People posting here trying to connect Obama to the falling markets, demonstrating exactly the kind of ignorance that destroyed the economy in the first place.
You can believe and blame who you want it makes no difference, you are still going to suffer whether you think it is Obama or not.
He is not my guy at all, I’m just sick of americans blaming everyone but themselves. Also a lot of hypocrits who are quick to blame Obama, but Bush was a saint.
Pretty sick of the bipolar blaming game - for example your immediate assumption that I am “Obamas’ man”. It is a joke. Stop trying to make everything black and white and start learning something.
Pretty sick of it because it makes me lose faith in the intelligence of the people.
For the record, I am against the bail outs, they are stupid, all those companies should collapse and die. Would have been even better if they were prevented from being such idiots in the first place, or better yet, let them do what they want - but get full disclosure of what they are doing so the market can decide.
Without perfect information you don’t get a perfect market, it isn’t a perfect world, you therefore have to have legislation to restrict certain behaviour - or force disclosure. Instead you get cronies and backhand deals and favours for the boys. Far from perfect market, far from true capitalism. A market driven up on bullshite.
This happened under Bush, not Obama. No new president could fix that in a way to make the market rise again. Obama’s approach is not the solution, but if the right action was taken instead, it would not have sent the market upwards until it had weeded out all the crud companies and fake rises.
Or to put it another way, if you expected the market to go up, you haven’t got a clue. And if you blame Obama, you are not only ignorant, but stupid.
Learn something.
If I sound angry it is because I can’t believe how dumb people can be and having seen these cycles countless times, wonder why nobody ever bloody learns.
I don’t like Obama or Bush, Democrate or Republican. I like the Republican Platform, but it has not been followed for many many years.
Obama inherited an impossible situation and he has made it worse, but he is no different than any other politician.
Many people are going to wish they had listened to first, Ross Perot and second, Ron Paul.
Both absolutely predicted what is and what will happen(ing).
[quote]100meters wrote:
pat wrote:
100meters wrote:
hedo wrote:
Stocks and other tangible investments will not rebound until he is out of office.
Again! jesus.
You’re returns under bush 8yrs/-22%
Something tells me after 8 years Obama beats that. By like a lot.
Well if that’s your mantra then, under Obama 43 days/-22.5%…Damn, the man’s a genius!
The market seems to regard Obama’s economic plans as pure garbage.
I was thinking a term was longer than 43 days, I’ll have to check wikipedia.[/quote]
You keep shoving the Bush = -22% market drop in our faces thought that only happened as late as september of '08 when the market started it’s free fall.
The market was tanking at the end of Clinton’s term as well.
Obama is letting his hubris and personal agenda get in the way of a true recovery. There are people who know how to make money and he needs to listen to them.
He needs to cut spending, not increase it. He’s needs to remove pork from legislation, not have a fucking pig roast. He needs to quit bailing out failing companies (it’s not working, these same companies keep coming to the trough, hat in hand.)He needs to suspend taxes on companies, especially small business, not increase them.
In other words, he is doing the exact opposite of what needs to happen, because he wants to and he can. That is the only reason…This dog is going to turn around and bite him.
[quote]Magarhe wrote:
He is not my guy at all, I’m just sick of americans blaming everyone but themselves. Also a lot of hypocrits who are quick to blame Obama, but Bush was a saint.
Pretty sick of the bipolar blaming game - for example your immediate assumption that I am “Obamas’ man”. It is a joke. Stop trying to make everything black and white and start learning something.
Pretty sick of it because it makes me lose faith in the intelligence of the people.
For the record, I am against the bail outs, they are stupid, all those companies should collapse and die. Would have been even better if they were prevented from being such idiots in the first place, or better yet, let them do what they want - but get full disclosure of what they are doing so the market can decide.
Without perfect information you don’t get a perfect market, it isn’t a perfect world, you therefore have to have legislation to restrict certain behaviour - or force disclosure. Instead you get cronies and backhand deals and favours for the boys. Far from perfect market, far from true capitalism. A market driven up on bullshite.
