The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: G-String on June 05, 2020, 05:05:25 AM
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What impacts do you see the results of the election having on US equity markets? There are some theories that Trump is doing everything possible to prop up markets now because a large part of his election platform is based on the success of the stock market. If he loses, Biden won't have the same philosophy of pumping money like the Fed is now. And if Trump wins, he's out in 4 years anyways so may not have the same desperation to keep pumping money into markets.
What are your thoughts? Could we see a big crash following the election? Anyone planning on selling just prior to the election?
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What are you even talking about?
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What are you even talking about?
My post is clear. Maybe you don't follow the markets and politics like some others do so you can ignore this thread.
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I am expecting short-term volatility.
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Both political factions are corporatist to their core. Long term nothing should be all that different.
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It all comes down to what policies are passed. Charts show markets do well under both D and R.
I wouldn't look at averages to show that R is better than D or D is better than R. often times the policies of one president effect the economy / stock market deep into the first term of the new incoming president.
I don't see a crash. Trump barks at the FED but its still independent. Thank god they acted as swiftly and meaningfully as they did. Powell prior to this downturn has been increasing rates. That's why Trump was so mad at him.
So Biden comes in ? taxes go up a bit - no big deal
Trump stays - tax rates stay the same, no big deal
If Biden sweeps in with a overwhelming majority and DEMS have full control of both houses like they did under the first 2 years of Obama then I think policies they pass will have huge effects either positive or negative. to early to tell/ predict.
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Garrett, how is it going with your girlfriend (on the other thread?) I'm sure people would appreciate an update.
Hope you are doing well!
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What are you even talking about?
My post is clear. Maybe you don't follow the markets and politics like some others do so you can ignore this thread.
Thanks, I’ll take the advice.
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Biden won't have the same philosophy of pumping money like the Fed is now.
History says different. Quantitative easement in the US went from late 2008 to 2015. That overlaps nicely with Bidens term as VP.
What are your thoughts?
-->I don't care.
Could we see a big crash following the election?
-->Yes. The future is a strange unpredictable thing where anything is possible.
Anyone planning on selling just prior to the election?
-->No. I don't market time.
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I think there was a post when Trump got elected. check that one out. not sure anyone predicted what happened next.
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Garrett, how is it going with your girlfriend (on the other thread?) I'm sure people would appreciate an update.
Hope you are doing well!
There was too much negativity in that thread so I've taken a break from it. I'll go back there eventually but trying to stay positive.
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What are your thoughts?
Same thoughts as last election. Do nothing. Ignore the noise. Nobody knows what will happen so there is nothing actionable about the event.
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What are your thoughts?
Same thoughts as last election. Do nothing. Ignore the noise. Nobody knows what will happen so there is nothing actionable about the event.
I'd normally agree but the Fed pumping trillions into the corporate bond markets isn't just "noise".
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Both political factions are corporatist to their core. Long term nothing should be all that different.
This, and the fact that unless you get president Biden *AND* a democratic senate you'll just have gridlock that keeps us in the status quo anyways. I think the odds that one party controls the house/senate/presidency after the next election are pretty low.
But really, it's not like we're going to have president Bernie. Biden is pretty centrist/corporatist in the grand scheme of things.
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What are your thoughts?
Same thoughts as last election. Do nothing. Ignore the noise. Nobody knows what will happen so there is nothing actionable about the event.
I'd normally agree but the Fed pumping trillions into the corporate bond markets isn't just "noise".
It is noise, what are the primary and secondary and tertiary consequences of the QE? If you can't answer that with confidence then it's noise. If you can then feel free to risk your money. But consider we went through this before with 2008 and it turned out fine.
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I'd normally agree but the Fed pumping trillions into the corporate bond markets isn't just "noise".
Neither were lots of other world events over the last hundred years (world wars, pandemics, nuclear weapons, automobiles, the internet, etc, etc) that resulted in:
1: Increases in stock prices
2: Decreases in stock prices
3: No change in stock prices
If you go look at stock price charts and significant world economic/political events, I dare you to find any meaningful pattern. Other than generally up with a lot of volatility.
Today's news is not actionable data for investing. Sorry.
-W
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A Biden victory reduces the near-term earning power of American business as repealing the corp tax cuts will be high on the agenda. This definitely hurts stocks on a fundamental basis.
Of course, this is not the only factor. This market is primarily being driven by narratives. Perhaps a narrative around stability will take hold and more than offset the tax cut earnings hit?
I have no idea.
P.S. the Fed impact is huge, but this only changes if Biden nominates a new Fed chair with radically different views. He might keep Powell. Who knows.
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What are your thoughts?
Same thoughts as last election. Do nothing. Ignore the noise. Nobody knows what will happen so there is nothing actionable about the event.
I'd normally agree but the Fed pumping trillions into the corporate bond markets isn't just "noise".
Where did you read that? I count "$1,294,544,258" in the report from about a week ago that the Fed provided to Congress. That's $1.3 billion.. not trillion.
https://www.federalreserve.gov/monetarypolicy/files/pmccf-smccf-talf-5-29-20.pdf
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A Biden victory reduces the near-term earning power of American business as repealing the corp tax cuts will be high on the agenda. This definitely hurts stocks on a fundamental basis.
Of course, this is not the only factor. This market is primarily being driven by narratives. Perhaps a narrative around stability will take hold and more than offset the tax cut earnings hit?
I have no idea.
P.S. the Fed impact is huge, but this only changes if Biden nominates a new Fed chair with radically different views. He might keep Powell. Who knows.
1. A Biden victory is of literally zero consequence for tax policy unless Democrats also win the senate. I'd argue that legislative gridlock, coupled with current tax policy and the lowered risk of incendiary behavior from the president would be neutral at worst, in this scenario.
2. Hiking corporate taxes is probably less likely than hikes to the top marginal rates for individual earners, in my opinion. Even Obama favored a corporate tax cut(albeit not as deep as the Republican cuts). I doubt you'll see a big corporate tax hike, for this and a variety of other reasons (mostly, not wanting to piss off corporate donors). Hikes to the top individual rates? Maybe.
Unless you have president Bernie and a left-wing(not merely Democratic) wave in the senate, a lot of these things are pretty unlikely to happen.
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I think there will be little impact on Wall St, if Biden wins. The corporate tax rate will go unchanged, as will capital gains taxes. You might see the tax rates on top earners go up. Biden will also not interfere with the Fed.
Over time, I do see an attempt might be made to change corporate tax policy. Near term, not so much. At this point in time, I think he would be more focused on social policy and programs.
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I remember some news articles after Obama was elected. He was a socialist and the economy was horrible and everyone should get out of stocks, maybe until he was out of office. Then Trump got elected and other people pointed out that he is a narcissist wannabe strongman who has bankrupted most of the companies he has run, so everyone should get out of stocks, maybe until he was out of office.
Both of those takes were wrong, at least as far as the investing advice goes. But maybe this time it’s different.
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I predict short-term volatility on Election Night. A few hours unreasonably up or down and then futures traders realize the world won't be all that much different in the morning. The rich will still be rich and everyone else will get up and go to work.
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If Trump loses the results will be contested in some way until at least January. Trump is not a person capable of conceding, no matter the facts. During those months a lot of things could happen to scare the markets. Riots, terror attacks, talk of a coup, arrests of government officials, etc. Be hedged and prepared to rebalance during this time.
If Trump wins, markets may go up in the short term on the certainty of tax cuts, full fledged money printing, and negative interest rates. However they could also go down if by that time the pandemic, (rather than just the response to the pandemic) is having a severe economic impact and people are pissed about the lack of leadership. A side effect of a Trump win might be the splintering of the Democratic Party, which would lock in Republican rule for a generation or more. One-party states like Russia, Turkey, and China don’t tend to reward their investors or currency holders in the long term.
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I think there will be little impact on Wall St, if Biden wins. The corporate tax rate will go unchanged, as will capital gains taxes. You might see the tax rates on top earners go up. Biden will also not interfere with the Fed.
Over time, I do see an attempt might be made to change corporate tax policy. Near term, not so much. At this point in time, I think he would be more focused on social policy and programs.
Corporate tax rate is expected to go up to around 27% under Biden, where it's now 21% under Trump. Was 35% prior to Trump taking office.
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If Trump loses the results will be contested in some way until at least January. Trump is not a person capable of conceding, no matter the facts. During those months a lot of things could happen to scare the markets. Riots, terror attacks, talk of a coup, arrests of government officials, etc. Be hedged and prepared to rebalance during this time.
