Dow Jones Up 30%..2000 Pts since innauguration

[HUGGY]

I don't get it. How can the Dow make all these gains under the thumb of a Marxist?

Your thoughts?

 

[Toro]

Here's a better one:

The Venezuelan stock market under Chavez outperformed American stock markets under Bush.

Stocks have historically done better under Democrats than Republicans, though they do best when one party controls the White House and another controls Congress.

This does not mean that stocks do better under Democrats. Instead, it proves that stocks do not do worse under Democrats. People who view everything politically or ideologically don't understand this, which isn't surprising.

Stocks will do better under Obama than they did under Bush.

 

[HUGGY]

Here's a better one:

The Venezuelan stock market under Chavez outperformed American stock markets under Bush.

Stocks have historically done better under Democrats than Republicans, though they do best when one party controls the White House and another controls Congress.

This does not mean that stocks do better under Democrats. Instead, it proves that stocks do not do worse under Democrats. People who view everything politically or ideologically don't understand this, which isn't surprising.

Stocks will do better under Obama than they did under Bush.

Stocks have historically done better under Democrats than Republicans

"Historically" isn't much of a reason. At best it is a trend.... as we say in the machining world.."a witness mark"..

With all of the anger exprssed at the tea bagger protests one would think the world and being part of the world..the stock market would be tanking.

 

[Paulie]

The stock market typically does better after the federal reserve takes steps to lower interest rates. This time around, they created more money than they ever have before, and lowered the rate to a historically low level.

It stands to reason that people would put their money to work now, because next year it'll be worth much less in cash. And that pattern looks like it may continue exponentially for a while.

 

[PLYMCO_PILGRIM]

The stock market typically does better after the federal reserve takes steps to lower interest rates. This time around, they created more money than they ever have before, and lowered the rate to a historically low level.

It stands to reason that people would put their money to work now, because next year it'll be worth much less in cash. And that pattern looks like it may continue exponentially for a while.

They have monetized our debt so that over 2x as much paper money is in circulation. Hopefully this doesn't work out like it usually does when debt is monetized and lead to inflation.

Either way I'm glad the stock market is doing better and I hope that these bailouts and TARP don't do what these type of programs have been historically shown to do in other economies that have tried. I hope we can be the exception to the rule and dont do like after the great depression where stocks and the economy did good for a few years then tanked again even worse (until ww2 came along)

I'm with the OP being glad about the stock market doing good and I hope that we can somehow have a different result than has been shown to happen time and time again in other countries that have tried these tactics, including our own in the Great Depression.

 

[Paulie]

The stock market typically does better after the federal reserve takes steps to lower interest rates. This time around, they created more money than they ever have before, and lowered the rate to a historically low level.

It stands to reason that people would put their money to work now, because next year it'll be worth much less in cash. And that pattern looks like it may continue exponentially for a while.

They have monetized our debt so that over 2x as much paper money is in circulation. Hopefully this doesn't work out like it usually does when debt is monetized and lead to inflation.

Either way I'm glad the stock market is doing better and I hope that these bailouts and TARP don't do what these type of programs have been historically shown to do in other economies that have tried. I hope we can be the exception to the rule and dont do like after the great depression where stocks and the economy did good for a few years then tanked again even worse (until ww2 came along)

I'm with the OP being glad about the stock market doing good and I hope that we can somehow have a different result than has been shown to happen time and time again in other countries that have tried these tactics, including our own in the Great Depression.

You are incorrect about the amount of paper money in circulation. The "2x" is the amount that the Fed increased the monetary base. The Fed can not directly affect the money supply in circulation, they can only increase and decrease bank reserves. The banks have to lend and/or invest those reserves for that money to enter the supply. Obviously they have not been doing much lending, instead hoarding it to strengthen their balance sheets.

And as far as the market goes, yes I suppose it's nice to see it gaining if you're exposed to it. It's also a little scary to see it come this far without any kind of real correction. It's running on liquidity creation at this point, and I worry about another bubble.

 

[eagleseven]

As Paulie and Pilgrim have stated, in two words:

Free Money


When you take a drastic pro-inflation stance, you'll see it in the Dow.

 

[PLYMCO_PILGRIM]

As Paulie and Pilgrim have stated, in two words:

Free Money


When you take a drastic pro-inflation stance, you'll see it in the Dow.

I like it when people are pithy. That was a great post.

 

[Paulie]

As Paulie and Pilgrim have stated, in two words:

Free Money


When you take a drastic pro-inflation stance, you'll see it in the Dow.

I like it when people are pithy. That was a great post.

My last post to you was less than pithy because I wanted to clear up your confusion about the money supply. Too many people are misinformed about monetary policy and how it works, and it ultimately makes a bad name for those who are anti-federal reserve that are fighting for some kind of real change. There's a movement, and misinformation will only hurt the process.

No offense meant, of course.

 

[Toro]

Stocks have historically done better under Democrats than Republicans

"Historically" isn't much of a reason. At best it is a trend.... as we say in the machining world.."a witness mark"..

With all of the anger exprssed at the tea bagger protests one would think the world and being part of the world..the stock market would be tanking.

You are correct. "History" is not a good reason.

The reason why stocks have done well over the past several months is because investors realized that the world was not going to end, stocks were dirt cheap, and the Fed is flooding the financial system with liquidity.

Both the Bush and the Obama administrations deserve credit for saving the financial system, which was on the verge of collapse. But this has to do with actions through the Federal Reserve and the Treasury as opposed to the stimulus. The stimulus helps some but Obama's health proposal hurts, so the two are probably a wash.

