It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
Federal Reserve chairman Alan Greenspan took issue with the White House view that rising budget deficits pose little near-term threat to the climate of low interest rates that the US economy enjoys.
Rising red ink, he said, could potentially push up long-term interest rates in the near term, potentially slowing an economy now struggling to create jobs.
1. I am not talking about spendable income. I am talking about income, period. My credit card debt does not affect my income level. Of course it affects my disposable income. No shit.
Yep. No shit is right.
Having more debt increases debt service payments (AKA "interest") and therefore reduces spendable income. So when we have a higher deficit, we have higher debt service, less of our tax income is available to spend, and the deficit balloons ever higher. Which is the point you've been arguing against.
And speaking of no shit, you just said you were talking about something different (income level vs. money available to spend, AKA "gross" vs. "net") than the statement you originally disagreed with:
Quote:
Just as with your credit debt there is less money to go around when you have a large debt so please don't don't tell me it doesn't effect how much money from your income you have to spend.
Of course, you will stay true to form and ignore this post, and not mention your point 1 above ever again, right?
It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
Well, keep in mind these are predictions. Certainly, the source is well-qualified. The again, it seems Greenspan bungled rates att he end of the last expansion, so who knows.
The question is: Do we see high interest rates? No. If anything, rates are far too low. Further, it depends on what you mean by "high". If the average mortage rate (just for example) is 7.5% in good economic times, then there is little reason for concern. There just isn't evidence to suggest that deficits truly harm the economy, at least in the short term. They most certainly affect fiscal policy...I agree completely with that.
Having more debt increases debt service payments (AKA "interest") and therefore reduces spendable income. So when we have a higher deficit, we have higher debt service, less of our tax income is available to spend, and the deficit balloons ever higher. Which is the point you've been arguing against.
And speaking of no shit, you just said you were talking about something different (income level vs. money available to spend, AKA "gross" vs. "net") than the statement you originally disagreed with:
Of course, you will stay true to form and ignore this post, and not mention your point 1 above ever again, right?
No, No NO! I am not attempting to flame you here, but PLEASE READ what I'm posting.
I fully and completely understand that incuring higher debt loads will affect the amount of money the government can spend on its programs. The debt/deficits are not without consequence. I am not arguing that point in any way.
I am simply saying this: The fiscal health of the government as it pertains to debt load does not necessarily correlate to the overall health of the economy (i.e GDP, manufacturing, employment, personal income, consumer confidance, retail sales, etc).
The only argument that could be made would be that as a result of the higher debt load, we'd have to raise taxes to keep up, which would in turn hurt the economy. That argument would be worth having...though its purely hypothetical.
As an aside, it should be pointed out that while the term $7.5 Trillion sounds sickening to all of us, our national debt is actually quite manageable from a "percentage of GDP" and debt service perspective. I'm just saying..the sky is not exactly falling. The United States economy is growing a three to four times the rate (and perhaps more) of other industrialized nations. Yet, we have Mr. Chirac (for example) running around screaming about the US deficit...all while his economy grows by 1.2% (2002 estimate).
No, No NO! I am not attempting to flame you here, but PLEASE READ what I'm posting.
I fully and completely understand that incuring higher debt loads will affect the amount of money the government can spend on its programs. The debt/deficits are not without consequence. I am not arguing that point in any way.
I am simply saying this: The fiscal health of the government as it pertains to debt load does not necessarily correlate to the overall health of the economy (i.e GDP, manufacturing, employment, personal income, consumer confidance, retail sales, etc).
The only argument that could be made would be that as a result of the higher debt load, we'd have to raise taxes to keep up, which would in turn hurt the economy. That argument would be worth having...though its purely hypothetical.
As an aside, it should be pointed out that while the term $7.5 Trillion sounds sickening to all of us, our national debt is actually quite manageable from a "percentage of GDP" and debt service perspective. I'm just saying..the sky is not exactly falling. The United States economy is growing a three to four times the rate (and perhaps more) of other industrialized nations. Yet, we have Mr. Chirac (for example) running around screaming about the US deficit...all while his economy grows by 1.2% (2002 estimate).
So you're saying you won't have to deal with it? It'll be someone in the future right?