This happened under Bush, not Obama. No new president could fix that in a way to make the market rise again. Obama’s approach is not the solution, but if the right action was taken instead, it would not have sent the market upwards until it had weeded out all the crud companies and fake rises.
Or to put it another way, if you expected the market to go up, you haven’t got a clue. And if you blame Obama, you are not only ignorant, but stupid.
Learn something.
If I sound angry it is because I can’t believe how dumb people can be and having seen these cycles countless times, wonder why nobody ever bloody learns.[/quote]
There are many Americans to blame, this is true, but I am not one of them. I handled my shit and did everything right economically speaking. I don’t buy what I cannot afford and all the bills are paid on time…This shit ain’t on me, I will not shoulder the blame.
[quote]NealRaymond2 wrote:
Bill Roberts wrote:
I know I’m repeating myself but I have no idea whether the reason was that no one got the point, everyone saw the point as being too obviously wrong to bother with, or everyone saw the point as being too obviously correct and thoroughly-stated as to require any followup:
Ultimately – considering collectively all owners of a stock over time, and not concerning ourselves with its changing hands – the reason a stock is purchased is for the net monies the investors will receive from dividends.
For example, if long term absolutely zero is expected to be paid, then except as a form of stamp-collecting, the value of the stock is zero. Or if the amount expected to be paid on an ongoing long-term basis is very high, then the value will be very high.
This is very basic and not really subject to being denied.
Now, suppose investors first fear, and then come to know, that corporate income tax will be substantially increased.
And second, that taxation on dividends will be greatly increased.
Let’s say that people’s willingness to pay money for a stock is such that they will spend X dollars to obtain net dividends (after they have been taxed) of $100.
Obama comes along and well, those evil corporations aren’t paying enough tax.
So,as amount paid in dividends is ultimately intimately related to after tax profits (not necessarily in any given quarter, but long term) if corporate tax goes up to where for every $100 of after tax profit there had been, now there is only say $65 left, that will long-term drop dividends down to 65% of what they were.
But wait, Mr Obama is not done yet.
Those evil investors are paying only 15% tax on their dividends. Obama will move that to 20%.
So, not only do the dividends expected to, long term, drop to 65% of what they were, but the investor can now keep only 80/85ths as much of that as he could previously.
Which leaves him with net dividends of only 61% of what would be the case without the Obama taxation.
Is it not reasonable then that the market would value stocks at only 61% of what the stocks had been judged to be worth without the Obama taxation?
And this is not even accounting for less growth in GDP, and therefore on average corporate growth, from the taxation increase. Or accounting for insistence on going ahead with cap-and-trade, or the tera-pork spending bill.
All things being equal, the value of a stock will be proportional to the expected income stream from the stock.
But a stock price should also vary according to the prices of other assets that have an equal expected income stream. In particular, stock prices should tend to move in the opposite direction from any change in the expectations about long term interest rates.
If long term interest rates for high-grade bonds are expected to average 10%, that means the cost of buying “safe” bonds is expected to be 10 times their annual interest. If long term interest rates for high-grade bonds are expected to average 5%, that means the cost of buying “safe” bonds is expected to be 20 times their annual interest.
Assuming equal tax treatment and equal corporate dividend payouts in both cases, one might expect that stock prices should only be half as high with a belief that interest rates will average 10% as stock prices would be with a belief that interest rates will average 5%.
This is because stocks compete with bonds for investors’ money, and if the interest rate were 10% then it would only cost half as much to obtain a given amount of interest income from bonds as it would if the interest rate were 5%.
So: if taxes go up; corporate earnings go down; and besides all that interest rates also go up and are expected to stay up – then in that case, stock prices will really get squashed.
On the other hand, if somehow long term interest rates were to go down and investors were to believe they will stay down, that would mitigate the effects of increased taxes and reduced corporate earnings on stock prices.[/quote]
One can always introduce other factors as changes.
To understand the basic effect of an action, though, it seems helpful to see what that action would do without also assuming unrelated changes. (If however the action inevitably leads to those changes then it must be accounted for.)
