while their companies tanked and those in Congress who failed in their oversight responsibilities in spite of repeated warnings what would happened if they didn't. But even if he had, McCain aides ran a lousy campaign for this guy anyway and would have figured out another way of sabotaging his chances. Haven't seen a campaign shoot themselves in the foot on such a regular basis since Dukakis ran. I think it was due to the respect people have for McCain's service in general as well as Palin being a positive force for the base that prevented it from becoming the humiliating defeat Dukakis suffered of just winning his own state and no others.)

 

[Article 15]

Oy vey ...

Do people not realize that the market crash in 1929 didn't happen in one day but over a period of a couple of months?

 

[busara]

Oy vey ...

Do people not realize that the market crash in 1929 didn't happen in one day but over a period of a couple of months?

or that markets behave irrationally? anyone who is trying to pinpoint a market rise or dip on only 1 variable is painfully ignorant of how they work. economics is not a hard science

 

[jschuck12001]

or that markets behave irrationally? anyone who is trying to pinpoint a market rise or dip on only 1 variable is painfully ignorant of how they work. economics is not a hard science

This market is going to plunge even further, well have earnings coming out in the next 30 days and with retail tanking(especially at christmas time) along with the financial fallout, we will be screwed for sometime. Its doesnt matter who is in there, this was inevitable.

 

[SwingVoter]

I thought the market would react better to Obama's win. His message of "hope" hasn't made it to the owners of capital, which is a problem for a capitalist country.

 

[editec]

I wonder why it is that with the election of Obama the markets are dropping like rocks around the world?

Could it be they paid attention to all the dumb things Obama has said he was gonna do?

No.

The stock market has known the outcome of this election for the last month or so. The market probably incorporated the reality of an Obaman admin weeks ago.

If the election played any role in what happened yesterday, it's more likely the outcome in Congress which spooked the easily frightnened investors.

What other news came out on the financial front yesterday?

I wasn't paying attention so that's a legit question.

 

[SwingVoter]

unless he wants to be a gridlocked one termer, Obama needs to come out as soon as possible against this ridiculous plan by some members of his party to get rid of 401Ks

 

[editec]

I realize you are under the impression that nothing different is going on with the stock market since Obama won -but something different is going on. The stock market appeared to have bottomed out in response to the housing and credit crunch and had been more stable and making fairly steady gains the week prior to the election.

A single swallow does not a spring make, Fraz. The market is fibrilating because of many things.. few of them inspiring much confidence.

Like this for example:

NEW YORK (CNNMoney.com) -- The number of Americans filing new claims for unemployment insurance last week was higher than economists expected, and the number continuing to collect benefits shot to a 25-year high.

or this:

NEW YORK (CNNMoney.com) -- U.S. retailers, already struggling with a protracted sales slump this year, suffered another disastrous sales month in October as Americans continue to shun unnecessary purchases in tough economic times.

or this:

In June, 45.5% of all delinquencies reported by Freddie Mac (FRE, Fortune 500) were due to unemployment or the loss of income, according to the company. That's a rise from a level of 36.3% in 2006.

or this:

NEW YORK (Fortune) -- Forget about inflation. The opposite threat - deflation - is what has policymakers sweating now.
Central banks across Europe slashed interest rates again Thursday. The Bank of England cut its policy rate to 3% from 4.5% - a cut three times as big as the market expected - while the European Central Bank trimmed its own rate by half a point, to 3.25%. The moves come a week after the Federal Reserve cut the Fed funds rate to 1%, touching the lows it set earlier this decade before the housing bubble took shape.

If I were a political idealogue, it would be all too easy to say it is entirely in response to Obama's win which has scared off investors who are getting their money out before Obama raises capital gains taxes. But I think that isn't true at all.

Oh...upon reading further I can see we're on the same page.


1. There are no capital gains here to be taxed in the first place -those pulling their money out are doing so at a loss.

2. Retail reports on several major companies came out today and they were DISMAL -one company after another reporting major losses.

3. The drop in unemployment was less than half of what had been predicted -while it did drop, it wasn't a significant one at all.

These are all significant recessionary indications and fears of a recession played very little role as part of the stock market drops last month. Those drops were nearly entirely due to the housing/financial and credit problems. But the stock market is responding to these strong indicators of a serious recession in the last two days -that happened to emerge just as Obama won.

