DU Economists: Will indictments be 'last straw' for stock market?

[spuddonna]

We're at the mountaintop of a gigantic credit/real estate bubble which has propped the economy up since Bush took office. Much of this credit depends on the 'safety' of the American dollar, and the government which supports it.

Will the indictments be the final 'loss of confidence' that kicks off the next big economic depression?

[TheFarseer]

1. Seriously doubt it

Clinton Impeachment didn't do anything to the stock market that I can remember.

[The Backlash Cometh]

2. I think the stock market has been hurting because most middle

class investors don't trust Wall Street due to the culture of corruption. So anything that appears to destroy the status quo that feeds that corruption, would be a good thing.

[dretceterini]

4. There is still the illusion

throughout most of the world that the US is the strongest country. Nothing will charge greatly. We will continue to have a slow increase in inflation. When/if Herr Kommander Chimppy Von Poopypants himself actually gets impeached, things might change.

[ewagner]

3. In my opinion

If Bush* is immasculated for the next three years by these indictments, it means he can't screw up the economy any more than he already has.

IF some sanity prevails in the house and Senate (the House with Delay gone could be interesting), then some sort of fiscal sanity could take place and the economy will react favorably.

IF, however, chaos ensues by Repubs taking a "scorched earth policy" on their way to jail, then we're in trouble.

[dretceterini]

6. I firmely believe

that the Republinuts DO have a "scorched earth" policy...

[HereSince1628]

5. No, the market will do great with return to Democratic control of govt

[ProfessorGAC]

7. Almost Negligible Effect

The problems in the economy are manifest and extrinsic forces such as this aren't going to move the glacier that is the economy. As long as the economy is weak, the markets will be weak but not terrible.

The Professor

[Angry Girl]

8. The rigging of america's stock markets...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x2165009

I don't understand why this got so little attention.... The report has been around for months.

[Neil Lisst]

9. spuddonna, you're right, and here's why ...

The economy is floating on a bubble of debt, and that debt is reaching critical mass. As the debt chases consumers, who continue to borrow more than they save in the aggregate, they will be unable to service it. This will lead to loan defaults, credit card defaults, and foreclosures.

The bubble in real estate is about to pop, too.

Your observation that the markets are pressed to the wall now is accurate. They desperately WANT a good market to continue, and they want the DOW to remain above 10K, but it's going down. Bet on it.

We will have a recession in 2006, and in my opinion, it's already started, we're just seeing the pre-earthquake tremors.



http://www.webcomicsnation.com/neillisst/

[applegrove]

10. Not necessarily. They can keep selling off assets - like right now it

is Gold in the U.S. treasury. As long as they keep "fluffing" the market - it can continue to roll. As long as wages keep falling among the poor & the middle class - that will fight inflation.

Do not worry - the rich will be fine.:sarcasm:

[spuddonna]

11. LOL I don't worry about them... I'm selfish; I'm worried about me!

I'm worried we'll end up like post WWI Germany, carting minivans full of worthless cash to the Safeway to buy a loaf of bread! :(

[Neil Lisst]

15. spuddonna, did you know you are on my site today?

I give a Neil Lisst Shout Out to you and a few other posters here whose postings I have enjoyed. I wanted you to know.

http://www.webcomicsnation.com/neillisst
right below the comic

[spuddonna]

16. (blush) Thank you! :)

I totally agree with your points from above, btw.

You know, I've been watching the market closely since the mid-90's, but I watched the 2000-2001 crash in the tech's with personal interest (I'm an IT person) and now, I'm really worried as an American...

These idiots have sold our country to the highest bidder to pay for this illegal war, and now we are so incredibly debt laden, if the market crashes, we're in big trouble.

When I try to find good comparisons for our economy I see excellent parallels to the Great Depression. A huge credit boom that leads to a devestating credit bust... bank failures... 20% unemployment. I honestly won't be surprised to see our currency become essentially worthless.

Frankly, I hope I'm totally wrong...

[Neil Lisst]

20. I predict we are in for the worst recession since the 1980s

I don't see how we can escape it. We are ice skating on a bubble, and it has to pop, and let the air out.

All of these storm costs are real losses of value. There is no free money, not from insurance companies or governments. As a country, if we spend it there, we can't spend it elsewhere. Now the folly of a ill-defined war on terror, complete with the new Vietnam, drains the federal coffers.

The levels of debt v. savings in this country are appalling. We are absolutely on the same track American was in the 1920s, when the farm belt was already in Depression, while the business sectors did just fine.

If the economy isn't good for the Americans making under $20 an hour, it's not good.

When Watergate was breaking, Nixon was quoted as in my subject line, and that was his story that HE was telling John Dean NOT to do something illegal.

He was lying. He was telling Dean it was the wrong move, POLITICALLY.

Bush would never jump Rove for anything but leaving fingerprints at the crime scene.

------------------------
who's behind terror threats?
http://www.webcomicsnation.com/neillisst

[applegrove]

19. And in the recent past - a timely and shallow recession was used

to quiet down inflation. To stop the market for a bit - and everyone including the rich used to take part in that type of manangement of the economy. It seems now the rich will not allow that and insist they need a roaring market to prepare themselves to take over the world corporatwise - so it is on the backs of the middle class & the poor to fight inflation.

And oil is only going to go higher and higher. So my question is - "when will the rich sacrifice?". Children not even born will be paying off this debt. My gosh everyone pays for this rolling market that benefits the rich. When to they become part of the american community again and do their fair share of sacrifice & work for the good of the country?

[lovuian]

12. I think the stock market is going to get a WAKE UP CALL!!!

Especially Halliburton!!!

[Neil Lisst]

13. I agree. It's going to be rocky

and it will probably get a nudge when the indictments come down


The markets are playing "la-la-la-la, I'm not listening!" with the Plamegate matter. They're whistling through the graveyard, and when the indictments come down, it's pants-wetting time on Wall Street.

----------
speaking of pissing his pants, here's Bush
http://www.webcomicsnation.com/neillisst

[hang a left]

14. You know I have thought about this and this may just weigh

very heavy on Fitzgerald. If you read the Niger Forgery article at antiwar.com that is posted on the first page of GD right now you will realize the depth and breadth of this investigation. It truly has the ability to bring this country to it's knees.

I wonder if Fitzgerald lies awake at night regretting what he got himself into. He has a daunting task ahead of him. The fallout could be catastrophic to our nation. Not that we don't need to start over, but before the dust settles on this one, America is going to take an unprecedented hit IMO.

[newportdadde]

17. Not as long as G990 or whoever that anon buyer who sweeps in

to the rescue keeps propping it up.

[Orrin_73]

18. What about the housing market???

[spuddonna]

21. You mean the one that's a huge bubble?

What about it? :evilgrin:

[Neil Lisst]

22. the housing boom is built on debt and low interest rates ...

... not value and equity.

The instant there is a downward adjustment in the economy, the air will be let out of the real estate values, which are illusory.

bush looks at cheney replacements ...
http://www.webcomicsnation.com/neillisst