Also in this case interest rates seem unlikely to get much lower. There just isn’t room for much drop in CD and municipal bond returns. If anything, I would think that plans (such as Obama’s) necessitating sales of a trillion-plus dollars worth of additional Treasury bills would tend to drive that rate up.
So above, I was examining: What is the effect that can be predicted from greatly increased corporate taxation and increased taxation of dividends?
As that is what Obama says he is planning to do.
And the answer is: that change itself should predictably yield much lower stock values for very fundamental reasons.
So exactly why there is so little discussion in most places about how Obama’s tax plans COULD HAVE BEEN PREDICTED to yield a very large drop in stock prices (and therefore quite reasonably the slide starting as soon as it started seeming risky and then probable that he would be President resulted from such prediction) and so long as such tax rates are in effect should keep stock prices at the devalued level, is hard to see. Is it that most people in most places – other than investors re-evaluating what should be paid for a stock or at what point they should sell – don’t understand this fact?
Or cap-and-trade and energy taxes Obama wants. With the known heavy cost to the economy of this, should this not also decrease future revenues?
Obama and his crew are, thus far, straight out of Atlas Shrugged in their “management” of the economy.
ProwlCat, it seems you were prophetic:
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGJ_.gr_awkY
[quote]Gambit_Lost wrote:
hedo wrote:
I agree with this guy. I don’t view Obama as simply a naive fool being manipulated by special interests and fringe groups…I think he really is trying to fuck the economy up.
Wednesday, March 04, 2009
Mission Accomplished! Did Obama intentionally nuke the economy?
Yes! YES! This is what I’m talking about! TRUTH!! Obviously Barry “Hussein” Obama is trying to destroy the economy! I’m so glad that PWI and right wing blogs can bring us THE TRUTH!!!11!!1![/quote]
Glad you finally agree with the obvious.
I agree on Perot and Ron Paul. Ron is one of the few people I’ve heard who seems to know / understand what the score is.
Unfortunately the way politics are setup these days (all days since Rome?) is that the popular guy with the positive speech gets the vote. Or the guy in the pocket of power behind the scenes.
The market falling is not Obamas’ work - it has to fall to clear out the mess.
That doesn’t mean Obamas plans are good.
The market falling is NOT a bad thing. It is cleaning itself up.
The fact that people fell for the illusion of the rising market, that was rising on lies, smokescreens and bullshite, that is bad.
The fact pensions / savings are devastated, bad.
The missed opportunity of selling at the top, bad.
The high prices paid for oil before it collapsed again, bad.
The majority of Americans losing out, missing these opportunities, unable to profit from the swings, unable to effect real change directly, getting shoved around by political agendas they don’t agree with, taking all the pain and none of the profit, bad.
The assturds who manipulated things, made profit, and by god got bailouts as well after screwing up, well this is bad.
But don’t blame Obama for the falling market because taking a simplistic view, a black and white, this party/that party view, that isn’t going to change things not for the country or yourself.
The market was set to collapse no matter what ANYONE did - it HAS to collapse to kill off the crap. The rise was caused by lies, overvalued bullshite and a massive con trick on the rest of the world. Nothing will suck in the rest of the world again (for awhile). You want the market to fall, companies to fail and F@#$ Off and new companies to replace them as the index, companies that do stuff that isn’t stupid.
Here’s a good one: an internet based, person to person lending scheme where investors can directly invest in businesses bypassing the screwy banks. Now that is a new (old?) system. Cut out these useless middle men, get real money in the hands of business that needs it to do real work.
There are businesses in UK that are booming but can’t get money from the banks to buy stock that is in high demand because the moron banks won’t give it to them - WHAT THE F#$K IS THAT??? Free market? OR banker cronies who screwed up doing pretend banking work and lost all the money?
[quote]Magarhe wrote:
I agree on Perot and Ron Paul. Ron is one of the few people I’ve heard who seems to know / understand what the score is.
Unfortunately the way politics are setup these days (all days since Rome?) is that the popular guy with the positive speech gets the vote. Or the guy in the pocket of power behind the scenes.
The market falling is not Obamas’ work - it has to fall to clear out the mess.
That doesn’t mean Obamas plans are good.
The market falling is NOT a bad thing. It is cleaning itself up.