Stocks are no longer cheap. In fact, they are probably expensive now, given the fragile state of the economy. That probably means stocks won't do much for the rest of Obama's term, though they may bounce around pretty violently.

As for the Fed, its actions have put a floor under pretty much all asset prices, including stocks and real estate. However, its actions have been massive and will almost certainly have large unintended consequences down the road.

 

[Zander]

Dems taking credit for the current upswing in stock prices is a bad move politically. In another 3-6 months every bit of that 30% gain (and more) will evaporate. Stock valuations are based on EARNINGS. The S&P 500 price to earning ratio (P/E) is now at 130. there is one word to describe this - OVERSOLD. It will fall, and it will fall hard. Earning are going to remain poor for the next 4-6 quarters as a minimum. If the Dems take credit for the "upswing" they will take the entire blame for the inevitable crash. The smartest thing to do is to say nothing.

 

[CrusaderFrank]

The only thing keeping the markets from tanking is the fierce battle against ObamaCare; a collapsing dollar helps too.

 

[Toro]

Dems taking credit for the current upswing in stock prices is a bad move politically. In another 3-6 months every bit of that 30% gain (and more) will evaporate. Stock valuations are based on EARNINGS. The S&P 500 price to earning ratio (P/E) is now at 130. there is one word to describe this - OVERSOLD. It will fall, and it will fall hard. Earning are going to remain poor for the next 4-6 quarters as a minimum. If the Dems take credit for the "upswing" they will take the entire blame for the inevitable crash. The smartest thing to do is to say nothing.

Actually, the word is "overbought," but we get your drift.

The market is not being valued on current earnings, nor should it because the $7 that S&P has for an earnings number is not indicative of the earnings power of corporate America. Normalized earnings are somewhere between $60 and $70, which means stocks are trading at 16x-17x earnings. That's probably expensive for this environment, and higher than 15x historically, but it isn't 130x either.

 

[Zander]

Dems taking credit for the current upswing in stock prices is a bad move politically. In another 3-6 months every bit of that 30% gain (and more) will evaporate. Stock valuations are based on EARNINGS. The S&P 500 price to earning ratio (P/E) is now at 130. there is one word to describe this - OVERSOLD. It will fall, and it will fall hard. Earning are going to remain poor for the next 4-6 quarters as a minimum. If the Dems take credit for the "upswing" they will take the entire blame for the inevitable crash. The smartest thing to do is to say nothing.

Actually, the word is "overbought," but we get your drift.

The market is not being valued on current earnings, nor should it because the $7 that S&P has for an earnings number is not indicative of the earnings power of corporate America. Normalized earnings are somewhere between $60 and $70, which means stocks are trading at 16x-17x earnings. That's probably expensive for this environment, and higher than 15x historically, but it isn't 130x either.

Thanks for the correction -been a long day!

We'll just have to agree to disagree. There is no reason to be bullish on stocks at this time. Irrational exuberance has returned!!! SELL SELL SELL!!!!

 

[Toro]

Well, I've started selling stocks but I think the market is probably going to trade in a range between 900-1000 at the bottom and 1100-1200 at the top for the next few years.

 

[editec]

I don't get it. How can the Dow make all these gains under the thumb of a Marxist?

Your thoughts?

And all it took to save cpaitalism this time was the promise of $ 9 Trillion dollars to back up the dubious paper the banks issued to make it happen.

My thought is that Obama, as a Marxist, truly doesn't get Marxism.

Bailing out the rich just isn't very typical Marxist policy.

 

[Douger]

I don't get it. How can the Dow make all these gains under the thumb of a Marxist?

Your thoughts?

Because it's a plan.
They're going to make the bank while tossing the flag wavers in the poor house and then convert it all into precious and non precious metals,Euros and Chilean pesos.
The yen will look really good after the BIG war is over.Soon. Sorry. No weapons involved.
It doesn't take weapons to kick the shit out of Amurkins and make them suicidal. Just empty their piggy bank, no more credit cards, and board up the closest Walmart.
TEOTWAWKI. as some say.

 

[tigerbob]

Here's a better one:

The Venezuelan stock market under Chavez outperformed American stock markets under Bush.

Stocks have historically done better under Democrats than Republicans, though they do best when one party controls the White House and another controls Congress.

This does not mean that stocks do better under Democrats. Instead, it proves that stocks do not do worse under Democrats. People who view everything politically or ideologically don't understand this, which isn't surprising.

Stocks will do better under Obama than they did under Bush.

Stocks have historically done better under Democrats than Republicans

"Historically" isn't much of a reason. At best it is a trend.... as we say in the machining world.."a witness mark"..

With all of the anger exprssed at the tea bagger protests one would think the world and being part of the world..the stock market would be tanking.

He never said it was a reason. It was just an observation, and an interesting one at that.

 

[CrusaderFrank]

Libruls should invest in Venezuela and go to France for their health care needs

 

[edthecynic]

The stock market typically does better after the federal reserve takes steps to lower interest rates. This time around, they created more money than they ever have before, and lowered the rate to a historically low level.

It stands to reason that people would put their money to work now, because next year it'll be worth much less in cash. And that pattern looks like it may continue exponentially for a while.

Except the Fed set this historically low rate on Dec 16, 2008 and stocks continued down until the end of February 2009. So this rise in stocks since the end of Feb has nothing to do with a change in the Fed rate.