O.T. Obama's Generous Christmas Gift

Art, are you trying to stir up the Americans for your Canadian amusement?

We do hold presidents responsible for the economy, but isn't the president's influence very limited? And isn't this the way we want it? A president would have to have dictatorial powers to control the economy.

@jackslash: According to the GOP Obama IS a dictator, so they should be the first to congratulate him.

My favorite is all the explanations people come up with to explain the fact that we are in a boom away with.

"Well, well! It's not that the job market is improving it's just that the statistics are wrong because so many people have given up looking for work"

"It's all an illusion due to money printing, and we are going to collapse into deflation or hyperinflation not sure which though any day now"

"It's just another bubble like 2000 and 2007 - stay out!"

"It's just an evil plot to destroy the middle class"

"Once Obamacare really kicks in it's all over"

"Any Rand said we must have a gold standard and follow other tenants of her philosophy otherwise John Galt and other capitalist heroes who hold up the world for the hoi polloi will go strike and we are all fucked! And we haven't followed her closely at all do the day of reckoning is any day now!"

"The rich are just trying to stuck the poor into the market and then will dump all their shares. Another conspiracy!"

What your favorite denial of what is becoming too obvious to deny day after day?

Talking heads separate politics from policy because that's their job. Politicians do that too. Obamacare was actually first proposed by Newt Gingrich and the Democrats were against it. Romney and Kennedy worked together to bring it to MA where it is very popular, but Romney was against Obamacare only because it was a Democratic program. The GOP said Obama was too soft on foreign policy but then balked at sending troops to Syria when Obama proposed it.

Obama will be remembered in a far better light than his poll figures might suggest. Under his watch, the economy avoided depression, and by the end it will be stranger than it ever was under W. Cuba is opening up. Bin Laded is dead. We've avoided wars in the Middle East. We're bankrupting Russia. Unemployment will be at a reasonable level. The Feds are no longer busting medical marijuana facilities. Immigration will become more even handed.

Pity he's black or he'd be as popular as Reagan.

^^^ excellent points.

Only thing I don't like about him is how he allowed the NSA abuses to continue and his gun policies (which, thankfully, didn't get anywhere).

Good points by everyone so far.

Who is 'John Galt' . When the real wealth generating people leave the workplace (like Art) who generate real wealth by producing a product and employing people you all will be stuck with lying thieving asshole who only steal other's ideas like Gates and Zuckerberg who have built their wealth by stealing the work of others and are now feeling so guilt about it they want to prevent anyone else from succeeding. The only difference between Gates and Zuckerberg is that Gates has made no secret he stole other's work to build Microsoft. Microsucks and facebutt are a house of cards I would never invest in because while Microsucks currently has cornered the market place if a better idea comes along and they have enough gumption and backing to capture a market share Microsoft would flush fast that a jet toilet and facebook is just wrong.

Art you're giving way too much credit to the Presidents for influencing the economy.

First of all, I don't have information that convinces me that any of these indexes measures the health of the economy. Seems like common sense to me that the aggregate performance of all stocks is a better measure:

personal.vanguard.com

This indicates that the last year has been good but performance is worse than the previous two years. Looking at this fund performance factors in dividends as well as stock price.

Also, high stock prices can result from problems in the economy. Like too-loose monetary policy which is a subsidy for very low interest rates to big borrowers. I think I read that NY state is going to ban fracking? So maybe that will mean that money that would have been invested looking for shale oil and gas will wind up parked in the stock market, pushing up stock prices. How can the public ever know if fracking is really safe or not, when some states ban it and others don't? My guess is the risks of fracking are acceptable if it's done with proper safeguards. But we'll probably end up with nature worshipers blocking it in some states, and the BP bribery-is-cheaper-than-safety approach in other states.

And what happens when the fed stops this...

money.cnn.com

Well, like any government program, they never stop, only grow!

And that is from CNN! Might not be reliable.

Clubber: "And what happens when the fed stops this..."