The fact that people fell for the illusion of the rising market, that was rising on lies, smokescreens and bullshite, that is bad.
The fact pensions / savings are devastated, bad.
The missed opportunity of selling at the top, bad.
The high prices paid for oil before it collapsed again, bad.
The majority of Americans losing out, missing these opportunities, unable to profit from the swings, unable to effect real change directly, getting shoved around by political agendas they don’t agree with, taking all the pain and none of the profit, bad.
The assturds who manipulated things, made profit, and by god got bailouts as well after screwing up, well this is bad.
But don’t blame Obama for the falling market because taking a simplistic view, a black and white, this party/that party view, that isn’t going to change things not for the country or yourself.
The market was set to collapse no matter what ANYONE did - it HAS to collapse to kill off the crap. The rise was caused by lies, overvalued bullshite and a massive con trick on the rest of the world. Nothing will suck in the rest of the world again (for awhile). You want the market to fall, companies to fail and F@#$ Off and new companies to replace them as the index, companies that do stuff that isn’t stupid.
Here’s a good one: an internet based, person to person lending scheme where investors can directly invest in businesses bypassing the screwy banks. Now that is a new (old?) system. Cut out these useless middle men, get real money in the hands of business that needs it to do real work.
There are businesses in UK that are booming but can’t get money from the banks to buy stock that is in high demand because the moron banks won’t give it to them - WHAT THE F#$K IS THAT??? Free market? OR banker cronies who screwed up doing pretend banking work and lost all the money?
[/quote]
No, at this point it is beyond fixing itself, this is what’s known as an over correction…It is no longer in the cleaning phase.
This situation is not Obama’s fault, but he is doing nothing to help. He is doing his damnedest to fuck shit up worse.
AIG does not need another bail out, it needs to be dismantled and sold off. Same with most of the big banks…they cannot seem to sustain their own size.
Throwing .75 trillion bucks in to dead ends is not going to help. The stimulus creates work, but not jobs…What happens when the work ends?..Folks are back on the street.
Raising taxes on the small businesses and large businesses at this time is beyond fucking stupid, despite how just some people may feel that is. They need to be investing that doe into their companies, not subsidize Nancy Pelosi’s private jet.
[quote]Magarhe wrote:
He is not my guy at all, I’m just sick of americans blaming everyone but themselves. Also a lot of hypocrits who are quick to blame Obama, but Bush was a saint.
Pretty sick of the bipolar blaming game - for example your immediate assumption that I am “Obamas’ man”. It is a joke. Stop trying to make everything black and white and start learning something.
Pretty sick of it because it makes me lose faith in the intelligence of the people.
For the record, I am against the bail outs, they are stupid, all those companies should collapse and die. Would have been even better if they were prevented from being such idiots in the first place, or better yet, let them do what they want - but get full disclosure of what they are doing so the market can decide.
Without perfect information you don’t get a perfect market, it isn’t a perfect world, you therefore have to have legislation to restrict certain behaviour - or force disclosure. Instead you get cronies and backhand deals and favours for the boys. Far from perfect market, far from true capitalism. A market driven up on bullshite.
This happened under Bush, not Obama. No new president could fix that in a way to make the market rise again. Obama’s approach is not the solution, but if the right action was taken instead, it would not have sent the market upwards until it had weeded out all the crud companies and fake rises.
Or to put it another way, if you expected the market to go up, you haven’t got a clue. And if you blame Obama, you are not only ignorant, but stupid.
Learn something.
If I sound angry it is because I can’t believe how dumb people can be and having seen these cycles countless times, wonder why nobody ever bloody learns.[/quote]
You make absolutly no sense. enacted and expected policy are making huge waves in the economy. If you can’t see this, you are blind. Investment and spending is essentially on hold. Bush and Obama are responsible for the largest increase in gov’t spending…ever. Very few people can predict what’s next.
Complete uncertainty is the worst thing that can happen to an economy. When trillions of dollars can be handed out at any time to anyone, how do you think investors act? When there is absolutly no intelligent discussion of how this money will be paid back or how much of it will be printed, how do you think investors will act?
