President Trump is such a genius that he somehow figured out how to pay for porn.      

I know, "correlation is not causation", but (and it's gone up more than a thousand points since this graph was made...)...

I know, "correlation is not causation", but (and it's gone up more than a thousand points since this graph was made...)...

Other than to cherry pick, is there a reason the chart starts in 2014? I'm with you on correlation is not causation, I think the Federal Reserve had far more to do with the market run up than either POTUS. Just seems like if you're taking one election point, the other should be used too.

Other than to cherry pick, is there a reason the chart starts in 2014? I'm with you on correlation is not causation, I think the Federal Reserve had far more to do with the market run up than either POTUS. Just seems like if you're taking one election point, the other should be used too.

If you think Obama's economic performance his first term, before any recovery began, is better than the economy in his second term, feel free to find that info yourself and post it.  Making a claim the data is cherry picked but not offering proof when that data is readily available to you is kind of lazy.

As for artificial influences, it was the borrowing of almost $10T that kept the market artificially sustained.  The Fed kept interest rates at or near 0%, which also helped.

If you think Obama's economic performance his first term, before any recovery began, is better than the economy in his second term, feel free to find that info yourself and post it.  Making a claim the data is cherry picked but not offering proof when that data is readily available to you is kind of lazy.

As for artificial influences, it was the borrowing of almost $10T that kept the market artificially sustained.  The Fed kept interest rates at or near 0%, which also helped.

Economic or equity performance? There's a difference. The chart is talking about equities and I've already stated the Fed (I.e. Your artificial influences) were the reason stocks went up.

If it's not cherry picked, then what's the significance of 2014?

I know, "correlation is not causation", but (and it's gone up more than a thousand points since this graph was made...)...

Actually, the Fed did nothing more than prop up the economy and keep it from turning from an inflation economy to a deflation economy. The Fed did two things during Bush's and Obama's reign. They had to lower the prime lending rate to 0% or 0.25% which is much lower than considered normal. They did this because the economy was in danger of turning towards deflation. The banking system was in danger of collapsing so reducing the prime rate allows for more liquidity in the banking system.

The other thing they did was to devalue the dollar in order to keep the economy from stalling or worse, collapsing. So the Fed decided to print more money in order to flood the financial institutions with money/liquidity. They call this quantitative easing.

To say that stocks went up because of the actions of the Fed is not acknowledging the environment that has a much more effect on the markets than the Fed actions. Maybe you can provide the information you have that shows that the actions of the Fed have a direct correlation to how well or bad the markets are doing?

I know you don't want to believe this, but what the Fed does to prop up the banking system has little to do with how well/bad the markets do. When the prime rate is down then businesses get cheap money to borrow. But most companies in the market are not borrowing money unless they have to. And if they have to it is due to not having enough cash to expand or pay bills depending on how well the company is doing. When the prime rate goes up it becomes more expensive for companies to borrow money so they will sell more shares into the market if it is cheaper to do that. Either way, borrowing money doesn't usually effect company performance. Borrowing is usually done because of company performance. Either good or bad. I am not saying that low prime rates and quantitative easing doesn't effect the market, what I am saying is that the effect is quite limited and in some circumstances it is unknown how it may or may not effect the markets.

Economic or equity performance? There's a difference. The chart is talking about equities and I've already stated the Fed (I.e. Your artificial influences) were the reason stocks went up.

If it's not cherry picked, then what's the significance of 2014?

Why does anything have to be significant about the starting year.  It could go back to 1900, and the trend would still show 6,000 point through this month -- all under Trump's presidency.

Yes, the markets and the economy are different animals, but they are interconnected.  Obama's the only president to have an average GDP less than 3% for his administration.  Trump is already seeing GDP growth to the 3.4%+ range.  This last holiday retail sales report is predicting the best sales numbers in history.

Yes, we all know Trump isn't at Walmart pushing LED TVs.  But the confidence factor under Trump is enormous. 

It only took 8 trading sessions for the DOW to close above 26K after the 25K record was set.  The market is on fire.  That's not cherry picking anything.  You can't compare the last 8 years of an anemic economic recovery with Trumps first 12 months and conclude anything other than he's doing something right.

Yes, the markets and the economy are different animals, but they are interconnected. 

With you so far.

Obama's the only president to have an average GDP less than 3% for his administration.

Okay. Then by the logic of your first sentence, the markets should be down during his administration then? Well let's see:



The market has been "on fire" for 9 years now. Do I think Trump lowering the corporate tax rate and reducing regulations has spurred the market? Sure. But even with anemic growth under Obama the market was great. Why?