So you're saying you won't have to deal with it? It'll be someone in the future right?
Excuse me, but I'd like you to stop the rather slimey tactic of "putting words in my mouth".
What do you mean "deal with it"? You mean pay it off? Or, do you mean "service it"?
I was simply making a secondary point for the purpose of perspective. I was not attempting to make any other incinuations about the national debt. I was imply saying that the current load is quite serviceable.
Excuse me, but I'd like you to stop the rather slimey tactic of "putting words in my mouth".
What do you mean "deal with it"? You mean pay it off? Or, do you mean "service it"?
I was simply making a secondary point for the purpose of perspective. I was not attempting to make any other incinuations about the national debt. I was imply saying that the current load is quite serviceable.
Don't get hot under the collar! I was just asking a question. Deal with it means attempt to pay it off. Even your beloved Reagan campaigned on balancing the budget and getting rid of the deficit so he must have seen it's importance. As a matter of fact he campaigned on it more than once.
Don't get hot under the collar! I was just asking a question. Deal with it means attempt to pay it off. Even your beloved Reagan campained on balancing the budget and getting rid of the deficit so he must have seen it's importance. As a matter of fact he campained on it more than once.
I see. Thank you for clarifying. The debt is an important problem, as is the deficit. I'd like to see both of them solved. To do that, I think we need cuts and changes in the federal budget that can only be considered "catostrophic" and "revolutionary". We should eliminate entire agencies, drastically change the federal tax codes, etc. Not only do I think that this would help get spending under control, I think it would actually cause and improvement in some of the areas that government is no longer present in. Speaking of Reagan, "Government is not the solution to all problems, government IS the problem". That's where I stand.
I consider Bush's great fault to be his propensity to spend. I do not support the medicare bill, nor do I support things like faith-baed charities (for financial reasons only). Domestic non-defense spending has also increased two quickly, though I do support the vast increases in education spending we've seen. This being said, I still support the President from an economic standpoint. His tax cuts have had positive effects for both my family and our economy in general. Now it's time to control spending.
It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
Let me say that long term I do believe what you are saying is true. However let me also say that we haven't witnessed any crowding out yet. I will say that theoretically it is true though.
However I also have to point out that theoretically we thought that 5% was full employment. Under Clinton we allowed ourselves to go below that without addressing it. It ended up doing us no harm. There were concerns that it would shoot interest rates through the roof but instead they only went up modestly.
So theoretical is nice, but the reality is who knows. But again, theoretically it is correct and I believe that as well.
This suggests that we didn't know the recession was over until Dec. 22nd, 1992 - after the election. Not that I'd put it past Clinton to lie or anything, but I don't think that is one of them...
We DID know enough to know that the economy wasn't anything like the Great Depression. It wasn't even anything like the recession of 1981-82. Besides, Bush tried to tell people that the economy was in recovery. He was accused of being "out of touch" for saying this.
We DID know enough to know that the economy wasn't anything like the Great Depression. It wasn't even anything like the recession of 1981-82. Besides, Bush tried to tell people that the economy was in recovery. He was accused of being "out of touch" for saying this.
No as a matter of fact this recession wasn't like any other. It went on abnormaly long and unemployement is still in recovery. The problem with Bush was he was saying it was in recovery a long time before it really was. I guess if you keep saying something eventually it'll be true.
No as a matter of fact this recession wasn't like any other. It went on abnormaly long and unemployement is still in recovery. The problem with Bush was he was saying it was in recovery a long time before it really was. I guess if you keep saying something eventually it'll be true.
First of all, I wasn't talking about this recession I was talking about the recession of 1990-91. Secondly, this recession was also relatively mild. What was the peak unemployment rate? Did it even break 7%? Thirdly, unemployment was still in recovery long after the recession of 1990-91 ended. That's one of the reasons the Democrats lost the House in 1994. Unemployment is always a lagging indicator.
First of all, I wasn't talking about this recession I was talking about the recession of 1990-91. Secondly, this recession was also relatively mild. What was the peak unemployment rate? Did it even break 7%? Thirdly, unemployment was still in recovery long after the recession of 1990-91 ended. That's one of the reasons the Democrats lost the House in 1994. Unemployment is always a lagging indicator.
