The Obama Bull Market?

[DavidS]

Real simple. The debacle was created by the Bush admin. Bush acted, but at the last possible moment. Obama took charge, and took some chances, and thus far they seem to have worked.

For sure, given the pile of shit that the previous administration handed President Obama, if he is able to get this economy turned around in the next three or four years, he will be a two term President, and be remembered as one of the good ones.

The debacle was NOT Bush's fault. Bush had nothing to do with what went wrong but he did save the economy from collapsing at the last possible second.

 

[Iriemon]

Real simple. The debacle was created by the Bush admin. Bush acted, but at the last possible moment. Obama took charge, and took some chances, and thus far they seem to have worked.

For sure, given the pile of shit that the previous administration handed President Obama, if he is able to get this economy turned around in the next three or four years, he will be a two term President, and be remembered as one of the good ones.

The debacle was NOT Bush's fault. Bush had nothing to do with what went wrong but he did save the economy from collapsing at the last possible second.

The fact that he gave the "one fingered salute" to the only bill passed to regulate F/F while the Republicans controlled the Congress could be argued otherwise.

 

[Munin]

Real simple. The debacle was created by the Bush admin. Bush acted, but at the last possible moment. Obama took charge, and took some chances, and thus far they seem to have worked.

For sure, given the pile of shit that the previous administration handed President Obama, if he is able to get this economy turned around in the next three or four years, he will be a two term President, and be remembered as one of the good ones.

The debacle was NOT Bush's fault. Bush had nothing to do with what went wrong but he did save the economy from collapsing at the last possible second.

What economy? The economy has collapsed, don't you remember that?
Or did you just come out of a coma?

Bush did not save the economy, he stood by and watched while the housing crisis turned in a US crisis and then turned into a global economic crisis and recession. Bush and his adnministration deserve all the blame for the mishandling of the economy, after all it is the federal gov administration that has the most influence on economic policies (that is the reason why certain economic plans are named after members of the gov administration: for example "the paulson plan").

Bush destroyed the economy partly (GDP is shrinking), by doing nothing: "the so called self correcting principle of a free market". They thought that a free market would correct itself and we all know how that turned out ...

What Bush proved is the ultimate failure of his (and his parties) economic beliefs and policies, that is why he had to do something that contradicted everything he and his party believed in : starting with bailing out the banks

How the bush administration handled the economy ...

Jan. 4, 2008

“financial markets are strong and solid.”

“This economy of ours is on a solid foundation, but we can’t take economic growth for granted,” Bush said. “And there are signs that will cause us to be ever more diligent and make sure that good policies come out of Washington.”

“For those of you who are paying more and are worried about your home, we understand that,” Bush said. “That’s why we have an aggressive policy to help creditworthy people stay in their homes.”

Bush says financial markets ‘strong, solid’ - Stocks & economy- msnbc.com

If this president didn't really happen and this was some kind of joke then I would be laughing like hell, unfortunately this joke is real and it is something so pathetically sad that it sickens me

 

[editec]

Oh please!

Here we go again.

A ttemtpting to put the blame for this whole debacle either on BUSH II or Obama or the DEMs or the Reps is idiotic.

Economies cannot get this bad based on one aspect of it, folks.

The conditions that developed to set us up for this meltdown took a long time to come to the surface. Those conditions include EVERYTHING happening in the economy at once...not one small part of it, but ALL of it acting on concert to make the economy sick.

Seeking to simplify the economy down to just the real estate market, or just what ACORN did, or just the derivatives or just the FED or just the greed of the bankers is simply foolish partisanship.

It took all sorts of events, some of them which started happening in FDR's administration, to create the situation which lead to this economic event.

Picking and choosing ONLY those things that we can pin on the OTHER team is flawed logic.

 

[Munin]

The bad handling of the economy when it began to come into this crisis can be blamed on certain people. Their is no doubt about that. Do you think that all the actions of the fed and the federal gov that happend recently have 0 effect? And if you do think that they (will) have an effect, then are you not saying that the government could have prevented this (if they took those measures earlier)?

