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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsTRUMPS MYSTERIOUS STOCK BOOM
By James Surowiecki at the New Yorker
http://www.newyorker.com/magazine/2017/03/06/trumps-mysterious-stock-boom
"SNIP..........
the run-up to last years Presidential election, pundits, economists, and Wall Street analysts agreed on one thing: a Donald Trump Presidency would be a disaster for the stock market. The common wisdom is that markets hate uncertainty. Theyre all about prediction, and Trump is unpredictability personified. Citigroup said that a Trump win would send the S. & P. 500 down three to five per cent, and, on Election Day, the hedge fund Bridgewater Associates told its clients that the Dow could fall almost two thousand pointsa full ten per centif Trump was elected. As the result became clear, these forecasts briefly looked accurate: stock-market futures took a vertiginous overnight tumble. But the day after Trumps victory markets rebounded, and, as he never tires of boasting, theyve risen since. The Dow is up more than thirteen per cent, an impressive gain by historical standards.
At first glance, this seems bizarre. Trumps first five weeks in office have been even more chaotic than expected, and the global Economic Policy Uncertainty Index has spiked to levels unseen in this century. During Barack Obamas Presidency, many Republicans and economists blamed uncertainty about the Administrations policies for the slow recovery from the recession. Yet Trump is far more volatile and unpredictable than Obama ever wasrisking a trade war with China, vowing to punish companies that move production abroad, calling for a new nuclear arms raceand markets are giddy with delight. Businesses are excited, too. A PwC study of private companies saw an unprecedented post-election jump in optimism, and, in December, the National Federation of Independent Businesses found that small-business owners were unusually optimistic. The new Administration looks as if it will be a roller-coaster ride. So why are companies and investors keen to jump aboard?
As far as business policy is concerned, there were two Trumps on the campaign trail. The candidate who appealed to the white working class was a blustery populist who promised to tear up trade agreements, bring jobs back to the U.S., and use Americas bargaining power to drive down drug prices. The other Trump was a classic Republican businessman, who vowed to slash taxes, resurrect coal production, and keep Washington from meddling in business. Hed repeal Dodd-Frank, soften other regulations, and curb the E.P.A. Markets have bet that the second Trump will prevail, and so far it looks like theyre right.
Trump has thrown a few bones to Main Street, such as scrapping the Trans-Pacific Partnership (which was more or less dead anyway), but hes already backing away from populist positions. The commitment to bargaining for lower drug prices didnt survive a meeting with pharmaceutical executives; Trump came out of it saying that he was opposed to price fixing. Meanwhile, he has filled his Cabinet with corporate executives, handed the E.P.A. to a fervent opponent of environmental regulation, and threatened to rescind an Obama regulation making millions of workers eligible for overtime pay. He has launched efforts to dismantle Dodd-Frank and to halt a new regulation requiring financial advisers to act in the best interest of their clients. Agencies have been told that for any new regulation they introduce they have to get rid of two existing ones.
...........SNIP"
applegrove
(118,622 posts)savings accounts into his new health care plan. That would put money into the stockmarkets from every household in the USA that could afford it. Bidding the price of stocks up. This is speculation and the stocks would likely be quickly over valued. Hurting the very public who invest their health savings accounts in stocks. But hey the already rich would make a killing. Proving once again that markets don't work when the rich are exploiting the markets themselves using government.
rzemanfl
(29,556 posts)malaise
(268,930 posts)Groper is a classic CON
flamingdem
(39,313 posts)The mystery is who is behind it and when they'll get out
I'm not sure there's a mystery behind it. Didn't one of Comrade Trump's cabinet members invent the software for that kind of thing? His Commerce Secretary, maybe? I wouldn't put it past him to use it like this.
haele
(12,647 posts)Most of Drumpf's advisory team comes from or have had long-time backing from the Mercers, who are up there in the Dominionist club along with the DeVos group.
It would be interesting to see how many of the stocks that are doing phenomenal are in the Renaissance Funds.
(And the righties complain about George Soros and Warren Buffet...)
Haele
AwakeAtLast
(14,124 posts)Sad it has come to this.
Wellstone ruled
(34,661 posts)all Goldman Saches IBM and Intel.
GeoWilliam750
(2,522 posts)But the far more important bond market is down sharply over the last six months.
People are focusing on the bright and sparkly stock market as the bond market is rolling over America.
ananda
(28,858 posts)The bond market does the opposite of the stock market.
When stocks go down, people move to the safety of bonds.
When the market rises, people pull out of bonds and trend
toward stocks.
Best_man23
(4,897 posts)I would take the money out. We are WAY OVERDUE for a significant correction.
superpatriotman
(6,247 posts)But there's always money to be made on misery on the way down. That's the casino.
Lisa0825
(14,487 posts)I still have some money in some specific companies I believe in, but I liquidated all my mutual funds and index funds. I agree we are in for a correction, plus, I think the "market hates uncertainty" deal will kick in if/when impeachment comes into play.
onenote
(42,694 posts)There is a long history of really bad advice/predictions about the stock market on DU.
If, like some on DU, you had gotten out the day after Trump was elected, you would have walked away from a very significant gain from that point until now.
Will there be a correction? Almost certainly? When? Hard to say? Will the gains that have occurred since election day be wiped out overnight? Almost certainly not. If the market turns south, most people who haven't been buying near the peak prices will be able to get out and still have a comfortable return.
But every situation is different and depends on when you invested and what you invested in. Just getting out lock stock and barrel generally is terrible advice.
Ilsa
(61,694 posts)In this market and that it is due to correct. He just shakes his head and says he feels stupid for not riding it all the way up.
cbdo2007
(9,213 posts)dollar cost averaging
Bubble?
Seems like business as usual.
Lucinda
(31,170 posts)BSdetect
(8,998 posts)with their algorythms and FFT
Yavin4
(35,437 posts)support it like, record low unemployment or some new business innovation, something is up. My guess is that the banks believe that they will be able to gamble again like they did before 2008. Run up huge fees by taking on obscene amounts of risks all the while knowing that the Federal govt will bail them out if their bets go south.
Sort of like going to Vegas where you keep your winnings but the government will make you whole again if you lose.
Vinca
(50,261 posts)One day it will go poof and Twittler will have to explain why he's such a loser.