Mild yet it was long and had the worst unemployment since WWII. Unemployment has always lagged but not like this. This is not speculation on my part. Economists have said this.
Here's a sample from the past incase you've forgotten.
Mild yet it was long and had the worst unemployment since WWII. Unemployment has always lagged but not like this. This is not speculation on my part. Economists have said this.
Here's a sample from the past incase you've forgotten.
Your link contradicts your argument:All it says about unemployment is that it didn't go much above 6%. Unemployment during the 1980-81 recession was much, much worse.
Except that you have to consider the date of the artcle. That was from Jan. 2003. The problems with the economy went well beyond that.
And lets print everything......
RECESSIONS
Duration in months
Current 10
Post WWII average 11
Decline in industrial production
[Current] -4.4%
[Post WWII average] -8.1%
BEAR MARKETS
Duration in months
[Current] 33
[Post WWII average] 16
Decline in Dow
[Current] -38%
[Post WWII average] -31%
Sources: InvesTech Research, Federal Reserve, National Bureau of
Economic Research.
And of course this was the tone of the article.
From the title :
" THIS BEAR MARKET IS MUCH WORSE THAN THE ECONOMY WARRANTS, AND INVESTORS FACE A PUZZLING AND CHAOTIC OUTLOOK HERE'S HOW TO MAKE SENSE OF IT ALL. "
Also :
" THIS BEAR MARKET HAS BEEN WORSE THAN THE RECESSION
The key question for this market cycle is why the downturn in
stock prices has been so much more severe than the downturn in
the economy. The recession, which began in March 2001, was over
before year-end, making it one month shorter than the average
since World War II. The decline in manufacturing during those
months was only 4.4% vs. a historical average of 8.1%. This
relatively mild slump nonetheless triggered a bear market that
was far worse than usual. From its peak in early 2000, the Dow
dropped as much as 38% (compared with a 31% historical average).
Worst of all, this bear market has dragged on for almost three
Except that you have to consider the date of the artcle...
Yep. By the time of that article the unemployment situation was starting to flatten.
Quote:
... That was from Jan. 2003. The problems with the economy went well beyond that.
And lets print everything......
BEAR MARKETS
Duration in months
[Current] 33
[Post WWII average] 16
Decline in Dow
[Current] -38%
[Post WWII average] -31%
Sources: InvesTech Research, Federal Reserve, National Bureau of
Economic Research.
And of course this was the tone of the article.
From the title :
" THIS BEAR MARKET IS MUCH WORSE THAN THE ECONOMY WARRANTS, AND INVESTORS FACE A PUZZLING AND CHAOTIC OUTLOOK HERE'S HOW TO MAKE SENSE OF IT ALL. "
Also :
" THIS BEAR MARKET HAS BEEN WORSE THAN THE RECESSION..."
The bear market was over by January of 2003 too. My 401K had a very nice run up last year.
Quote:
"... This relatively mild slump nonetheless triggered a bear market that was far worse than usual. From its peak in early 2000, the Dow dropped as much as 38% (compared with a 31% historical average). Worst of all, this bear market has dragged on for almost three years. "
And who was president in early 2000? Hello? The downturn in the economy was predicted by a downturn in the equities markets that began at least 6 months before Bush was even elected! With this massive loss in paper wealth (we're talking about trillions of dollars in paper wealth here) it's a wonder the recession wasn't deeper than it was. By the way, the bear market came first. The recession didn't trigger it. GDP was still positive but trending downward in 2000.
Yep. By the time of that article the unemployment situation was starting to flatten. The bear market was over by January of 2003 too. My 401K had a very nice run up last year. And who was president in early 2000? Hello? The downturn in the economy was predicted by a downturn in the equities markets that began at least 6 months before Bush was even elected! With this massive loss in paper wealth (we're talking about trillions of dollars in paper wealth here) it's a wonder the recession wasn't deeper than it was. By the way, the bear market came first. The recession didn't trigger it. GDP was still positive but trending downward in 2000.
It's not about who was in office when it started it's about the guy who handled it during. The economy is cyclic and we were over due for a downturn.
Here's another little thing from the past for you to chew on......