There is no need for picking, there was only 1 guy in charge: Even a "sitting duck" like Bush had an impact on economic policy, again I ll refer to the "paulson plan" as evidence of this "power/influence".

The biggest issue of this is deregulation of wall street, which is indeed something that can be blamed on both democrats (like clinton) and republicans. But this is not what I m referring to, I m referring to the fact that a president and his administration normally handles an economic crisis. It s like treating a sick patient, normally you don't punch him in the nose: that is exactly what the Bush admin did when they let lehman brothers go bancrupt (this is what will be or is already seen as THE triggering event for the widespread and global financial crisis, this was the punch in the nose)

 

[oreo]

http://www.fivethirtyeight.com/2009/05/obama-bull-market.html




The Obama Bull Market?

by Nate Silver @ 5:01 PM

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The NASDAQ closed today at 1,763.56, gaining about 2.5 percent on the day to achieve its highest closing price since November 4 (Election Day, natch), when it finished at 1,780.12.

The NASDAQ was at 1,484.43 at noon on January 20th, at which point Barack Obama took over the Presidency. The NASDAQ has increased its value by approximately 19 percent since then, a span of 104.5 days. Per the compound interest formula, this translates to an 82.7 percent annualized growth rate.

Looking at the stock market, of course, is a relatively asinine way to evaluate the performance of the economy, much less the performance of the Presidency. But I think conservatives may have done themselves a real disservice by making the market the benchmark for Obama's success back when the major indices were slumping in late February and early March. The market was somewhat undervalued at that point by long-term measures like 10-year average P/E ratios, and the odds were pretty strong that it would produce above-average returns over Obama's term. It may not be a coincidence that Obama's approval ratings, which were declining over the first 50 days or so of his Presidency, have held steady since mid-March and perhaps even ticket upward -- his Gallup approval rating hit 68 percent yesterday (it fell a tick to 67 percent today), its highest figure since interviewing on January 22-24th.

There is risk here for Obama -- it is now much harder to make the case that the market is undervalued and volatility remains high by historical standards; a significant retrenchment is possible, as is a continuation of the bull market conditions of the past 60 days or so. But given the choice between having a leading indicator like the stock market be regarded as his economic benchmark or a lagging indicator like employment (where the numbers are still getting worse), Obama would take the stock market every time.

When did conservatives make the bench mark the stock market. The reason why stocks--especially banking stocks surged is because they started to show a profit. Why? Their debt was wiped out by Tarp 1--aka taxpayer dollars. I would show a profit too, if all my debt just disappeared.

But in the end with the stock market--it is real profit that drives it. While government is expanding in leaps & bounds the private sector is still hemoraging jobs. While hemoraging jobs--creates more profit for the individual company due to job cuts--it will be interesting to see the results in a year--if business in this country is able to survive this recession.

That's the big question?

 

[KittenKoder]

If we keep throwing money at it like Bush tried, we'll keep seeing more problems develop.

 

[Munin]

If we keep throwing money at it like Bush tried, we'll keep seeing more problems develop.

Then what is the solution? To do nothing?

If you look at all the economies in the world, their isn't even a single one that is crazy enough to do nothing (except for the countries that are already bankrupt, like Iceland for example). Even the european countries (who seemed to give a different impression at the G20) now reckognize that, in fact politicians in europe are thinking about doing the exact same thing as the american federal gov (which may be too little too late). The chinese government is one of the biggest spenders in the whole world and it appears that their approach is working, the chinese economy seems to be improving.

From an economic perspective, you can only use money to solve this issue. Even the republicans reckognize that (although they would have only used tax-breaks and let the FED do all the "dirty" work just like in the last crisis, so it doesn't look like the republican politicians are doing all the "spending").

Another issue is that you shouldn't simplify it so much, people who invest in stocks would be also throwing with money (according to your reasoning). Which is not true, because most of them are making money by using it, the same could be said about the US government if all goes well. If this in fact works like it seems to be working, then this recent stock rally of the banks may be our ticket out of the financial crisis. If the stimulus starts to kick in it may even start the whole economic recovery a year sooner than would be the case if this doesn't happen. And if the economy recovers a year sooner that means more income for the government, they will in fact be able to recover a lot of money by getting the tarp money back.