To say that the public is somehow responsible for this mess is insane. Individuals are responsible for their own economy. The trouble comes with big brother decides we all share in individual failures and fuck-ups.
Bush fucked up. Most of congress fucked up. Obama is continuing to fuck up on a massive scale. These are the people that are to blame.
What’s most important now is not who did what in the past. It is what happens next. Somebody needs to stop the insanity. Stop the borrowing. Stop the spending.
We can either start to recover now or another x number of pts from now.
We can start to pay out debts now, or another few trillion from now.
We can start to put people back to work now, or a few million more unemployed from now.
[quote]Magarhe wrote:
The market falling is not Obamas’ work - it has to fall to clear out the mess.
…
But don’t blame Obama for the falling market because taking a simplistic view, a black and white, this party/that party view, that isn’t going to change things not for the country or yourself.
[/quote]
Do you think that dividends paid will be the same regardless of large increases in corporate income tax rates, regardless of cap-and-trade, etc?
Or do you agree dividends will be predictably considerably less as a consequence of Obama’s policies but are determined that that must have no effect on value?
[quote]Magarhe wrote:
I agree on Perot and Ron Paul. Ron is one of the few people I’ve heard who seems to know / understand what the score is.
Unfortunately the way politics are setup these days (all days since Rome?) is that the popular guy with the positive speech gets the vote. Or the guy in the pocket of power behind the scenes.
The market falling is not Obamas’ work - it has to fall to clear out the mess.
That doesn’t mean Obamas plans are good.
The market falling is NOT a bad thing. It is cleaning itself up.
The fact that people fell for the illusion of the rising market, that was rising on lies, smokescreens and bullshite, that is bad.
The fact pensions / savings are devastated, bad.
The missed opportunity of selling at the top, bad.
The high prices paid for oil before it collapsed again, bad.
The majority of Americans losing out, missing these opportunities, unable to profit from the swings, unable to effect real change directly, getting shoved around by political agendas they don’t agree with, taking all the pain and none of the profit, bad.
The assturds who manipulated things, made profit, and by god got bailouts as well after screwing up, well this is bad.
But don’t blame Obama for the falling market because taking a simplistic view, a black and white, this party/that party view, that isn’t going to change things not for the country or yourself.
The market was set to collapse no matter what ANYONE did - it HAS to collapse to kill off the crap. The rise was caused by lies, overvalued bullshite and a massive con trick on the rest of the world. Nothing will suck in the rest of the world again (for awhile). You want the market to fall, companies to fail and F@#$ Off and new companies to replace them as the index, companies that do stuff that isn’t stupid.
Here’s a good one: an internet based, person to person lending scheme where investors can directly invest in businesses bypassing the screwy banks. Now that is a new (old?) system. Cut out these useless middle men, get real money in the hands of business that needs it to do real work.
There are businesses in UK that are booming but can’t get money from the banks to buy stock that is in high demand because the moron banks won’t give it to them - WHAT THE F#$K IS THAT??? Free market? OR banker cronies who screwed up doing pretend banking work and lost all the money?
[/quote]
This is so oversimplistic is hurts my brain. Yes, we needed a correction in the market. What we are getting is much worse than that. We are way beyond a correction in the market. We need to rally.
There can be no correction in the market without successful speculation. There can be no successful speculation without clear market signals. There can be no clear market signals with gov’t spending unpredictable amounts of money the country doesn’t have, in an essentially arbitrary fasion. There can be no successful speculation in the long term with no plan to pay back this money.
[quote]pat wrote:
No, at this point it is beyond fixing itself, this is what’s known as an over correction…It is no longer in the cleaning phase.
[/quote]
I am not sure we can even call it an overcorrection. Our leader are trying to enact policy and behavior that led us into this mess and are almost assuring that we won’t work ourselves out of it anytime soon.
A boom is nothing more than overspeculation. The bust is a correction in that overspeculation, not systematic underspeculatoin. True, we have probably seen the last of huge investments in mortgage backed securities, but that was not the sourse.
We are now again trying to convince borrowers to lend money by guarentee that Fannie and Freddie will buy any mortgages made.