Just ask McCain how it feels to have the economy make a strong bigtime negative move during the most inopportune time -the difference is at least Obama doesn't have to worry it will affect his chances of winning the election, huh? McCain had been leading Obama when that hit and it tanked his chances of winning after that because he never led again. (I think his response to it was poor and had he responded in a totally different way, he could have overcome this. The proper response to that market nosedive and financial crisis/bailout should have been ANGER -just like all Americans were feeling anyway. With promises to go after those most responsible for it -including the CEOs and CFOs enriching themselves while their companies tanked and those in Congress who failed in their oversight responsibilities in spite of repeated warnings what would happened if they didn't. But even if he had, McCain aides ran a lousy campaign for this guy anyway and would have figured out another way of sabotaging his chances. Haven't seen a campaign shoot themselves in the foot on such a regular basis since Dukakis ran. I think it was due to the respect people have for McCain's service in general as well as Palin being a positive force for the base that prevented it from becoming the humiliating defeat Dukakis suffered of just winning his own state and no others.)

 

[frazzledgear]

Obama hasn't even been sworn in it yet. so don't blame him for this mess. blame the man that's sitting in the white house right now.

ENOUGH with idiotic political idealogues already! Sorry, but this isn't due to Bush tax policies. Cutting taxes doesn't result in a crisis with financial and housing institutions or cause a RECESSION. The problems with the financial/credit/housing crisis isn't Bush's fault. It is far more the fault of the Democrat controlled CONGRESS which has oversight and regulatory responsibilities for these institutions -and the CEOs who went along with it even while knowing it was bad business practice. A Democrat controlled Congress thought it would be a fine idea to use their power to do some social engineering by ENCOURAGING Fannie Mae and Freddie Mac to make loans to people who would otherwise have never been given those loans -because they wouldn't be able to pay them back. Bush repeatedly warned Congress what would happen unless regulatory oversight was tightened up on this. He even got a bill that made it to the floor of the Senate and was voted down by DEMOCRATS. McCain warned what would happen unless the Senate acted and HIS bill was voted down. (I posted links to both of these facts.) The Fannie Mae/Freddie Mac regulators testified to the House Banking and Financial committee what was going to happen -where Chairman Barney Franks and other Democrats like idiot Maxine Waters INSULTED them and claimed there wasn't anything wrong at Fannie Mae/Freddie Mac, they were JUST FINE (I posted a link to this hearing where this occurred) and that the real problem was the regulators just weren't any good at their jobs -although their hands were tied by Congress about their ability to properly regulate these institutions.

The only thing Bush can be blamed for here is the mistake of not making this a far more public issue before the crunch hit -if he had, perhaps public pressure would have gotten Congress to act since Bush wasn't able to get them off their asses and DO something to prevent it. Reagan was a master of bypassing a Democrat controlled Congress and going straight to the people -who then turned around and pressured their representatives. Haven't seen a President before or since who knows the real value of his bully pulpit though.

I understand the desire of political idealogues to constantly figure out ways to pretend their party is just soooo "noble" they can't possibly be even SLIGHTLY to blame and must pretend it is entirely the other party's fault at all times -no matter what the issue. To listen to Democrat idealogues, they would have you believe that Democrat politicians are just PERFECT in all things they do, so all-knowing and all-wise at all times, EVERY bill they pass is perfect, they are never wrong about a damn thing. Which is why PERFECT people are Democrats and Republicans are all evil. BULLSHIT buddy. Democrats are just people too and like all human beings -they screw things up ALL THE TIME. And in this situation, they screwed up big time.

No matter which party a President belongs, he still doesn't have oversight and regulatory authority here AT ALL. It is solely a Congressional power. That means the President had NO power or authority to affect this at all beyond urging Congress to act -which Bush repeatedly did for the past 3 years. But both houses of Congress are controlled by Democrats who couldn't care less about a lameduck Republican President they would rather systematically undermine anyway - and without any pressure from the other house of Congress controlled by the other party -Congressional Democrats were the ones who pushed and encouraged Frannie Mae/Freddie Mac to make these bad loans while they patted themselves on their backs about their "successful" social engineering. How they figured they were helping people by getting them suckered into taking out loans they could never afford to pay back is beyond me -but somehow Congressional Democrats thought that was a really good idea.