 

[KittenKoder]

If we keep throwing money at it like Bush tried, we'll keep seeing more problems develop.

Then what is the solution? To do nothing?

If you look at all the economies in the world, their isn't even a single one that is crazy enough to do nothing (except for the countries that are already bankrupt, like Iceland for example). Even the european countries (who seemed to give a different impression at the G20) now reckognize that, in fact politicians in europe are thinking about doing the exact same thing as the american federal gov (which may be too little too late). The chinese government is one of the biggest spenders in the whole world and it appears that their approach is working, the chinese economy seems to be improving.

From an economic perspective, you can only use money to solve this issue. Even the republicans reckognize that (although they would have only used tax-breaks and let the FED do all the "dirty" work just like in the last crisis, so it doesn't look like the republican politicians are doing all the "spending").

First, comparing us to the Chinese is bad, really bad, if you saw their working conditions you'd cringe. Also, sometimes doing nothing is the best solution. People have become too pro-active and it's been hurting us more. We are further in debt as a country and as individuals because of it. When you are in debt you have to work it off, period. You can't just keep going further into debt and expect to get out of it once the crisis passes.

 

[Iriemon]

If we keep throwing money at it like Bush tried, we'll keep seeing more problems develop.

I for one am quite happy that the banking and financial systems did not collapse.

 

[DavidS]

Real simple. The debacle was created by the Bush admin. Bush acted, but at the last possible moment. Obama took charge, and took some chances, and thus far they seem to have worked.

For sure, given the pile of shit that the previous administration handed President Obama, if he is able to get this economy turned around in the next three or four years, he will be a two term President, and be remembered as one of the good ones.

The debacle was NOT Bush's fault. Bush had nothing to do with what went wrong but he did save the economy from collapsing at the last possible second.

The fact that he gave the "one fingered salute" to the only bill passed to regulate F/F while the Republicans controlled the Congress could be argued otherwise.

Uh, because he didn't want to regulate banks he caused millions of homeowners to have their homes foreclosed upon? Are you serious?

 

[Iriemon]

The debacle was NOT Bush's fault. Bush had nothing to do with what went wrong but he did save the economy from collapsing at the last possible second.

The fact that he gave the "one fingered salute" to the only bill passed to regulate F/F while the Republicans controlled the Congress could be argued otherwise.

Uh, because he didn't want to regulate banks he caused millions of homeowners to have their homes foreclosed upon? Are you serious?

According to this article, it was because the WH wanted privatization of F/F. But otherwise you'd have to ask Bush administration why it the didn't support the only bill passed by a house of Congress to regulate F/F in the 6 years the Republicans controlled the Govt.

The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley [Then Republican Chairman of the Committee on Financial Services and sponsor of the Sarbanes-Oxely Act which provided oversight of public companies to prevent fraud after Enron], now vice-chairman of Nasdaq.

He fumes about the criticism of his House colleagues. “All the handwringing and bedwetting is going on without remembering how the House stepped up on this,” he says. “What did we get from the White House? We got a one-finger salute.”

The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.

Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration. Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.

FT.com / UK - Oxley hits back at ideologues[/QUOTE]

 

[DavidS]

Real simple. The debacle was created by the Bush admin. Bush acted, but at the last possible moment. Obama took charge, and took some chances, and thus far they seem to have worked.

For sure, given the pile of shit that the previous administration handed President Obama, if he is able to get this economy turned around in the next three or four years, he will be a two term President, and be remembered as one of the good ones.

The debacle was NOT Bush's fault. Bush had nothing to do with what went wrong but he did save the economy from collapsing at the last possible second.

What economy? The economy has collapsed, don't you remember that?
Or did you just come out of a coma?

You have NO idea what a collapsed economy looks like. Look at Zimbabawe as an example. We entered into a severe recession, not even a depression. A collapsed economy would've come about when all of our major banks such as Citibank, Bank of America, Wells Fargo, JP Morgan, etc. would have failed, GM, Ford and Chrysler would have failed, AIG would have failed, unemployment would have hit over 50% and our government would have shut down because there's no money to run it. That's what a collapsed economy is. Instead, our unemployment rate will bottom out at 10%, all of the major auto companies and banks will survive through re-organization and re-structuring and our government has not shut down.