Friday's report means the year-to-year net change in private payrolls has been negative for 22 straight months, extending the longest stretch of labor-market pain since 1944-46. Private, non-farm payrolls are now 2.6 million jobs lower than they were in March 2001, when a recession began.
Payrolls in goods-producing industries fell 73,000 in April, led by a 95,000 jobs cut from the manufacturing sector.
Service-producing payrolls grew by 25,000, led by a 32,000-job surge in government hiring. Retailers cut 10,000 jobs. Other service industries, such as tourism, data processing and personnel supply, added 21,000 jobs.
Average hourly wages rose 0.1 percent to $15.11 an hour from $15.09 in March. In a weak labor market, wage growth is a critical support to consumer spending, which makes up more than two-thirds of the nation's economy.
Along with the drop in the overall average work week, manufacturing hours fell 0.3 hour to 40.5, and overtime fell 0.1 hour to 3.9 hours.
The average length of unemployment rose to 19.6 weeks, the highest since January 1984. "
Comments
For example:
Federal Reserve chairman Alan Greenspan took issue with the White House view that rising budget deficits pose little near-term threat to the climate of low interest rates that the US economy enjoys.
Rising red ink, he said, could potentially push up long-term interest rates in the near term, potentially slowing an economy now struggling to create jobs.
Originally posted by SDW2001
Oh my God. You're just ridiculous.
1. I am not talking about spendable income. I am talking about income, period. My credit card debt does not affect my income level. Of course it affects my disposable income. No shit.
Yep. No shit is right.
Having more debt increases debt service payments (AKA "interest") and therefore reduces spendable income. So when we have a higher deficit, we have higher debt service, less of our tax income is available to spend, and the deficit balloons ever higher. Which is the point you've been arguing against.
And speaking of no shit, you just said you were talking about something different (income level vs. money available to spend, AKA "gross" vs. "net") than the statement you originally disagreed with:
Just as with your credit debt there is less money to go around when you have a large debt so please don't don't tell me it doesn't effect how much money from your income you have to spend.
Of course, you will stay true to form and ignore this post, and not mention your point 1 above ever again, right?
Originally posted by jimmac
I think he's starting to get it!
I seriously doubt it. He's totally blinded by leader-love.
Originally posted by BRussell
It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
For example:
Gov't always wins. They get the money they want.
We should look-up "loanable funds market" and "crowding out"
And some one in the past had poo-pood the idea of crowding out, I would like to hear that again while I have some time on my hands.
Originally posted by BRussell
It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
For example:
Well, keep in mind these are predictions. Certainly, the source is well-qualified. The again, it seems Greenspan bungled rates att he end of the last expansion, so who knows.
The question is: Do we see high interest rates? No. If anything, rates are far too low. Further, it depends on what you mean by "high". If the average mortage rate (just for example) is 7.5% in good economic times, then there is little reason for concern. There just isn't evidence to suggest that deficits truly harm the economy, at least in the short term. They most certainly affect fiscal policy...I agree completely with that.
Originally posted by FormerLurker
Yep. No shit is right.
Having more debt increases debt service payments (AKA "interest") and therefore reduces spendable income. So when we have a higher deficit, we have higher debt service, less of our tax income is available to spend, and the deficit balloons ever higher. Which is the point you've been arguing against.
And speaking of no shit, you just said you were talking about something different (income level vs. money available to spend, AKA "gross" vs. "net") than the statement you originally disagreed with:
Of course, you will stay true to form and ignore this post, and not mention your point 1 above ever again, right?
No, No NO! I am not attempting to flame you here, but PLEASE READ what I'm posting.
I fully and completely understand that incuring higher debt loads will affect the amount of money the government can spend on its programs. The debt/deficits are not without consequence. I am not arguing that point in any way.
I am simply saying this: The fiscal health of the government as it pertains to debt load does not necessarily correlate to the overall health of the economy (i.e GDP, manufacturing, employment, personal income, consumer confidance, retail sales, etc).
The only argument that could be made would be that as a result of the higher debt load, we'd have to raise taxes to keep up, which would in turn hurt the economy. That argument would be worth having...though its purely hypothetical.