Cheap money that's why. Money used for share repurchases and acquisitions. Every public company's #1 goal is shareholder value. It's easy to increase shareholder value when you can borrow cheaply. Profits are flat:



So the market is up when economic growth and profits are basically flat (esp when you factor in the amount of debt we've taken on). The market is entirely decoupled from fundamentals. It's a bubble. Trump is riding that bubble, even inflating it with his tax plan, but that's all it is. You want to give him the credit? That's fine but remember, bubbles burst and guess who's going to take the blame?

You're kind of dancing around the point , but missing the center. 

Under Obama, the top 10% got richer, while the rest of the country lost homes, jobs, the motivation to even look for a job, took minimum wage jobs that replaced good-paying middle class jobs, and their savings.

There's a known principal that states, the more severe a monetary based drop in the markets, the more quickly, and more robustly, they recover.

There's a caveat to that principle -- as long as the government doesn't pump money into the economy to prop up companies that by all measures should have been allowed to sink or swim on their own.

The two examples of the government stifling what should have been a great recovery were Hoover after the Great Depression, and Obama after the Great Recession.

In the absence of these policies, we estimate that labor input would have been about 20 percent higher
than it was at the end of the 1930s and would have returned the economy to trend by that time.

https://www.hoover.org/research/stimulus-and-great-depression

So, Obama repeated the failed stimulus policies of Hoover, and received the same results -- a government-caused slow-down in economic recovery.

when the federal government bailed out the big Wall Street banks and two big auto companies, that action led to
capital staying in those sectors that would otherwise have been redeployed to higher growth ventures. In cushioning
the blow to those industries, we starved possible new industries of capital with which to expand and create jobs.
We also kept capital invested in industries destined for slow growth.

Government action did keep the recession from being even worse. Unemployment would have gone higher and GDP
would have dropped farther without the actions taken. However, was the tradeoff worth it? Would you rather have
14 million people unemployed with four million experiencing bouts of unemployment of over six month or have perhaps
15 or 16 million unemployed at the worst point, but virtually nobody going unemployed for more than three months?
This is a subjective question, but my answer would be the latter.

https://www.forbes.com/sites/jeffreydorfman/2016/06/05/this-recovery-has-been-so-weak-because-government-action-has-been-so-strong/#738f4a9e7a80

There's a known principal that states, the more severe a monetary based drop in the markets, the more quickly, and more robustly, they recover.

Sounds like a made-up rule if I ever heard one. You know the reason astrology was invented, right? To make economics seem like an accurate science.

There's no room in your model for massive fraud, speculative stupidity, and just plain looking out the window to see how things are actually getting worse for most people despite all the exciting imaginary numbers dancing around on the computer screen. The 2008 bubble would have crashed the world economy but was "contained" by the massive money printing. The can got kicked down the road and when those chickens come home to roost the same problems will be much worse because all the fraud, stupidity, and manipulation have all been allowed to continue uninterrupted. 

When you point at the stock market as useful an indicator of our national financial health is incredibly naive. But then again people who expect Trump to swoop in and save the day are having a difficult time separating fantasy from reality to begin with.

Sounds like a made-up rule if I ever heard one. You know the reason astrology was invented, right? To make economics seem like an accurate science.

There's no room in your model for massive fraud, speculative stupidity, and just plain looking out the window to see how things are actually getting worse for most people despite all the exciting imaginary numbers dancing around on the computer screen. The 2008 bubble would have crashed the world economy but was "contained" by the massive money printing. The can got kicked down the road and when those chickens come home to roost the same problems will be much worse because all the fraud, stupidity, and manipulation have all been allowed to continue uninterrupted. 

When you point at the stock market as useful an indicator of our national financial health is incredibly naive. But then again people who expect Trump to swoop in and save the day are having a difficult time separating fantasy from reality to begin with.

All rules are "made up" at some point, but the proof is in the number of times it proves true.

Deep Recessions, Fast Recoveries, and Financial Crises: Evidence from the American Record
By Michael D. Bordo and Joseph G. Haubrich

19 February, 2013

The recovery from the recent recession has now been proceeding for over fifteen quarters. Many argue that this recovery is
unusually sluggish and that this reflects the severity of the financial crisis of 2007-2008 (Roubini, 2009, Reinhart and Rogoff, 2009).
Yet if this is the case it seems to fly in the face of the record of U.S. business cycles in the past century and a half. Indeed,
Milton Friedman noted as far back as 1964 that in the American historical record “A large contraction in output tends to be followed
on the average by a large business expansion; a mild contraction, by a mild expansion.” (Friedman 1969, p. 273). Much work since
then has confirmed this stylized fact but has also begun to make distinc- tions between cycles, particularly between those that include
a financial crisis.

