Dems and stock market question

Garmel said:
I don't know about influence but the fact that he received his second nomination in 2010 tells you it was because Obama was happy with the quantitative easing. Obama could have pulled the plug on the easing by getting a supply side guy in 2010. That's why this is Obama's fault. The agency may have it's independence but the nomination process insures that the president will get his way.
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Well, I don't think any Democrat would nominate a supply-sider. He didn't have to endorse QE as the only monetary policy tool at that point. And what would a supply-side Fed Chairman do? He can't lower taxes. Seems as if he would possibly sit on his hands and stare Congress down to do something.
 
Garmel said:
Well, he wouldn't be running up the debt with quantitative easing. :D In all seriousness, even we supply guys know that the Feds controlling the interest rate is important.
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I think the interest rate was just about 0 at the time.

The question seems to be driven by this: the stock market is booming. We know there were predictions of doom from the Left if Trump won the election. That has not happened. My 401k is looking good. So why is it really happening? Delusional confidence? BECAUSE of QE? Obamacare was neither repealed or replaced. There was no guarantee of this tax bills passage but now it's in place. If we give Obama credit how do we factor in the national debt of $20 Trillion? It seems we bought our way out of the recession. We didn't grow our way out.
 
bystander said:
My 401k is looking good. So why is it really happening? Delusional confidence?
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I believe we are slowly becoming more business friendly. Manufacturing is really booming in this country. Delusional confidence? Maybe, but I don't think so.
 
Garmel said:
I believe we are slowly becoming more business friendly. Manufacturing is really booming in this country. Delusional confidence? Maybe, but I don't think so.
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No one wanted to invest cause they believed Obama would punish success with regulation and taxes. Do you really believe Dems would have supported fracking if it hadn’t been developed out of sight?
 
It’s not a question of the President influencing/dictating Fed Policy; but quite the opposite. The tail wags the dog. It is the Fed that influences the President.

As the crises unfolded in 2008, do any of you remember Bush stepping aside from the podium and allowing Treasure Secretary Paulson, former Goldman chief, to layout what had to be done ($700 billion bailout for the banking system)? This was basically a bridge loan until the Fed could unleash many times this amount in guarantees, nearly free money, and QE - the purchasing of US treasuries. This wasn’t Bush Policy. It was created and coordinated solely by the Fed and the elite bankers. Obama and McCain, the two Presidential candidates, both signed on to the entire plan. I guarantee neither Bush nor the two candidates had any real say or input in the matter.

Since QE ended a few years back, the Japanese and EU central banks have more than picked up the QE slack. Stock markets and other assets such as real estate have surged higher as the creation of debt, bond buying by central banks (QE), and the resultant low interest rates have allowed for floods of money and high leverage to continue unabated. Profit, real growth, and conventional benchmarks of economic progress now have little relationship to stock market values. It’s all tied to expansion of debt and money creation; not economic output (making things). Once the debt creation slows down, interest rates will rise, and asset prices will fall. Thus far, the world’s central banks have been able to prevent this and willing to due whatever it takes to suppress market forces. And governments continue to heap on more debt on future generations in order to postpone the inevitable crash.
 
Musburger1 said:
It’s not a question of the President influencing/dictating Fed Policy; but quite the opposite. The tail wags the dog. It is the Fed that influences the President.

As the crises unfolded in 2008, do any of you remember Bush stepping aside from the podium and allowing Treasure Secretary Paulson, former Goldman chief, to layout what had to be done ($700 billion bailout for the banking system)? This was basically a bridge loan until the Fed could unleash many times this amount in guarantees, nearly free money, and QE - the purchasing of US treasuries. This wasn’t Bush Policy. It was created and coordinated solely by the Fed and the elite bankers. Obama and McCain, the two Presidential candidates, both signed on to the entire plan. I guarantee neither Bush nor the two candidates had any real say or input in the matter.

Since QE ended a few years back, the Japanese and EU central banks have more than picked up the QE slack. Stock markets and other assets such as real estate have surged higher as the creation of debt, bond buying by central banks (QE), and the resultant low interest rates have allowed for floods of money and high leverage to continue unabated. Profit, real growth, and conventional benchmarks of economic progress now have little relationship to stock market values. It’s all tied to expansion of debt and money creation; not economic output (making things). Once the debt creation slows down, interest rates will rise, and asset prices will fall. Thus far, the world’s central banks have been able to prevent this and willing to due whatever it takes to suppress market forces. And governments continue to heap on more debt on future generations in order to postpone the inevitable crash.
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Good post. I don't remember that particular press conference but I'm sure you're correct on who formulated the plan to bail us out.