As an aside, it should be pointed out that while the term $7.5 Trillion sounds sickening to all of us, our national debt is actually quite manageable from a "percentage of GDP" and debt service perspective. I'm just saying..the sky is not exactly falling. The United States economy is growing a three to four times the rate (and perhaps more) of other industrialized nations. Yet, we have Mr. Chirac (for example) running around screaming about the US deficit...all while his economy grows by 1.2% (2002 estimate).
Originally posted by SDW2001
No, No NO! I am not attempting to flame you here, but PLEASE READ what I'm posting.
I fully and completely understand that incuring higher debt loads will affect the amount of money the government can spend on its programs. The debt/deficits are not without consequence. I am not arguing that point in any way.
I am simply saying this: The fiscal health of the government as it pertains to debt load does not necessarily correlate to the overall health of the economy (i.e GDP, manufacturing, employment, personal income, consumer confidance, retail sales, etc).
The only argument that could be made would be that as a result of the higher debt load, we'd have to raise taxes to keep up, which would in turn hurt the economy. That argument would be worth having...though its purely hypothetical.
As an aside, it should be pointed out that while the term $7.5 Trillion sounds sickening to all of us, our national debt is actually quite manageable from a "percentage of GDP" and debt service perspective. I'm just saying..the sky is not exactly falling. The United States economy is growing a three to four times the rate (and perhaps more) of other industrialized nations. Yet, we have Mr. Chirac (for example) running around screaming about the US deficit...all while his economy grows by 1.2% (2002 estimate).
So you're saying you won't have to deal with it? It'll be someone in the future right?
Originally posted by jimmac
So you're saying you won't have to deal with it? It'll be someone in the future right?
Excuse me, but I'd like you to stop the rather slimey tactic of "putting words in my mouth".
What do you mean "deal with it"? You mean pay it off? Or, do you mean "service it"?
I was simply making a secondary point for the purpose of perspective. I was not attempting to make any other incinuations about the national debt. I was imply saying that the current load is quite serviceable.
Originally posted by SDW2001
Excuse me, but I'd like you to stop the rather slimey tactic of "putting words in my mouth".
What do you mean "deal with it"? You mean pay it off? Or, do you mean "service it"?
I was simply making a secondary point for the purpose of perspective. I was not attempting to make any other incinuations about the national debt. I was imply saying that the current load is quite serviceable.
Don't get hot under the collar! I was just asking a question. Deal with it means attempt to pay it off. Even your beloved Reagan campaigned on balancing the budget and getting rid of the deficit so he must have seen it's importance. As a matter of fact he campaigned on it more than once.
Originally posted by jimmac
Don't get hot under the collar! I was just asking a question. Deal with it means attempt to pay it off. Even your beloved Reagan campained on balancing the budget and getting rid of the deficit so he must have seen it's importance. As a matter of fact he campained on it more than once.
I see. Thank you for clarifying. The debt is an important problem, as is the deficit. I'd like to see both of them solved. To do that, I think we need cuts and changes in the federal budget that can only be considered "catostrophic" and "revolutionary". We should eliminate entire agencies, drastically change the federal tax codes, etc. Not only do I think that this would help get spending under control, I think it would actually cause and improvement in some of the areas that government is no longer present in. Speaking of Reagan, "Government is not the solution to all problems, government IS the problem". That's where I stand.
I consider Bush's great fault to be his propensity to spend. I do not support the medicare bill, nor do I support things like faith-baed charities (for financial reasons only). Domestic non-defense spending has also increased two quickly, though I do support the vast increases in education spending we've seen. This being said, I still support the President from an economic standpoint. His tax cuts have had positive effects for both my family and our economy in general. Now it's time to control spending.
Originally posted by BRussell
It's pretty well accepted that deficits keep interest rates high: Gov't competes with the private sector to borrow money, which increases demand for money, and therefore keeps interest rates high. High interest rates makes it harder for people and businesses to borrow money to invest, which is bad for the economy.
For example:
BRussell
Let me say that long term I do believe what you are saying is true. However let me also say that we haven't witnessed any crowding out yet. I will say that theoretically it is true though.
