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Three are over 7,000 stocks out there, measuring the economy on 30 arbitrary stocks is largely irrelevant. Especially considering the fact that I don't think I've ever run into anyone who has a meaningful % of their investments in some sort of DOW ETF or something.
The30 arbitrary companies are price weighted so the higher the price, the bigger the impact on the indexes average. When Boeing dropped so much earlier this year, the entire index suffered, which I would say has the potential to give a false signal to people who don't know any better. Same can be said for it going up significantly. It has the potential to be too "lumpy" in terms of its charts to be meaningful.
What I'm trying to explain is what the DOW is and what it represents while of course there is much the DOW is not...
What you consider "irrelevant" is not as irrelevant to others for what I think are pretty obvious reasons. You may not know people who have investments in some sort of "DOW ETF," but if you know anyone with investment in any financial markets, you know the value of most those investments (401Ks) tends to go up and down in very close correlation with the DOW. I know mine do. Accordingly the DOW tends to be a little more relevant to some people than you seem wanting to admit, even if not for the many reasons you seem exclusively focused upon...
Carter, Reagan, Bush 1, Clinton, and Bush 2 share "credit" for the credit boom and sub-prime meltdown that led to the collapse in 2008. And the increase in FDIC ceilings bears most of that blame. When the FDIC limits were increased to levels beyond the deposits of small investors, it was "off to the races."
The laws are often not as important as the oversight.....and that's where a lot of failures occur. GWB cut the size of the SEC way down and I think a lot of others did the same. That's what deregulation is all about - letting the foxes watch the chickens.
This is something we have heard over and over again as a talking point! "They know best how to regulate themselves", etc. - as if selfish and greedy people should be given the Keys to the Economy.
"Sears on Thursday lodged a lawsuit against its former CEO Eddie Lampert and a string of its high-profile past board members, including his former Yale roommate Treasury Secretary Steven Mnuchin, for allegedly stealing billions of dollars from the once-storied retailer."
Must just be coincidence.......
In another coincidence, some reporting claims that currency wars...brought on by trade wars...caused a lot of the Great Depression. Here we go again!
The "best people".
I have to differ that "most of the blame" is about one thing, event, law or anything else. It's about complete lack of ethics and norms at the top of Wall Street and Government. Phil Graham (Sen. from TX) made it his life's work to deregulate everything.....again, by coincidence, he and his cronies gained 100's of billions from it.
And yet - STILL TODAY - we have many who say "let the invisible hand work"....and "get government out of the business of regulation, they are good for nothing"....
When the foxes are given access to the chickens, they kill ALL of them.....not for food, just because they can.
At least you remembered that GWB was the original POTUS to sign off on TARP, but it was actually created by the US Treasury dept, and passed by the Democrat controlled congress. So previous comments that "Obama saved us from the brink of the next great recession" are clearly way over stated.
"Overstated" is also certainly a matter of opinion, but I can't begin to distill all that GW and/or Obama did that helped prevent economic collapse. Either could have done or not done much that would have made things worse rather than better, and of course even those options are still debated to this day.
What I do know is that we DID experience a "great recession," and it was serious. All the code red lights were flashing, and things looked really grim. What DID NOT happen is another Depression. Why or why not is another debate that tends to be partisan based and not one that ever seems to be very productive in this forum.
I'm just glad it wasn't Trump instead of GW or Obama at the time. Perhaps best to just leave it at that...
What I'm trying to explain is what the DOW is and what it represents while of course there is much the DOW is not...
What you consider "irrelevant" is not as irrelevant to others for what I think are pretty obvious reasons. You may not know people who have investments in some sort of "DOW ETF," but if you know anyone with investment in any financial markets, you know the value of most those investments (401Ks) tends to go up and down in very close correlation with the DOW. I know mine do. Accordingly the DOW tends to be a little more relevant to some people than you seem wanting to admit, even if not for the many reasons you seem exclusively focused upon...
Of course they correlate, because the DOW is given artificial significance and the misconception of what it really represents has an influence on people and it drives other parts of the market.
Again, the Boeing example. If someone who doesn't know much about the markets and sees that the DOW is tanking (specifically and almost exclusively because of Boeing) and reacts by selling a chunk of all of their holdings, then yes all of the other indices will be impacted. Most analysis shows that the recent trouble with Boeing had impacted the DOW by 150 points, and it makes up 11% of the index. You literally have only one company having a huge impact on one index and driving uninformed people to possibly make bad decisions.
"Overstated" is also certainly a matter of opinion, but I can't begin to distill all that GW and/or Obama did that helped prevent economic collapse. Either could have done or not done much that would have made things worse rather than better, and of course even those options are still debated to this day.
What I do know is that we DID experience a "great recession," and it was serious. All the code red lights were flashing, and things looked really grim. What DID NOT happen is another Depression. Why or why not is another debate that tends to be partisan based and not one that ever seems to be very productive in this forum.
I'm just glad it wasn't Trump instead of GW or Obama at the time. Perhaps best to just leave it at that...
Agree, this forum or anywhere really.
As for "overstated" I do not think its really an opinion. You had 2 different Presidents, different house/congress, different Treasury heads, its folly to assign significant ownership to any of them since so many were involved.
More proof that the credit/blame game for most of this stuff is incredibly difficult to assign to one POTUS or administration. Its 90% political games when people attempt that nonsense.
Yep, but like it or not US Presidents are like NFL quarterbacks when it comes to the economy. They get all the credit when things go right, and all the blame when things go wrong.
Albert Einstein : “Insanity is doing the same thing over and over again and expecting different results.”
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