If Trump wins, markets may go up in the short term on the certainty of tax cuts, full fledged money printing, and negative interest rates. However they could also go down if by that time the pandemic, (rather than just the response to the pandemic) is having a severe economic impact and people are pissed about the lack of leadership. A side effect of a Trump win might be the splintering of the Democratic Party, which would lock in Republican rule for a generation or more. One-party states like Russia, Turkey, and China don’t tend to reward their investors or currency holders in the long term.
I agree 100% that Trump will contest the election result if he loses.
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I agree 100% that Trump will contest the election result if he loses.
He will 100% contest the results if he wins and say he was cheated out of a huge landslide by voter fraud! ;-)
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What impacts do you see the results of the election having on US equity markets?
What are your thoughts? Could we see a big crash following the election?
The one way that you could easily see equities values driven down would be an increase in the corporate tax rate. To do this you would need majorities in both houses of congress and the presidency. I'm not sure how likely that is.
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What impacts do you see the results of the election having on US equity markets?
What are your thoughts? Could we see a big crash following the election?
The one way that you could easily see equities values driven down would be an increase in the corporate tax rate. To do this you would need majorities in both houses of congress and the presidency. I'm not sure how likely that is.
I already read Biden is expected to raise the corporate tax rate from its current 21% to 27%.
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I already read Biden is expected to raise the corporate tax rate from its current 21% to 27%.
I bet that he would like to. He'll need a majority in the Senate.
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What impacts do you see the results of the election having on US equity markets?
What are your thoughts? Could we see a big crash following the election?
The one way that you could easily see equities values driven down would be an increase in the corporate tax rate. To do this you would need majorities in both houses of congress and the presidency. I'm not sure how likely that is.
I already read Biden is expected to raise the corporate tax rate from its current 21% to 27%.
Higher taxes don't always correlate to low equity values. Policies enacted with that tax money can actually improve economic output and purchasing in the long term. There's some evidence that the corporate tax cuts aren't doing what they were expected to do anyway (drive re-investment by corporations).
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Higher taxes don't always correlate to low equity values. Policies enacted with that tax money can actually improve economic output and purchasing in the long term. There's some evidence that the corporate tax cuts aren't doing what they were expected to do anyway (drive re-investment by corporations).
But in the short term they'll effect the E in P/E.
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Higher taxes don't always correlate to low equity values. Policies enacted with that tax money can actually improve economic output and purchasing in the long term. There's some evidence that the corporate tax cuts aren't doing what they were expected to do anyway (drive re-investment by corporations).
But in the short term they'll effect the E in P/E.
Sure. But the only impact that really should matter to any of us is long term. Short term nobody knows what's happening with the market.
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Higher taxes don't always correlate to low equity values. Policies enacted with that tax money can actually improve economic output and purchasing in the long term. There's some evidence that the corporate tax cuts aren't doing what they were expected to do anyway (drive re-investment by corporations).
But in the short term they'll effect the E in P/E.
Sure. But the only impact that really should matter to any of us is long term. Short term nobody knows what's happening with the market.
Yes, but, the OP asked if anyone thinks the election will cause a crash in the markets. This feels like a short term question to me.
I also stated that it's possible other narratives could override the downward pressure of (expected) corporate tax rate increases. But, that doesn't change the fact that it's a negative on a near term fundamental basis.
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There are some theories that Trump is doing everything possible to prop up markets now because a large part of his election platform is based on the success of the stock market.
Didn't Obama have better S&P500 numbers than Trump? If you're going to equate a political party with stock market performance (which I do not) - um, Democrats it is then I guess.
https://www.macrotrends.net/2482/sp500-performance-by-president
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It's awkward to compare stock markets by President because of the other things that are going on in the broader economy. Since markets move instantly upon election results, it's probably most fair to compare election to election rather than inauguration day to the next.
Personally, I'm horrified by many of the things Trump does--I don't plan to vote for him--but I imagine stocks will soar if he gets re-elected because most traders are probably pricing in a Biden victory at the moment. I don't want to have my money on the sidelines in case that happens.
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but I imagine stocks will soar if he gets re-elected because most traders are probably pricing in a Biden victory at the moment.
Or the markets may have priced in the stability Biden would provide and if Trump gets elected the markets could drop in anticipation of 4 years with even more uncertainty and carnage since he won't be worried about elect-ability.
Bottom line everyone has an opinion and a guess....some may even turn out to be right, but nobody knows what will happen.
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Higher taxes don't always correlate to low equity values. Policies enacted with that tax money can actually improve economic output and purchasing in the long term. There's some evidence that the corporate tax cuts aren't doing what they were expected to do anyway (drive re-investment by corporations).
But in the short term they'll effect the E in P/E.
Sure. But the only impact that really should matter to any of us is long term. Short term nobody knows what's happening with the market.
Speaking of the long-term, one way to avoid corporate taxes is to invest more in marketing and R&D instead of dividends and buybacks. To the extent marketing and R&D are what drive revenues in the long run, it might be a good idea to buy stocks from people who are disappointed by reduced PE ratios in the short run. A higher corporate tax rate could actually improve the case for corporations to invest back into business innovation, which is tax deductible, instead of shrinking their workforces and doing buybacks in an effort to hit numbers. Recall that the fastest rates of economic growth and innovation the US ever experienced occurred in the mid-20th century at tax rates that seem outrageous today.
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I think the biggest result of a Biden victory will be Republicans will suddenly be concerned about the deficit again and any large scale government spending will be stalled by the Senate. Trump has presided over massive spending and deficits that Republicans stalled that were arguably more needed when the recovery was weaker during Obama's administration. I'm assuming that even if the Dems control the House and Senate any funding increases will be filibustered. There will possibly be a government shutdown during the first year or two.
What does all this mean to the market is anyone's guess. Personally I have a perfect track record of getting all predictions wrong.
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I think the biggest result of a Biden victory will be Republicans will suddenly be concerned about the deficit again and any large scale government spending will be stalled by the Senate. Trump has presided over massive spending and deficits that Republicans stalled that were arguably more needed when the recovery was weaker during Obama's administration. I'm assuming that even if the Dems control the House and Senate any funding increases will be filibustered. There will possibly be a government shutdown during the first year or two.
What does all this mean to the market is anyone's guess. Personally I have a perfect track record of getting all predictions wrong.
Not sure I’d want to own an insurance company if Biden wins. I mean, if the House or Senate are Republican-majority, he might try to revive the ACA and give insurance companies a profitable place to play but the mood among Democrats is to kill off all the corporate parasites and go Medicare for all.
Of course, insurers and reinsurers will be hit hard by the pandemic too. Life insurance will not be profitable in a year with a few hundred thousand unplanned deaths.
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I think the biggest result of a Biden victory will be Republicans will suddenly be concerned about the deficit again and any large scale government spending will be stalled by the Senate. Trump has presided over massive spending and deficits that Republicans stalled that were arguably more needed when the recovery was weaker during Obama's administration. I'm assuming that even if the Dems control the House and Senate any funding increases will be filibustered. There will possibly be a government shutdown during the first year or two.
What does all this mean to the market is anyone's guess. Personally I have a perfect track record of getting all predictions wrong.
Not sure I’d want to own an insurance company if Biden wins. I mean, if the House or Senate are Republican-majority, he might try to revive the ACA and give insurance companies a profitable place to play but the mood among Democrats is to kill off all the corporate parasites and go Medicare for all.
Of course, insurers and reinsurers will be hit hard by the pandemic too. Life insurance will not be profitable in a year with a few hundred thousand unplanned deaths.
you might be right with the health insurance - that could be a miserable place to be invested for a while. however the life is fine. If you look at the people who are dying its those who are older - less likely to have large policies and more likely to have held them for years - they are profitable by now anyway.
It takes a lot of small policies to make up for one large Kobe Bryant Death (as an example).
Additionally any life insurance who also does annuities will see those books balance each other out.
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It's awkward to compare stock markets by President because of the other things that are going on in the broader economy. Since markets move instantly upon election results, it's probably most fair to compare election to election rather than inauguration day to the next.
Personally, I'm horrified by many of the things Trump does--I don't plan to vote for him--but I imagine stocks will soar if he gets re-elected because most traders are probably pricing in a Biden victory at the moment. I don't want to have my money on the sidelines in case that happens.
At this point, the only scenarios which differ materially from the others are if one party controls the house, senate, and the White House. If Democrats control the House and Republicans control the senate, President primarily impacts how things play out with regards to the Supreme Court. A divided government means the status quo for fiscal policy. And even if the Democrats manage to take the Senate, it would be by a razor-thin margin, and there are enough centrists in the Democratic coalition to stop any substantial tax hikes.
