Dow falls nearly 1,000 points on rate hike fears and poor earnings from Verizon

[MTAtech]

Actually, one effect of the 2017 corporate tax cut was to deliver more tax revenue in recent years than the CBO’s projections had the cuts not been made.

The actual amount of tax revenue collected in FY2018 was significantly lower than the CBO’s projection made in January 2017—before the tax cut was signed into law.

The 2017 tax cuts were advertised to pay for themselves. Did they? No.

US lost more tax revenue than any other developed country in 2018 due to Trump tax cuts, new report says

The U.S. tax-to-GDP ratio fell the most of any OECD member country in 2018, according to a new report released Thursday.

www.cnbc.com

What Are the Costs of the Trump Tax Cuts to You?

The Tax Cut and Jobs Act promised to add $1.8 trillion in revenue. Instead, it could add $2.3 trillion to the debt.

www.thebalance.com

 

[nvflash]

How much of this drop in the market do you think can be attributed to the average investor with a 401 which is what most investors have?

Now then, who wants to argue that the markets don't run on speculation? This in my opinion is a drop due to fear not fact, speculation.

The warning signs were there all week, Face the Nation had a pretty good read on a few facts:

1. Major cities and ports in China on lockdown, exacerbating supply chain issues.
2. 40% of the worlds grain comes from the Ukraine, most of that from the Eastern Ukraine where Putin's war is raging out of control.
3. Liberty and democracy in Europe being held hostage by a gas station with nuclear weapons.
4. Fears that the Fed can not bring in a "soft" landing and interest rate hikes will lead to a recession.

Did I miss anything, oh yes, there is the fact that we are in the biggest bubble economy of all time. We just papered over all of our past bubbles to keep the game going, now we have run-up inflation and the Fed has been left with no real means to fight it, as our debt can't sustain the type of interest rate hikes it would take to reign in that inflation. The end stage of inflation is not hyper-inflation, it's deflation, but our debts do not deflate.

 

[holbritter]

Are you anticipating a sharp market reduction in housing prices, or a leveling off?

No, not a 'sharp' reduction. More of a down to earth prices. Some of the pricing I'm seeing in areas of NY are crazy for the location.
The price of lumber started to come down, but stalled with fuel costs going up. And the urgency to 'buy now or never be able to' will fade. Those who originally wanted to go the brand new home route and were turned off by the rising prices (due to the lumber costs) looked to homes already on the market, causing that increase. Rising mortgage rates will help slow it down as well.
I could be wrong, but that's the way I see it and waiting another year to see where it's at, is still what I'm advising her.

 

[bongsaway]

Which reminds me: what are the odds that Peter Ducey ask Biden at his next press conference if he thinks that a dropping stock market is good for Democrats’ chances this Fall?

Good one.

 

[bongsaway]

The warning signs were there all week, Face the Nation had a pretty good read on a few facts:

1. Major cities and ports in China on lockdown, exacerbating supply chain issues.
2. 40% of the worlds grain comes from the Ukraine, most of that from the Eastern Ukraine where Putin's war is raging out of control.
3. Liberty and democracy in Europe being held hostage by a gas station with nuclear weapons.
4. Fears that the Fed can not bring in a "soft" landing and interest rate hikes will lead to a recession.

Did I miss anything, oh yes, there is the fact that we are in the biggest bubble economy of all time. We just papered over all of our past bubbles to keep the game going, now we have run-up inflation and the Fed has been left with no real means to fight it, as our debt can't sustain the type of interest rate hikes it would take to reign in that inflation. The end stage of inflation is not hyper-inflation, it's deflation, but our debts do not deflate.

I'm no market expert by any means and why the markets really started this absurd rise is beyond me. Companies were not producing more, wages were stagnant as usual and yet the markets just kept going up in comparison to many p/e's. It's insane and sooner or later we will experience another bust giving the super wealthy another opportunity to buy low after they sold high and helped the crash. I had a buddy who was in the market for a long time, I think he got in around ten thousand on the dow. When the dow hit 25000 I suggested he sell, he was closing in on seventy, nope, he said he would sell when it hit 28000 and he didn't and the markets still kept going up. Why? Inflation is hurting the average american, why are the markets going up with all the supply chain issues and short supplies?

