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Obama could not be blamed for a drop in the Dow Jan to March since his policies couldn't have taken effect in that time. The GFC had actually been experienced in the previous year and s I explained in an earlier answer the Dow has risen because investor confidence has returned after the government has assumed much of the riskQuote:
Originally Posted by inthebox
And as I stated above it has nothing to do with investor confidence.There in no confidence displayed when you get daily triple digit swings. That is quick in and quick out profit taking.Quote:
investor confidence has returned after the government has assumed much of the risk
Yesterday the House Democrats passed another trillion in spending . Even better if it does become law they will collect tremedous increases in taxes where the spending won't kick in until 2012. I don't believe the markets will react kindly to that and it certainly will not make the employment futures rosier.
I think you don't understand volatility Tom. Some of the big steadying influences on the index have removed, or neutralised, so the more volatile stocks have greater influence on the index. We are no longer in a era of steady growth. I can't get too excited about short term movements, take a look at the index month by month, or quarter by quarter. If you are a day trader your business has been disrupted otherwise take a longer term viewQuote:
Originally Posted by tomder55
Well, that seemed to be what you were saying when you wrote:Quote:
Originally Posted by phlanx
There will no longer be just a single country recession that is part of this web, purely one giant market moving on the same tidesSure have. Neither of which change my question... do you think that the policies of individuals countries will have no individual effects on those countries because they are all interconnected... part of that "one giant market moving on the same tides"?Quote:
Have you ever heard of export?
Have you ever heard of international companies?
I disagree with that premise.
Agreed.Quote:
Recessions have to take a path as we both know, how that path is does depend on individual countries tackling what they see as the important issue
Here is where I disagree. I believe that there is a reason that some countries suffer from recessions when others do not. I believe that there is a reason that some countries suffer more from a recession than others. And I believe that there is a reason that some countries break out of recessions quicker than others. The policies of individual countries are the important factor, much more so than the "global economy" model than many wish to use today.Quote:
However, the market is so interwoven around the world that where you have major markets also in recession, it will take the combined effort from all to pull the markets out of it
Not at all. I don't deny any such thing.Quote:
As every countries markets are set up slightly different from each, the policies as you say effect the countries individual market
The EU exports some where around £250bn ($350bn approx) every year
So if your markets are in recession, they will drop our exports down, and the depending on how bad your deflation is working will depend on the value of the dollar which will depend on the value of gold
And way too much to go into, the web of finance is so that each market in the world is connected - or do you want to deny that individual polices create a market we can all trade in?
However, I also do not believe that our countries are so tied together that what happens to one automatlically effects all others.
Yes, if we are going through a recession, it is going to effect your exports to us. However, how your country reacts to the slowdown in exports is going to determine how you weather that slowdown much more so than what WE do about the recession. For instance if your country decides to react by raising interest rates (a stupid thing to do in that situation), it will make the situation harder for all the companies that are sitting on all that inventory that hasn't been exported... and will likely cause increased unemployment. However, if your country DROPS interest rates, it will have a better chance of weathering the export slowdown. AND NOTHING WE DO IN THE USA WILL EFFECT YOU TO THE SAME DEGREE AS WHAT YOU DO TO YOURSELVES. Your policies as an individual country will be the factor that gets you through the recession, even if we act stupidly (as Obama has been acting).
So I still argue that despite the global economy, individual country policy is much more important than a "global policy" than will never find agreement anyway.
Elliot
Well said...Quote:
Originally Posted by paraclete
Although I would change your last sentence as follows:
"A certain part of the GOVERNMENT has to be restrained for the good of the nation."
It is the government bailouts and the government policies that preceded them that created the mess in the first place. Restraining government spending and government policy would go a long way toward fixing it.
Elliot
First of all, there has been increased investment over the past several months. Lots of people who had gotten out of the market in October 2008 are getting back in because they believe the worst of the bleeding has been stopped and they see opportunity in the market. But that is only an indicator that people have less fear of losing money in the market, not an indicator of the state of the rest of the economy.Quote:
Originally Posted by inthebox
Second of all, with savings interest rates as low as they are, and banks continuing to fail, where else are people going to put their money? The rating agencies are looking at the possibility of lowering the credit rating of the US government, so bonds don't look so good. Gold is at an all-time high, and people can't afford it, and worse, they don't want to buy at the top of the market. Securities is the only real viable option. And the vast majority of that money is going into mutual funds or ETFs, not individual stocks, which means that people still see heavy market risk and are trying to diversify as much as possible.
So I don't really see the market as an indicator of anything other than the market. It does not serve as a good indicator of the economy as a whole.