Absolute DOOM! Because Stevie-girl said so!

funny it seems to me people go to strip clubs are the most chill people in life, wonder why they get the loser rep.

Anyways...thanks for the good time. Looking forward to more wisdom in 2015

I think it is pretty sad that we judge a President by the "economy", and even worse by the stock market indices.

The way I look at it, the higher the indices, the sicker our society is. It means that instead of investing their time, money, and energy into improving themselves and our society, they are gambling, succumbing to fatalism.

SJG

Have a very Ayn Rand Holiday...?! youtube.com

One little problem, SJG. This time the indices are high because it's a genuine boom. Still don't get why I seem to be the only one of this board to see it. Oh well. Lonely at the top I guess.

Genuine Boom? So how long does that mean it will last?

What about the fact that we are living in ways which are not environmentally sustainable, or that for many many people the quality of jobs they have in terms of wages and stability continues to drop. It drops with each one of these booms.

Carlo Ponzi was able to convince people that he have created a genuine boom too. When it crashed, it wiped out a medium sized New Jersey Bank.

I am the only one? How many people think there is a "genuine boom" manifesting itself before us?

One of the best ways of creating a bubble is to convince people that it is a "genuine boom".

SJG

How long will it last?

Well of course some parts will be faster than others and there will some snags along the way and bad days for the market and that will give the cynics a sliver of hope to hang onto, but I'm thinking it's a 20-30y boom ahead of us. We are still in the very early stages.

So what I'm reading is that the president should only be blamed when the economy is bad because then it is his fault but when the economy is good, the president has nothing to do with it… How does that work?

There is a genuine boom in minimum wage jobs. Who cares? Obama isn't growing the economy. He is a career politician who talks a good game and artfully avoids criticisms.

It's been rather obvious. Democrats are borrow and spend spend spend proponents. easy money. Obama even got the Fed involved to pump things up. Get stock prices up to create the wealth effect so that people who own assets spend more. So far it appears to have worked. If the US can get the annual growth rate up to 7% without spending more, then they won't need to cut spending to get te debt under control. Our debt is so large that we are in danger of it getting out of control leading to a default or high inflation. We have some time to get it under control IMO.

The Republicans keep working on getting the debt under control right away by cutting spending and cutting out some easy money. The stock market reacts negatively to that. If you cut too much, the economy can go into recession. The smart republicans did spending cuts early in their terms to get any recession out of the way before the next election. Amercans vote with their current wallet, not how they felt 3 years ago.

shark,

"Amercans vote with their current wallet, not how they felt 3 years ago."

Were that true, it would be President Romney. obama won against all economical; political trends.

@SJG Like many people I have a lot of savings in the stock market. But I invest for the long term with the idea that my returns will come from economic growth, not market timing or declining real wages. The only "timing" I do is trying to guess very long term trends. For example, I started putting some money in real estate trusts after 2008. It's true that the stock market does nothing for start-ups and small businesses. But economic growth also depends on the ability of medium size and large companies to expand and hire, and that requires the stock market.

ibbly: "It's true that the stock market does nothing for start-ups and small businesses."

I guess if they plan to stay small and private and aren't dependent on the health of their customers who might be individuals or big companies they offer goods or services too. Yep. Definitely nothing for them.

Also there would be no relation between the stock market and the rate small business and startups can borrow money from banks from would there? Nah. Does absolutely nothing...

I thought technically the economy was officially out of recession during the last election. However any party that selects a candidate that a majority of people disagree with is bound to lose.

"Democrats are borrow and spend spend spend proponents."

Isn't this the very thing Bush did to finance the Iraq and Afghanistan wars? Borrow tens of billions from Japan and China?