As for going into a recession -if you are under the impression that the economy hinges on the least little thing government does and one false move will throw it into a recession, you are nuts. It takes one government mistake after another to do that because the economy hinges on what the private sector does FAR MORE. The government can only make conditions as favorable for economic growth as possible or unfavorable for economic growth as possible. Tax cuts and low interest rates are known tools for encouraging economic growth. Raising taxes, discouraging investment by increasing taxes on capital gains and high interest rates discourage economic growth. There are times when raising taxes and interest rates are deliberately used to try and slow down an economy that appears to be super-heated and without a strong foundation under it to explain that kind of rapid growth -but this sure isn't the case here.

Government can make multiple errors like protectionist trade agreements, putting tariffs in place, wage and price controls, raising taxes, raising interest rates all in a short timeframe -and oh yeah, it can cause a recession. About 1/3 of our economy hinges on foreign trade and protectionist trade policies and tariffs in the hopes it will protect US businesses by making foreign goods more expensive to US consumers -has the opposite effect. It harms them because other countries respond in kind by putting tariffs on our goods and adopting their own protectionist policies. When US goods don't sell in foreign countries as a result, the pain from that is felt back here at home where US companies can only raise their prices to try and combat their losses. So US consumers find that EVERYTHING costs much more while their choice of goods is far less at the same time. US companies go bankrupt, unemployment rises. Good times for all to be had. But Bush adopted NONE of these economy killing policies -so he isn't to blame for the upcoming recession either.

Recession and temporary shrinking of the economy are cyclic in nature -it is impossible to have nonstop economic growth that never experiences corrective measures that actually clean out ineffective and nonproductive businesses. In the short run such cyclical economic "corrections" cause some pain as workers are temporarily dislocated -especially in particular industries that experienced faster than usual growth where these corrections are most needed. In the long run, these corrections provide even greater benefit with more efficient and productive companies coming through it and the economy ends up even stronger than before the correction. Such corrections usually last two quarters or less before fully recovering and moving on -and occur on a REGULAR basis every 8-10 years or so. Almost like clockwork. Regardless of who is President. We had one just as Clinton left office and Bush took office -and 8 years later, we are going to have another one.

Bush's tax policies when he took office for an across-the-board tax cut to all taxpayers get a great deal of credit for an economy that had so swiftly recovered from the brief recession and had become so strong -that when 9/11 wiped out nearly a 1/3 of our economy almost overnight, it recovered in a matter of a few months. In another country, it could easily have resulted in a deep depression.

The problem is when the economy is at the brink or in the middle of such a correction, government can take actions that make it teeter into outright depression or help it be a shallow and short recession. People getting hysterical or over-reacting to it can pressure government to make the wrong moves and we can end up with a serious depression that can take years for the economy to recover from. Raising taxes, higher interest rates and tightening credit etc. can all pressure a recessionary economy into a depression. Ask Jimmy Carter how those 20% interest rates and high taxes (which he promised would only hurt the rich) helped out during that recession and how much we all enjoyed those double digit unemployment rates. Had he been given a second term when he promised to do even more of the same and told Americans the best days of this country were behind us - he would have thrown us into a serious depression because the economy showed no signs of recovering and was only getting worse. Instead voters threw out Carter as the disaster he was. It took Reagan's tax cuts and economic policies that were as favorable as possible for economic growth to get it turned around -and even so, it took 3 times longer to recover from Carter's horrific policies than it took for him to inflict them on us.

Now we are all set up for yet another generation of historically ignorant people to learn firsthand why it is never a good thing to turn over control of both houses of Congress, the White House and majority of governorships to just one party. In fact, the country AND economy do their best when power is split between the two -because it provides a system of checks against one party going too far. And those checks won't exist at all for at least the first two years of an Obama administration. Which means if Democrats decide to go hysterical in their belief the economy hinges on government going to extreme lengths with massive increases in government spending, raising taxes to pay for that, implementing protectionist trade policies and increased tariffs and doing some more well-intentioned but disastrous social engineering -start tightening your belt right now.

