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Yes and Bush achieved that with the big bank bailout, he was very foolish to support that. The bank bailout was signed Oct 3, 2008, it was what led to the first big drop in the Dow.
Actually, it was the first realization of the extent of the problem that led to the big drop - not the approval of the bailout money itself. Unfortunately as more and more information has become available, it becomes clear the problem was EVEN WORSE than it appeared at THAT time.
If our economy is so fragile that it goes down such a degree in just two months, it was in extremely poor shape to begin with.
This is what I believe.
The value is gone (or more likely never existed in the 1st place) in the markets. I believe all the numbers were based on the deception that huge returns of interest, from unscrupulous house loans and brutal interest rates for credit cards, would be happening. Now I see that those loans and credit card interest rates were impossible and totally unrealistic for many people. The game is over and many have lost.
My theory about the 1st big bank bailout last summer is that banks were on the verge of such a total collapse that they soon would not have been able to supply funds for normal day-to-day transactions. That would explain why Bush suddenly looked like a deer in the headlights when he told the nation how urgent this bailout was needed. This would be why we cannot, and will not, know exactly what the bailout was used for. They (the feds) did not want to start a panic cascade.
In addition, the administration had prepared to execute martial law at a moments notice if the bailout bill did not pass (A Senator leaked the info about the martial law thing when asked why they pushed the bailout so fast).
Yes it did have problems. What was that economy based upon? A big housing bubble that was about to burst.
Greedy housing developers were bringing in truckloads of cheap labor to build cheap but expensive McMansions to sell to people who had no down payments, no steady income and in many cases were the illegals themselves so Congress and the banks came up with subprime loans requiring no down payment, and interest only loans.
The other problem was that too many people were living off credit. Credit they would never repay.
The best thing would be to let the illegals go home, we no longer "need" them to build houses, there's a large over-supply of houses now. Let the housing developers go belly up, let that be the price of greed. Let inefficiently run corporations declare bankruptcy which lets them reorganize and streamline.
Obama's approach of spending trillions upon trillions of dollars that can never be repaid is obviously not the only way, let things adjust naturally. Let us admit that some of that wealth never really existed.
Imagine being told you have advanced stage CANCER.
The doctor you had been going to for the past 8 years COMPLETELY IGNORED your early symtems for years, and never ordered any tests.
Then in the 8th year, he finally dicovers your disease, but by then it's in very advanced stages.
You are angry with your doctor for not diagnosing it sooner, so you switch doctors.
Do you now expect your NEW doctor to make your disease go away OVERNIGHT?
We are talking advanced stage CANCER!
That is how Republicans are treating Obama with the stock market and the economy.
Obama is now the "new" doctor, and Republicans expect him to perform MIRACLES with the both the stock market and the economy OVERNIGHT.
Hey Republicans ... here's a little news ... it's not that simple!
It was YOUR "doctor" who COMPLETELY IGNORED the "early symptoms" allowed the economy to get this bad.
And now the problem is SO BAD that no "doctor" can easily fix it.
Obama is now getting advice from the worlds best "doctors", but there is NO IMMEDIATE CURE for the problem.
Once you can understand this, then maybe you can better accept the current situation that Obama is facing, and stop BLAMING him for the continuing drop of the stock market.
That would be fine if the previous doctor (from the supposedly new firm) didn't implant the cancer in the first place.
Yes it did have problems. What was that economy based upon? A big housing bubble that was about to burst.
Greedy housing developers were bringing in truckloads of cheap labor to build cheap but expensive McMansions to sell to people who had no down payments, no steady income and in many cases were the illegals themselves so Congress and the banks came up with subprime loans requiring no down payment, and interest only loans.
The other problem was that too many people were living off credit. Credit they would never repay.
The best thing would be to let the illegals go home, we no longer "need" them to build houses, there's a large over-supply of houses now. Let the housing developers go belly up, let that be the price of greed. Let inefficiently run corporations declare bankruptcy which lets them reorganize and streamline.
Obama's approach of spending trillions upon trillions of dollars that can never be repaid is obviously not the only way, let things adjust naturally. Let us admit that some of that wealth never really existed.
This idea would cause complete chaos, social upheaval, lawlessness, and violent crime. Then the government would have no choice but to enforce martial law. Is that a preferable outcome?
It was not that long ago that the dow crossed the 2000 mark for the first time. So the numbers have little to be compared to from the past...........
Single day loss records (through Oct 2008)
and using the below chart, it lost over 22% in 1 day in recent history and i wonder who was president?