Elliot
That's a pretty stupid comment, considering that 65% of Americans have investment accounts of one sort or another... including IRAs, Roth IRAs, 401Ks and private investment accounts. Something like 80% of investors are people earning less than 6 figures per year. Most of the money in the market today is invested via mutual funds and Exchange Traded Funds that cater to smaller accounts. Which means that "regular folks" are getting richer too.Quote:
Originally Posted by excon
Your elitism and class-warfare attitude is shocking from one who claims to be so anti-elitist and so anti-class-warfare.
You throw out these one-liners about the rich getting richer as if these statements actually mean something and should be causing a reaction. But upon closer examination, we find that your are just clueless and have no idea what you are talking about. Which is just par for the course where your comments are concerned.
Elliot
Quote:
Originally Posted by excon
Hello again, Elliot:Quote:
Originally Posted by ETWolverine
I don't know how you misread so much stuff, and make the assumptions you do. Nothing constrains you, it appears. But, that's why I'm here...
I described a phenomenon above - an ACCURATE phenomenon by the way, that I, as a capitalist rather enjoy. Then you go all bonkers on me...
excon
Ok Elliot lets examine what you said here because you seem to be contradicting yourself. Some countries fair much better because they don't allow the market to totally dictate what is happening. Some countries stimulate specific key industries such as construction and some regulate banking so that the market cannot pull the sort of deals that got the US into this problem. Some countries like your own subsidise agriculture whilst preaching free tradeQuote:
Originally Posted by ETWolverine
Yes It used to be said the when the US caught cold Australia got the flu. That was back in the days when our manufacturing industries were controlled by US multinationals and you could export your unemployment to us, but we took a vaccine for the flu and now when the US catches cold we ask you how much cold medicine you would like. But there are countries, such as Mexico, still caught in the fly trapQuote:
However, I also do not believe that our countries are so tied together that what happens to one automatlically effects all others.
Yes individual policy is important this is why we don't slavishly follow you in applying the market economy. We have come to learn that markets are imperfect, there is always someone trying to manipulate the market, to get and edge or corner a commodity.Quote:
So I still argue that despite the global economy, individual country policy is much more important than a "global policy" than will never find agreement anyway.
You think that the USA is preaching free trade? Our government isn't even paying lip service to the concept of free trade anymore. In actuality, we haven't engaged in free trade since the early 1940s with the Supreme Court's Willard decision. The USA long ago gave up free trade. What I am proposing is going BACK to free trade... something which hasn't existed in the USA in almost 7 decades. Trying to use the USA's actions as a proof for or against free trade policies is silly since they don't practice free trade.Quote:
Originally Posted by paraclete
What you just said essentially proves my point... your individual national policies are what insulates you from what is happening here. Thanks for proving my point.Quote:
Yes It used to be said the when the US caught cold Australia got the flu. That was back in the days when our manufacturing industries were controlled by US multinationals and you could export your unemployment to us, but we took a vaccine for the flu and now when the US catches cold we ask you how much cold medicine you would like. But there are countries, such as Mexico, still caught in the fly trap
As I said, the USA isn't "slavishly" following the free market system themselves. If they had, none of the issues caused by government-mandated CRA lending would have happened in the first place... there would have been no sub-prime mortgages.Quote:
Yes individual policy is important this is why we don't slavishly follow you in applying the market economy.
I'm curious... where have you learned that from? Because it wasn't from us. We're making the same centralized-government-control mistakes you are... only BIGGER.Quote:
We have come to learn that markets are imperfect, there is always someone trying to manipulate the market, to get and edge or corner a commodity.
Elliot
You would like to think you are but the evidence belies this. If you were doing what we do your economy would have turned around and you would be raising interest rates and expressing concern about inflation. You would have begun to turn your stimulus off. Further, your government would not own, have large equity stakes in the banks, insurance companies, auto makers.Quote:
Originally Posted by ETWolverine
You guys don't have a clue how we operate because you think you are the seat of all wisdom, instead you are the seat of all B*****t.