 

[MTAtech]

The warning signs were there all week, Face the Nation had a pretty good read on a few facts:

1. Major cities and ports in China on lockdown, exacerbating supply chain issues.
2. 40% of the worlds grain comes from the Ukraine, most of that from the Eastern Ukraine where Putin's war is raging out of control.
3. Liberty and democracy in Europe being held hostage by a gas station with nuclear weapons.
4. Fears that the Fed can not bring in a "soft" landing and interest rate hikes will lead to a recession.

Did I miss anything, oh yes, there is the fact that we are in the biggest bubble economy of all time. We just papered over all of our past bubbles to keep the game going, now we have run-up inflation and the Fed has been left with no real means to fight it, as our debt can't sustain the type of interest rate hikes it would take to reign in that inflation. The end stage of inflation is not hyper-inflation, it's deflation, but our debts do not deflate.

I hear the gloom but aren't as pessimistic as you.

I've been hearing worries since I was a child that we have a bubble economy for decades and that the debt is unsustainable. Yet, we have prospered. The Fed also does that the tools to fight inflation.

While there is a significant chance of recession over the course of the next few years that's always the case, no matter what the current data look like.

Our current situation, creates elevated risks of recession, mainly because the Federal Reserve is trying to steer a course through opposing dangers of cooling down an overheated economy while avoiding recession. I think they will succeed. But they might not. And here’s the thing: The kind of recession we have, if we do have one, will depend on which way the Fed gets it wrong. If the Fed panics, they'll raise interests rates too high and cause a recession. If they do too little, the economy will overheat more and inflation will persist.

Inflation is, of course, unacceptably high. Some of this reflects disruptions -- supply-chain problems, surging food and energy prices from the war in Ukraine -- that are likely to fade away over time. In fact, I’d argue that these temporary factors account for a majority of inflation, which is why just about every major economy is experiencing its highest inflation rate in decades.

This isn't 40 years ago, as there’s essentially no evidence that inflation has become entrenched, like in the1980s, when inflation persisted simply because prices were raised expecting future inflation. This is evident in this chart:

 

[post]

How much of this drop in the market do you think can be attributed to the average investor with a 401 which is what most investors have?

Now then, who wants to argue that the markets don't run on speculation? This in my opinion is a drop due to fear not fact, speculation.

If this is accurate, I assumed "the average investor" has little impact on market direction.

The wealthiest 10% of Americans own a record 89% of all U.S. stocks

The top 1% gained over $6.5 trillion in corporate equities and mutual fund wealth during the pandemic, according to the latest data from the Federal Reserve.

cnbc.com

October 18, 2021

Combined, the NYSE and NADAQ stocks were worth $52 trillion on February 1 :

Largest stock exchange operators by market cap 2021 | Statista

The New York Stock Exchange is the largest stock exchange in the world, with an equity market capitalization of just over 27.7 trillion U.S.

www.statista.com

And, with less than 20 percent (of total retirement investments), and selling discouraged and short selling in a 401k a rare practice.....

401(k) Plan Research: FAQs

Frequently Asked Questions About 401(k) Plan Research How la

www.ici.org

How large are 401(k)s?​

As of June 30, 2021, 401(k) plans held an estimated $7.3 trillion in assets and represented nearly one-fifth of the $37.2 trillion US retirement market, which includes employer-sponsored retirement plans (both defined benefit (DB) and defined contribution (DC) plans with private- and public-sector employers), individual retirement accounts (IRAs), and annuities. In comparison, 401(k) assets were $3.1 trillion and represented 17 percent of the US retirement market in 2011.

 

[nvflash]

I'm no market expert by any means and why the markets really started this absurd rise is beyond me. Companies were not producing more, wages were stagnant as usual and yet the markets just kept going up in comparison to many p/e's. It's insane and sooner or later we will experience another bust giving the super wealthy another opportunity to buy low after they sold high and helped the crash. I had a buddy who was in the market for a long time, I think he got in around ten thousand on the dow. When the dow hit 25000 I suggested he sell, he was closing in on seventy, nope, he said he would sell when it hit 28000 and he didn't and the markets still kept going up. Why? Inflation is hurting the average american, why are the markets going up with all the supply chain issues and short supplies?