1 -22.6% October 19, 1987
2 -12.8% October 28, 1929
3 -11.7% October 29, 1929
4 -9.9% November 6, 1929
5 -8.7% December 18, 1899
6 -8.4% August 12, 1932
7 -8.3% March 14, 1907
8 -8.0% October 26, 1987
9 -7.9% October 15, 2008
10 -7.8% July 21, 1933
This idea would cause complete chaos, social upheaval, lawlessness, and violent crime. Then the government would have no choice but to enforce martial law. Is that a preferable outcome?
There is no way housing developers should go on building houses now that their housing bubble has burst. What would you want done with all that cheap labor they brought in to build too many houses that had to be sold with subprime loans?
Don't forget, many Americans owe nothing on their homes, they own them outright. Of those who are paying mortgage, 90% are current on their mortgages.
Yes, the housing industry should suffer a collapse. Along with the banks that gave out loans irresponsibly and committed fraud.
It would not harm the country to let nature take it's course and let the adjustments be made. The housing bubble was going to burst at some point, anyone paying attention saw that.
There are plenty of banks and credit unions that are not in trouble.
It was not that long ago that the dow crossed the 2000 mark for the first time. So the numbers have little to be compared to from the past...........
Single day loss records (through Oct 2008)
and using the below chart, it lost over 22% in 1 day in recent history and i wonder who was president?
1 -22.6% October 19, 1987
2 -12.8% October 28, 1929
3 -11.7% October 29, 1929
4 -9.9% November 6, 1929
5 -8.7% December 18, 1899
6 -8.4% August 12, 1932
7 -8.3% March 14, 1907
8 -8.0% October 26, 1987
9 -7.9% October 15, 2008
10 -7.8% July 21, 1933
Maybe a lot is over valued.
Just a market correction.
What goes up, will come down.
What goes down, will come back up.
Someday.
And what kinda picture are you trying to convey?
Quote:
The term "irrational exuberance" derives from some words that Alan Greenspan, chairman of the Federal Reserve Board in Washington, used in a black-tie dinner speech entitled " The Challenge of Central Banking in a Democratic Society" before the American Enterprise Institute at the Washington Hilton Hotel December 5, 1996. Fourteen pages into this long speech, which was televised live on C-SPAN, he posed a rhetorical question: "But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" He added that "We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs and price stability."
Immediately after he said this, the stock market in Tokyo, which was open as he gave this speech, fell sharply, and closed down 3%. Hong Kong fell 3%. Then markets in Frankfurt and London fell 4%. The stock market in the US fell 2% at the open of trade. The strong reaction of the markets to Greenspan's seemingly harmless question was widely noted, and made the term irrational exuberance famous. It would seem to make no sense for markets to react all over the world to a question casually thrown out in the middle of a dinner speech. Greenspan probably learned once more from this experience how carefully someone in his position has to choose words. As far as I can determine, Greenspan apparently never actively used the words "irrational exuberance" again in any public venue. The stock market drops around the world that occurred after his speech on December 6, 1996 have all been forgotten, eclipsed by bigger subsequent events, but it was those stock market drops that focused public attention on the phrase irrational exuberance and which caused it to enter our language.
Wouldn't it be more accurate to examine actual economic downturns like 2000-2003, 1990-1993...etc. There were a number of little nail bitters going on around 1987... Everything from peace talks to Iran Contra..etc
Quote:
1985: -- Mikhail Gorbachev ascends to power in Soviet Union
1986: -- Gorbachev ends economic aid to Soviet satellites
1986: October -- Reagan and Gorbachev resolve to remove all intermediate nuclear missiles from Europe
1986: November -- Iran-Contra Affair revealed to public
1987: October -- Reagan and Gorbachev agree to remove all medium and short-range nuclear missiles by signing treaty
1989: January -- Soviet troops withdraw from Afghanistan
1989: June -- China puts down protests for democracy; Poland becomes independent
1989: September -- Hungary becomes independent
1989: November -- Berlin Wall falls
1989: December -- Communist governments fall in Czechoslovakia, Bulgaria, and Romania; Soviet empire ends
1990s
1990: March -- Lithuania becomes independent
1990: May 29 -- Boris Yeltsin elected to presidency of Russia
Wouldn't it be more accurate to examine actual economic downturns like 2000-2003, 1990-1993...etc. There were a number of little nail bitters going on around 1987... Everything from peace talks to Iran Contra..etc
But the OP was on the affect Obama's election had on the market using the Dow as the only indicator. He was not looking at global issues or even the current facts of already lost jobs, bank failure and other issues the effect the market on a day to day basis that started well before November of 2008.
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