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Beginning to See the Effects?

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  • Beginning to See the Effects?

    So I've been watching the economy and the market. The results are mixed at best. Although we saw a marvelous run-up in 2017 (which was a continuation of the run-up in 2015-2016) the last two months has seen a market in turmoil. Fortunately, I shifted at the end of January and have not been significantly impacted. We saw a spike in GDP in in 2017, it has not sustained itself and doesn't show any dramatic differences from the 2012-2016 numbers. And we've seen a few good months of job growth, but 2017 and 2018 (so far) numbers are still (on average) behind 2015 and 2016 numbers. We've seen slight, but not significant, changes in the industrial or coal sectors. We've seen major attrition on the tourism sector. Unemployment has dropped slightly, but not as much as it did 2010 through 2016, not even as a monthly rate. Meanwhile we have reduced government income and are on the cusp of increasing it's spending, making the deficit problem even worse.

    So where is all of this economic prosperity and fiscal responsibility?
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

    I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

  • #2
    Originally posted by carpedm9587 View Post
    So I've been watching the economy and the market. The results are mixed at best. Although we saw a marvelous run-up in 2017 (which was a continuation of the run-up in 2015-2016) the last two months has seen a market in turmoil. Fortunately, I shifted at the end of January and have not been significantly impacted. We saw a spike in GDP in in 2017, it has not sustained itself and doesn't show any dramatic differences from the 2012-2016 numbers. And we've seen a few good months of job growth, but 2017 and 2018 (so far) numbers are still (on average) behind 2015 and 2016 numbers. We've seen slight, but not significant, changes in the industrial or coal sectors. We've seen major attrition on the tourism sector. Unemployment has dropped slightly, but not as much as it did 2010 through 2016, not even as a monthly rate. Meanwhile we have reduced government income and are on the cusp of increasing it's spending, making the deficit problem even worse.

    So where is all of this economic prosperity and fiscal responsibility?
    well as far as the market goes, volatility like we see right now is pretty good for people who make money trading stocks, like daytraders. They pretty much know it will bounce up and down and it has been pretty steady. So buy low and sell high and keep doing it over and over and make a ton of money. For us average Joes we would probably lose our shirts just on the trading fees. I don't own enough of any particular stock to sell it and buy it back and make any money after paying the Etrade transaction fees. :-(

    But the good news is that it is almost back up to where it was before all this started.

    Comment


    • #3
      Originally posted by carpedm9587 View Post
      So where is all of this economic prosperity and fiscal responsibility?
      No doubt hacked by the Russians, amirite?
      I DENOUNCE DONALD J. TRUMP AND ALL HIS IMMORAL ACTS.

      Comment


      • #4
        Originally posted by carpedm9587 View Post
        So I've been watching the economy and the market. The results are mixed at best. Although we saw a marvelous run-up in 2017 (which was a continuation of the run-up in 2015-2016) the last two months has seen a market in turmoil. Fortunately, I shifted at the end of January and have not been significantly impacted. We saw a spike in GDP in in 2017, it has not sustained itself and doesn't show any dramatic differences from the 2012-2016 numbers. And we've seen a few good months of job growth, but 2017 and 2018 (so far) numbers are still (on average) behind 2015 and 2016 numbers. We've seen slight, but not significant, changes in the industrial or coal sectors. We've seen major attrition on the tourism sector. Unemployment has dropped slightly, but not as much as it did 2010 through 2016, not even as a monthly rate. Meanwhile we have reduced government income and are on the cusp of increasing it's spending, making the deficit problem even worse.

        So where is all of this economic prosperity and fiscal responsibility?
        I've been predicting a correction in the market for the past few years (hardly alone there) and never pointed to the stock market as an indicator of the economic upturn. Instead I've pointed to a sharp rise in the GDP[1], record employment rates among blacks and Hispanics (funny how the MSM/Democrats aren't celebrating that), strong and rising levels of consumer confidence...



        1. which I should note has dropped but still well above Obama Era typical numbers.