The markets are a fickle bitch.

Money is proof of debt, it is a financial asset, backed by a financial liability, held by another party. We've spun off way more liability than we have assets to back it and we are trying to inflate our way out of it. To what ends that will all come to, I wish I knew, and it's going to be rather interesting to find out, but you know the old curse " May you live in interesting times."

Beyond money, the fundamental building blocks of society or human civilization are mining and farming, because there really isn't anything that we need that doesn't come from some variation of these two things. So what is going to happen if 40% of the worlds grain markets collapse?

Not what is going to happen to the DOW, but what will happen to civilization?

That sure seems to me it's going to lead to a lot of hungry people, and hungry people do desperate things. I'm sure glad I'm not trying to control 8 billion people when and if 40% of them can't get enough food.

 

[post]

The warning signs were there all week, Face the Nation had a pretty good read on a few facts:

1. Major cities and ports in China on lockdown, exacerbating supply chain issues.
2. 40% of the worlds grain comes from the Ukraine, most of that from the Eastern Ukraine where Putin's war is raging out of control.
3. Liberty and democracy in Europe being held hostage by a gas station with nuclear weapons.
4. Fears that the Fed can not bring in a "soft" landing and interest rate hikes will lead to a recession.

Did I miss anything, oh yes, there is the fact that we are in the biggest bubble economy of all time. We just papered over all of our past bubbles to keep the game going, now we have run-up inflation and the Fed has been left with no real means to fight it, as our debt can't sustain the type of interest rate hikes it would take to reign in that inflation. The end stage of inflation is not hyper-inflation, it's deflation, but our debts do not deflate.

If enough damage is done to port infrastructure and internal transportation networks in war affected areas and the war is expected to go into next year or weather events hit North America to an unanticipated extent, futures prices will rise again. Brazil's output is forecast to be below average,

We're Not Facing a Global Food Crisis | Aaron Smith​

https://asmith.ucdavis.edu › news › russia-ukraine
Mar 9, 2022 — Russia produces 11% of the world's wheat and Ukraine produces 3%. These countries make up a larger proportion of global exports. Russia accounts ...

Reddit speculators distorted the short term wheat contract in early March,

A Market Mystery: The ‘Wheat Whale’ That Came Out of Nowhere

Who was behind the surge of trading in wheat futures last month? Some point to a group of Reddit users who mobbed an E.T.F. offering exposure to the wheat market.

www.nytimes.com

April 7, 2022
"Mr. Brooks pointed to the sudden jump in Teucrium’s shares and trading volume as evidence. Shares of the E.T.F. had been turning over at a daily volume of 300,000 to 500,000 for months. On March 4, their daily trading volume hit 27 million shares. That day, the fund took in $183 million; it had never before taken in more than $35 million in a single day. Its price, which was just over $8 on Feb. 25, peaked at $12.28 on March 7....""

 

[RealityNow]

I am in total agreement, ninety five percent of the market movement and prices of goods are pure speculation. Who drives up the price of a barrel of oil, speculators pure and simple. However much 401 owners lost yesterday, it was no doing of their own.

University no longer for decades past teach the principle the Stock Market was founded for.

The current people who engage, have no idea the Stock Market Listing as a Public Traded Company was designed for "Industrial/Business STABILITY, Industrial/Business RESEARCH AND DEVELOPMENT, Industrial/Business MANAGED GROWTH.
It was never designed to play "let's break a record"... quarterly reporting was based on "Actual Production", Actual Sales, and Actual Profit based on The Actual Production and and the Actual Sale.

It has been promoted as a get rich game that went into overdrive during the Junk Bond Era, and Reagan's Deregulation. Devastation by Fiction has resulted every since. The enhancements of grave damages was amplified during Nixon Admin and Outsourcing core "Ore Processing", followed by outrourcing of various other commodity types. By the 1970's we saw car tires companies close and many other once major industries closed.
By the 1980's Major Brands were being produced on foreign soil, as "disposable products" with no system of repair parts, that devasted much. Imported vehicle stepped up in the mid 1970's. All such things ignored that "back bone industry exodus" and challenges mounted. "All done during "Republican Administrations".
Union Busting escalated in the 1980's. by the late 1970's throught the 1980's ... employees became "secondary", and focus went to University Degree Rides, and the cycle began to escalate where "employees not only lost voice", Pay became "stagnant".

