Posted on 01/05/2018 1:47:27 PM PST by BlackAdderess
Not too hot, not too cold - but just right.
Goldilocks' requirements for the perfect bowl of porridge are similar to the requirements of an attractive economy.
Not too hot - growth busting out the lights raising fears about sustainability and rampant inflation.
And not too cold - economic slowdowns and recessions pulling down business profitability and weighing on equity valuations.
Market investors certainly sense that 2018 will see a continuation of a global "Goldilocks economy". Why?
(Excerpt) Read more at bbc.com ...
No mention of Trump or the anticipation of corporate tax cuts coming
Three reasons:
Donald
John
Trump
Obviously Obama’s economic policies are really starting to kick in.
I always take my financial advice from Achmed of the BBC.
Three reasons:
1. 0 is not in the WH
2. Cankles is not in the WH
3. Trump is in the WH
The left wing socialist, pacifist, unionist, borderless, internationalist shackles have been torn asunder.
A businessman that listens has deregulated so much no one knows the total scope.
If you look at the last two years under Obama, the DJIA was a lifeless leviathan.
Before Trump was even elected, the day before the market went up 371 points. Three days later it set one of 17 records it would set to the end of the year. The next year it set 70 new records.
About 30 minutes ago, the market had climbed 41.4% since that day before the 2016 election.
For the record the first ten months of 2016, the DJIA had reached about 8 new highs, so it wasn’t coming off a low spell when Trump came along.
None the less, it has exploded since Trump did come on the scene.
I like how the Left argues that Obama had set the stage. LOL
In 2015, the market had it’s worst year since 1995. Think about what transpired during that period, and yet this was still true.
In 2016, the market rose 3.4% before the November election. From the opening the day before the election until the end of the year, the market went up 10%.
Under Obama the first ten months and one week, the market had 8 new records. One week into November through the end of the year, despite two holidays, there were a 17 new records.
The idea Obama primed the market, can only be validated by the claim he was out of his depth when it came to economic policy. Yes Obama may have primed the market for Trump, by being so unqualified to hold his job.
I think it is even bigger. Everything you said is true, and add to that the fact that since Democrats were so sure they would win and win big they have no ticking time bomb ready to explode and then point the blame to Republicans. The most recent bomb was the collusion between the pro-Community Reinvest Act politicians, the swamp at Fannie Mae and Barney Frank to create the financial and real estate crash.
“Yes Obama may have primed the market for Trump, by being so unqualified to hold his job.”
Obama didn’t prime the market for Trump. The MSM primed the market for Hillary to piggyback on Obama’s perceived success.
After 9/11 when the market tanked and the rich guys rallied together to stabilize the markets, my suspicions are that Donald J. Trump probably played a big role in that. He was very good friends with the Mayor, and the guys who pulled this off took no credit. They just basically saved our financial system, and took no credit for a hugely good dead done.
If these *ss-hats will just climb out of his butt and give the man his due, who knows what this country could do?! I’m so done with the sliming of this president.
The really savvy investors know that any day now Mueller will announce his findings that the election was stolen from Hillary, and he will make her president. Investors are optimistic that she will quickly reverse the great depression Trump has put the country into.
Buy now before Hillary is sworn in.... the smrt ones are already buying stocks in anticipation of her coming into office and making the economy soar like an eagle!
Thanks for your response, but if you’ll read the whole post, it lays out why the market was all set to grow at a rapid rate.
Obama’s policies were atrocious.
This takes nothing away from Trump. It just goes to show how important it was to install a man that knew what he was doing.
This all to Trump’s (sound economical policy) credit.
I can’t add anything to your comments about helping NY after 09/11. You may be right. I just don’t have anything to add.
I agree with your overall emphasis.
Trump, Trump, Trump
The market is simply correcting to the mean after at least a decade of suppression by Barky and even Bush and the whole 9/11 thing and Klintoon and the .com bust before that. Save for V bottom recoveries the market has not done much at all in almost two decades. The DOW did not sustain a recovery above the levels of ‘99 until 2010.
Reversion to the mean encouraged by regulation and tax busting by Trump is what is raising the market. Children who think that 3 and 4% interest rates are normal are just plain wrong. You can’t attract risk capital at that rate even in a very low inflation environment.
Seven percent has always been the “risk free” alternative investment rate of return for business for ages. We have not suddenly slipped into a new normal of 3 or 4%. That new ABNORMAL has been created by the Barky era liberals and the derivatives based crash of 2008. Like Roosevelt after the Depression, Barky just made the Recession worse with his spending and draconian regulation that robbed profits for investment.
8% long term average annually compounded growth rate for the 22 years from 1/96 when the DOW was 5,395 would put the DOW just over 29,000 now. It takes productivity for growth but we have been stifled in our outlook. Past performance is no guarantee of future performance and you can’t extrapolate a point but history suggests that for 10, 20 and 30 year periods growth is fairly constant when all the highs and lows are smoothed. 6 or 7% is pretty much a shoe-in and 8% is quite possible.
We will have a correction and we may even have a long duration crash, I surely hope not but if we see another regulatory and anti-business climate like the last decade expect more of the same tepid performance in the markets after another plummet and bottom like 2008 to 2016. I claim that if it were not for Barky and his minions and their left wing nut world we would have recovered much sooner and it would have stuck. Instead, the economy tried to crawl out of the hole in 2011 and Barky just hammered the door shut. BTW, most crashes in the market, even the one in 2008 “only” last about 3 years or so. If you plan to live on investments plan accordingly.
My biggest concern now is inflation driven by a very tight labor market. We just don’t have enough trained youngsters who are qualified to work to replace the retiring boomers so the retiring boomers may be compelled to go back to work. Good thing though since so many of them are not even remotely prepared to retire.
I’m not sure about housing demand and prices, cars production and such since the new generation don’t see a big house in the suburbs as one of their main goals now. I do know that I will not be buying any $85,000 pickups. That is stupid money. Heck, some of then new generation don’t even want to drive. They remind me of Norwegians who work to live enough. I believe they have looked at the collection of possessions boomers and silent generation worked for all their lives that were their treasures and when they are gone are just a problem to get rid of. I see a lot of once very nice houses in my home county that are now empty becoming derelict. It is rural here, there are no real jobs, only the very poor, the working class and the rich overlords. Most people with much on the ball that did not inherit overlord status left for greener pastures and will not return.
I am looking to a reasonably prosperous retirement now. Up until November 2016 I felt like there was no hope and no use in trying to retire. My only regret now is that I am not younger and able to begin again in these conditions instead of the slogging I did for about half of 40 years in business. I’ll give it another year or two though and if I am able I may give something else another go.
We only have so much time here that we are still able to do things though and I am looking forward to doing things I have wanted to do and not been able to do for a long long time. Things that do not involve regulations, labor relations, specifications, conferences, and all manner of real and imagined problems that suddenly become emergencies to remedy. I am enjoying being King of my own little world most days in the good company of my Queen.
I believe you and I have shared thoughts on similar subjects to this in the past. I’d appreciate your view on my post #17 here particularly on inflation and real estate and in more particular rural land.
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