1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.
  2. Discuss politics - join our community by registering for free here! HOP - the political discussion forum

The Markets are Weak Because the Candidates Are Lousy

Discussion in 'U.S. Politics' started by Unite Our Nation, Oct 29, 2008.

  1. Unite Our Nation

    Unite Our Nation New Member

    Joined:
    Oct 27, 2008
    Messages:
    560
    Likes Received:
    4
    Trophy Points:
    0
    This is a great read everyone! Today in the wsj.



    "A lot has been said about the causes of the drastic drops -- and extreme volatility -- in stock prices and the impending recession. Blame has been heaped on low interest rates and dubious mortgage practices, and on the subsequent collapse of real-estate prices and the freeze in financial markets. But one other major factor has largely escaped attention.

    To state the obvious: The valuation of an individual stock reflects the collective expectation of investors about a company's future profits, dividends and appreciation, and the same is true of the market as a whole. These profits, in turn, are greatly influenced by government policy on taxes, spending, subsidies, environmental and other regulations, labor laws, and the corporate legal climate. Investors have heard enough from both candidates in the last month or two to conclude that prospects for a flourishing, competitive, growing and reasonably free economy in a McCain administration are bad, and in an Obama administration far worse. (In fact, the market's bearish behavior over the last couple of months pretty closely tracks Barack Obama's gains.)

    If you don't believe me, please answer a few questions:

    - Have you thought of what a gradual doubling (and indexation) of the minimum wage, sailing through a veto-proof and filibuster-proof Congress, would do to inflation, unemployment and corporate profits? The market now has.

    - Have you thought of how easily a Labor Department headed by a militant union boss would push through a "Transparency in Labor Relations" law that does away with secret ballots in strike votes, and what this would do to industrial peace? The market now has.

    - Have you thought of how a Treasury Secretary George Soros would engineer the double taxation of the multinationals' world-wide profits, and what this would mean for investors (to say nothing of full-scale industrial flight from the U.S.)? The market now has.

    - Have you thought of how an Attorney General Charles J. Ogletree would champion a trillion-dollar reparations-for-slavery project (whittled down, to be fair, to a mere $800-billion, over-10-years compromise), and what this would do to the economy? The market now has.

    - Have you thought of what the virtual outlawing of arbitration -- exposing all industries to the fate of asbestos producers -- would do to corporate liability and legal bills? The market now has.

    - Have you thought of how a Health and Human Services Secretary Hillary Clinton would fix drug prices (generously allowing 10% over the cost of raw materials), and what this would do to the financial health of the pharmaceutical industry (not to mention the nondiscovery of lifesaving drugs)? The market now has.

    - Have you thought of a Secretary of the newly established Department of Equal Opportunity for Women mandating "comparable worth" pay practices for every company doing any business with government at any level -- where any residual gap between the average pay of men and women is an eo ipso violation? Have you thought about what this would do to administrative and legal costs, hiring practices, productivity and wage bills? The market now has.

    - Have you thought of what confiscatory "windfall profits" taxes on oil companies would do to exploration, supply and prices? The market now has.

    - Have you thought of how the nationalization of health insurance, the mandated coverage of ever more -- and more exotic -- risks, the forced reimbursement for excluded events, and the diminished freedom to match premium to risk would affect the insurance industry? The market now has.

    - Have you thought of Energy Czar Al Gore's five million new green jobs -- high-paying, unionized and subsidized -- to replace, at five times the cost, what we are now producing without those five million workers, and what this will do to our productivity, deficit and competitiveness? The market now has.

    I could go on, but you get the point. Nothing reveals Mr. Obama's visceral hostility to business more than the constant urging of our best and brightest to desert the productive private sector ("greed") and go into public service like politics or community organizing (i.e., organizing people to press government for more handouts). Who in his ideal world would bake our bread, make our shoes and computers, and pilot our airplanes is not clear.

    And if you think all this comes from an ardent John McCain fan, you couldn't be more wrong. The Arizona Senator has made some terrible mistakes, one of them trying to out-demagogue Mr. Obama to the economic illiterates. This kind of pandering never works. Such populists and other economic illiterates will always go for the genuine article.

    Mr. McCain should have asked some simple questions -- pertinent, educational and easily understood by ordinary voters. Such as:

    - If the rise in the price of oil from $70 to $140 was due to "greed" (the all-purpose explanation of the other side for every economic problem), was the fall from $140 to $70 due to a sudden outbreak of altruism?