        I'm always still in trouble again

        "You're by far the worst poster on TWeb" and "TWeb's biggest liar" --starlight (the guy who says Stalin was a right-winger)
        "Overall I would rate the withdrawal from Afghanistan as by far the best thing Biden's done" --Starlight
        "Of course, human life begins at fertilization that’s not the argument." --Tassman

        Comment


        • #5
          Originally posted by Sparko View Post
          well as far as the market goes, volatility like we see right now is pretty good for people who make money trading stocks, like daytraders. They pretty much know it will bounce up and down and it has been pretty steady. So buy low and sell high and keep doing it over and over and make a ton of money. For us average Joes we would probably lose our shirts just on the trading fees. I don't own enough of any particular stock to sell it and buy it back and make any money after paying the Etrade transaction fees. :-(

          But the good news is that it is almost back up to where it was before all this started.
          Are we looking at the same market? The W5000 dropped 688 points today, and is 2,300 points off its 29,760 high. It has essentially shed all of its 2018 gains and some of the end of 2017 as well. The same (about 10%) is true of most of the other major indices. We enjoyed 3.1 and 3.2 GDP for two quarters of 2017. The others were 2.5 and 1.8. Those are roughly equivalent of the average for 2012-2016. Q1 2018 is projected to come in at somewhere between 2.7 and 2.9, despite the "enormous boost" of the tax cuts. Job growth is on the uptick for the first two months, but not at numbers unlike what we saw before.

          So I have to admit I am somewhat unimpressed...
          The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

          I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

          Comment


          • #6
            Originally posted by Zymologist View Post
            No doubt hacked by the Russians, amirite?
            Somehow...I don't think so...


            ...but I do think our current leadership over-promised and is going to under-deliver. And, if history repeats itself, it will be someone else's fault...
            The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

            I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

            Comment


            • #7
              Originally posted by rogue06 View Post
              I've been predicting a correction in the market for the past few years (hardly alone there) and never pointed to the stock market as an indicator of the economic upturn. Instead I've pointed to a sharp rise in the GDP[1], record employment rates among blacks and Hispanics (funny how the MSM/Democrats aren't celebrating that), strong and rising levels of consumer confidence...

              1. which I should note has dropped but still well above Obama Era typical numbers.
              Umm...you're looking at numbers I'm not looking at, or not reading them the same way. The increase in GDP rate is slightly above the numbers from 2015-2016 (as an average), but not markedly so. The unemployment rates for ALL (including African Americans) was near historic levels when Obama left office. They have reduced slightly under Trump, and crossed into "historic lows," but most of that drop happened before Trump took office and the rate has actually slowed (no big surprise - there's not a lot of room for them to drop further without beginning to create other economic pressures). As for consumer confidence, that has also been on the rise steadily over the last 6 years, since the words of the recession was over, but we were not going to see wage pressure until unemployment dropped to normal or subnormal levels, and that has only been in late 2016 and early 2017.

              But that upwards movement is badly skewed. Numbers from 2017 suggest that the vast majority of americans saw a .2% wage increase, except the top 5% - they saw an increase of 1.5% (over seven times as much) and it is projected to be as bad or worse in 2018.

              Don't get me wrong - I'm not complaining. Mediocre economic news is perfect right now. As the 2018 elections roll around, an unpopular president, a tax hike still hated by half the electorate, and mediocre economic news is exactly what is needed to change the political tide in November and (hopefully) swing us somewhere near back to center. Indeed, I'm beginning to fear we are not going to see the same kind of reversal in 2018/2020 that we saw in 2010/2012. It would be nice if the political pendulum would swing just a little less energetically.
              The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

              I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

              Comment


              • #8
                Originally posted by carpedm9587 View Post
                Are we looking at the same market? The W5000 dropped 688 points today, and is 2,300 points off its 29,760 high. It has essentially shed all of its 2018 gains and some of the end of 2017 as well. The same (about 10%) is true of most of the other major indices. We enjoyed 3.1 and 3.2 GDP for two quarters of 2017. The others were 2.5 and 1.8. Those are roughly equivalent of the average for 2012-2016. Q1 2018 is projected to come in at somewhere between 2.7 and 2.9, despite the "enormous boost" of the tax cuts. Job growth is on the uptick for the first two months, but not at numbers unlike what we saw before.

                So I have to admit I am somewhat unimpressed...
                stock.jpg

                I look mostly at the S&P

                And looking at the chart above, while it is down today, it was pretty high a few days ago, then low before that, then high before that. That is the volatility I am talking about. If someone is good at timing it, they can make money both ways and do it over and over. When the market is just climbing like it was before, the best you can do is just sit on the stocks and let them climb in value. But when it bounces around like it does now, you can keep buying and selling. But you have to have enough stock to cover the cost of the transaction fees, which I don't.