Bush did not save the economy, he stood by and watched while the housing crisis turned in a US crisis and then turned into a global economic crisis and recession.

We all stood by and watched the housing crisis occur last year. I've taken a look through the threads here and NO ONE last year at this point called for immediate action by Bush to stop this housing crisis from getting worse. No one could have known how bad this crisis would have gotten until it actually got very bad last September. Bush DID make a mistake in not bailing out Lehman Brothers - but we survived that.

Bush destroyed the economy partly (GDP is shrinking), by doing nothing: "the so called self correcting principle of a free market". They thought that a free market would correct itself and we all know how that turned out ...

A contraction in our GDP does not mean our economy has been totally or even partially destroyed. Especially when we're in the single digits. Show me a 50% GDP contraction, then I'll show you a destroyed economy.

Bush asked Congress to create a bailout bill that he could sign - that bailout bill largely saved our economy, whether directly or indirectly. If that bailout had not happened and the Fed had not released subsequent trillions of dollars to stimulate the banks and the economy, we would be dead in the water right now. If Bush is to blame for letting the economy collapse on his watch, then he is also to blame for saving the economy. I don't like Bush one bit - the Iraq War was the biggest debacle ever by a president and has cost this country $1 trillion, 4300 lives of our brave men and women, nearly 30,000 injured, plus over a million innocent Iraqis' lives. For that, he should've been impeached. He broke the law by authorizing torture on detainees. His Middle East policy was horrible. And I could go on and on discussing how terrible his guy was... but one thing he did not do was cause the economy to collapse and one thing he did do was save it from collpasing.

 

[Iriemon]

...
Bush asked Congress to create a bailout bill that he could sign - that bailout bill largely saved our economy, whether directly or indirectly. If that bailout had not happened and the Fed had not released subsequent trillions of dollars to stimulate the banks and the economy, we would be dead in the water right now. If Bush is to blame for letting the economy collapse on his watch, then he is also to blame for saving the economy. I don't like Bush one bit - the Iraq War was the biggest debacle ever by a president and has cost this country $1 trillion, 4300 lives of our brave men and women, nearly 30,000 injured, plus over a million innocent Iraqis' lives. For that, he should've been impeached. He broke the law by authorizing torture on detainees. His Middle East policy was horrible. And I could go on and on discussing how terrible his guy was... but one thing he did not do was cause the economy to collapse and one thing he did do was save it from collpasing.

I agree with that -- While it may be a tad early to say conclusively we've turned the corner, Bush for a change did not stick with rigid ideology and bucked many in his own party to support the bailout bill. It was probably his best moment as president. He deserves a lot of credit.

 

[Munin]

You have NO idea what a collapsed economy looks like. Look at Zimbabawe as an example. We entered into a severe recession, not even a depression. A collapsed economy would've come about when all of our major banks such as Citibank, Bank of America, Wells Fargo, JP Morgan, etc. would have failed, GM, Ford and Chrysler would have failed, AIG would have failed, unemployment would have hit over 50% and our government would have shut down because there's no money to run it. That's what a collapsed economy is. Instead, our unemployment rate will bottom out at 10%, all of the major auto companies and banks will survive through re-organization and re-structuring and our government has not shut down.

Zimbabwe is a destroyed economy, the US economy has collapsed. It s not because only a part of the economy has collapsed that you can not say that the economy is just in a recession. This is not just "a" recession, this is probably a once in a lifetime economic collapse. Even if only the chimney fell of your house, you can still say that your house is collapsing. (The many comparisons with the great depression confirm for me that this is not just another recession, but a real collapse of the economy and a once in a lifetime event. The only thing that is standing in between a great depression and this recession is the government.)