    - If a bank is guilty both for rejecting a mortgage ("redlining") and for approving it ("greed" -- see above), how might a bank president keep his business out of trouble with the law?

    - If the financial turmoil of the last year or so was caused by inadequate regulation, which party has controlled both Houses of Congress and all of its financial committees and subcommittees (where such regulation would originate) in the last two years?

    - If we bemoan the sending of $750 billion a year to our enemies for imported oil, which party has prevented domestic drilling for decades that would have made us more self-sufficient?

    - You were unhappy with Congress, and in 2006 you cast your lot with those who, like Mr. Obama now, promised "change." Are you happy with the changes that have taken place in the last two years?

    None of these questions have been asked loudly or often enough, while the other message -- everything is bad, it's all Bush's fault, and McCain=Bush -- has sunk in. So given his own penchant for business bashing, a McCain win would merely count as damage control.

    The market is forward looking. If it is unhappy with a president, it does not wait almost eight years before the numbers reflect it. If it really anticipated good times under Mr. Obama, the market would have gained 40% in anticipation of the transition. By losing that much, it seems to be saying the opposite.

    The silver lining in all this is that the market has already "discounted" an Obama win, so if that happens you won't wake up on Nov. 5 to find your remaining savings down the drain. If the unexpected happens, you may be in for a pleasant surprise.

    Mr. Newman is an economist and retired business executive"
     
  2. primerib

    primerib New Member

    Joined:
    Oct 14, 2008
    Messages:
    81
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    Red State AZ
    Neither candidate would my first pick but it's what it is. Markets are weak because of housing meltdown and corruption on Wall St. No regulatory oversight, we went from an internet bubble to a housing bubble, what's next? There is also a Nobama component. Some are selling because of Nobama, he won't not be good for the markets.
     
  3. Andy

    Andy Well-Known Member

    Joined:
    Jan 6, 2008
    Messages:
    3,497
    Likes Received:
    59
    Trophy Points:
    48
    I hear a lot of talk about 'corruption of Wall St.', can someone explain what corruption they are referring to?
     
  4. foggedinn

    foggedinn New Member

    Joined:
    Apr 23, 2008
    Messages:
    335
    Likes Received:
    8
    Trophy Points:
    0
    In a sense, I agree. In the last eight years, what used to be considered corruption has all been legitimized.
     
  5. foggedinn

    foggedinn New Member

    Joined:
    Apr 23, 2008
    Messages:
    335
    Likes Received:
    8
    Trophy Points:
    0
    When there are no rules or regulations, it really isn't posible to violate them.
     
  6. laughinatreps

    laughinatreps New Member

    Joined:
    Oct 24, 2008
    Messages:
    226
    Likes Received:
    0
    Trophy Points:
    0

    bingo!!
     
  7. Andy

    Andy Well-Known Member

    Joined:
    Jan 6, 2008
    Messages:
    3,497
    Likes Received:
    59
    Trophy Points:
    48
    For example? What specifically are they allowed to do that prior they were not?

    I actually see the reverse. Enron for example, the people who did the deed went to jail. After Enron, there was a major change in accounting practices. The changes didn't make it easy to do bad things, but rather made it harder.

    So I'm not seeing any evidence of what you suggest. What exactly is it, that prior was considered corrupt, and now is not corrupt? And even if that's true, if it's not illegal, how do you call it corrupt? Corruption is doing illegal things.

    How do you define corruption then?

    I need more to go on is what I'm saying. I hear corruption and wall st. tossed around like it's conventional wisdom, with nothing of any substance backing up the claim. Give me something specific. Or is this just some abstract "Hope" and "Change" theme that is full of hot air with nothing behind it?
     