From the period in the 1970's employees personal saving, began to decline, and by the 1980's into the 1990's employee pension disappeared at an increased rate, and by the 1990's some industries no longer offered Pension Pland, and by the late 1990's the company match for the 401k began to dry up and ultimately by the early 2000's employee match was gone. "except for some level of upper management and executives".
Citizen's Personal Debt took off like a rocket into space. After Reagan corporations began to get massive "Tax Cuts" and that led us to the escalation of the National Debt.

Even after the 77-79 Gas Issues, there was no promotion of increasing improvements at Refineries and No promotion to build new and improved refineries,....

Again, all under Republican Administration....

 

[post]

University no longer for decades past teach the principle the Stock Market was founded for.

The current people who engage, have no idea the Stock Market Listing as a Public Traded Company was designed for "Industrial/Business STABILITY, Industrial/Business RESEARCH AND DEVELOPMENT, Industrial/Business MANAGED GROWTH.
It was never designed to play "let's break a record"... quarterly reporting was based on "Actual Production", Actual Sales, and Actual Profit based on The Actual Production and and the Actual Sale.

It has been promoted as a get rich game that went into overdrive during the Junk Bond Era, and Reagan's Deregulation. Devastation by Fiction has resulted every since. The enhancements of grave damages was amplified during Nixon Admin and Outsourcing core "Ore Processing", followed by outrourcing of various other commodity types. By the 1970's we saw car tires companies close and many other once major industries closed.
By the 1980's Major Brands were being produced on foreign soil, as "disposable products" with no system of repair parts, that devasted much. Imported vehicle stepped up in the mid 1970's. All such things ignored that "back bone industry exodus" and challenges mounted. "All done during "Republican Administrations".
Union Busting escalated in the 1980's. by the late 1970's throught the 1980's ... employees became "secondary", and focus went to University Degree Rides, and the cycle began to escalate where "employees not only lost voice", Pay became "stagnant".

From the period in the 1970's employees personal saving, began to decline, and by the 1980's into the 1990's employee pension disappeared at an increased rate, and by the 1990's some industries no longer offered Pension Pland, and by the late 1990's the company match for the 401k began to dry up and ultimately by the early 2000's employee match was gone. "except for some level of upper management and executives".
Citizen's Personal Debt took off like a rocket into space. After Reagan corporations began to get massive "Tax Cuts" and that led us to the escalation of the National Debt.

Even after the 77-79 Gas Issues, there was no promotion of increasing improvements at Refineries and No promotion to build new and improved refineries,....

Again, all under Republican Administration....

It wasn't, "after Reagan," Reagan did the same thing the two Bushes and Trump did. They cut taxes, replaced the diminished revenue
that resulted with increased borrowing and declared a new paradigm, lowering taxes on the wealthiest and the corporations they own
increases "growth".
Reagan grew the national debt from $930 billion on Sept. 30. 1981, to $2,400 billion on Sept. 30. 1989. Bush increased it another $2,000
billion to $4,400 billion on Sept. 30. 1993. Eight years later, the debt was $5,670 billion and Bush cut taxes without cutting spending.
Before the 2008 crash, excess Social Security collection reached $180 billion annually and was spent as general revenue disguising the
extent of the deficit, along with the "off the books" war expense.

PolitiFact - Did George W. Bush 'borrow' from Social Security to fund the war in Iraq and tax cuts?

Evoke George W. Bush, his income tax cuts and the war in Iraq, and you’re sure to arouse some liberal ire. Suggest that

www.politifact.com

"...
In this broad sense, Bush technically did "borrow" Social Security surplus to pay for the income tax cuts and the Iraq war. But even if we use this loose definition of the word, we still run into a few issues.

First, the amount of surplus Bush "borrowed" is actually around $708 billion, a little more than half of the $1.37 trillion claimed in the meme. While around $1.52 trillion in bonds was added to the trust funds from 2000 to 2008, the Treasury only has access to the cash revenue collected every year, not the interest accrued on the entire surplus.

