I’ve been watching the stock market closely lately for two reasons: 1. (the obvious) I’ve got a pension plan. 2. (ironically) I think it’s the only thing that will save the Obama presidency. These impulses are at war with each other because I don’t think the administration deserves to be saved, but (again obviously) I’d sure like my pension plan to go up.
So I agree with the opinion piece in the Jerusalem Post that lays the blame for many of Obama’s travails at the foot of the lumbering US economy. Of course much of that is probably his fault. The economies which seem to be recovering fastest (France) are those that used the least government intervention in the crisis. Our stock market started to go up when it became clear Obama wasn’t able to get his legislation through anymore. If the Dow starts to push over ten or eleven thousand, the market will probably start pushing substantial cash into the economy. Good times will come back. Obama’s ultimate success (again ironically) may be due to his own failure. What’s the corollary to “No good deed goes unpunished?” No bad (or foolish) deed isn’t rewarded? So it goes.
Roger – the minor upward fluctuations in the stock market may be important to your 401k, but it is not the economy. The underlying economy is in very bad shape and everything Congress and the Fed has been doing is weakening it further. We are insolvent as a nation (big time)and I see little that encourages me about the next few years. Instead of pointing out any real improvement they made up a meaningless term (green shoots) – nice term, but what does it mean.
I’m certainly no money guru, but from what I understand the market can rise, but the underlying economy can still be in the toilet. I had heard that one of the reasons that the market is up is to higher corporate profit, higher corporate profit effected by lay offs and just a lot of cost cutting. The economy isn’t going to get much better as long as business fears government policy. If Obama ever said that he’s taking Obama type healthcare and cap and trade off the table, you’d see a big boost to the economy, stock market and employment jump.
I didn’t do well in Econ 101 so I might be a bit off.
I listened to the President yesterday. I wasn’t surprised to find out he had never studied calculus.
Being math challenged is not an impediment to the policy prescriptions of the Left. In fact, it’s one of the salient benefits.
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The Obamaclatura’s policies and statements have increased economic risk and uncertainty. Nationalization, invasive regulation, maniacal spending, and the prospect of higher taxes have economic agents hunkering down rather than innovating and executing. By reducing the level of “animal spirits”, Obama is prolonging the recession. The kindest interpretation is that he knows he has until November 2010 to move the regulatory superstructure leftward, and he and his followers are willing to pay the political price in 2010 and 2012. The rest of us will be paying the economic price for the rest of our lives.
Sadly, I don’t think that the growth in the stock market will equal growth in the economy. Everything that I’ve read says that the economy will continue to grow slowly, if at all, until we process all of the excess debt in our economy. Apparently, unlike in ’91 and ’92, consumers aren’t falling back to the credit cards, and are by and large trying to live within their means, meaning their paycheck. As long as consumers pull back, there won’t be any real growth to spur employment. Ignoring Congressional screw ups, I’ve seen forecasts that unemployment will continue to increase until mid 2010. The stock market’s celebrations may be premature.
Let’s just hope this isn’t a bear market rally, which is what it most resembles.
If abstraction is one of your pleasures, you can watch the stock market and say to yourself “So, this is how I might feel today if I was rich”. Nice to know.
Each of us can hope that his or her 201k will gradually retrieve its 401k arithmetic patina, but by that time the dollar may be worth one-half of what it is today, so our dear leader is doing a good job of leading us nowhere.
Opportunity may smile again after a while. In the meantime, Roger Simon is kindly suggesting how one might learn to metabolise absurdity. I appreciate the help.