@farmerart “Obama has been one of the great US presidents for stock market investors.”

hmmmm. if only there was a way we could evaluate your judgment about what makes a great politician. maybe something like a previous opinion. oh wait here it is:

tuscl.net

@farmerart “Tommy Douglas was the best Prime Minister that Canada never had.”

tuscl.net

@farmerart “Tommy Douglas is one of my very few Canadian political heroes.”

that would be the same Tommy Douglas who wanted to build Canadian concentration camps for ”those deemed to be "subnormal" because of low intelligence, moral laxity or venereal disease” and to carry out a Canadian genocidal pogrom to eradicate “those judged to be mentally defective or incurably diseased”.

en.wikipedia.org/wiki/Tommy_Douglas_%28minister%29

M.A. thesis on eugenics

Douglas graduated from Brandon College in 1930, and completed his Master's degree (M.A.) in Sociology from McMaster University in 1933. His thesis entitled The Problems of the Subnormal Family endorsed eugenics. The thesis proposed a system that would have required couples seeking to marry to be certified as mentally and morally fit. Those deemed to be "subnormal" because of low intelligence, moral laxity or venereal disease would be sent to state farms or camps while those judged to be mentally defective or incurably diseased would be sterilized.

okay so much for your competency to make judgments about politicians. only in the minds of limousine liberals like yourself can “the worst” be considered “the best”, can “ruination” be considered “progress” and can “looting the public treasury” be considered “an economic boom”. obama’s (JUST LIKE EVERY OTHER PRESIDENT IN HISTORY) most significant effects won’t truly be felt until years after his time in office and it is unlikely he will either be rightly credited or blamed for those effects but let’s not let that get in the way of your troll thread.

PG,

Heaven forbid we should spend money to protect ourselves. That just happens to be one of the few items the Constitution actually charges the federal government to do!

Clubber,

Afghanistan and Iraq weren't any threats. They had no ties to the 9/11 terrorists. There was absolutely no justification in attacking them, and so, absolutely no need to get financing for those wars.

PG,

Dream on my friend, dream on.

ilbbaicnl,

Unfortunately the stock market is way way inflated. Back after the 1986 bust, after the Reagan era boosting has run its course, people were saying that the Dow might never again go above 4000.

During G. W. Bush's run up to the Iraq war, the Dow seemed pegged around 7500. This could well be a fair value for it, based on sustainable economic productivity, not boosting or unrealistic future expectations.

But unfortunately there are speculators, and there are boosters, and so the stock market goes way way high. It is also just human fatalism, the same kind of fatalism which Las Vegas runs on.

It comes down to what is called "pop". That is, how much is a company really worth? I mean, how much should it's outstanding shares be worth?

Usually for a business, it is assets minus depreciation, plus the value of all contracts, minus obligations. Okay, but that is just salvage minimum. If the business is going well there is usually some other amount which is much higher. Sometimes people refer to this as Good Will, or name recognition. Sometimes it is just a multiplier factor on its annual gross.

I mean, imagine if you wanted to start a restaurant, and someone offered to sell you theirs for $500k. Would this a good deal? Buy, or start your own?

Well if you start your own, you have got to factor in, no name recognition, no built up customer base. You will probably have to pay for advertising and maybe even run at a loss, plus deal with the fact that you have no established employee team. By the time you get to the equity and cash flow that your friend has, you may have actually spent $500k. But is it really going to be $500k, or would it only be $300k?

Well when it comes to publicly traded corporations it has to be something like this. Historically the pop factor = 4 has been used as a bench mark. If it has average profitability, then a fair value of all the outstanding shares was seen as 4x the annual gross.

Okay, but what about interest rates? Much of this comes down to not what the company is worth now, but what it will be worth in the future. But how far into the future? This depends on interest rates, what is the Net Present Value of something which will be increasing in value over time? Depends on interest rates.

But it also depends on economic stability. Without this, these markets tank.

And then of course what about start up companies. They are expected to have a much higher growth potential, and so the pop factor could be many times higher. The dot com Ponzi scheme brought us billion dollar valuations on firms which did not even have a plan for becoming profitable, and sometimes still had zero annual gross! Mostly all they had was recognition for their funky names. Most of them are gone now, but some of the biggest ones are still here. Was this a socially constructive type of bubble, or did it just create near monopolies and an overall poorer value in Internet service? And I feel very safe in saying that it limited the amount of technical innovation and citizen involvement and creative involvement of minority and lower socio-economic cultures.