Second, Bush didn’t exclusively spend on the war, which has an estimated cost of $1.7 trillion. Other big costs include the financial bailout in 2008.."

 

[bongsaway]

University no longer for decades past teach the principle the Stock Market was founded for.

The current people who engage, have no idea the Stock Market Listing as a Public Traded Company was designed for "Industrial/Business STABILITY, Industrial/Business RESEARCH AND DEVELOPMENT, Industrial/Business MANAGED GROWTH.
It was never designed to play "let's break a record"... quarterly reporting was based on "Actual Production", Actual Sales, and Actual Profit based on The Actual Production and and the Actual Sale.

It has been promoted as a get rich game that went into overdrive during the Junk Bond Era, and Reagan's Deregulation. Devastation by Fiction has resulted every since. The enhancements of grave damages was amplified during Nixon Admin and Outsourcing core "Ore Processing", followed by outrourcing of various other commodity types. By the 1970's we saw car tires companies close and many other once major industries closed.
By the 1980's Major Brands were being produced on foreign soil, as "disposable products" with no system of repair parts, that devasted much. Imported vehicle stepped up in the mid 1970's. All such things ignored that "back bone industry exodus" and challenges mounted. "All done during "Republican Administrations".
Union Busting escalated in the 1980's. by the late 1970's throught the 1980's ... employees became "secondary", and focus went to University Degree Rides, and the cycle began to escalate where "employees not only lost voice", Pay became "stagnant".

From the period in the 1970's employees personal saving, began to decline, and by the 1980's into the 1990's employee pension disappeared at an increased rate, and by the 1990's some industries no longer offered Pension Pland, and by the late 1990's the company match for the 401k began to dry up and ultimately by the early 2000's employee match was gone. "except for some level of upper management and executives".
Citizen's Personal Debt took off like a rocket into space. After Reagan corporations began to get massive "Tax Cuts" and that led us to the escalation of the National Debt.

Even after the 77-79 Gas Issues, there was no promotion of increasing improvements at Refineries and No promotion to build new and improved refineries,....

Again, all under Republican Administration....

And yet the base keeps coming back for more election after election on promises of repairing everything they themselves broke. You know, the job creators, the makers, not those pesky democratic takers. When you point out they are voting against their own best interests, they proudly tell you that you don't know what their best interests are and apparently neither do they.

 

[gdgyva]

I am in total agreement, ninety five percent of the market movement and prices of goods are pure speculation. Who drives up the price of a barrel of oil, speculators pure and simple. However much 401 owners lost yesterday, it was no doing of their own.

only people that lost anything are the ones that SOLD

it is paper profits and paper losses until you SELL

and there is NO REASON to sell unless you are over 65, and you should already be in a bond/equity mix that changes as you grow older

You pull out what you need to live and let the rest continue to grow

Markets are fickle.....they go up, they go down

But in the long run, no better place to have you money

 

[bongsaway]

only people that lost anything are the ones that SOLD

it is paper profits and paper losses until you SELL

and there is NO REASON to sell unless you are over 65, and you should already be in a bond/equity mix that changes as you grow older

You pull out what you need to live and let the rest continue to grow

Markets are fickle.....they go up, they go down

But in the long run, no better place to have you money

So if you had a stock worth forty a share and it lost twenty a share, you haven't lost any money? That is some wishful thinking. Your 401 was worth a thousand yesterday and now it's worth five hundred but you haven't lost any money? How does that work?

 

[gdgyva]

So if you had a stock worth forty a share and it lost twenty a share, you haven't lost any money? That is some wishful thinking. Your 401 was worth a thousand yesterday and now it's worth five hundred but you haven't lost any money? How does that work?

It was only worth $ 40 if you needed to sell it today

It is paper profits or paper losses.....i have lots of both.....bough XM at $35 a share and now at $ 22 approx

But it only a LOSS if i sell the shares i own.....since i plan to own them for another 5-10 years minimum i am not concerned

Bought SYY at an average of $37 over the years.....now near $ 80......only a gain IF i sell

Stop thinking like most losers who invest.....invest for the LONG TERM

I cant help day traders.....

