Romney and the Market

Discussion in 'Wall St. News' started by Hoofhearted, Oct 17, 2012.

  1. I couldn't help but notice how many in the media give the Romney campaign credit for surges in the market. I've even heard it stated as fact that "the markets jumped after Romney wins the first presidential debate, particularly in the coal stocks"


    So why did, ANR jump 8% today after last nights debate? I haven't really heard anyone in the media saying that Romney won last night. All I've pretty much heard is that Obama mopped the floor with him- and I don't even watch CNN- so I'm not talking about Obama biased media.

    Come to think of it, I don't remember the markets crashing after Romney stuck his foot in his mouth about how 47% of America has an entitlement complex, and saying they are going to vote for Free Ride Obama no matter what he says. In the days following that debacle, even the majority of republicans were walking around the media with bags on their heads- but the market continued on.

    So my question is, If Romney having a strong showing manifests into market surges, then Who is responsible for the 4 year bull run that has us into new all time highs?
  2. The Ben Bernank. :D
  3. piezoe


    Ben Bernanke, mainly. The Fed and Treasury are Following a Keynesian like approach to first preventing depression, and secondly to push the U.S. economy slowly out of recession. This is why the market is going up and it is likely to continue as long as there is plenty of money available at low rates. It's working as planned so far, and the Housing Market is showing signs of recovery. Prices are starting to move up slowly. There is still the problem of excess inventory. It will take a number of years to work through that.

    It will be essential for the Fed to tighten at the appropriate time, but that is a long way off. The Fed needs to keep a close watch on the market and not let "Greenspan irrational exuberance" rear its ugly head. This hasn't happened so far, as gains are mostly nominal, but could happen easily enough. And then it will be up to the Fed not to repeat the error of the supply siders who held the misconception that markets would return to equilibrium on their own.

    By adjusting margin and capital requirements --two things Greenspan refused to do when it was suggested to him-- the Fed can prevent market bubbles. Small bubbles are inevitable, giant bubbles are entirely avoidable. One has to be willing to reject failed economic theory such as the Efficient Market Hypothesis --what a joke that is!, spontaneous equilibrium, rational expectations, and other non-sensical, mumbo jumbo, and go to what will work in the real market.

    It is amazing to realize that there are so many good ways to increase government revenue and hold deficits in check that would be of tremendous help to the economy in the long run, while we extricate ourselves from this horrendous mess the supply siders have dropped on us; yet we haven't done a one of them!
    For example, it is critical that the Bush tax cuts on those making >250K be reversed. Reversing these cuts will have very little negative effect on jobs, but a large effect on revenue.

    Prisons and drug policy are a source of 100's of billions of sorely needed revenue at the State level. Some states now spend 1/5 of their budget on ever swelling prison populations. This is a consequence of three gargantuan mistakes: the first being to privatize prisons, and in so doing create an incentive to swell the prison population; the second being mandatory sentencing that followed on the heels of privatizing --that accomplishes the prison entrepreneur's goal of keeping these criminals we created locked up as long as possible; the third being to criminalize drug use thus creating millions of criminals-- or hapless human profit centers if you prefer.

    All three of these mistakes must be reversed as quickly as possible. This won't make drug use any less or any greater, but more than a trillion dollars will be saved annually as the rate of petty crimes drops to what it is in other industrialized countries. There will be savings in policing, criminal prosecution, court costs, insurance, undertaking, and of course prisons. The petty crime rate will plummet. Fifteen to 20% of the saving realized can be diverted to drug treatment and recovery, and social services. The rest will be available for job stimulus programs in the economy.

    Cutting defense spending is also essential, and a no brainer. (Disabuse yourself right now of any thought that war is good for an economy-- don't use WWII as the model, that's a special case. Use Vietnam, Iraq, and Afghanistan --there are your models.) But of course you have to cut military spending in a way that does not throw hundreds of thousands out of work. Money should be moved from weapons to infrastructure and the same contractors and people now making weapons must convert over time to engineering projects in the private sector.