Gains in our productive economy may well contribute to the performance of your stock holdings. But I say this is miniscule compared to all sorts of other ways that their valuation is being manipulated by perception, and by those who drive these boom and bust cycles.

SJG

Rolling Stones, Gimme Shelter youtube.com

The US gave the Taliban the chance to give up the Al Qaeda guys they were giving sanctuary to before attacking them.

Correct that Iraq had nothing to do with Al Qaeda. Iraq repeatedly broke the terms of the cease-fire after its invasion of Kuwait, so the US cannot be called the aggressor in any straight-forward way. However, in hindsight, it seem pretty clear that W should have continued the policy of containment started by HW and carried on by Clinton.

Isn't Japan a pretty good ally of ours? Perhaps top 5? Wonder why they would never mess with us? Might even put Germany on that list. Italy? I see a pattern here.

I think your numbers are a little off SJG. 4 PE is very low historically except for during very sevre depressions. More normal acceptable numbers are 8-16 depending alot on interest rates. But, hey you go trying buying a business a 4x earnings or 4x book and let us know how that one works out for you.

I would also argue that we should expect higher PE now due to technologies which have made and will continue to make workers more productive and vastly shorten the length of the product cycle.

The rule of thumb I've seen for growth companies are that a PE of the % growth of earnings is typical and acceptable. For companies where is no steady trend and which are new there are kinds of different notions of how to value them, and much more guess work is involved. And, in these cases, there is much more opportunity for big swings as big money moves in or stands by and watches or shorts. In many case it's probably fair to say nobody has any idea what it is worth until more information comes in and, in the meantime, the market is going to swing it both ways to scare people on both sides of the trade.

Clubber,

Are you talking about Iraq having nothing to do with 9/11? Bush even said Iraq didn't. Watch starting about 1:10.

youtube.com

PG,

Iraq was, for the most part, a WMD thing. And before you say it, most everyone agreed they were there. Of course, waiting an eternity gave them plenty of time to move them, likely to Syria.

Also, as ilbbaicnl stated, "The US gave the Taliban the chance to give up the Al Qaeda guys they were giving sanctuary to before attacking them. Correct that Iraq had nothing to do with Al Qaeda. Iraq repeatedly broke the terms of the cease-fire after its invasion of Kuwait..."

Clubber: "Iraq was, for the most part, a WMD thing. And before you say it, most everyone agreed they were there. "

Wrong! Even at the time everyone thought it was ridiculous and the evidence presented a complete joke.

But Sadam did have chemical weapons. Thousands and thousands were killed, 10,000 injured and maimed. Kinda obvious he did not want the US to find them. And where did Syria get their chemical weapons?

Had chemical when relative to the invasion? According to whom? They didn't even find chemical weapons in the country. Completely false pretext.

^^^^ Only the intelligence agencies of England,France, Germany, Russia, China, and Israel. They all agreed with the US. Which makes my last two points very valid.

My point was that the stock market swings have little to do with the fortunes of the productive economy. I mean at least within a 10 year time frame. But beyond that it is still not improvements in the productive economy which drive it either. Speculators create booms and busts. The busts wipe out worthwhile stuff. The booms wipe such stuff out too, by soaking up all the money and the attention.

SJG

Early after 9/11, Bush was not just looking for but demanding that a link be found between Iraq and the terrorists. Before Bush and Cheney even took office, per CNN, Vice-President-Elect Cheney had been checking out the CIA files on Iraq. I wish that they had said if he had also checked out the files on other aggressor countries, but IF that was the only one, it looks like Bush and Cheney had Iraq in their sights from the get-go, at least to me.

The inspectors found no evidence of the weapons, but the Bush Administration published its version of their reports, claiming to have found weapons. Thousands and thousands were not killed by Saddam's chemical weapons; last I remember, 148 people were. That's it.