                Comment


                • #9
                  Originally posted by Sparko View Post
                  [ATTACH=CONFIG]27069[/ATTACH]

                  I look mostly at the S&P

                  And looking at the chart above, while it is down today, it was pretty high a few days ago, then low before that, then high before that. That is the volatility I am talking about. If someone is good at timing it, they can make money both ways and do it over and over. When the market is just climbing like it was before, the best you can do is just sit on the stocks and let them climb in value. But when it bounces around like it does now, you can keep buying and selling. But you have to have enough stock to cover the cost of the transaction fees, which I don't.
                  Timing the market is, IMO, essentially a fool's errand. Perhaps a few can do it occasionally. I know of no one that can do it predictably and reliably. And my post was in response to your statement that "the good news is that it is almost back up to where it was before all this started". Even the graph you posted shows that the market is nowhere near where it was "when this all started," assuming that "it" means "the decline" and that it started after the market hit its peak.

                  Don't get me wrong - I agree that the market was overdue for a correction. I also think Trump was unwise to continue to talk about how great the market was doing, as if it had something to do with him. By doing that he ensured that people woould assume corrections are also due to him. After all, you can't have it both ways. I also think the market has little/nothing to do with the president. The market is a measure of "feeling" and "confidence" more than anything else. When people feel that things are heading in the right direction and companies are going to make money, they invest and are willing to pay more and that confidence feeds on itself. When they think their investsments may be at risk, they get skittish and markets retrench or become volatile. The market can shift because a CEO gets sick or dies, a president or party gains/loses power, a disaster strikes, a company exceeds or fails to meet profit expectations, or congress passes (or doesn't pass) a given act. It reacts to adjustments of the fed rate, which we have every reason to expect given the historic lows of these interest rates and their consistent use to "adjust" the economy and prevent hyper inflation or deflation. It is sometimes related to the over health of the economy - and often not.

                  You might want to consider tracking the Wilshire 5,000. Though it no longer actually has 5,000 stocks (apparently, not enough companies due to M&As), it still has over 3,500 in the index, making it a better reflection of the larger market. The S&P 500, as the name implies, only has 500. The DOW is even worse, with only 30 stocks reflected. Statistically, the law of large numbers tells us that stability is optimized at around a sample size of 1000-1500 (depending on the specific application). It's why most polls try for that population size.
                  Last edited by carpedm9587; 03-23-2018, 07:57 AM.
                  The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                  I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                  Comment


                  • #10
                    Originally posted by carpedm9587 View Post
                    Timing the market is, IMO, essentially a fool's errand. Perhaps a few can do it occasionally. I know of no one that can do it predictably and reliably. And my post was in response to your statement that "the good news is that it is almost back up to where it was before all this started". Even the graph you posted shows that the market is nowhere near where it was "when this all started," assuming that "it" means "the decline" and that it started after the market hit its peak.

                    Don't get me wrong - I agree that the market was overdue for a correction. I also think Trump was unwise to continue to talk about how great the market was doing, as if it had something to do with him. By doing that he ensured that people woould assume corrections are also due to him. After all, you can't have it both ways. I also think the market has little/nothing to do with the president. The market is a measure of "feeling" and "confidence" more than anything else. When people feel that things are heading in the right direction and companies are going to make money, they invest and are willing to pay more and that confidence feeds on itself. When they think their investsments may be at risk, they get skittish and markets retrench or become volatile. The market can shift because a CEO gets sick or dies, a president or party gains/loses power, a disaster strikes, a company exceeds or fails to meet profit expectations, or congress passes (or doesn't pass) a given act. It reacts to adjustments of the fed rate, which we have every reason to expect given the historic lows of these interest rates and their consistent use to "adjust" the economy and prevent hyper inflation or deflation. It is sometimes related to the over health of the economy - and often not.