 

[NatMorton]

You did not post a link because very likely you are aware of the reputation of the WSJ editorial board,

Opinion | Corporate Tax Reform Worked

Revenue is surging, exceeding what CBO and critics predicted.

www.wsj.com

Corporate Tax Reform Worked​

Revenue is surging, exceeding what CBO and critics predicted.​

By The Editorial Board​

April 19, 2022​

This was published one month before the era of pandemic driven, government stimulus and Federal Reserve "accommodation on steroids,"

Link to cached page of this article,
https://www.forbes.com/sites/christianweller/2020/01/29/trumps-wasteful-tax-cuts-lead-to-continued-trillion-dollar-deficits-in-expanding-economy/?sh=5846fa8e66c4

Trump’s Wasteful Tax Cuts Lead To Continued Trillion Dollar Deficits In Expanding Economy​

Christian Weller Senior Contributor
Jan 29, 2020,
"...This is the opposite of tax cuts paying for themselves.
CBO released its regular update to the economic and budget outlook on January 28. The new estimates show a deficit of $1 trillion for 2020. This is the equivalent of 4.6% of gross domestic product. The federal budget deficit will grow to 5.4% of GDP by 2030, according to GDP.

This is a much worse outlook for the current deficit than CBO showed just before Congress passed the Trump tax cuts. In June 2017, CBO anticipated a deficit of 3.6% of GDP for 2020. The current deficit is thus 27.8% greater than CBO projected before the tax cuts. .. difference in the current projected deficit and the prior projection equals $221 billion for 2020. This is a substantial gap that follows in large part from the tax cuts,..."

The only figures I agree with the Tax Foundation on are the corporate tax receipts of fiscal year ending Sept. 30, 2021,
and I documented why they were dramatically higher, Covid-19 federal borrowing of $5 trillion in that one fiscal year and Federal Reserve "accommodation". I also supported the contention that the 2017 Trump-McConnell tax cuts failed to deliver as promised in 2018-19 (see below).

Tax Foundation - Wikipedia

en.wikipedia.org

Reception​

"In a column for The New York Times blog The Upshot, Josh Barro, a former Tax Foundation employee, criticized the group's approach to scoring the Rubio-Lee tax plan as producing "implausibly rosy results." ...

In opinion editorials for the New York Times, economist Paul Krugman has characterized the Tax Foundation as "not a reliable source" while criticizing a report by the Tax Foundation comparing corporate tax rates in the U.S. to those in other countries. Krugman has also accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act. The Tax Foundation has published various responses to Krugman's criticisms."

Our choice is Joe Biden* | Editorials | unionleader.com​

https://www.unionleader.com › opinion › our-choice-is-jo...
Oct 25, 2020 — "...Since Trump took over, the national debt has exploded by more than 7 TRILLION dollars. While the last several trillion was in response to the COVID-19 economic crisis, at least the first three trillion was on the books well before the pandemic, while Trump was presiding over “...the best economy we’ve ever had in the history of our country.” (Trump’s words.)
The layman would expect that the best economy in history would be a time to get the fiscal house in order, pay down debt and prepare for a rainy day (or perhaps a worldwide pandemic). .."

Most clear thinking — and objective — editorial page in the country, IMO. I didn’t post it because it’s a subscription site.

 

[dobieg]

No, not a 'sharp' reduction. More of a down to earth prices. Some of the pricing I'm seeing in areas of NY are crazy for the location.
The price of lumber started to come down, but stalled with fuel costs going up. And the urgency to 'buy now or never be able to' will fade. Those who originally wanted to go the brand new home route and were turned off by the rising prices (due to the lumber costs) looked to homes already on the market, causing that increase. Rising mortgage rates will help slow it down as well.
I could be wrong, but that's the way I see it and waiting another year to see where it's at, is still what I'm advising her.

There's always a rush of buying as rates start to climb. Eventually, that fades and it turns from a sellers market to a buyers market.

I actually wouldn't be surprised to see mortgage rates start to come down in the intermediate as that's happened in the past when the Fed started raising rates and the 10 year bond actually fell. Soon after comes the real spike in interest rates and everything gets ugly real quick until the Fed backs off and starts reversing direction once again.