Saddam was putting on a huge front, not so much for the U.S. but for neighboring countries, countries that he feared would try to invade Iraq. Face it, wouldn't you think twice about invading a country if its PR machine pretty much bragged about all of those weapons it had at its disposal?

I, for one, would be cool if we had wars about oil but just admitted it. Why are we having this war? We want to secure oil. Not fair! We don't care, fuck you!

No SJG, you are quite wrong it is the product cycle which primarily drives the stock market. More on this from me as we move into the new year.

Curious do you yourself have any money invested in the market right now?

148? Uhhh... Halabja?

@SJG: one thing that is true is that economic booms tend to end in speculative booms in the market.

Another important thing to know is how the middle class's new found purchasing power in the last century contributes to economic booms. Exactly why there is no conspiracy to destroy them and, Indeed, programs like ObamaCare to help them along.

@ Phantom, is history forgotten? Please read Halabja

en.wikipedia.org

Jester and Mikey, I stand corrected. Thanks; I'll take a better, longer read of the article after work and make a better attempt at pulling my head out of the sand/my ass then.

Just finished reading it. Okay. I'm an idiot.

The gift of economic DOOM. Because stevie-girl and The Economist said so and his cohort of mindless, cock-sucking, circle-jerkers from TUSCL sheepishly just nodded their head in agreement.

PG,

You're not. Being "un" or under informed doesn't make one an idiot. Makes one a liberal! :)

Maybe I should add this:

Your not. Being "un" or under informed doesn't make one an idiot. Makes one a liberal! :)

Perhaps for the true idiots?

Thanks, Clubber. Y'know, I might have to start looking at something other than just the comics section of the paper from here on out, although I'll probably still want to look at that first.

ObamaCare was very hard to get thru, and it has always been quite compromised.

There most definitely is a conspiracy to destroy the middle class. This is what some call it. But really it is a deliberate campaign to destroy the lives of working people, and let ours become a two tier society. Yes of course, ObamaCare is a step in the right direction, and attempt to mitigate this. But just like with the Great Society programs, it is too little to late.

You don't have to believe in conspiracies. They people never need to even talk to each other. They just all can see that they have an interest, a common interest, in making the rich richer and poor poorer, in order to destroy our attempt at Democracy.

Elizabeth Warren writes that when her father died, her mother went and too a minimum wage job at a department store. In those days, one minimum wage job could support a parent with three children.

Today it could do nothing of the sort. But see, without that, they would have ended up homeless, or they would have ended up living in shame and disgrace and becoming a white version of what some TUSCLer's call "Ghetto People".

Clearly the direction things have gone, with all these booms and busts, and with de-regulation and gutting of progressive income tax and all the middle class jobs that those tax dollars created, and without the support to middle income wages given by federal spending, is the wrong way!

SJG

SJG,

"ObamaCare was very hard to get thru...". Are you kidding? Only had to bribe a few thinking liberal democrats and it was done!

As for the lies, piece of cake for libs!

@SJG: do you believe that those at the top are actively working toward and want to see the middle class destroyed? If so why would they do that if so much if the strength of the economy depends in them? Do you think they just can't see that? Or do you it's not something they are actively working toward but just tends to happen in countries with relatively high degrees of capitalism?

Hello All,

As I've mentioned other places I am involved in some touchy things, like one of them is trying to get some people to file a lawsuit. I was contacted by someone the day after New Years and I have been completely tied up responding.

So it will take a while here for me to catch up on these many threads. Just to let you know.

Yes, those at the top are actively working to try and destroy the middle class. Workers of any type are in gross excess. We are not needed. What they need are political brown nosers. What they want is to make this society work the same way most every society has worked, some very rich people at the top, and those at the bottom working just to keep their bellies full.

Our democracy depends on there being a middle class, and democracy is how the middle class sustains itself. Those at the top, without ever having to meet together or anything like that, are working to destroy democracy and the middle class. And they are doing a very good job of it.

SJG