12176

[Brickboy240]

Are you sure the election results are the major determining factor in the Dow's closing numbers?

Please tell us how, Mr. Economics.

- Brickboy240

[Frenchy]

Originally Posted by Mark S.

As I recall Tommy was trumpeting the previous highs on the Dow as evidence of the great Bush economy. I think bd was tweaking him a bit.

In truth neither the Democrats nor the Republicans have much effect on the stock market, although over the long-term the Dow has done slightly better under Democrats than Republicans.

Another truth, when adjusted for inflation, the markets are not at record levels. The Dow would have to rise above the 14,000 level for that to be true.

That's true for the most part Mark, but the "dot.com" boom was a false indicator. Remember...things were starting to slide before the end of Clinton's term.

[Delija]

Originally Posted by Frenchy

That's true for the most part Mark, but the "dot.com" boom was a false indicator. Remember...things were starting to slide before the end of Clinton's term.

I don't think anyone would blame our under-performing economy completely on Bush or the Republican congress, but certainly he (and they) have been no help.

I realize that some people (like Tom) will always stand on the sidelines, flip their skirts, and wave pom-poms and cheer on for their less than competent heroes.

But I think most adults are smart enough to understand that a lower unemployment rate coupled to lower real (buying power) wages, money infused into the economy by people refinancing their homes (often with back-firing ARM mortgages), some corporate profits increasing due to outsourcing, and of course a war that has created a deficit so large that it exceeds all prior deficits added together since the inception of our country, etc......does NOT mean this is a "booming economy".

In fact we realize and accept the reality that it is actually an economy that has resulted in a diminishing middle class, an increasing lower class, a greater disparity between the "haves" and the "have nots", and an inflationary environment (despite what the govt. tells us, since they exclude the costs of both food and energy in their inflation figures, and I don't know of anyone who doesn't need and spend on both).

While at the very least, paying attention to economic numbers is part of my job and I can't afford to have any political preference at all if I am to be successful (which means neutral), I have to say that I am sorely disappointed in the Bush policies that have impacted our economy. While Tom sits like Silas Marner and counts his fractional shares of Haliburton in his IRA mutual fund, I am forced by my profession to be more realistic and accept that our economy is in relatively poor shape and that to trade successfully means to understand the reasons and to be forced (I cannot stress how much I dislike this) to generally be short the American markets and even the dollar - despite the Dow Jones 30 closing at all time highs, as Mark S. has pointed out, this is a number that has very little relationship to the overall market, and in fact is actually down from prior highs after adjustments taking into account such factors as inflation and cost of carry. (Google "cost of carry" if interested....I am no longer willing to give lessons here, I've wasted enough time trying to provide facts and hard numbers and in depth explanations in previous "disagreements" with Tom, our resident expert on everything - when I did, I only got the repetitious responses of how many words I wrote. Never a single coherent or thoughtful counter-response).


Some here, (hopefully including Tom) might be interested in the following link to an article written by one of G. W. Bush's economic professors from his days at the Harvard business school.

I realize this may be a bit dry and long, but facts are facts, opinions are opinions, and if we are to credit or discredit Bush on his economic beliefs and policies, it is only realistic to hear both sides of the argument. Tom used a large font. That was the sum of his "argument". Here is an alternate way of expressing one's opinion....this is the opinion of Yoshi Tsurumi, professor of economics at Baruch College, the City University of New York, and formerly at the Harvard Business School. While Tom may know better, here at least is what Mr. Tsurumi has to say:

http://www.scientificjournals.org/articles/1032.htm

Peace,
D.

[KP Ling]

Actually I saw that pharmaceutical stocks slipped today; 3% industry average if I recall correctly. Analysts said it might have been on fears of the Dem's promise to insert an amdendment to the Medicare prescription drug benefit law allowing government negotiated prices as well as legalizing importation from cheaper countries such as Canada. Even if the analysts are right, it is still based on the investor's actions to perceived consequences since the Dems have done nothing yet.

[Delija]

Originally Posted by KP Ling

................ Even if the analysts are right, it is still based on the investor's actions to perceived consequences since the Dems have done nothing yet.

In all my years of trading, the most volatility I saw outside of the crash of 1987 (a snowball effect kicked off by fear that self corrected almost immediately), and also excluding the volatility following the tragic events of 9/11 was during the 2000 presidential election recount.

In other words, the market reacts far more violently to emotion than it does to actual factors that effect underlying issues. And of course fear trumps "exuberance" as far as degree and speed of impact.

Everyone who trades, and even most of the non-professional/casual investors...in fact even just the bystanders with no more than a passing occassional glance at our equity and derivitive markets have heard the old axiom "buy on rumor, sell on news".

The perception on Wall Street that a Republican president/congress/court is more "market friendly" has been a fact of life for as long as I can remember. (which is pretty long). The reality seems very different.

An axiom that does seem to hold true however is "most of the people (including pros) are wrong most of the time". Hence the fairly reliable indicator we have in the put/call ratio....one of the few that seems to actually play out quite regularly (of course it's not that easy.....knowing something will go up or down is nice, but knowing when is what makes money....and the put/call ratio doesn't tell us that).



Peace,
D.

[FrankRizzoXD40]

Originally Posted by bd

Election confidence results in the highest ever closing of the DOW.

bd

lol!

Any substantiating "facts" to back this one up with?

Frank