A couple of things. I read that the Fed bought quite a bit of mortgaged backed securities. Those securities did not add to the national debt did they? Also, this discussion I believe was triggered by who gets the credit for the positive metrics we are seeing in today's economy; Obama or Trump. I am skeptical about credit for the numbers when our national debt doubled. I think we bought the "good news" we are seeing today. People on the Left want to give Obama credit and people on the right want to believe that Trump has unleashed confidence that has spurred the stock market and other positive metrics. What do you think? It's all a ticking time bomb?
 
QE - The creation of digital dollars by the fed to purchase treasuries or mortgages - does not add to the debt. It does create inflation in assets both in real estate and in the stock and bond markets. The holders of assets benefit as a result while those not holding assets are further separated from buying assets as their purchasing power in terms of real estate and stocks by increasing amounts. This is why income and wealth inequalities have exploded since the 2008 crises.
 
Musburger1 said:
QE - The creation of digital dollars by the fed to purchase treasuries or mortgages - does not add to the debt. It does create inflation in assets both in real estate and in the stock and bond markets. The holders of assets benefit as a result while those not holding assets are further separated from buying assets as their purchasing power in terms of real estate and stocks by increasing amounts. This is why income and wealth inequalities have exploded since the 2008 crises.
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I was thinking the purchase of treasuries is government debt while the mortgaged back securities are not. I guess I need to T that out. Are these treasuries already issued or new treasuries issued by the government to finance itself?
 
Mr. Deez said:
He might have been listening to Paul Krugman.
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Mark Cuban also said if Trump wins he's bailing out.

humahuma said:
Yep, I heard the alarmist and how Trump was going to screw the economy. The Dem did too and sold, I didn't I went all in. I just wanted to get a little survey of what people did when Trump was elected. It was the same people who had Clinton winning the election.
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I said many times right here the polls are wrong. Recent history started exposing that. So I felt strong Trump would be our next President. I stayed all in and have really benefited. Recently sold the higher stocks to something with better chances of more growth. Life is good.
 
Joe Fan said:
this is sort of dems and stock mkt related
time to short Facebook?

https://www.cnet.com/news/facebook-still-uncool-among-most-teens-emarketer-snapchat/
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There is no doubt about it from my perspective. My two kids are 14 and 21 years old respectively. They both have a FB page but it's crickets on there and it's been like that for a long time. The only posts are from their family members. The thing is, I think there is an argument that they might like it when they get older. I use it all the time. I have lots of old friends on there (not friends that are just old; also some I've known a long time. You know what I mean) and post poetry and videos of myself playing the piano. I like FB. It's been a huge blessing to me.
 
Musburger1 said:
QE - The creation of digital dollars by the fed to purchase treasuries or mortgages - does not add to the debt. It does create inflation in assets both in real estate and in the stock and bond markets. The holders of assets benefit as a result while those not holding assets are further separated from buying assets as their purchasing power in terms of real estate and stocks by increasing amounts. This is why income and wealth inequalities have exploded since the 2008 crises.
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Let's just take one of your assertions and examine it: Inflation benefits the holders of bonds. Go ahead and explain how that happens.
 
iatrogenic said:
Let's just take one of your assertions and examine it: Inflation benefits the holders of bonds. Go ahead and explain how that happens.
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Supply and demand. The Fed creates artificial demand for bonds by purchasing them, thus inflating the value of the bonds (by lowering the interest rate).
 
iatrogenic said:
Let's just take one of your assertions and examine it: Inflation benefits the holders of bonds. Go ahead and explain how that happens.
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My simple explanation of inflation is an oversupply of currency bidding up the values of the assets. More dollars then means more money chasing bonds, real estate and the like. But I know what you're thinking (I think); as the money supply and economic activity increases, inflation is spurred which then results in higher interest rates which means those who hold bonds will see their bonds lower in value so that their coupon rate is in equilibrium with newly issued bonds.
 
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bystander said:
There is no doubt about it from my perspective. My two kids are 14 and 21 years old respectively. They both have a FB page but it's crickets on there and it's been like that for a long time.....
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Where do they get their news (if you know)?
I asked some kids this over T-Giving and I recall two of them said Facebook. I was a little surprised. And none of them got it directly from cable or network news.
 
Joe Fan said:
Where do they get their news (if you know)?
I asked some kids this over T-Giving and I recall two of them said Facebook. I was a little surprised. And none of them got it directly from cable or network news.
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My son is on Reddit quite a bit. He see's all kinds of perspectives there. I think he might have Yahoo or something on for basic news.
 
bystander said:
My son is on Reddit quite a bit. He see's all kinds of perspectives there. I think he might have Yahoo or something on for basic news.
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But I've warned him that Yahoo's home page is full of bloggers that appear to be unbiased news. He's catching on pretty quick.
 
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