 

[ClaraD]

Dow falls nearly 1,000 points on rate hike fears and poor earnings from Verizon

Stocks plunged Friday.

www.cnn.com

--

Yow!

What a finish to what was already a losing week!

I walked away from Verizon as my service provider, last month. I am tired of their beyond expensive spotty coverage. The first years were great, coverage was fabulous....now I spent more time pointing my damn cell phone at the sky yelling at it to get a signal....so, I went with a cheaper carrier and now have a signal for half the price.

 

[Vern]

It's still cheap when you look at context.
In the 80s you were paying 18% interest and for some reason the right looks fondly at Reagan

It wasn't just that. That was a short period. because of Reagan's tripling of the national debt and massive deficit spending, the fed had to keep rates high. I was looking at a house in 91-2 and the rate I was going to get was 8.75%. And that was paying it down with points.

 

[RealityNow]

I walked away from Verizon as my service provider, last month. I am tired of their beyond expensive spotty coverage. The first years were great, coverage was fabulous....now I spent more time pointing my damn cell phone at the sky yelling at it to get a signal....so, I went with a cheaper carrier and now have a signal for half the price.

I use a Non Marquee Service, and its been good for the past yrs. (Advertising is even less honest than it use to be)

 

[Anthony60]

It's still cheap when you look at context.
In the 80s you were paying 18% interest and for some reason the right looks fondly at Reagan

Any idea what rates were in the beginning of the '80's and where they were at the end?

 

[Cope]

For the millionth time the president does not control the Dow.

Does he have anything to do with the economy? The economy drives the Dow.

 

[Cope]

Very, very little. Possibly not at all.

Tax rates, stimulus, oil policy, simple threat of rate hikes

No effect at all?

 

[Gatsby]

Tax rates, stimulus, oil policy, simple threat of rate hikes

No effect at all?

Oil policy I'd say has almost no effect at all on the markets. Tax rates and stimulus will affect the economy eventually, which could potentially affect markets now. But it's a very attenuated process:

For example, if Biden says "I think tax rates should be higher," the effect of that is diluted by the likelihood that he'll never actually pursue it. If Biden does actually pursue it, the effect of that is diluted by the likelihood of higher tax rates actually being passed into law. If Congress does pass a tax hike and Biden signs it into law, the effect of that is diluted by whatever time period people think the higher rate will actually last (e.g. does it have an expiration date in the law, will some future Congress/President repeal it, etc). And finally, the actual economic effects of that policy change are diluted in how they are reflected in the stock prices. Some companies will probably benefit while others will suffer, making the affect on stocks hard to read.

And all of this happens usually happens over a multi-year period, rather than a single-day stock rally/decline. I just think that other completely unrelated factors will dominate whatever effects a fiscal policy change has, such that it's almost impossible to see it reflected in the prices.

 

[Cope]

Oil policy I'd say has almost no effect at all on the markets. Tax rates and stimulus will affect the economy eventually, which could potentially affect markets now. But it's a very attenuated process:

For example, if Biden says "I think tax rates should be higher," the effect of that is diluted by the likelihood that he'll never actually pursue it. If Biden does actually pursue it, the effect of that is diluted by the likelihood of higher tax rates actually being passed into law. If Congress does pass a tax hike and Biden signs it into law, the effect of that is diluted by whatever time period people think the higher rate will actually last (e.g. does it have an expiration date in the law, will some future Congress/President repeal it, etc). And finally, the actual economic effects of that policy change are diluted in how they are reflected in the stock prices. Some companies will probably benefit while others will suffer, making the affect on stocks hard to read.

And all of this happens usually happens over a multi-year period, rather than a single-day stock rally/decline. I just think that other completely unrelated factors will dominate whatever effects a fiscal policy change has, such that it's almost impossible to see it reflected in the prices.

In the construction industry, there is almost always a pause around election time in new financing/projects opening up, all due to who is likely to win the Presidential election. Republicans generate movement/building in the construction industry is the general train of thought in this industry.

Obama certainly didn't hurt much regarding that though.