  8. Mr. Shaman

    Mr. Shaman New Member

    Joined:
    Nov 27, 2007
    Messages:
    7,829
    Likes Received:
    12
    Trophy Points:
    0
    Whew!!!! Without the option of fleecing the average-Americans (who were sold the idea there was "No WAY!" they could lose...long-term...in The Market, back in the '90s), I surely was worried that investors would run-out of excuses for their poor performance, lately!!! After all, Everybody knows that politics & economies are cyclical!! :rolleyes:


    <Yaaaaaaaawwwwwwwwnnnnnnnn........>

    BEEN there!!!! :rolleyes:

     
  9. Mr. Shaman

    Mr. Shaman New Member

    Joined:
    Nov 27, 2007
    Messages:
    7,829
    Likes Received:
    12
    Trophy Points:
    0
    How far, back, do you wanna go?? :rolleyes:
     
  10. Mr. Shaman

    Mr. Shaman New Member

    Joined:
    Nov 27, 2007
    Messages:
    7,829
    Likes Received:
    12
    Trophy Points:
    0
    "conservatives" refer-to-it, as Allowing The Marketplace To Regulate Itself. :rolleyes:
     
  11. Unite Our Nation

    Unite Our Nation New Member

    Joined:
    Oct 27, 2008
    Messages:
    560
    Likes Received:
    4
    Trophy Points:
    0
    LET'S ALL BE CLEAR...the PROBLEMS WE ARE HAVING are because of lack of regulations on Fannie, Freddie, and AIG, etc!!!

    Those LAWS were changed under Clinton. THIS MESS FALLS MAINLY (NOT ALL) ON THEIR SHOULDERS.

    Bill admitted this himself in an interview the other day!

    The war mess that has hurt our nation financially falls on the shoulders of Bush!


    So if you want to really find out what caused this so you will be an INFORMED CITIZEN and elect legislators who will truly look out for your interest. Make sure you understand why and who caused us to get where we are at.

    If you just be a puppet of the mass media, you will not be informed and therefore will, BY YOUR VOTES, cause us all to get in this mess (and worse) again.

    This problem was caused by both sides! And we will only recover if both sides work together for US, THE CITIZENS.
     
  12. Dr.Who

    Dr.Who Well-Known Member

    Joined:
    Jul 11, 2007
    Messages:
    6,776
    Likes Received:
    251
    Trophy Points:
    83
    Location:
    Horse Country
    LET'S ALL BE CLEAR...some the PROBLEMS WE ARE HAVING are because of the wrong regulations on Fannie, Freddie, and AIG, etc!!!

    Regulations are intended to stop people and companies from doing harm to the American people. When the regulations are instead intended to allow the economic alchemist tinker around potions while they have no idea what the results will be all we get is unexpected consequences. our politicians are engaged in a giant game of wack a mole with the economy and it seems to be more important to them that they keep score than that the economy is just stable.

    And I seriously doubt that the U.S. regulations on the U.S. Fannie and the U.S. Freddie and the U.S. AIG were the cause of the world economic crisis that is effecting most countries. I know that the U.S. leads the markets but we are just one country and our effect is not that great.
     
  13. Mr. Shaman

    Mr. Shaman New Member

    Joined:
    Nov 27, 2007
    Messages:
    7,829
    Likes Received:
    12
    Trophy Points:
    0
    Yeah....let's try, at ALL costs, not to blame the hustlers that gamed the system. After all, they were rewarded with huge-bonuses (for racking-up all o' those mortgages), so they must be good Capitalists, right? :rolleyes:
     
  14. laughinatreps

    laughinatreps New Member

    Joined:
    Oct 24, 2008
    Messages:
    226
    Likes Received:
    0
    Trophy Points:
    0
    heh, it helps being friends with g-dubya lolololol
     
  15. Unite Our Nation

    Unite Our Nation New Member

    Joined:
    Oct 27, 2008
    Messages:
    560
    Likes Received:
    4
    Trophy Points:
    0
    Okay, those of you who don't understand how our failing caused the world to fail, tell me exactly what caused the stocks to free fall? In detail please.

    Every economist review that I have read (about 7) have described it as a domino affect (the failing of Fannie, Freddie AIG) that set everything else in motion.

    Some of you don't agree with these experts. You don't see the lack of regulations or the encouragement (by fannie and freddie) to ask bankers/mortgage folks to create the exotic loans, that are now all failing, as the cause.

    What is the cause?

    Additionally, my investment banker predicted this 9 months ago and advised all of his clients where to move investments. If he could see this coming, why couldn't our Legislators???

    The answer is, they all could. They didn't do **** about it...and that includes all of them. McCain did try to pass a bill in 2005 that failed and I don't know of him trying anything since. Bush did nothing. Every Senator did nothing. The mortgage and wall street folks kept making all they could.

    There's A LOT of blame to go around!
     
Loading...

Share This Page