    There is nearly an endless list of worthwhile private and state-level public sector jobs that can be created with federal seed money. The seed money spent will be an investment that can be repaid via higher revenues going forward as the economy continues to recover. Here are just a very few suggestions: Intercity High speed rail -- a comprehensive 12 year program; intracity rapid transit; wind and solar power development; a new network of both prescribing pharmacists and small retail, for profit clinics throughout the U.S. (Some states have both already.); smaller classroom size in primary and secondary public education and addition of six years of foreign language training to all grade school curricula could easily add 1-2 million new jobs.

    Workers who lose their jobs when drug use is decriminalized will find new jobs in social work, drug rehab, education, and building infrastructure.

    All of these things are doable, but it might require that the Republican party disappear for about 20 years. That's a sacrifice I am prepared to make. What about you?
  4. CET


    Mods, this thread belongs in Politics or Trading. The OP being confused about what is happening in the market does not qualify as News.
  5. Why did ANR jump?- Because Romney had a very strong performance. Maybe the media (I assume you know which party most of the media is) will spin it because Obama was good at picking fights like a mediocre debater, but this did not change what voters and people think.

    The fiscal cliff will not happen with President Romney. That is another reason. There is also no answer if he would fire Bernanke. He said he might replace Bernanke, and that was before his shift to the left during the first debate.
  6. Kurgan


    -Are you a nark?
    -Do I look like a nark?
    -yeah...haha,gosh...I don't know who's weirder you or me...:D

    I'm watching "Taxi Driver"
  7. FourBrane


    I agree with everything you said (Bernanke gets the credit, Clinton-era tax rates under which the nation prospered should be restored, and drugs need to be legalized).

    The states should be in the drug business. Addicts can just sign up proclaiming themselves addicted to _fill-in-the-blank_, watch a required video offering free drug rehab services, and then buy the stuff cheap from the local pharmacy. The pharmacy buys at cost plus 30% from the state, which books the profit and uses it to fund drug rehab.

    However, we will NEVER see the end of the "War on Drugs" because the district attorneys, police and sheriffs have become addicted to confiscating drug property and cash and demanding high octane public spending to "prevent" (hah!) all the associated thefts and murders. They will fight legalization tooth and nail to preserve their revenue. That's a political powerhouse combo that no elected official can withstand, so sensible treatment of addiction is basically impossible in this country.
  8. piezoe


    Thank you. It's nice to know there are at least two of us.
  9. Humpy


    I don't know why the USA doesn't give itself a rest from their over spending politicians. Obama alone has taken the national debt from Bush's $3 trillion to a whopping $16 trillion. Not a penny of it trickled down to me but then it turns out they are paying the Taliban not to be too nasty and setting up Al Quaida with one hand in Libya, Syria etc. and fighting them with the other in Afghanistan !! How stooooooooopid can you get ????

    Italy has caved in and admitted the present democracy with those idiotic politicians just doesn't cut it. They have given the power to some technocrats unencumbered by the usual bribes and pressure.

    Come on somebody suggest a better system !!!!!!!!
  10. Humpy


    I agree with the above but guess what - neither Mutt or Jeff are going to set the USA straight again. Too many vested interests from the military to law enforcement for any one man to control.

    They could bring back corporal punishment. It would deter low level crime and empty the prisons.The objecting do-gooders could be forced into penal battalions to dig a canal from the Great Lakes to the drought stricken Mid West. Get the sods to do something useful.. So are the prisons full of extremely dangerous murderers ? Er actually no - cos they got their life sentences shortened to less than 50 days and a rope.

    You may wonder why a European cares tuppence if the USA kills itself ?Well 2 reasons really:-
    1. They are our allies ( God knows why )
    2. Our idiot politicians copy your crappy systems, would you believe !! The idiots that run this country have just introduced the US system of electing police chiefs. Boss Hog to the top !!

    TOUGHEN UP GUYS AND GALS - time is running out.
    #10     Oct 21, 2012