And another issue: those companies have failed, that is the reason why the government had to act. The collapse of lehman brothers actually deteriorated the situation of the other banks (banks loan also money to each other, if a huge bank like LB goes bankrupt it has huge consequenses for the liquidity of the other banks. You already reckognized that, but you don't seem to think it was that important).

We all stood by and watched the housing crisis occur last year. I've taken a look through the threads here and NO ONE last year at this point called for immediate action by Bush to stop this housing crisis from getting worse. No one could have known how bad this crisis would have gotten until it actually got very bad last September. Bush DID make a mistake in not bailing out Lehman Brothers - but we survived that.

I agree that few people saw this coming, but even when the Bush admin knew it was coming (when the housing bubble bursted) they still waited much too long to act on the financial sector (which was clearly involved).

A contraction in our GDP does not mean our economy has been totally or even partially destroyed. Especially when we're in the single digits. Show me a 50% GDP contraction, then I'll show you a destroyed economy.

Bush asked Congress to create a bailout bill that he could sign - that bailout bill largely saved our economy, whether directly or indirectly. If that bailout had not happened and the Fed had not released subsequent trillions of dollars to stimulate the banks and the economy, we would be dead in the water right now. If Bush is to blame for letting the economy collapse on his watch, then he is also to blame for saving the economy. I don't like Bush one bit - the Iraq War was the biggest debacle ever by a president and has cost this country $1 trillion, 4300 lives of our brave men and women, nearly 30,000 injured, plus over a million innocent Iraqis' lives. For that, he should've been impeached. He broke the law by authorizing torture on detainees. His Middle East policy was horrible. And I could go on and on discussing how terrible his guy was... but one thing he did not do was cause the economy to collapse and one thing he did do was save it from collpasing.

I agree that he is to be credited for the bank bailout, but this is the same reasoning of the surge. It is not because you suddenly have success in implementing a policy that it means that you are successful as a whole. In fact the surge was not an idea of the GOP (except John Mccain, he was against the handling of the war from the very beginning), it was the idea of a military general (whose advice had been ignored for years). The fact that the surge worked actually also proved the failure of the Iraq war policy, so many troops have died because of the incompetence of the federal gov. Bush and his gov are to be blamed for the many troops that have died as a result of using to few troops when the war began. The same reasoning seems to be used when it comes the economic crisis, bush and his admin are to be blamed for the further deterioration of the economy as a result of waiting too long to implement the right policy and they appearantly even opposed the solutions that were proposed to contain the damage (ironman posted the related article some posts above this post, ty ironman).

Bottom line: he had to do it earlier (both the surge and the bank bailout: LB), his incompetence (doing it much later) has resulted in many american casualties and joblosses that could have been prevented.

 

[editec]

When the working classes have been losing purchasing power (in the case of the bottom 20% of the working classes they actually make LESS money, not even taking inflation into account!) something has GOT TO GIVE, folks.

It wasn't JUST mistakes made by our banking and investment community that has caused this mess. Neither was it decisions surrounding housing financing that caused it.

They were playing INTO the fundamentals of our economy and in fact many of those responses were done as a direct result of the fact that the working classes are getting POORER and have been GETTING POORER since the early 1970s.

All that cheap money was masking the problem for the investment community.

But you could see it happening if you studied BANKRUPTSIES and SAVINGS RATES for the last thirty years or so.

I know many of you believe that trickle down economics works, but it cannot possible work for a long time because wealth is crreted at the bottom and goes up NOT down.

The salaries and saving of the WORKING CLASSES are the foundation upon which EVERY economy is built.


And the salaries and (therfore) savings rates of the American people have essantially been going DOWN since the early 1970s.

So blaming any ONE POTUS or any ONE Congress, is missing the whole picture.

We have GOT to get American working again, making our own stuff, such that we our economy is not a bleeding wound.

If we do everything else right, but fail to get America reindustrializing for THIS century, then we will never get out of this hole we've been digging for ourselves for the last 40 years.

We are not going to fix this problem in the next five or ten years.

It is going to take a concerted effort and a long term effort to get America back on track.

Meanwhile the rest of the world is NOT going to wait for us.

They are going to take the money WE HAVE SENT THEM to prepare their industrial base for this century, too.