However I also have to point out that theoretically we thought that 5% was full employment. Under Clinton we allowed ourselves to go below that without addressing it. It ended up doing us no harm. There were concerns that it would shoot interest rates through the roof but instead they only went up modestly.
So theoretical is nice, but the reality is who knows. But again, theoretically it is correct and I believe that as well.
Nick
Jobless claims down:
http://ap.tbo.com/ap/breaking/MGBS5JNYKVD.html
http://ap.tbo.com/ap/breaking/MGBZFK0WKVD.html
Originally posted by BRussell
This suggests that we didn't know the recession was over until Dec. 22nd, 1992 - after the election. Not that I'd put it past Clinton to lie or anything, but I don't think that is one of them...
We DID know enough to know that the economy wasn't anything like the Great Depression. It wasn't even anything like the recession of 1981-82. Besides, Bush tried to tell people that the economy was in recovery. He was accused of being "out of touch" for saying this.
Originally posted by zaphod_beeblebrox
We DID know enough to know that the economy wasn't anything like the Great Depression. It wasn't even anything like the recession of 1981-82. Besides, Bush tried to tell people that the economy was in recovery. He was accused of being "out of touch" for saying this.
No as a matter of fact this recession wasn't like any other. It went on abnormaly long and unemployement is still in recovery. The problem with Bush was he was saying it was in recovery a long time before it really was. I guess if you keep saying something eventually it'll be true.
Originally posted by jimmac
No as a matter of fact this recession wasn't like any other. It went on abnormaly long and unemployement is still in recovery. The problem with Bush was he was saying it was in recovery a long time before it really was. I guess if you keep saying something eventually it'll be true.
First of all, I wasn't talking about this recession I was talking about the recession of 1990-91. Secondly, this recession was also relatively mild. What was the peak unemployment rate? Did it even break 7%? Thirdly, unemployment was still in recovery long after the recession of 1990-91 ended. That's one of the reasons the Democrats lost the House in 1994. Unemployment is always a lagging indicator.
Originally posted by zaphod_beeblebrox
First of all, I wasn't talking about this recession I was talking about the recession of 1990-91. Secondly, this recession was also relatively mild. What was the peak unemployment rate? Did it even break 7%? Thirdly, unemployment was still in recovery long after the recession of 1990-91 ended. That's one of the reasons the Democrats lost the House in 1994. Unemployment is always a lagging indicator.
Mild yet it was long and had the worst unemployment since WWII. Unemployment has always lagged but not like this. This is not speculation on my part. Economists have said this.
Here's a sample from the past incase you've forgotten.
http://money.cnn.com/best/magazine_a...03/01/FOR.html
Originally posted by jimmac
Mild yet it was long and had the worst unemployment since WWII. Unemployment has always lagged but not like this. This is not speculation on my part. Economists have said this.
Here's a sample from the past incase you've forgotten.
http://money.cnn.com/best/magazine_a...03/01/FOR.html
Your link contradicts your argument:
RECESSIONS
Duration in months
Current 10
Post WWII average 11
Decline in industrial production
[Current] -4.4%
[Post WWII average] -8.1%
All it says about unemployment is that it didn't go much above 6%. Unemployment during the 1980-81 recession was much, much worse.
Originally posted by zaphod_beeblebrox
Your link contradicts your argument:All it says about unemployment is that it didn't go much above 6%. Unemployment during the 1980-81 recession was much, much worse.
Except that you have to consider the date of the artcle. That was from Jan. 2003. The problems with the economy went well beyond that.
And lets print everything......
RECESSIONS
Duration in months
Current 10
Post WWII average 11
Decline in industrial production
[Current] -4.4%
[Post WWII average] -8.1%
BEAR MARKETS
Duration in months
[Current] 33
[Post WWII average] 16
Decline in Dow
[Current] -38%
[Post WWII average] -31%
Sources: InvesTech Research, Federal Reserve, National Bureau of
Economic Research.
And of course this was the tone of the article.
