Posted on 11/20/2018 7:33:09 AM PST by Red Badger
No.
First of all, interest rates should have been inching up for about a decade already, but have been kept near zero. I believe our own President said as much as a candidate and even before that.
Second, the Powell Fed has been very clear on their intentions. None of the past Powell hikes nor the next couple are really news; it should already be priced in.
Finally, trillion dollar deficits as far as the eye can see doesn’t help matters either.
If you need to point the finger, the Republican controlled, wet-noodle Congress is most culpable.
I don’t know how things are where you live, but crude being at a 52-week low hasn’t translated into much in the way of price reductions at my local pump. Maybe it’s down 5 cents or something from a couple months ago, but nothing to write home about.
Not without pain, that’s for sure.
Still, if the Congress did it’s Constitutionally mandated job, there would be little need for the kind of money printing that’s gone on since 2008.
And no, I don’t buy the story that the banks and insurance companies HAD to be bailed out. The best thing would have been to let it all collapse. If they did that, by now we would be on much, much solid footing.
Also, you may have noticed that none of the lessons that should have been learned in 2008 have been.
This is just my own viewpoint obviously. Others surely disagree.
2008 and the Obama Administration did tremendous damage where the moral hazard is concerned. Frankly I am not sure it can ever be undone.
Our government went against the clearly expressed will of the majority and bailed out our largest banks.
That fundamentally changed the national attitude towards bailouts. “Well, Hell, if GM and Wells Fargo can get bailouts, where’s MY bailout?”
True, but only if Facebook makes any formal representations about their membership count in their dealings with those advertisers. Every report I've seen comes from outside media stories, so I don't know what they tell their advertisers.
Suppose I bought a home in early 2008 for $500,000 dollars and carried a $400,000 mortgage on it. If the entire real estate market collapsed at the same time I lost my job, I was suddenly in a position where I had a $400,000 mortgage on a $350,000 property and no way to pay it off.
Sure -- this basically becomes the bank's problem at that point. But if the bank has already packaged the loan into a mortgage-backed security (MBS) and sold it off to investors who accepted a low interest rate on the security in exchange for the "safety" of a highly-rated bond. The investor should have been left to toss in the wind, and perhaps the bond rating agency who gave that MBS a AAA rating should have been prosecuted for fraud. That doesn't change the fact that every U.S. investment will suddenly lose 60% of its value because nobody trusts the institutions underpinning our debt anymore.
By bailing out the banks and insurance companies, the U.S. government basically just ensured that the AAA-rated MBS would still perform like a AAA-rated security no matter how much value the collateralized property lost in the process.
The corruption and ineptitude that led up to that financial crisis was ample justification to let it all burn down.
Then we could have learned the lessons and started over. It is my belief that this country would have rose from the ashes like a Phoenix, stronger and wiser than ever.
Again, I know others have the exact opposite viewpoint and I understand that.
Or the run up went up for far too long.
Agree... nothing is forever except Christ. If market dips upset people, they shouldn’t be in the market.
The runup always goes on too far.
Goldman probably did some damage with their economic outlook. Personally nothing Goldman does is without their self interest in mind, so I don’t trust the company that sold mortgage backed securities only to take the other side of the trade against them.
Domestically I think they are full of crap. Corporate tax cuts have unleashed an economic beast that is not going to slow down anytime this soon.
Globally I think Oil is telling us something. China and the rest of the world is not doing well. I suppose one could argue, IN TIME, a global recession, will slow things down a bit in the US.
Definitely agree. This market weathered the Obama 8 years!!!! I would argue the stock market resembles, these days, more of a casino than any reasonable measure or reflection of things on the ground.
Exceedingly low interest rates kept money in stocks. Raising interest rates pull money out of stocks. That’s what’s happenin’ now.
Takes very real growth to counter the trend to lower stock prices.
There is definitely weirdness out there.
While my business owning friends are happy with the deregulation and tax cuts, there is very strong upward pressure on payroll, pretty much negating the tax savings.
Trade, especially with China, has many in my industry (clothing) worried. Some big players have already shifted production to other countries - I am seeing stuff produced in Nigeria for the first time - but there are increased costs coming down the pike.
Health insurance costs are still a big question mark.
Real Estate is feeling the pinch of higher mortgage costs. Banks are still tight with their lending. I had a home builder tell me today that construction loans are harder to get than they were a year ago.
Frankly, I am surprised the bull run has lasted as long as it has.
The firts thing Pelosi & Co. are going to do is restore the OBAMACARE MANDATE......................COUNT ON IT!.................that’s what has business spooked!............
+1
“Some big players have already shifted production to other countries “
I think the tech companies were hoping Dems would take Congress and stop Trump’s tariffs. Now they, and their invetors, are looking seriously at adjusting. It ain’t gonna be cheap.
DOA in Senate. However, blocking any progress on conservative agenda will not help of course.
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