I'd go so far as to say that a Republican sweep is the only scenario that is likely to differ substantially from the others when it comes to economic policy - and it's a relatively low-probability event from where we are right now.
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If Trump loses the results will be contested in some way until at least January. Trump is not a person capable of conceding, no matter the facts. During those months a lot of things could happen to scare the markets. Riots, terror attacks, talk of a coup, arrests of government officials, etc. Be hedged and prepared to rebalance during this time.
If Trump wins, markets may go up in the short term on the certainty of tax cuts, full fledged money printing, and negative interest rates. However they could also go down if by that time the pandemic, (rather than just the response to the pandemic) is having a severe economic impact and people are pissed about the lack of leadership. A side effect of a Trump win might be the splintering of the Democratic Party, which would lock in Republican rule for a generation or more. One-party states like Russia, Turkey, and China don’t tend to reward their investors or currency holders in the long term.
We just lived through 2 plus years of a large portion of the US populace under the false belief that Russia stole the election for trump and not just accepting the results. I saw a poll awhile back and it was remarkable how many people think votes got tampered with by Russians for trump. Or the general whining about the electoral college by the most recent presidential loser, Hilary.
Come on man, people not accepting election results is nothing new. Jill Steins recount efforts in 2016 ?
If trump loses he whines about voter fraud for a month, biden is sworn in and we get on with a new president.
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If Trump loses the results will be contested in some way until at least January. Trump is not a person capable of conceding, no matter the facts. During those months a lot of things could happen to scare the markets. Riots, terror attacks, talk of a coup, arrests of government officials, etc. Be hedged and prepared to rebalance during this time.
If Trump wins, markets may go up in the short term on the certainty of tax cuts, full fledged money printing, and negative interest rates. However they could also go down if by that time the pandemic, (rather than just the response to the pandemic) is having a severe economic impact and people are pissed about the lack of leadership. A side effect of a Trump win might be the splintering of the Democratic Party, which would lock in Republican rule for a generation or more. One-party states like Russia, Turkey, and China don’t tend to reward their investors or currency holders in the long term.
We just lived through 2 plus years of a large portion of the US populace under the false belief that Russia stole the election for trump and not just accepting the results. I saw a poll awhile back and it was remarkable how many people think votes got tampered with by Russians for trump. Or the general whining about the electoral college by the most recent presidential loser, Hilary.
Come on man, people not accepting election results is nothing new. Jill Steins recount efforts in 2016 ?
If trump loses he whines about voter fraud for a month, biden is sworn in and we get on with a new president.
Yea but Trump's supporters have guns.
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I remember some news articles after Obama was elected. He was a socialist and the economy was horrible and everyone should get out of stocks, maybe until he was out of office. Then Trump got elected and other people pointed out that he is a narcissist wannabe strongman who has bankrupted most of the companies he has run, so everyone should get out of stocks, maybe until he was out of office.
Both of those takes were wrong, at least as far as the investing advice goes. But maybe this time it’s different.
+100
This is a nice thought experiment about what may happen but please don’t time the market. Making decisions on emotion even if you get it right is luck. Your not being rationale when you sell based on politics and you won’t be rationale trying to get back into the market either. Stay disciplined.
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If Trump loses the results will be contested in some way until at least January. Trump is not a person capable of conceding, no matter the facts. During those months a lot of things could happen to scare the markets. Riots, terror attacks, talk of a coup, arrests of government officials, etc. Be hedged and prepared to rebalance during this time.
If Trump wins, markets may go up in the short term on the certainty of tax cuts, full fledged money printing, and negative interest rates. However they could also go down if by that time the pandemic, (rather than just the response to the pandemic) is having a severe economic impact and people are pissed about the lack of leadership. A side effect of a Trump win might be the splintering of the Democratic Party, which would lock in Republican rule for a generation or more. One-party states like Russia, Turkey, and China don’t tend to reward their investors or currency holders in the long term.
We just lived through 2 plus years of a large portion of the US populace under the false belief that Russia stole the election for trump and not just accepting the results. I saw a poll awhile back and it was remarkable how many people think votes got tampered with by Russians for trump. Or the general whining about the electoral college by the most recent presidential loser, Hilary.
Come on man, people not accepting election results is nothing new. Jill Steins recount efforts in 2016 ?
If trump loses he whines about voter fraud for a month, biden is sworn in and we get on with a new president.
Yea but Trump's supporters have guns.
Lol. I assume that’s a joke right ? Look back at the riots, oops I mean marches after Hilary lost in 2016. My eyes tell me it’s mostly one group that acts out and smashes windows and burns buildings after elections. I chalk it up to more like a 5 year old having a temper tantrum than actual violence so I think we’ll all be ok.
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In a democracy, I'd argue that it's understandable for a little frustration when more people in a country voted for a candidate, and the person with the fewest votes wins.
My understanding of the protests that were held after Trump's election though, is that they were peaceful. Can you provide some articles that show rioting, burning buildings, and smashing windows by Clinton supporters after Trump winning the electoral college?
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In a democracy, I'd argue that it's understandable for a little frustration when more people in a country voted for a candidate, and the person with the fewest votes wins.
My understanding of the protests that were held after Trump's election though, is that they were peaceful. Can you provide some articles that show rioting, burning buildings, and smashing windows by Clinton supporters after Trump winning the electoral college?
The headline couldn’t be better - “Not our president: Protests spread after Donald Trumps Election “
https://www.google.com/amp/s/www.nytimes.com/2016/11/10/us/trump-election-protests.amp.html
Second paragraph in they get to the rioting / fires and broken windows. Also goes on to talk about property damage and personal injury.
https://www.aljazeera.com/news/2016/11/anti-trump-protests-turn-violent-161111090846256.html
Another one for another news paper.
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https://www.aljazeera.com/news/2016/11/anti-trump-protests-turn-violent-161111090846256.html
"Many in the crowd are trying to get anarchist groups to stop destroying property, anarchists refusing. Others encouraged to leave area," the department said on Twitter after declaring the demonstration a riot."
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https://www.nytimes.com/2016/11/10/us/trump-election-protests.html (https://www.nytimes.com/2016/11/10/us/trump-election-protests.html)
Thousands of people across the country marched, shut down highways, burned effigies and shouted angry slogans on Wednesday night to protest the election of Donald J. Trump as president.
The demonstrations, fueled by social media, continued into the early hours of Thursday. The crowds swelled as the night went on but remained mostly peaceful.
Burning an effigy or flag is a protected form of free speech in the US, and a far cry from the claimed 'burning buildings'.
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Assholes on the left and assholes on the right act out in different stupid ways, but they both have a long history of acting out stupidly, as you'd expect of assholes. Some of them burn buildings and cop cars and smash up Target, some of them take over wildlife refuges at gunpoint, or refuse to pay their range fees on public land and have armed standoffs with the Feds, or run people over with their car.
Assholes gonna asshole.
That means zero about the mainstream of either major party, though I'm not entirely sure what's left of the mainstream Republican party except liking Trump. There's not much talk about free trade, limited government (as if!), or financial responsiblity/fiscal restraint. Let alone action.
You could make the same point about Democrats (united mostly by disliking Trump) but they've always been much less monolithic than the modern Republican party so a lot of philosophical inconsistency and give-and-take policy is sort of expected.
-W
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https://www.nytimes.com/2016/11/10/us/trump-election-protests.html (https://www.nytimes.com/2016/11/10/us/trump-election-protests.html)
Thousands of people across the country marched, shut down highways, burned effigies and shouted angry slogans on Wednesday night to protest the election of Donald J. Trump as president.
The demonstrations, fueled by social media, continued into the early hours of Thursday. The crowds swelled as the night went on but remained mostly peaceful.
Well you have to read past the first paragraph .... protesters started small fires / broke windows / injured police officer. “Demonstrations led to property damage”
The other article “ some protestors sprayed graffiti on cars and buildings/ destroyed shop windows.
These are just 2 papers. I don’t want to spoon feed it to you.
Burning an effigy or flag is a protected form of free speech in the US, and a far cry from the claimed 'burning buildings'.
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In a democracy, I'd argue that it's understandable for a little frustration when more people in a country voted for a candidate, and the person with the fewest votes wins.
My understanding of the protests that were held after Trump's election though, is that they were peaceful. Can you provide some articles that show rioting, burning buildings, and smashing windows by Clinton supporters after Trump winning the electoral college?