So we're got a LOT to do, and if we continue to allow the MASTERS to screw the American people so that they and their foreign based industries can get richer selling into OUR market, then we're simply fucking hosed.

Call me a class warrior, or call me what I really am...a nationalist, but we either start thinking about the wellbeing of this economy and the people who make this economy work, or just resign yourselves to the USA becoming a THIRD WORLD NATION.
'

 

[DavidS]

...
Bush asked Congress to create a bailout bill that he could sign - that bailout bill largely saved our economy, whether directly or indirectly. If that bailout had not happened and the Fed had not released subsequent trillions of dollars to stimulate the banks and the economy, we would be dead in the water right now. If Bush is to blame for letting the economy collapse on his watch, then he is also to blame for saving the economy. I don't like Bush one bit - the Iraq War was the biggest debacle ever by a president and has cost this country $1 trillion, 4300 lives of our brave men and women, nearly 30,000 injured, plus over a million innocent Iraqis' lives. For that, he should've been impeached. He broke the law by authorizing torture on detainees. His Middle East policy was horrible. And I could go on and on discussing how terrible his guy was... but one thing he did not do was cause the economy to collapse and one thing he did do was save it from collpasing.

I agree with that -- While it may be a tad early to say conclusively we've turned the corner, Bush for a change did not stick with rigid ideology and bucked many in his own party to support the bailout bill. It was probably his best moment as president. He deserves a lot of credit.

We've turned the corner. We turned the corner the second Obama was sworn in. Not to sound all mushy and gushy (he's NOT a messiah), but Obama's message of hope did have a psychological effect on the people of this country and you can see it in the polls where more people feel that this country is moving in the right direction vs. when Bush was prez. The thing is, we're turning the corner of a frickin Titanic, not some little passenger boat. It takes a long time to reverse the course of an economy this big. I think we'll see a good summer, a bumpy Autumn and a good holiday season. I think next Spring is when we'll finally be out of the recession.

 

[SnickyH]

Might have been the feeling back in May but obviously looking at the chart today, unfortunately this isn't the case!

 

[eagleseven]

...
Bush asked Congress to create a bailout bill that he could sign - that bailout bill largely saved our economy, whether directly or indirectly. If that bailout had not happened and the Fed had not released subsequent trillions of dollars to stimulate the banks and the economy, we would be dead in the water right now. If Bush is to blame for letting the economy collapse on his watch, then he is also to blame for saving the economy. I don't like Bush one bit - the Iraq War was the biggest debacle ever by a president and has cost this country $1 trillion, 4300 lives of our brave men and women, nearly 30,000 injured, plus over a million innocent Iraqis' lives. For that, he should've been impeached. He broke the law by authorizing torture on detainees. His Middle East policy was horrible. And I could go on and on discussing how terrible his guy was... but one thing he did not do was cause the economy to collapse and one thing he did do was save it from collpasing.

I agree with that -- While it may be a tad early to say conclusively we've turned the corner, Bush for a change did not stick with rigid ideology and bucked many in his own party to support the bailout bill. It was probably his best moment as president. He deserves a lot of credit.

We've turned the corner. We turned the corner the second Obama was sworn in. Not to sound all mushy and gushy (he's NOT a messiah), but Obama's message of hope did have a psychological effect on the people of this country and you can see it in the polls where more people feel that this country is moving in the right direction vs. when Bush was prez. The thing is, we're turning the corner of a frickin Titanic, not some little passenger boat. It takes a long time to reverse the course of an economy this big. I think we'll see a good summer, a bumpy Autumn and a good holiday season. I think next Spring is when we'll finally be out of the recession.

I don't share you optomism, because the fundamentals are still so rotten. Particularly if you look at the Dow, the largest contributors happened to be the ones receiving the largest sums of government money. I'd be very worried of the Dow didn't increase after we've plunged nearly $2 trillion of debt into the economy.

Still, I'd be VERY careful giving Obama credit for the current stock market.

If Obama "owns" the recent stock increases, then he also must "own" the current unemployment rates. People don't vote on the stock market, they vote on their personal economic condition, ie employment.