Do we have rogues here? Sure we do, HIH and NAB prove that, we also have "gifted" americans try to run our corporations, but because our B******t meters are strong they don't stay long. But when one of ours gets into trouble it doesn't bring the nation down. The reason, regulation. It is very difficult to create a sub prime mortgage here without lying through your teeth. Did we inject capital into banks to save them, no, we just guaranteed deposits, a different way of assuming risk. Did we inject capital into auto makers, No we helped with redundacy and restructuring. In other words a carrot and stick approach. If an auto maker wants to shut shop we let them go. Our way of housing the disadvantaged is for government to build the housing, takes longer but we know who to blame
Sony is a Japenese Company and I am using her as a single example from a very complicated web of tradeQuote:
Originally Posted by ETWolverine
Sony makes redunacies, closes factories and cancels contractual agreements
Sony to cut 8,000 jobs | Business | guardian.co.uk
This decision is based on a multinational company trading in a market that follows the same tide
The stock markets around the world follow this tide, not a single shares market was unaffected by its recent dips, and now that companies are stabilising the markets tide is all rising
I have read your thoughts about going back to 1940s free trade idea, this reminds me of my grandad, who would always moan the sausages of today were not like th ones of yesturday year, and as such were not better
The two arguments are both based on nostalgia, something that has no place in business and you would know that if you earned a living by buying and selling
Actually, we are doing what you do... centralized government control. And the result is money wasted on trying to bail out companies "too big to fail" that end up going bankrupt anyway, takeovers of the largest banks, brokerage houses, and insurance companies, increased government spending, increased borrowing, etc. And the result is exactly what you have predicted... concerns about inflation and the value of the dollar.Quote:
Originally Posted by paraclete
So, thanks for that. Ourt government copied you, and we're getting screwed for it.
Wouldn't have brought us down either... but sombody in the government decided that they needed to Take Action anyway... and that resulted in it bringing all of us down instead of just the companies involved.Quote:
Do we have rogues here? Sure we do, HIH and NAB prove that, we also have "gifted" americans try to run our corporations, but because our B******t meters are strong they don't stay long. But when one of ours gets into trouble it doesn't bring the nation down.
Yes, that is the reason it happened.Quote:
The reason, regulation.
That's because your government was smart enough NOT to mandate them into existence in the first place in order to perform social engineering through financial policy. That is certainly one area where your government has been smarter than ours.Quote:
It is very difficult to create a sub prime mortgage here without lying through your teeth.
These are all things that I have argued in favor of... let the failures fail, no government bailouts. KEEP THE GOVERNMENT OUT OF RUNNING THE ECONOMY.Quote:
Did we inject capital into banks to save them, no, we just guaranteed deposits, a different way of assuming risk. Did we inject capital into auto makers, No we helped with redundacy and restructuring. In other words a carrot and stick approach. If an auto maker wants to shut shop we let them go. Our way of housing the disadvantaged is for government to build the housing, takes longer but we know who to blame
Its too bad your government doesn't follow that advice across the board, though.
Elliot
Actually you don't do what we do and you spelled it out elsewhere. We are for free trade, we have removed our tariff barriers and other barriers to free trade. It was an expensive step but it is one of the reasons we survive the GFC much better than you did. You don't understand when you say centralised government control. Under our constitution we have what is described as the corporations power this gives our government the ability to proscribe how corporations will behave in the market place. Just one of the many differences between the way we are organised and yourselves. If you were doing what we do the value of your dollar would be appreciating, not depreciatingQuote:
Originally Posted by ETWolverine
Actually, if we stopped the government borrowing/spending/printing spree, our dollar would be appreciating. Just one more example of government interference in the economy.Quote:
Originally Posted by paraclete
All you are proving by all of this Elliot is that the system doesn't work. You have consistently elected people who are not governing with the interests of the country at heart. Now from my observation this is a function of the system not any particular political ideology and it has nothing to do with market economics since the market will operate whether there are brakes on it or not. When I look at your system just as I look at my own I can see how it was designed not to work. The only time it can truly function is in crisis when you gain consensus otherwise it is designed to maintain the status quo and avoid any radical change.Quote:
Originally Posted by ETWolverine
As far as your dollar is concerned it was not appreciating even before the current mêlée, the present government has only maintained the direction of the trend
True enough ;one of the policies that the Bush administration got wrong was it's refusal to defend the dollar value. Not surprising ;with guys like Geithner and Bernanke still at the wheel these policies have been given an injection of steroids... full steam ahead towards the cliff.Quote:
As far as your dollar is concerned it was not appreciating even before the current mêlée, the present government has only maintained the direction of the trend
Don't confuse refusal with inability, Tom. When you get to the point of zero interest rates you have a real problem any move you make to raise the rates will depreciate your currency so if you start buying your currency while you are reducing the price you are on a hiding to nothingQuote:
Originally Posted by tomder55
I'd settle for some jaw jaw and see what happens. Seems to me they made policies to weaken the dollar on the silly assumption that it was good for the export market.
If the government just indicated it wanted a support the dollar and then let it float ;I think the value would rise on it's own.
Tom the US dollar will "rise" when market conditions recover, when that happens interest rates can be adjusted. The weak dollar currently supports US industries by protecting from cheap imports so I'm betting no one is in a hurry to raise the valueQuote:
Originally Posted by tomder55
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