The headline couldn’t be better - “Not our president: Protests spread after Donald Trumps Election “
https://www.google.com/amp/s/www.nytimes.com/2016/11/10/us/trump-election-protests.amp.html
Second paragraph in they get to the rioting / fires and broken windows. Also goes on to talk about property damage and personal injury.
https://www.aljazeera.com/news/2016/11/anti-trump-protests-turn-violent-161111090846256.html
Another one for another news paper.
During the period you're describing, stock market did really well.
I'm not interested in debating the Trump-Russia complex of ideas on this thread, I didn't see any indication that they moved markets.
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There are some theories that Trump is doing everything possible to prop up markets now because a large part of his election platform is based on the success of the stock market.
Didn't Obama have better S&P500 numbers than Trump? If you're going to equate a political party with stock market performance (which I do not) - um, Democrats it is then I guess.
https://www.macrotrends.net/2482/sp500-performance-by-president
While I have often used this same logic, you do really have to consider that Obama took office at the end of a major recession, while Trump took office after 7-8 years of a strong bull market..
IMO - it’s much more challenging to continue to be successful after a strong bull run, as opposed to the end of a recession.
It’d be similar to the recent March/April market crashes instead taking place next January, and Biden taking office with the Dow at 19k instead of 29k, and giving him credit for bringing the market back up to where it was lol...
While I didn’t mind Obama and thought he did a great job in many aspects, I think it should be more realistic to compare where the market ended with him, vs it’s previous market peak..
That’s just how I look at it. In regards to this upcoming election, it’s easy to hate Trump for lots of things (I haven’t and would never vote for him) but I have a hard time finding too many sound arguments that his policies haven’t been good for the U.S. economy. The results have been at the sacrifice of many social causes and a negative reflection of our country, but for the economy, he has done well.
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The profitability of the largest corporations is just one dimension of a good and just society. Voting should be about considering many dimensions.
Our 'staches may grow more slowly depending on what changes are made to society during the next 2 1/2 years. That by itself does not rule out all of those changes as being necessary or moral.
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... but I have a hard time finding too many sound arguments that his policies haven’t been good for the U.S. economy. The results have been at the sacrifice of many social causes and a negative reflection of our country, but for the economy, he has done well.
By any objective set of measures, Trump economy is a lot of hype and not much substance. Compare it to other "socialist" periods in the American history and it comes far short.
Yes, you can legitimately question each of those objective measures (e.g. the fact that Obama took office after a recession, giving the market huge room to run), and you can also legitimately find counter-arguments to all those arguments (e.g. the fact that Obama administration held the economy together through a major systemic crisis amid the rise of the Tea Party politics was a massive achievement in itself).
However, the fact that almost any objective measure(s) (at least the ones I am aware of) you pick up seems to point in the same direction does not leave much room for confusion.
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
No one is forcing you to read this thread. And I'm not sure why it'd get shut down. It's a valid discussion.
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*. however, money and politics cannot be separated so easily. Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there. That said, I post in both locations.
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*. however, money and politics cannot be separated so easily. Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there. That said, I post in both locations.
I think allowing political discussion is on the negative side of the ledger. There is a left-of-center vibe and sometimes smarminess to things here that tends to silence or drive away other voices. And most of the politics ends up in a debate over the virtues/ evils of the current President. It’s as if some posters can’t control themselves when they feel they have the merest opportunity to shout “Orange Man Bad!” There are thousands if not millions of places on the internet where you can do that all day long and have others validate that viewpoint. I don’t see why it’s needed here.
I’m merely a guest. And if I don’t like things I’m free to take a hike. On balance I really do like this community and the insights are well worth it. I might just take a break around the election when the political idiocy gets to a fevered pitch.
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Years ago a thread I made on Bogleheads that crossed the investing/political boundary, and it got locked, and I probably got some kind of warning. But you only know about censorship when it kicks in, and so years ago I switched over to MMM forums.
So, getting back on topic before someone notices...
The U.S. election is likely to cause volatility... but I don't know when. The Republican candidate wants to keep tax cuts, the Democratic wants to end them. That's probably the main thing for the stock market.
But the election also involves changing all the heads of various departments - including the Justice Department. I think the phrase "Elizabeth Warren nominated to lead Justice Department" could send big tech shares tumbling. She has proposed applying anti-trust to big tech. The Democratic candidate has repeated that "Amazon pays $0 in taxes" and how that's unfair... so Senator Warren could play a role.
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So, getting back on topic before someone notices...
Thank you...
The U.S. election is likely to cause volatility... but I don't know when. The Republican candidate wants to keep tax cuts, the Democratic wants to end them. That's probably the main thing for the stock market.
Tax cuts are one thing that markets will be interested. Another is trade and tariffs. The current administration has placed more tariffs than any other administration since WWII. In response, a bunch of other countries have placed retaliatory tariffs on our exports. Before Covid these were already having a very big impact. Now the current administartion is threatening yet more tariffs, most recently in reponse to digital content and labor disputes.
But the election also involves changing all the heads of various departments - including the Justice Department. I think the phrase "Elizabeth Warren nominated to lead Justice Department" could send big tech shares tumbling. She has proposed applying anti-trust to big tech. The Democratic candidate has repeated that "Amazon pays $0 in taxes" and how that's unfair... so Senator Warren could play a role.
The tech sector might not like Warren leading the DOJ, but what markets hate most of all is uncertainty. And with this administration cabinet level positions have been a revolving door, with many people hired who had no experience with their appointed jobs. A lot of industry loved having Pruitt/Wheeler at the helm of the EPA because they collectively rolled back all sorts of monitoring and protections. But this came at the expense of 'cleaner' tech in direct competition, like wind and solar. NJ is proposing a new manufacturing hub for offshore turbines which could assemble and ship several billion$ in these enormous turbines each year. Trump is a blockade to that, and the plans will likely be scrapped if he gets re-elected.
In sum - there will be winners and losers, but my guess is that stability and predictability will calm the markets more than anything. In that sense I think a Biden win will tamp down volatility, because it's the exact opposite approach of Trump, who likes to be unpredictable, punitive and scoffs at norms.
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Note: volatility can also mean volatility to the upside.
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Volatility is non-directional. You can have high volatility with a bull market, or high volatility with a beat market.
I think the direction of the market won’t change much beard on who is in charge -presidents get far too much credit/blame for broader movement. But he CAN influence volatility to a greater degree, IMO
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I am tentatively in the camp of elections don't matter for markets.
If you go by strict numbers, the economic growth rate from Truman to Obama is generally better under democratic administrations than republican (4.3% vs. 2.5%). I haven't looked up the actual market data - but that would likely show a similar pattern with lower volatility (since markets anticipate and "discount" the future).
However, I am afraid this election can be norm-breaking in many ways. I'd be surprised if some sort of black swan does NOT show up between now and January. So, all bets are off!!
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Maybe to put the election in rough perspective, here's a partial list of things more impactful to stock market prices than the election:
(1) News of COVID-19 treatments and vaccines. The hope of going back to normal.
(2) Hints at new lockdowns, like new cases rising. Fears that the economy will get hurt again.
(3) Actions by the Fed. Predicting 0% rates for 2021 (because it's bad), or confirming they'll buy bonds.
(4) Congress, usually acting at the last minute with relief packages.
(5) Tariffs and trade wars, impacting import/export profits.
(6) Oil prices and OPEC, partially because fuel usage is one measure of economic activity
...
And somewhere down here, predictions of who wins the next Presidential election.
nereo - I think markets have adapted to President Trump's style, which brings down some volatility and uncertainty. But volatility spiked in March with COVID-19 cases, and will probably continue owing to the great uncertainty with where we end up months from now. Companies can't even predict future earnings.
I suspect the market underestimates how much Senator Warren could impact markets. A majority of the S&P 500's profits for the past 12 months came from the 5 largest companies - they contributed far more than the rest of the market, combined. When that 20% of the market suffers, people might not realize how big an impact that can have. I'm not even saying I disagree with the need for competitive markets and anti-trust actions, but I think the markets underestimate the chances. In fairness, the EU is more likely to act first (and already has started to, I believe). And those cases take years, so reacting now might be too soon.
I guess the other question is... if this October/November will be very volatile for markets, what do we do about it? Maybe delay rebalancing or perform more rebalancing during that time frame (for those staying the course). I'm not familiar with options, but they seem like the most likely manner of capturing volatility.
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I am tentatively in the camp of elections don't matter for markets.
Maybe not in a day-trading perspective, but long-term a lot of things are being decided.
There might be nothing more 20teens than the attitude that leadership doesn't matter, and that a few simple mantras are all that's required to make decisions. Let's hope the year 2020 marks the end of that fad.