                    You might want to consider tracking the Wilshire 5,000. Though it no longer actually has 5,000 stocks (apparently, not enough companies due to M&As), it still has over 3,500 in the index, making it a better reflection of the larger market. The S&P 500, as the name implies, only has 500. The DOW is even worse, with only 30 stocks reflected. Statistically, the law of large numbers tells us that stability is optimized at around a sample size of 1000-1500 (depending on the specific application). It's why most polls try for that population size.
                    If you look at the last several months you will notice that basically what we had was a correction and the last bit just before the crash was an anomaly and we are pretty much still on track (see blue line)

                    stock1.jpg

                    I don't see a symbol for the Wilshire 5000 but I did find one for the Wilshire 4500. And it is not much different from the S&P (s&P blue, W4500 red)

                    ScreenHunter_.jpg

                    Comment


                    • #11
                      Originally posted by Sparko View Post
                      If you look at the last several months you will notice that basically what we had was a correction and the last bit just before the crash was an anomaly and we are pretty much still on track (see blue line)

                      [ATTACH=CONFIG]27071[/ATTACH]
                      So, two things. Note that we could draw a line like this at almost any point and show that the end-point is essentially where the trend was going. It's a bit of an odd statistical trick. Second, even if I do accept that this is "a continuation of the trend line," that claim eviscerates the claim that the market was "going gangbusters because of Trump." It essentially drops the rate of gain in the market to almost the identical rate of gain we have seen since 2012 by correcting for the hyper-growth of 2017.

                      W5000.jpg

                      Originally posted by Sparko View Post
                      I don't see a symbol for the Wilshire 5000 but I did find one for the Wilshire 4500. And it is not much different from the S&P (s&P blue, W4500 red)

                      [ATTACH=CONFIG]27072[/ATTACH]
                      The symbol I track is W5000. As your graphs show, it tends to be a little less volatile than the DOW or the S&P, which is why I prefer it.
                      Last edited by carpedm9587; 03-23-2018, 09:09 AM.
                      The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                      I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                      Comment


                      • #12
                        Originally posted by carpedm9587 View Post
                        Umm...you're looking at numbers I'm not looking at, or not reading them the same way. The increase in GDP rate is slightly above the numbers from 2015-2016 (as an average), but not markedly so.
                        Blatant cherry picking. Then maybe you aren't aware of this but Obama was president longer than just 2015-16. Obama is the first president in history to not have a single year of 3% growth and AFAICT his annual growth rate of 1.48% is the weakest expansion since at least 1949.

                        And according to US News & World Report (hardly a bastion of pro-Trump sentiment), 2015-16 was hardly a good year for the economy


                        Source: GDP Growth Slows to 1.9 Percent in Obama's Final Days


                        The economy slowed in the final quarter of 2016, growing less than 2 percent

                        THE U.S. ECONOMY GREW at a 1.9 percent clip during the final three months in which former President Barack Obama's was in the White House, according to a report published Friday by the Bureau of Economic Analysis.

                        Gross domestic product growth in October, November and December slowed from the third quarter's 3.5 percent rate of expansion and was notably softer than what analysts anticipated. Forecasts mostly projected fourth-quarter growth would instead clock in solidly north of 2 percent. In all, the U.S. economy grew at a disappointing 1.6 percent clip in 2016.



                        Source

                        © Copyright Original Source



                        Under Trump we have seen 3% growth for his first 3 quarters (something not experienced during Obama's entire 8 years and not seen since 2005). And while the final quarter saw it drop to 2.6%, this is still a great deal better than Obama's final year of 1.6%.

                        I'm always still in trouble again

                        "You're by far the worst poster on TWeb" and "TWeb's biggest liar" --starlight (the guy who says Stalin was a right-winger)
                        "Overall I would rate the withdrawal from Afghanistan as by far the best thing Biden's done" --Starlight
                        "Of course, human life begins at fertilization that’s not the argument." --Tassman

                        Comment


                        • #13
                          Originally posted by rogue06 View Post
                          Blatant cherry picking. Then maybe you aren't aware of this but Obama was president longer than just 2015-16. Obama is the first president in history to not have a single year of 3% growth and AFAICT his annual growth rate of 1.48% is the weakest expansion since at least 1949.

                          And according to US News & World Report (hardly a bastion of pro-Trump sentiment), 2015-16 was hardly a good year for the economy

                          Source: GDP Growth Slows to 1.9 Percent in Obama's Final Days


                          The economy slowed in the final quarter of 2016, growing less than 2 percent

                          THE U.S. ECONOMY GREW at a 1.9 percent clip during the final three months in which former President Barack Obama's was in the White House, according to a report published Friday by the Bureau of Economic Analysis.

                          Gross domestic product growth in October, November and December slowed from the third quarter's 3.5 percent rate of expansion and was notably softer than what analysts anticipated. Forecasts mostly projected fourth-quarter growth would instead clock in solidly north of 2 percent. In all, the U.S. economy grew at a disappointing 1.6 percent clip in 2016.