Our analysis of the data shows that steep expansions tend to follow deep contractions, though this depends heavily on how
the recovery is measured. In contrast to much conventional wisdom, the stylized fact that deep contractions breed strong
recoveries is particularly true when there is a financial crisis. In fact, on average, it is cycles without a financial crisis that show
the weakest relation between contraction depth and recovery strength. For many configurations, the evidence for a robust
bounce-back is stronger for cycles with financial crises than those without.

Based on the facts used to support these opinions. The Great Recession should have been followed by one of the fastest and most expansive recovery in decades.  Didn't happen .... not even close.

https://jrc.princeton.edu/sites/jrc/files/jrcppf_2013_-_bordo_-_paper.pdf

He mentions three outliers. Great depression, 1990, and 2008. What they all have in common that Glass-Steagall was either toothless at those times or simply didn't exist. If I was looking for a quick lesson it's that capitalism needs government regulation otherwise it destroys itself in fairly short order.

Also interesting that he focuses on a very narrow range of factors and doesn't account for stuff like wars, oil supplies, deregulation, debt, decline of the middle class, and all the other stuff that were/are major contributing factors.

I guess that's what it must be like living in an academic bubble.

He mentions three outliers. Great depression, 1990, and 2008. What they all have in common that Glass-Steagall was either toothless at those times or simply didn't exist. If I was looking for a quick lesson it's that capitalism needs government regulation otherwise it destroys itself in fairly short order.

Also interesting that he focuses on a very narrow range of factors and doesn't account for stuff like wars, oil supplies, deregulation, debt, decline of the middle class, and all the other stuff that were/are major contributing factors.

I guess that's what it must be like living in an academic bubble.

How does all of that factor into a recovery?  If they weren't factors in the recession, then the weren't the problem with the slow recovery periods.

We know what caused the recessions, and the things you listed were not in the list.  So, recovery should not have been impeded by them either.

We know what caused the recessions, and the things you listed were not in the list.

It's only off the list if your University Professor friend is artificially narrowing the scope of his investigation using half-truths and confirmation bias. Then again he started off by quoting Mises so it's not entirely surprising.

Good article on Trump's first year.

http://www.chicagotribune.com/news/opinion/commentary/ct-trump-accomplishments-first-year-20180122-story.html

Think about this.  The “Trump Effect” has people talking. Never have I come across so many experts in immigration, tax law, nuclear deterrence and warfare, etc in my life. That’s in both sides of the issues. Like or hate, I see it as people getting involved. Yes, I see Trumps actions as mobilizing more folks against him than with him. But that’s generally how things are in life. You always hear the negatives. However, I am also starting to see folks who take the time to look into the issues for themselves, with an open mind, and come out of the fog of propaganda. And that’s on BOTH sides.

Trump is getting folks involved. Yes, he stirs the pot, but I see it generally as a good thing. Personally, I’ve looked into many of these issues much deeper than I ever have before. I also see it in others as well. Heck, I even see the tides changing in stuff like comments on HNN where I see calls for Ige to resign. Or super liberals in WA and OR opening their eyes to things that they used to bury their heads in the sand.

Think about this.  The “Trump Effect” has people talking.

That was my hope as well, especially for labor to wake up and realize that nobody is coming to the rescue and grassroots organization is the only way to get things done now. For too long we have been pledging our support to useless politicians who take it for granted. The Democrats protect the salary class and punish the working class just as much as the Republicans these days. Trump understands that and gets his support from the people who are being left behind. I still think he's a con artist but at least he's no lame duck and on the plus side there seems to be a growing appetite for people do get out and do something versus standing around and complaining.

That was my hope as well, especially for labor to wake up and realize that nobody is coming to the rescue and grassroots organization is the only way to get things done now. For too long we have been pledging our support to useless politicians who take it for granted. The Democrats protect the salary class and punish the working class just as much as the Republicans these days. Trump understands that and gets his support from the people who are being left behind. I still think he's a con artist but at least he's no lame duck and on the plus side there seems to be a growing appetite for people do get out and do something versus standing around and complaining.

I think people are getting too caught up in the liberal vs conservative and D vs R stuff. Why I am happy to see even folks that are typically Uber Liberal seeing the recent government shutdown for what it is.

I’ve said for many years that Congress should face penalties for nonperformance. Don’t get the budget figured out, no pay. For any issue really. We almost never see budget issues in election years (even number years). They magically get it done when it benefits them. This really is about haves, politicians who have been “given” power, and have nots, the citizens who suffer what politicians shield themselves from.