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I am tentatively in the camp of elections don't matter for markets.
Maybe not in a day-trading perspective, but long-term a lot of things are being decided.
There might be nothing more 20teens than the attitude that leadership doesn't matter, and that a few simple mantras are all that's required to make decisions. Let's hope the year 2020 marks the end of that fad.
I believe, long term, the stock market performance will depend on two factors:
1. demographics, increasing or decreasing the population component of the "secular rate of growth".
2. innovation, this is productivity multiplier component of the "secular rate of growth".
There sure are other shorter term factors (e.g. transfer of economic activity from small businesses to the larger, listed ones during the pandemic). But they are likely one time and will only look like blips in the long term return.
So far, elections have not impacted these two factors. However, going forward, they might!!
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Going slightly off topic.
For #1, the quick fix is immigration. That seems to be getting impacted with this administration (they just announced that all work visa's will be suspended). Long term, will at least the current levels be maintained? I'm hopeful, but not sure.
For #2, there are no easy answers. Immigration plays an indirect role. But there are far more complicated sociological factors at play as well. A nice NYTimes article on "Lost Einsteins": https://www.nytimes.com/2017/12/03/opinion/lost-einsteins-innovation-inequality.html
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Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.
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Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.
If Trump loses, the party will be split between the nativists and those who want the votes of a demographic that based on income, educational attainment, and religiosity should be Republican. “W” sided with the integrationists. Trump is with the nativists.
It is the parallel to the moderates vs. socialists divide in the Democratic Party.
The question is whether Trump has branded the Republican Party forever in the eyes of Hispanic voters who would otherwise agree with them. If that is the case, the next Republican presidential candidate will be an integrationist and will likely fail.
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Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.
If Trump loses, the party will be split between the nativists and those who want the votes of a demographic that based on income, educational attainment, and religiosity should be Republican. “W” sided with the integrationists. Trump is with the nativists.
It is the parallel to the moderates vs. socialists divide in the Democratic Party.
The question is whether Trump has branded the Republican Party forever in the eyes of Hispanic voters who would otherwise agree with them. If that is the case, the next Republican presidential candidate will be an integrationist and will likely fail.
I think it more likely that the red team is out of power for awhile. And we'll get to experience a blue team kakistocracy in the mean time.
We can always hope that one or both of the factions of the duopoly will fall off the map like the Whigs did. It's unlikely: both factions have spent the last 160 years refining new and better ways to preserve and extend their power.
Not much difference as investments go. There might be a drop if the blue team tries to claw back the 2017 corporate tax cuts, but I don't think it likely.
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How's everyone feeling now? I've stayed strong through COVID but am shaking in my boots a little as November approaches. RBG's death seems to have gotten everyone EVEN MORE riled up, as if that were even possible at this point.
I will have to have some sort of mantra through the election, which sounds like it might literally take weeks or even more than a month to shake out. Hang on there little green buds... just sit tight until the sun comes back out...!
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How's everyone feeling now? I've stayed strong through COVID but am shaking in my boots a little as November approaches. RBG's death seems to have gotten everyone EVEN MORE riled up, as if that were even possible at this point.
I will have to have some sort of mantra through the election, which sounds like it might literally take weeks or even more than a month to shake out. Hang on there little green buds... just sit tight until the sun comes back out...!
If you're in it for the long run, you've got nothing to "shake in your boots" about...
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How's everyone feeling now?
Just fine. Memories seem to be short around here so I'll remind you what an absolute shock to the system the Trump victory was in 2016. Much FUD was pushed online/TV. The markets did fine. Neither a Biden nor a Trump victory represent a threat to the markets nor does a longer than usual period before the election is decided. Relax. It will be okay. Given your state of mind I'd suggest a low information diet.
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How's everyone feeling now? I've stayed strong through COVID but am shaking in my boots a little as November approaches. RBG's death seems to have gotten everyone EVEN MORE riled up, as if that were even possible at this point.
I will have to have some sort of mantra through the election, which sounds like it might literally take weeks or even more than a month to shake out. Hang on there little green buds... just sit tight until the sun comes back out...!
I don’t get the angst over the election that we’re seeing. We’ve known the results for months now: the next president while be a white, male, elderly corporatist. So what’s the big deal?
As for the markets, if we’re really lucky all the Cassandras giving themselves a case of the vapors will result in a sale. I love sales! In 30 years though it won’t matter and we won’t even remember.
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I'm curious why you think the Fed would create less money in a Biden administration?
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
I came to the conclusion that the US market was overpriced relative to its upside potential. And I used to rail on about it. Then I came to the obvious (but not brilliant) conclusion that there was no need to invest in the US at all if I didn’t want to. The transaction costs for international equities are low, and what does it matter to me whether investment returns come from the US or elsewhere? Fast forward to today, and I have very low exposure to US equities. I kind of hope that US equities do take a fall so I can diversify into them, but it’s not a huge deal to me either way.
A lot of folks here spend their energy and stomach lining worrying and strategizing over things they can’t affect the outcome of. Like the election results, or nation level demographic trajectories. I think it better to focus on the things I can affect, like portfolio diversification or improving the lives of those of those near and dear to me.
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
I'm of the opinion that the "American Middle Class" is a bit of a historical anomaly that was created from the ashes of a very unique set of circumstances. Water always finds it's level, and as those historically unique circumstances regress to the mean the Middle Class is eroded. Therefore, I believe that income in-equality is going to get worse because that's the way it pretty much always has been outside of the post WWII rebuilding process in a handful of Allied countries.
It's for that reason, that I'm investing more than ever. If I want my heirs to have a decent shot at what we consider a "middle class" life, I've got to grow my wealth as much as possible before costs of housing/healthcare/etc climb any higher. Me fearing what might happen to the markets is something that my future grandkids can't afford. If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
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If Biden wins, in the short term there will be a buying opportunity because the Wall Street bros will panic. Then, it will turn into another long-term earning opportunity like the entire Obama administration and there will be less market volatility than there has been during the Trump regime.
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I'm of the opinion that the "American Middle Class" is a bit of a historical anomaly that was created from the ashes of a very unique set of circumstances. Water always finds it's level, and as those historically unique circumstances regress to the mean the Middle Class is eroded. Therefore, I believe that income in-equality is going to get worse because that's the way it pretty much always has been outside of the post WWII rebuilding process in a handful of Allied countries.
It's for that reason, that I'm investing more than ever. If I want my heirs to have a decent shot at what we consider a "middle class" life, I've got to grow my wealth as much as possible before costs of housing/healthcare/etc climb any higher. Me fearing what might happen to the markets is something that my future grandkids can't afford. If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
Well said.
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If Biden wins, in the short term there will be a buying opportunity because the Wall Street bros will panic.
Will they? CNN: Wall Street is shunning Trump. Campaign donations to Biden are five times larger (https://www.cnn.com/2020/09/25/business/trump-biden-wall-street-campaign-donations/index.html)
EDITed to add - Wall Street likes stability. Poor pandemic response, trade wars, failing to secure economic stimulus, and threats of not stepping down are bad for business.
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A wise comment (not mine) that has stuck with me on this type of question:
"What's interesting is that before an election, 100% of the public is uncertain or upset. After an election roughly 50% will be upset or uncertain. Better to buy before the election, in my opinion. "
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This is a long read, but very worth it to understand the seemingly nonsensical market reactions to recent news.
https://osam.com/Commentary/upside-down-markets (https://osam.com/Commentary/upside-down-markets)
TL;DR: government stimulus/budget deficits necessarily puts money into the hands of investors and props up asset prices, at the expense of yield. However, it is also likely to increase volatility because with yields so low no one can afford to "lose" a couple decades of bond coupons in one correction.
My take: Stocks have probably already priced in some probability of a 2nd stimulus bill. Thus, stocks will go up if the probability of a 2nd big stimulus bill goes up, and down if the probability goes down. If either party controls both Congress and the White House, we will see stocks go up. On the other hand, gridlock will be bad this time. For example, if Biden wins but Republicans hold the Senate, I would not expect them to help "his" economy. QE will still occur, but the era of big wealth transfers would be over.
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
The rest of the world has always been flabbergasted at our decisions, why should it be different now?
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snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
What is a "K shaped" recovery?
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snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
What is a "K shaped" recovery?
Google says it's a recovery where the rich get richer and the poor get poorer.
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snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
What is a "K shaped" recovery?
Google says it's a recovery where the rich get richer and the poor get poorer.
I think more people should have been saving and investing during the 12 years of steady economic growth between the Great Recession and the COVID-19 Crisis, but I guess Madison Ave. ad execs are really good at selling F-150 trucks and Disney vacations. If more people had saved and invested, they'd be in a better position to handle this crisis.
