Question from a non-economics guy...
Could there be people manipulating the market to hurt the Republicans? I always felt that was done in 2008, but it just seems odd that the market has taken these big dips over the last month or so.
The market is too big for anyone to manipulate it.
GEORGE SOROS
Yes, manipulation happens. And yes, I’ve been expecting a market sell off in October, especially since Trump has bragged about it so much.
“Could there be people manipulating the market to hurt the Republicans?”
Of course, it’s possible.
There is a history of attempted manipulation, yes.
I don’t think its “manipulation” as much as it is worry over policy changes. For example, remember all the big downturns at the end of two-term presidencies (dot com bubble bursting at the end of Clinton, mortgage melt down at the end of Bush Jr., flash crash in the 7th year of Reagan)? As an investor, my theory is that invetors don’t know the ground rules for new people coming into the gubment positions, and sometimes who the new people will be. So when the stock market is at crazy highs, just about any catalyst will bring it down (i.e. mortgage fears, trading algorithms). Often the stock market is at crazy highs when we haven’t had much turnover in gubment positions (because investors know what the game rules are).
IMHO, the Fed keeping the interest rates low during the Obama years (well below what they were when he was elected) is what kept the stock market from crashing at the end of his terms...prolonging the inevitable. That Trump has kept the market going up instead of crashing when it “should” is truly remarkable...with the Fed raising rates willy nilly ever since Trump was elected.
That’s why I’m out of all of my equities funds except for international value (they already went way down). My investments are spread out in money markets, long and short term corporate bonds, short term treasuries, and about 40% in long term treasuries. I pretty much am sitting back and waiting for each asset class of equities to go down. For example, I probably won’t get back into my large-cap funds until the S&P 500 drops to around 2050 (about a 30% drop from its all time high).
Yeah, the rug was pulled then, too. But wasn’t it in September? Plenty of time for McCain to suspend his campaign, tell Sarah to forget about Michigan, and run back to DC for a week to vote ‘Yes’ (again) on spending more money we didn’t have.