From the title :
" THIS BEAR MARKET IS MUCH WORSE THAN THE ECONOMY WARRANTS, AND INVESTORS FACE A PUZZLING AND CHAOTIC OUTLOOK HERE'S HOW TO MAKE SENSE OF IT ALL. "
Also :
" THIS BEAR MARKET HAS BEEN WORSE THAN THE RECESSION
The key question for this market cycle is why the downturn in
stock prices has been so much more severe than the downturn in
the economy. The recession, which began in March 2001, was over
before year-end, making it one month shorter than the average
since World War II. The decline in manufacturing during those
months was only 4.4% vs. a historical average of 8.1%. This
relatively mild slump nonetheless triggered a bear market that
was far worse than usual. From its peak in early 2000, the Dow
dropped as much as 38% (compared with a 31% historical average).
Worst of all, this bear market has dragged on for almost three
years. "
Originally posted by jimmac
Except that you have to consider the date of the artcle...
Yep. By the time of that article the unemployment situation was starting to flatten.
... That was from Jan. 2003. The problems with the economy went well beyond that.
And lets print everything......
BEAR MARKETS
Duration in months
[Current] 33
[Post WWII average] 16
Decline in Dow
[Current] -38%
[Post WWII average] -31%
Sources: InvesTech Research, Federal Reserve, National Bureau of
Economic Research.
And of course this was the tone of the article.
From the title :
" THIS BEAR MARKET IS MUCH WORSE THAN THE ECONOMY WARRANTS, AND INVESTORS FACE A PUZZLING AND CHAOTIC OUTLOOK HERE'S HOW TO MAKE SENSE OF IT ALL. "
Also :
" THIS BEAR MARKET HAS BEEN WORSE THAN THE RECESSION..."
The bear market was over by January of 2003 too. My 401K had a very nice run up last year.
"... This relatively mild slump nonetheless triggered a bear market that was far worse than usual. From its peak in early 2000, the Dow dropped as much as 38% (compared with a 31% historical average). Worst of all, this bear market has dragged on for almost three years. "
And who was president in early 2000? Hello? The downturn in the economy was predicted by a downturn in the equities markets that began at least 6 months before Bush was even elected! With this massive loss in paper wealth (we're talking about trillions of dollars in paper wealth here) it's a wonder the recession wasn't deeper than it was. By the way, the bear market came first. The recession didn't trigger it. GDP was still positive but trending downward in 2000.
Originally posted by zaphod_beeblebrox
Yep. By the time of that article the unemployment situation was starting to flatten. The bear market was over by January of 2003 too. My 401K had a very nice run up last year. And who was president in early 2000? Hello? The downturn in the economy was predicted by a downturn in the equities markets that began at least 6 months before Bush was even elected! With this massive loss in paper wealth (we're talking about trillions of dollars in paper wealth here) it's a wonder the recession wasn't deeper than it was. By the way, the bear market came first. The recession didn't trigger it. GDP was still positive but trending downward in 2000.
It's not about who was in office when it started it's about the guy who handled it during. The economy is cyclic and we were over due for a downturn.
Here's another little thing from the past for you to chew on......
http://money.cnn.com/2003/05/02/news/economy/jobs/
From that article......
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" Longest stretch of pain since WWII
Friday's report means the year-to-year net change in private payrolls has been negative for 22 straight months, extending the longest stretch of labor-market pain since 1944-46. Private, non-farm payrolls are now 2.6 million jobs lower than they were in March 2001, when a recession began.
Payrolls in goods-producing industries fell 73,000 in April, led by a 95,000 jobs cut from the manufacturing sector.
Service-producing payrolls grew by 25,000, led by a 32,000-job surge in government hiring. Retailers cut 10,000 jobs. Other service industries, such as tourism, data processing and personnel supply, added 21,000 jobs.
Average hourly wages rose 0.1 percent to $15.11 an hour from $15.09 in March. In a weak labor market, wage growth is a critical support to consumer spending, which makes up more than two-thirds of the nation's economy.
Along with the drop in the overall average work week, manufacturing hours fell 0.3 hour to 40.5, and overtime fell 0.1 hour to 3.9 hours.
The average length of unemployment rose to 19.6 weeks, the highest since January 1984. "
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I'm very happy your 401K did well. However I doubt the people out there struggling for work would see it in the same light.
My home state of Oregon exceeded 7% for a long while. It wasn't the only state like that.
I felt lucky to have the same job I've had for 16 years.