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snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
What is a "K shaped" recovery?
Google says it's a recovery where the rich get richer and the poor get poorer.
I think more people should have been saving and investing during the 12 years of steady economic growth between the Great Recession and the COVID-19 Crisis, but I guess Madison Ave. ad execs are really good at selling F-150 trucks and Disney vacations. If more people had saved and invested, they'd be in a better position to handle this crisis.
For most Mustachian types, with white collar back grounds and the ability to work from home, the Covid shut downs and economic fallout are little more than an annoyance that's pretty much over with (S&P500 is up over 3% YTD). For tons of other people, it's an ongoing concern. I don't want to excuse financial irresponsibility but a whole lot of the people that are suffering now simply don't make enough to really save/invest outside of perhaps a 401k if they're lucky. Or they're small business owners that were heavily invested in their business rather than financial markets. Think of the jobs/industries that are still shut down or greatly reduced and it's service jobs like retail, bars/restaurants, concert/party/wedding venues, hotels, etc. The people that work in these places typically make low wages, probably aren't offered any kind of employer sponsored retirement plan, and are lucky if they have health insurance through their employer.
Service jobs have actually suffered more in higher income areas, because the customer flow into many of these businesses stopped completely in recent months as nearly all of the customers were able to work from home:
https://www.bloomberg.com/news/features/2020-09-24/harvard-economist-raj-chetty-creates-god-s-eye-view-of-pandemic-damage
We won't hear sob stories about over-leveraged "middle class" people losing their stuff for a few more months as they probably had a bit more cushion, and higher likelihood of remaining employed through the shutdowns.
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snip
If the COVID, "K shaped" recovery has taught us anything, it's that the markets are only concerned with those wealthy enough to participate in the markets.
What is a "K shaped" recovery?
Google says it's a recovery where the rich get richer and the poor get poorer.
I think more people should have been saving and investing during the 12 years of steady economic growth between the Great Recession and the COVID-19 Crisis, but I guess Madison Ave. ad execs are really good at selling F-150 trucks and Disney vacations. If more people had saved and invested, they'd be in a better position to handle this crisis.
Indeed we may look back on the remarkable bull market from 2009-2020 as a gold age for wealth creation.
It's particularly brutal for people who--by chance--could not position themselves well to take advantage of it. I graduated in 2008 and got a job quickly. People who graduated during the next two years faced a much stiffer job market, which would have cost them the chance to quickly build their nuts during those early years.
Many people benefitted when the ACA came fully online in 2015. If their health emergency came after that--not before--their ability to generate wealth was juiced yet again.
And these advantages accumulate.
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
I'm right with maisymouser. Without a correction even larger than March Covid I don't plan on buying any stocks anytime soon. I'm thinking that the election could give us that much needed correction. I'm new to the forum (think I had an account in the past) but my thought is that since consumption is ~70% of the economy and that is being propped up with stimulus checks, 0% interest, and QE what happens when one or more of those stop or their effect starts to drop. It seems like the majority of opinions split based on time horizons. Since I'm close to FI and don't want to extend working much longer I'm very conservative. 50% bond 20% cash, 30% company stock account. If I was just starting out I would go mostly VTSAX, or if I had more than enough saved I would be the traditional 50/50, but since markets look way overpriced I've backed way off equities. Would love more opinions?
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
I'm right with maisymouser. Without a correction even larger than March Covid I don't plan on buying any stocks anytime soon. I'm thinking that the election could give us that much needed correction. I'm new to the forum (think I had an account in the past) but my thought is that since consumption is ~70% of the economy and that is being propped up with stimulus checks, 0% interest, and QE what happens when one or more of those stop or their effect starts to drop. It seems like the majority of opinions split based on time horizons. Since I'm close to FI and don't want to extend working much longer I'm very conservative. 50% bond 20% cash, 30% company stock account. If I was just starting out I would go mostly VTSAX, or if I had more than enough saved I would be the traditional 50/50, but since markets look way overpriced I've backed way off equities. Would love more opinions?
Indeed, the speed of the US’s decline is rivaling the USSR during the 1980’s. Relatively few people, especially young people, have confidence in their form of government. Imagine going from superpower to a broken up and impoverished oligarchy within about 5 years as the Russians did. Don’t say it is impossible. The 2020 election is going to be contested and there will be acts of violence and terrorism. Whether an intact democracy with freedoms and a high standard of living emerges from the chaos is anyone’s guess, but I’m thinking consumerism will continue, even as our governance comes to resemble Russia’s. It’s the only remaining widely-shared ideology amongst Americans.
If there is a correction around election uncertainty and riots, I might drop a few tens of thousands on long call options. The market will go back up because we are all convinced that consumer spending is the path to happiness, even if we can no longer cooperate on basic things like masks to save our own lives. Facebook is in control.
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Most of the people fighting against the current administration don't want a soviet style government, they want the American style government we were all taught in k-12 schooling that we had.
They want the big money out of elections.
They want more regulation of corporate activities so people go to jail when they poison us for profit.
They want people who work for a living to actually receive a decent living.
There are some that have lost faith in the capitalistic system because they don't have any hope those reforms will happen. If we make it happen anti-capitalism will largely disappear.
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Most of the people fighting against the current administration don't want a soviet style government, they want the American style government we were all taught in k-12 schooling that we had.
They want the big money out of elections.
They want more regulation of corporate activities so people go to jail when they poison us for profit.
They want people who work for a living to actually receive a decent living.
There are some that have lost faith in the capitalistic system because they don't have any hope those reforms will happen. If we make it happen anti-capitalism will largely disappear.
+1
We're a very very long way from Soviet style collapse; either in speed or magnitude.
The USA still innovates better than any other country. The Nobel Prize in Chemistry this year went to an American researcher who's discovery in 2012 will change the world as we know it.
If the discovery seems recent for a Nobel Prize award, you would be correct. Which is a signal as to how groundbreaking it was. Americans, and those who participate in the US stock market, will all benefit from that discovery. Which ties into (my interpretation of) SwordGuy's next to last point; we need more Americans to earn more per hour so that they can participate in the stock market.
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I guess, if I had to put a finger on why I'm actually concerned, it comes down to a feeling that the US is in decline in general and I don't think "American exceptionalism" is going to dig us out of the holes we've made anytime soon. I don't think we are *that* innovative, we obviously don't care what happens to the majority of our population as a whole, and I could see us continuing the trends of income inequality, etc for multiple decades to come. I've never felt like the long-term situation has ever felt quite so dismal. Like I said, COVID didn't seem like something that would have a noticeable impact to the market or to my long-term-future self, but the way everything else has been going lately gives me great pause. It's hard to feel confident that my US stocks are going to increase in value when the rest of the world is flabbergasted at our decisions and doesn't have confidence in us as of late.
I'm probably being completely illogical about it but damn, it's hard to see a brighter future right now for my friends, my family, and my neighbors. And yeah I guess I am projecting that onto my portfolio.
I'm right with maisymouser. Without a correction even larger than March Covid I don't plan on buying any stocks anytime soon. I'm thinking that the election could give us that much needed correction. I'm new to the forum (think I had an account in the past) but my thought is that since consumption is ~70% of the economy and that is being propped up with stimulus checks, 0% interest, and QE what happens when one or more of those stop or their effect starts to drop. It seems like the majority of opinions split based on time horizons. Since I'm close to FI and don't want to extend working much longer I'm very conservative. 50% bond 20% cash, 30% company stock account. If I was just starting out I would go mostly VTSAX, or if I had more than enough saved I would be the traditional 50/50, but since markets look way overpriced I've backed way off equities. Would love more opinions?
To be clear, I have not and do not plan to stop buying index funds with surplus cash. I'm still trusting my albeit aggressive and maybe too-bold strategy of 100% stocks, but it hasn't been easy as November approaches. I can sit with the idea of a recession, but not knowing what's on the other side is what makes me stressed. So it goes.
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We know that, in the 2000 contested election, the S&P went down ~8% and the Nasdaq went down ~25% during November.
Of course, that was also the year of the dotcom bomb and QQQ was already tumbling because of the "quantity over profit" balance sheet belief (Uber anyone?).
So, expect a sky-is-falling decline while the election is contested and then the market will return to where it was before, which is the lukewarm covid miasma.
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USSR had a huge problem with productivity - things took forever. I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."
I don't really see the comparisons to 1980s USSR. Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt? And instead the whole USSR went bankrupt?
The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc. And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner. That too, differs from the USSR approach.