 

[Ravi]

Am I the only person here who thinks Frazz is clinically insane?

 

[Mad Scientist]

I thought the market would react better to Obama's win. His message of "hope" hasn't made it to the owners of capital, which is a problem for a capitalist country.

You are joking right? Tell me you're joking.

 

[Andrew2382]

Markets trade on the future...another down day tomorrow and it will be th ebiggest post election sell off in history

Say what you want about the market, but since October 27 it has been steadily going up

Oct 27- 8175
Oct 28- 9065
Oct 29- 8990
oct 30- 9180
Oct 31- 9325
Nov 3- 9319
Nov 4- 9625
Nov 5- 9139
Nov 6- 8695

You could make an arguement that the market was quite stable and trying to rebound all of last week and then obama won and has loss almost all the gains it made in a week.

We can only see what happens tomorrow

 

[jschuck12001]

Markets trade on the future...another down day tomorrow and it will be th ebiggest post election sell off in history

Say what you want about the market, but since October 27 it has been steadily going up

Oct 27- 8175
Oct 28- 9065
Oct 29- 8990
oct 30- 9180
Oct 31- 9325
Nov 3- 9319
Nov 4- 9625
Nov 5- 9139
Nov 6- 8695

You could make an arguement that the market was quite stable and trying to rebound all of last week and then obama won and has loss almost all the gains it made in a week.

We can only see what happens tomorrow

Its just a trend, every time earnings come out(they have been shitty) the market tanks then builds leverage, you are about to see it tank because of earning reports about to be disclosed and many companies already dropping the bomb that they will under perform.

 

[xsited1]

How the DOW does the day after the election has been an historical indicator that provides insight into how confident investors are with the next round of politicians. This is its worst post-election plunge on record. The losses narrowly surpassed the Dow’s 4.51% decline the day after Franklin Roosevelt’s win in 1932 during the Great Depression. Now we have another huge drop on Thursday. It's obvious investors don't trust the Democrats in Congress and Obama.

 

[Article 15]

How the DOW does the day after the election has been an historical indicator that provides insight into how confident investors are with the next round of politicians. This is its worst post-election plunge on record. The losses narrowly surpassed the Dow’s 4.51% decline the day after Franklin Roosevelt’s win in 1932 during the Great Depression. Now we have another huge drop on Thursday. It's obvious investors don't trust the Democrats in Congress and Obama.

And we are in the midst of a financial crash. The biggest one since the aforementioned Great Depression.

The difference is that when Roosevelt was elected it was 3 years after the crash.

Obama's election happened right smack in the middle of our current financial meltdown.

Maybe you already knew that ...

 

[xsited1]

And we are in the midst of a financial crash. The biggest one since the aforementioned Great Depression.

The difference is that when Roosevelt was elected it was 3 years after the crash.

Obama's election happened right smack in the middle of our current financial meltdown.

Maybe you already knew that ...

And the Democrats have controlled Congress since January 2007. It's just an historical fact that markets do poorly while Democrats control Congress. And now they've solidified their numbers and even have a Democrat as President. Put your money in bonds and gold.

 

[Article 15]

And the Democrats have controlled Congress since January 2007. It's just an historical fact that markets do poorly while Democrats control Congress. And now they've solidified their numbers and even have a Democrat as President. Put your money in bonds and gold.

When the market crashed in 1929 the Republicans controlled Congress and the White House.

 

[jschuck12001]

How the DOW does the day after the election has been an historical indicator that provides insight into how confident investors are with the next round of politicians. This is its worst post-election plunge on record. The losses narrowly surpassed the Dow’s 4.51% decline the day after Franklin Roosevelt’s win in 1932 during the Great Depression. Now we have another huge drop on Thursday. It's obvious investors don't trust the Democrats in Congress and Obama.

You may be right historically but I dont think thats whats doing it this time. The market was already too volatile to point fingers at anyone, just my opinion. Those stats dont hold weight because we are in the 2nd worst economic situation in history.

 

[Article 15]

You may be right historically but I dont think thats whats doing it this time. The market was already too volatile to point fingers at anyone, just my opinion. Those stats dont hold weight because we are in the 2nd worst economic situation in history.