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Dow Hits 20000 for First Time

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Re: Dow Hits 20000 for First Time

#111
post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

It takes a long time for economies to correct to a President's actions- on the order of years. It's better to judge a President's effect on the economy at the end of their tenure than at the beginning. It's also been shown that the President has less affect on the economy than people's perception would have them to believe.

[deleted]

Re: Dow Hits 20000 for First Time

#112
post #82

Earlier quoted context omitted.

Depends which 75% of regulations he cuts. If he cuts EPA regulations and there is more pollution as a result of the increase in manufacturing this could result in more deaths in the long run. How about safety regulations get cut so manufacturing gets cheaper but more workers die in manufacturing plants, is that ok?

He will remove only the bad, useless ones. See A theory of regulation in https://www.bloomberg.com/view/articles/2017-01-24/metrics-f...

Okay, that was a good read.

Also the 2nd very solid Matt Levine article I've read in this thread, I think I detect a pattern.

Re: Dow Hits 20000 for First Time

#113
post #88
post #55

Just a reminder that Dow Jones went up by over 140% over the last 8 years.

Right. It was basically already at 20k (19,963.8) on Jan 6, with two weeks left for Obama's Presidency.

That's correct, but the bull run started after the election results in November.

I'm not exactly shocked that an ego-driven, heavily pro-business Republican President with full congressional control and majority of states under Republican governorship could drive the market up.

Re: Dow Hits 20000 for First Time

#114
post #98

Other people have covered how the Dow is a mediocre stock index. The other half is that 20k doesn't mean anything either. It's just a number calculated by the math-function of the index. The psychology is mildly fun, just like a 50th birthday may be more celebrated than a 49th. Round numbers appeal to us. But 20k dow says nothing more about the state of the economy than the 19.9 dow did a few days ago.

Mediocre? It's worse than that. It's worthless. Stock price means nothing.

It's ironic to see so many people posting about how the Dow and stock market mean nothing.

If so, why did such noted liberal economists (like Krugman) make such dire predictions about where the market was going after Trump won the election?

Are they to be disregarded because they obviously place a lot of importance on the stock market?

Re: Dow Hits 20000 for First Time

#115
post #94
post #80

Earlier quoted context omitted.

> Trump for all his craziness is vehemently pro business. No he is definitely not. Trump is anti-business and he makes that very clear. His campaign promises and actions since election are super clear that he is pro-his-wealth and not pro-business. A pro-business politician would raise taxes on the wealthy, provide tax cuts for the middle class, increase the corporate tax rate, improve immigration so that more people…

Could you explain why any of what you say a 'pro-business' politician should do is pro-business? I think a lot of people would disagree with you on those points.

Okay, sure. The first place is to immediately dispel the idea that Republicans have ever been about being "pro-business" - and the second place will be that Trump specifically is not.

It's simple Tragedy of the Commons at first. Republicans / Republican Presidents are generally pro-greed and pro-riches, not pro-business, and those are different things. What you want in a good business environment is not achieved with Republican policies. This can be seen with the past few presidents - good economic times and growth with Democrat policies, and poor economic times and decline with Republicans.

Specifics.

> A pro-business politician would raise taxes on the wealthy, provide tax cuts for the middle class, increase the corporate tax rate

Henry Ford is the good example here of showing why this is pro-business. Give your country a stable, wealthy middle class (pay your auto-workers more, a lot more), and then they will be able to buy your products and your company will thrive. Roads will be built for your cars to drive on, with those taxes!

Wealthy people are important in a capitalistic society, but income inequality and extreme wealth present dangers, not useful things. Income inequality will catch up with the business as the middle class fades and doesn't buy their products.

Want a pro-business environment? Increase corporate taxes to fund schools and education and infrastructure so that more people will grow up healthy and wealthy and wanting to buy things.

> Improve immigration so that more people could come in to the country

Is this really a debate, especially here? Most of the smart people in the world who can create wealth and businesses do NOT live in the USA. If they wanted to live here, or did live here, that would be great.

> Address massive business risks like climate change with a serious face

The climate is changing, and it's going to kill a lot of people that could have been buying your products. It's going to displace hundreds of millions of families and settlements. Food production and distribution is going to be wildly affected. Basic things that should be stable in a business environment will not be stable. Climate change is the biggest RISK for corporate profits in the world (though right now you could also see it as an opportunity - if you recognize that it needs to be addressed).

> improve healthcare for everyone in nation

Again is this really a debate? Isn't it obvious that healthy people will be better for business? Do you want your customer base to be dying? Or your employees worried about disease? That's not useful for business.

Re: Dow Hits 20000 for First Time

#116
post #99
post #80

Earlier quoted context omitted.

> Trump for all his craziness is vehemently pro business. No he is definitely not. Trump is anti-business and he makes that very clear. His campaign promises and actions since election are super clear that he is pro-his-wealth and not pro-business. A pro-business politician would raise taxes on the wealthy, provide tax cuts for the middle class, increase the corporate tax rate, improve immigration so that more people…

Your list is largely comparable to what one would see as a list of goals from someone sympathetic to European style socialism. And yet the USA is the dominant economy in the world. How do you square that reality with your claim of what a "pro-business politician" would do?

Sure, I wrote out a big answer just above.

Re: Dow Hits 20000 for First Time

#117
post #71

I understand that people believe Trump is good for business. And I also understand that people believe Trump is good for the rich. And I also understand that people believe Trump is good for the blue-collar worker. But I don't understand how Trump could be a good influence, in the long term, on business and the stock market, when looking at his positions and policy changes. Why Trump isn't good for poor working class…

What makes you think "trump" is the stock market?

The graves of investors have been dug with political shovels.

Re: Dow Hits 20000 for First Time

#118
post #11
post #5

Earlier quoted context omitted.

It's still important for the Dow Theorists (if there are any left).

Here's my favorite part of Dow Theory: "Trends persist until a clear reversal occurs." In other words, if you find yourself falling, you're no longer rising. Useful.

If you receive a margin call, the bull market is over.

Re: Dow Hits 20000 for First Time

#119

Trump for all his craziness is vehemently pro business. I know the whole tech crowd wants him to crash and burn but the stock market rising is no surprise to me. Whether it's worth the damage done to the poor and the environment is yet to be seen.

Is there anything more statist than wanting to pick and choose which businesses do well and which ones crash and burn? Taking out one's personal vendettas on businesses on a whim?

I take that back, the 2nd part is beyond even statism.

Re: Dow Hits 20000 for First Time

#120

Earlier quoted context omitted.

Trump for all his craziness is vehemently pro business. I think this might generally be correct however he seems to be more vehemently "Pro American Worker" and so far when that collides with his "Pro Business" stance the worker is currently winning. Attempting to get businesses to repatriate jobs is not necessarily a "pro-business" stance.

What decisions has he made that are pro worker? I have heard that he has pushed to restart pipeline construction (pro business), freeze fedral hiring (anti worker), and kill ACA (anti worker, pro business).

All of the pro-manufacturing-in-the-US, anti-import stuff.
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