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We know that, in the 2000 contested election, the S&P went down ~8% and the Nasdaq went down ~25% during November.
Of course, that was also the year of the dotcom bomb and QQQ was already tumbling because of the "quantity over profit" balance sheet belief (Uber anyone?).
So, expect a sky-is-falling decline while the election is contested and then the market will return to where it was before, which is the lukewarm covid miasma.
I'm mostly concerned with the quick recoveries. The market tanking makes total sense to me as valuations are sky high, interest rates 0, earnings level or dropping for the last few years, gold and real estate very high. The quick recovery just sets markets up to crash again possibly worse than last time. Basically no investments that seem reasonable to buy right now, actually looking into getting a cheap house or land so that at least my COL could drop to near nothing if neaded.
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USSR had a huge problem with productivity - things took forever. I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."
I don't really see the comparisons to 1980s USSR. Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt? And instead the whole USSR went bankrupt?
The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc. And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner. That too, differs from the USSR approach.
The US just lost Trillions losing a 20 year war in Afghanistan, just like the Soviets.
The US just lost more trillions in Iraq.
The US just this year bailed out its airlines, banks, and other industries. Are they partially state-owned-enterprises now? Do we expect them to increase productivity?
Would a process of decline be impossible beyond a certain scale?
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The entity that is closest to a Sovereign bank made loans that are convertible to grants to many of these companies. GM-style Public ownership of these companies is not on the table.
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The entity that is closest to a Sovereign bank made loans that are convertible to grants to many of these companies. GM-style Public ownership of these companies is not on the table.
So all the negatives of communism (losing shit-tons of money) without the benefits (actually getting to say how the company is run)? Capitalism at it's finest.
:P
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USSR had a huge problem with productivity - things took forever. I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."
I don't really see the comparisons to 1980s USSR. Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt? And instead the whole USSR went bankrupt?
The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc. And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner. That too, differs from the USSR approach.
The US just lost Trillions losing a 20 year war in Afghanistan, just like the Soviets.
The US just lost more trillions in Iraq.
The US just this year bailed out its airlines, banks, and other industries. Are they partially state-owned-enterprises now? Do we expect them to increase productivity?
Would a process of decline be impossible beyond a certain scale?
Search for "ussr expense afghanistan" and the estimate is $118 USD in 2019 dollars, which is 20x off the number you claimed. You can further divide that expense by the USSR's GDP over the years of that war, and see the war was 1% of USSR GDP. How does that add up to collapse?
https://en.wikipedia.org/wiki/Soviet%E2%80%93Afghan_War
You consider the $25 billion airline relief package (a combination of loans and payments) to be significant enough to cause the decline of the U.S.?
During Covid, no country's airlines are showing increased productivity. Very few people are flying, and many countries restrict travelers. Why would airline productivity during Covid-19 be a measure of any country's decline?
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USSR had a huge problem with productivity - things took forever. I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."
I don't really see the comparisons to 1980s USSR. Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt? And instead the whole USSR went bankrupt?
The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc. And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner. That too, differs from the USSR approach.
The US just lost Trillions losing a 20 year war in Afghanistan, just like the Soviets.
The US just lost more trillions in Iraq.
The US just this year bailed out its airlines, banks, and other industries. Are they partially state-owned-enterprises now? Do we expect them to increase productivity?
Would a process of decline be impossible beyond a certain scale?
Search for "ussr expense afghanistan" and the estimate is $118 USD in 2019 dollars, which is 20x off the number you claimed. You can further divide that expense by the USSR's GDP over the years of that war, and see the war was 1% of USSR GDP. How does that add up to collapse?
https://en.wikipedia.org/wiki/Soviet%E2%80%93Afghan_War
You consider the $25 billion airline relief package (a combination of loans and payments) to be significant enough to cause the decline of the U.S.?
During Covid, no country's airlines are showing increased productivity. Very few people are flying, and many countries restrict travelers. Why would airline productivity during Covid-19 be a measure of any country's decline?
My point is that over the last 20y the US has spent itself into a historically high debt situation in terms of debt/GDP and has received little to nothing of value in return (I.e. no infrastructure, no generation of GI Bill high achievers, no R&D that creates whole new industries).
Airlines and banks are only some of the industries where the government owns a significant slice of their capital structure. It is fair to say many of them would be out of business right now had the government allowed capitalism to take its course. This is closer to a semi-planned economy than many would like to admit. Government subsidies for industries are generally anti-competitive and productivity-reducing, as we see with China’s SOEs.
The USSR’s inability to defeat the impoverished and illiterate Taliban on open terrain was a clear signal of its military decline and is considered by historians to be a precursor to the fall of the USSR. This loss encouraged independence movements from East Germany to Ukraine. Similarly, the US’s experience of the exact same loss with much more resources thrown into the country is a signal that the US military is corrupt and unable to defeat any modesty competitive adversary. Consequences of this change include increasing odds that smaller countries will abandon or reduce their alliances with the US, as we saw in the Philippines. Eventually they stop banking in New York and the economic sphere of the dollar shrinks. This is how empires end.
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I tend to worry that government spending was around 1/3 of GDP before Covid, now who knows what it will become. How can an economy be spending that high of a proportion on government given it has very low ROI. I realize that the taxes get collected and the money spent gets circulated throughout the economy, but what happens as velocity drops off or tax revenue continues to drop. No way any of that is sustainable. Ironically I think a large war could allow a giant reset as long as USA finds a way to delete the debt.
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I actually see this as exactly the reverse: having day-to-day business decisions made by the government is the BAD part of communism. "Losing money" is tolerable when you have a sovereign currency, particularly when those expenses can made less burdensome by restoring long-term economic growth through private sector dynamism.
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USSR had a huge problem with productivity - things took forever. I recall a joke that a guy (in the USSR) buys a dishwasher:
Customer: "When will it be delivered?"
Salesman: "In ten years"
Customer: "Morning or afternoon?"
Salesman: "It's in 10 years, why does it matter?"
Customer: "Because I'm having a refrigerator delivered that afternoon."
I don't really see the comparisons to 1980s USSR. Didn't the USSR pour all of it's resources into preventing one soviet country from going bankrupt? And instead the whole USSR went bankrupt?
The U.S. is far richer than the 1980s USSR by any measure - global market cap, size of economy, productivity, etc. And when a car rental business is failing in the U.S., like Hertz, it's allowed to go bankrupt and collapse in an orderly manner. That too, differs from the USSR approach.
The US just lost Trillions losing a 20 year war in Afghanistan, just like the Soviets.
The US just lost more trillions in Iraq.
The US just this year bailed out its airlines, banks, and other industries. Are they partially state-owned-enterprises now? Do we expect them to increase productivity?
Would a process of decline be impossible beyond a certain scale?
Search for "ussr expense afghanistan" and the estimate is $118 USD in 2019 dollars, which is 20x off the number you claimed. You can further divide that expense by the USSR's GDP over the years of that war, and see the war was 1% of USSR GDP. How does that add up to collapse?
https://en.wikipedia.org/wiki/Soviet%E2%80%93Afghan_War
You consider the $25 billion airline relief package (a combination of loans and payments) to be significant enough to cause the decline of the U.S.?
During Covid, no country's airlines are showing increased productivity. Very few people are flying, and many countries restrict travelers. Why would airline productivity during Covid-19 be a measure of any country's decline?
My point is that over the last 20y the US has spent itself into a historically high debt situation in terms of debt/GDP and has received little to nothing of value in return (I.e. no infrastructure, no generation of GI Bill high achievers, no R&D that creates whole new industries1).
Airlines and banks are only some of the industries where the government owns a significant slice of their capital structure. It is fair to say many of them would be out of business right now had the government allowed capitalism to take its course. This is closer to a semi-planned economy than many would like to admit.2 Government subsidies for industries are generally anti-competitive and productivity-reducing, as we see with China’s SOEs.
The USSR’s inability to defeat the impoverished and illiterate Taliban on open terrain3 was a clear signal of its military decline and is considered by historians to be a precursor to the fall of the USSR. This loss encouraged independence movements from East Germany to Ukraine. Similarly, the US’s experience of the exact same loss with much more resources thrown into the country is a signal that the US military is corrupt and unable to defeat any modesty competitive adversary3. Consequences of this change include increasing odds that smaller countries will abandon or reduce their alliances with the US, as we saw in the Philippines. Eventually they stop banking in New York and the economic sphere of the dollar shrinks. This is how empires end.
1) Yes, agreed that the excessive debt is bad, as were the subsidies to renewables and electric cars. It does seem like the electric vehicles could be a new industry.