Instead of lenders sorting mortgages and working with customers on payment or sale, they are begging and getting cash from the gov’t.
Instead of letting money are resourse flow to the ONLY sources of economic knowledge, the enomomy itself, gov’t is spending trillions arbitrarily.
Instead of allowing clear market signals direct investors, we are completely blind folding them.
I assert that there has been no correction yet and there will be not until the gov’t backs off. Let the productive aquire the failed. Let the economy direct economic resourses and capital. This is the only way to recovery.
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGJ_.gr_awkY
More confidence in the administrations policies.
[quote]dhickey wrote:
pat wrote:
No, at this point it is beyond fixing itself, this is what’s known as an over correction…It is no longer in the cleaning phase.
I am not sure we can even call it an overcorrection. Our leader are trying to enact policy and behavior that led us into this mess and are almost assuring that we won’t work ourselves out of it anytime soon.
A boom is nothing more than overspeculation. The bust is a correction in that overspeculation, not systematic underspeculatoin. True, we have probably seen the last of huge investments in mortgage backed securities, but that was not the sourse.
We are now again trying to convince borrowers to lend money by guarentee that Fannie and Freddie will buy any mortgages made.
Instead of lenders sorting mortgages and working with customers on payment or sale, they are begging and getting cash from the gov’t.
Instead of letting money are resourse flow to the ONLY sources of economic knowledge, the enomomy itself, gov’t is spending trillions arbitrarily.
Instead of allowing clear market signals direct investors, we are completely blind folding them.
I assert that there has been no correction yet and there will be not until the gov’t backs off. Let the productive aquire the failed. Let the economy direct economic resourses and capital. This is the only way to recovery.
[/quote]
It over corrected and is paralyzed with fear as to what will happen next.
Obama gave us the exact opposite of what we needed. We needed to reduce spending not exponentially increase it. Businesses are afraid to spend because they do not know if up comming taxes are going to cripple them. The guy is an idiot, period. He was so horny to implement his fucking socialism, that he just couldn’t wait. He needed to put the country on the path to recovery BEFORE he started spending like a drunk sailor in a whore house.
1937 was called a depression with in a depression. What was the cause? Dramatically increased taxes. FD(ickhed)R had to have the taxes rescinded. I 1930, we we in a recession, Herbert Hoover fast tracked it into a depression by raising taxes, big time. Anybody who thinks that raising taxes really helps is simply not educated.
And lucky us, we got to pay for it! Well, today’s children are going to have to pay for it, that is.
It’s not just businesses changing their plans due to Obama’s taxes, or investors realizing that dividends will be less.
I don’t know the prevalence of this but from immediate friends and acquaintances, my best friend decided back in the Spring – as soon as it seemed Obama would likely win the Presidency and had announced his soak-the-“rich” taxation policy – that if Obama were elected he would cut his income to under $250K per year rather than be taxed so heavily. He is an ER physician and can readily change his hours.
He promptly cut spending in advance to be ready for the income change. Stopped paying for a personal trainer, cancelled vacations, stopped eating out as much and lowered the per-visit cost, decided to hang onto the same vehicles for a while longer (they’re only a few years old) rather than buy new ones as he otherwise would have done, etc.
He stated that some other doctors he worked with were planning the same, to get under the punished tax-bracket. I don’t know if they also trimmed their spending in advance.
All this is predictable, too. Unless one attributes extreme stupidity or ignorance to the Obama team, they would have had to have known in advance that taxation increases would reduce GDP compared to no increase, let alone to a cut.
Reducing GDP is never good, but creating additional reduction in a recession is just either destructive – “never waste a good crisis, it lets you accomplish things you otherwise couldn’t have” (paraphrase) – or incredibly stupid.
On the other hand the man is lost without a TelePrompTer for, we learn, even the tiniest of public speaking.
http://www.businessweek.com/print/investor/content/mar2009/pi2009034_253747.htm
The market has no reason to go up and many reasons to go down.
You will most likely see a prolonged contraction in this market. I’m thinking Dow at 5000, unemployment at 12%. The backlash is going to be big.