                          Source

                          © Copyright Original Source



                          Under Trump we have seen 3% growth for his first 3 quarters (something not experienced during Obama's entire 8 years and not seen since 2005). And while the final quarter saw it drop to 2.6%, this is still a great deal better than Obama's final year of 1.6%.
                          Umm.. no.. not cherry picking. I simply pointed to a period far enough after the recession to be somewhat divorced from its effects. People seem to continually forget that Obama and his administration inherited the worst recession since 1929, and oversaw a shift from 10% unemployment to about 4.7% unemployment. They grouse about "stagnant wages" but the reality is that wages don't climb until unemployment recovers. That wage growth began in late 2016 and continued into 2017 and 2018, but the fact is it was an inevitable outcome of unemployment reduction, no matter how many times Trump takes credit for it. As for the GDP growth, you need to go back and check your numbers. Q1 was not anywhere near 3%. If we take that off the table as "only 2/3 Trump," we have had only two quarters above 3% so far, and we saw several instances of that during Obama's term. There is no way to know (yet) if it is sustainable. And many economists are pointing to the tax cut as equivalent of putting nitrous into a car engine - you get a short-term rev, and then things return to normal. So we've seen an injection as foreign dollars have come home, companies are going to see a boost in profit, but wage growth is being concentrated in the top 5%, many companies are giving bonuses, not salary increases (which is a way to rev up the employee base short-term without a long-term commitment), and every indication is that the bulk of the gains are going into dividends, stock by backs, and other strategies that will largely benefit that same 5%. Meanwhile, if the economy does show signs (and it does) of heating up, the fed is going to use the opportunity to increase the fed rate and accelerate the shutdown of the quantitative easing - both of which will very likely dampen the effect.

                          Right now - we have too little data to make a reasonable prediction. Four quarters (and the fourth one is not even over) is not a large enough sample set. It's a bit early to start crowing about how awesome things have become. From what I can see, so far they are on the same basic trajectory they were on before. Furthermore, any slight shift is not going to be enough in November to tamp down the energy of the left, which is not just responding to the economy, but is also responding to Trump's persona, the major damage he has done to the U.S. internationally, the destruction that has been done to ecologically-focused programs, the un-acknolwedged/corrected mysogyny, the overt racism shown by this administration, the lack of concern for the LGBTQ community, and a variety of things that have nothing to do with the economy. Basically, Trump has been playing to his base since he was elected, and he has alienated (probably permanently) those who did not vote for him, and has lost many of the moderates who did vote for him. He only had a 100,000 vote margin to work with to begin with.

                          Unless something significant happens in the next 2 years, in 2020 the American electorate will collectively say "you're fired!" My one fear in all this, and it is exacerbated by the lost of McCallister and the appointment of Bolton, is that Trump knows the effect on the American populace of war, and could easily engage in military action to bolster his numbers. Hopefully, if he does that, the populace will see through it. Hopefully, by then, Democrats will control the house and take steps.

                          We shall see.
                          The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                          I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                          Comment


                          • #14
                            Originally posted by carpedm9587 View Post
                            Right now - we have too little data to make a reasonable prediction. Four quarters (and the fourth one is not even over) is not a large enough sample set. It's a bit early to start crowing about how awesome things have become. From what I can see, so far they are on the same basic trajectory they were on before. Furthermore, any slight shift is not going to be enough in November to tamp down the energy of the left, which is not just responding to the economy, but is also responding to Trump's persona, the major damage he has done to the U.S. internationally, the destruction that has been done to ecologically-focused programs, the un-acknolwedged/corrected mysogyny, the overt racism shown by this administration, the lack of concern for the LGBTQ community, and a variety of things that have nothing to do with the economy. Basically, Trump has been playing to his base since he was elected, and he has alienated (probably permanently) those who did not vote for him, and has lost many of the moderates who did vote for him. He only had a 100,000 vote margin to work with to begin with.

                            Unless something significant happens in the next 2 years, in 2020 the American electorate will collectively say "you're fired!" My one fear in all this, and it is exacerbated by the lost of McCallister and the appointment of Bolton, is that Trump knows the effect on the American populace of war, and could easily engage in military action to bolster his numbers. Hopefully, if he does that, the populace will see through it. Hopefully, by then, Democrats will control the house and take steps.

                            We shall see.
                            In economics discussion, sudden rant about Trump.

                            Yes, Trump is having big effect all right.
                            Remember that you are dust and to dust you shall return.

                            Comment

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