2) Also agree, this is far from a free market, and does need work to get a bit freeer.
3) I'm not sure you definition of open terrain, but I don't think most would consider Afghanistan it. While there is very little vegetation, most of the country is a series of mountain ranges, rocky outcroppings, caves, and cliffs. The lack of any infrastructure or actual army made standard warfare difficult. Similar factors to Vietnam and even the Revolutionary war. Never get involved in a land war in Asia.
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Afghanistan: Netflix has a show on "The Outpost", which I found so interesting, I bought the book it was based on. US soldiers there used many words to describe the terrain of Afghanistan, 'open' was not one of them.
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https://www.cia.gov/library/publications/the-world-factbook/geos/af.html
"mostly rugged mountains; plains in north and southwest"
Wouldn't using incorrect data lead to incorrect theories? You seem to be doubling down on the theory, even as your data falls apart.
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Markets are machines for collectively predicting the future. At this point the market has largely baked in a Biden win. I suspect that this is why the markets have done so well even with the economy in shambles. But that make no sense, you may say, surely Trump was good for business. Not really, the tariffs have drawn bloody everywhere, from lobster fishermen in Maine to Silicon Valley. Most businesses, hedge funds aside, thrive on predictable actions by the government. With Biden in office they aren’t going to have any big surprises. It will be boring and they will thrive under that.
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IB is expecting high volatility post-election. They're tightening up their margin requirements.
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Is it settled that Biden will reverse the Trump tariffs?
Did the market's progression upwards during 2016-2019 slow when Trump implemented the tariffs?
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talltexan - Tariffs in 2016? Are you sure about that start date?
Before tariffs, there was a tax cut. A number of high profile companies used the tax savings in share buybacks.
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I should have been more exact in what I was trying to describe.
Market rose with remarkable consistency during CY 2017, and indeed we ended the year with TCJA. Trade war seemed to be most intense beginning summer 2018 through late 2019.
If you simply showed me the graph of the SP500 during that period, I don't know that it would be obvious from those stock prices when the law was signed, or when Trump started hiking tariffs.
Both ought to have been anticipated, because (1) GOP governments cut taxes, and (2) Trump campaigned pretty consistently on tariffs and lowering immigration.
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What are your thoughts? Could we see a big crash following the election? Anyone planning on selling just prior to the election?
I am not a stock-market seer.
A stock-market crash is possible immediately following an election.
My opinion is that for days there will be unprecedented uncertainty about who won.
Since investors dislike uncertainty I think there is a heightened possibility of significant stock-market volatility.
FWIW G.B., I expect Biden to win.
If he does some investors may sell because they fear higher taxes on their investments in stocks.
OTOH, some investors will have a sense of relief and return to normalcy which could spur them to buy stocks.
Under no circumstances would I sell stocks just prior to an election.
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*. however, money and politics cannot be separated so easily. Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there. That said, I post in both locations.
As a free-speech absolutist I always favor speech and oppose enforced silence.
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*. however, money and politics cannot be separated so easily. Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there. That said, I post in both locations.
As a free-speech absolutist I always favor speech and oppose enforced silence.
As a free-speech absolutist, a large group of white men screaming "We're going to lynch you n-words as soon as you leave your house!" outside of the home of a black family is perfectly OK in your view?
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*. however, money and politics cannot be separated so easily. Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there. That said, I post in both locations.
As a free-speech absolutist I always favor speech and oppose enforced silence.
As a free-speech absolutist, a large group of white men screaming "We're going to lynch you n-words as soon as you leave your house!" outside of the home of a black family is perfectly OK in your view?
This conversation does not seem relevant to this thread.
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One of the strengths of Bogleheads over MMM is that threads like this get shutdown. Besides, who the hell knows?!
One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*. however, money and politics cannot be separated so easily. Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there. That said, I post in both locations.
As a free-speech absolutist I always favor speech and oppose enforced silence.
As a free-speech absolutist, a large group of white men screaming "We're going to lynch you n-words as soon as you leave your house!" outside of the home of a black family is perfectly OK in your view?
...well that escalated quickly...
No, I doubt that is what they meant. Context is forums, not neighborhoods.
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My point was simply that being an absolutist invariably results in support of evil. The real world rarely allows for an absolute viewpoint on topics . . . so it's a weird thing to be proud of.
I suspect what Galt meant is that he believes in free speech within limits that are acceptable to him based on his concept of safety/decency.
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My point was simply that being an absolutist invariably results in support of evil. The real world rarely allows for an absolute viewpoint on topics . . . so it's a weird thing to be proud of.
I suspect what Galt meant is that he believes in free speech within limits that are acceptable to him based on his concept of safety/decency.
This reminds me of Intro to Philosophy class where we went through utilitarianism, Kantianism, natural law theory, social contract theory, etc. and learned how each principled system on its own leads to some pretty horrible outcomes.
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Pulling this thread out from the back of the closet. My assessment, retroactively:
Was it reasonable to be worried? Yes. Was there potential for a coup? Yes. Was I personally concerned? Absolutely.
Did I change the frequency or quantity of my regularly scheduled index fund contributions in response to my fears or news items? No.
This was yet another experience where staying the course and being steadfast in that resolve ended up being the most profitable option. Hooray to JC Collins, his teachings for money simpletons like me have yet again proved valuable.
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I'd argue that it's not over until this trainwreck is removed from the Oval Office and is relegated to rage tweeting about conspiracy theories from Florida.
Today is certainly an important day, EC votes are being submitted, and in any other normal election, today wouldn't matter much, but this is a very abnormal election all because of one abnormal person.
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It’s clear to me that
a) We dodged a bullet - a second Trump term would have represented the end of multi-party democracy in the US - but we just barely dodged the bullet, so it is likely a Mike Pence or Tom Cotton will win in ‘24 and this whole process will repeat,
b) Had the election been a smaller loss for Trump, there would have been absolute chaos. The Supreme Court would have likely intervened in Trump’s favor.
c) The stock market is priced for the world 9-12 months from now, when consumers are expected to unleash their wallets upon all the things the pandemic deprived them.
d) The US pandemic death toll may “only” hit 750k by the end of 2021, which is a downward revision for me.
e) The US will soon experience an insurgency stemming from the many right wing groups and cults growing on the internet.
f) China’s date of economic supremacy over the US has been accelerated a couple of years.
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Most of the covid deaths in the US are elderly people. From a purely analytical point of view I wonder if that will be a net long term positive on economic growth. Elderly people don't add much to the economy.
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I'd argue that it's not over until this trainwreck is removed from the Oval Office and is relegated to rage tweeting about conspiracy theories from Florida.
Today is certainly an important day, EC votes are being submitted, and in any other normal election, today wouldn't matter much, but this is a very abnormal election all because of one abnormal person.
I wonder when the last time "the Electoral College has voted" even made it into a newspaper, let alone the front page.
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Most of the covid deaths in the US are elderly people. From a purely analytical point of view I wonder if that will be a net long term positive on economic growth. Elderly people don't add much to the economy.
If you're performing a VSL-type analysis, then we are losing fewer years when elderly people die (and--perhaps--zero working years). I'll accept that.
But we're also spending a ton of productive health care resources in mitigating this virus and providing care to people old and young. Young people with severe cases are suffering, losing weeks or months here and there and some of them are dying as well. This removes their labor.
Meanwhile, HH are dipping into savings to get through this period, particularly if they've lost employment. That dissaving will decrease investment which will reverberate in future periods where those investments would have yielded a return. At extreme ends of the scale, lost rent and evictions will produce dislocation costs and compromise the rate of return of valuable assets. The economy will likely be at a lower output rate permanently than if we could have followed a South-Korea type trajectory through this crisis.
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Meanwhile, HH are dipping into savings to get through this period, particularly if they've lost employment. That dissaving will decrease investment which will reverberate in future periods where those investments would have yielded a return. At extreme ends of the scale, lost rent and evictions will produce dislocation costs and compromise the rate of return of valuable assets. The economy will likely be at a lower output rate permanently than if we could have followed a South-Korea type trajectory through this crisis.
Along those lines: every dollar of capital raised for economic stimulus through government debt is a dollar that wasn't put into private productive use somehow.
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I will challenge this: check out the St. Louis FRB series on private investment (setting aside housing) at https://fred.stlouisfed.org/series/PNFI (https://fred.stlouisfed.org/series/PNFI)
Investment was already dropping in late 2019 when people had little preview of the massive government actions that would come in the spring. The private sector was having trouble finding productive investments for some other reason than the massive public deficits that we were running from March 2020 through the present.