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The Economy Immediately After the Election

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Admittedly, I'm no financial guru and I understand that there are a multitude of factors in play in the current economic situation in our country and around the world.

That having been said, I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.

What gives? Is it a more wait and see kinda situation? Are things just too far gone? Do the markets not see him as the one to usher in a period of greater economic stability and growth? Or do the markets still just have to flush out all the shit first?

Again, as you can probably tell from my questions, my understanding of these issues leaves a lot to be desired. Somebody help a brothah out.

m

I miss Lee.
And JP.
And Chris. And...

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Admittedly, I'm no financial guru and I understand that there are a multitude of factors in play in the current economic situation in our country and around the world.

That having been said, I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.

What gives? Is it a more wait and see kinda situation? Are things just too far gone? Do the markets not see him as the one to usher in a period of greater economic stability and growth? Or do the markets still just have to flush out all the shit first?

Again, as you can probably tell from my questions, my understanding of these issues leaves a lot to be desired. Somebody help a brothah out.

m



I think the markets respond more to profits (reported and projected) being way down, foreclosures (still at absurdly high levels), unemployment (big increase last month and last week), rumors of bankruptcies, indecision by Paulson about will he or won't he do this or that with the bailout package...
...

The only sure way to survive a canopy collision is not to have one.

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The worldwide economic turn down is so complicated that no one knows how to best mitigate the short term effects, and there is more disagreement on how to fix the long term issues.
Although there could reasonably be a confidence "bounce" domestically, the rest of the world is less likely to respond to non specific US conditions. The overwhelming support expressed for Obama outside the US had more to do with US foreign policy and less to do with economics. The truth is Obama has shown signs of being very left in his economics, but what he will actually do is largely an unknown. He will no doubt support the Europeans' calls for greater financial regulation, but he (and the new congress) may push policies that hinder trade. The world markets will definitely not like that.
I think when he names his treasury secretary that will be a meaty thing that the ROW will react to.

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Admittedly, I'm no financial guru and I understand that there are a multitude of factors in play in the current economic situation in our country and around the world.

That having been said, I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.

What gives? Is it a more wait and see kinda situation? Are things just too far gone? Do the markets not see him as the one to usher in a period of greater economic stability and growth? Or do the markets still just have to flush out all the shit first?

Again, as you can probably tell from my questions, my understanding of these issues leaves a lot to be desired. Somebody help a brothah out.

m



I think the markets respond more to profits (reported and projected) being way down, foreclosures (still at absurdly high levels), unemployment (big increase last month and last week), rumors of bankruptcies, indecision by Paulson about will he or won't he do this or that with the bailout package...



So am I the only one who thought there'd at least be a titter of positivity from the markets post election? It seems to be as volitile as ever!

I miss Lee.
And JP.
And Chris. And...

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I think all the ready access to information allows for what some could consider to be process tampering. That's when someone reacts instantly to every little change in a process. You generally actually end up with more fluctuation than if you just let shit happen.

Kind of like the thermostat. If you leave it alone, in the long run, the temperature is more even than if you turn it up every time you're a little cold, and down when you're just a little warm.

With all the data and information with instant access (thanks, computers and internet), people can react really, really quickly. And I think that's part of what's happening now; it's entirely reactive to itself.

Wendy W.
There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

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I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.



He can't deploy the Magic Tummy Beams of HopeChange® until he's sworn in.


Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

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I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.



He can't deploy the Magic Tummy Beams of HopeChange® until he's sworn in.



all kidding aside, i personally don't think his policies, which will raise taxes, won't help the economy at all. i hope i'm wrong but we'll see.

I miss Lee.
And JP.
And Chris. And...

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That having been said, I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.



His win was anticipated and priced into the markets in the couple weeks prior to the election. Only if there had been a major upset by McCain would you see a marked change int the market as related to the election.

Given the volatility of late, I think it would be very hard to see any election effect anyway. Between the day traders and the chickens selling out at the bottom, and the long term bulls trying to buy at perceived bottoms, and the never ending sequence of dramatic economic news, everything goes up/down 5% a day.

BTW, the market != the economy. It tends to be a leading indicator.

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I believe Obama won across nearly the entire spectrum, majority and minority.

Unless, of course, your "majority" is white men and whites over 65.

Wendy W.
There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

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Obama isn't going to change much. That slogan, "vote for change" worked. Thank God there are so many ignorant minorities, we can thank that populous for him getting President elect. Pray you have a stable job. Pray.



Sour grapes.

Obama won handily among those with graduate and professional degrees. He even won (51%) among those making over $200,000 a year.
...

The only sure way to survive a canopy collision is not to have one.

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Admittedly, I'm no financial guru and I understand that there are a multitude of factors in play in the current economic situation in our country and around the world.

That having been said, I thought there'd be a more positive response in the markets to Obama's election and frankly I'm surprised there hasn't been.

What gives? Is it a more wait and see kinda situation? Are things just too far gone? Do the markets not see him as the one to usher in a period of greater economic stability and growth? Or do the markets still just have to flush out all the shit first?

Again, as you can probably tell from my questions, my understanding of these issues leaves a lot to be desired. Somebody help a brothah out.

m



What would make you think that the majority of investors actually think Obama's tax policies are going to be good for businesses?



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What would make you think that the majority of investors actually think Obama's tax policies are going to be good for businesses?



current policies sure worked great for business.



I think its funny that the dems keep using that line. Obama used it over and over again in the debates. Its Bush's policies blah, blah, blah... I'm not a big fan of Bush either, but its hardly Bush's policies that got us into this mess. I know the problem now extends beyond the mortgage crisis, but that is still the root of it. I'm curious how anybody can link the mortgage crisis to "Bush's policies", or to tax policies in general. So to solve this conundrum were going to tax struggling businesses even more? Fantastic!

Here's a simple question. Do you honestly think that if Obama's proposed tax policies ever passed that it would be good for the economy? Do you think taxing business heavier is going to do anything to help that business profit more?



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>Do you honestly think that if Obama's proposed tax policies ever passed
>that it would be good for the economy? Do you think taxing business
>heavier is going to do anything to help that business profit more?

Historically, the economy does better under democratic presidents.

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but its hardly Bush's policies that got us into this mess.



If it's hardly Bush policies that are responsible, that you have nothing to fear from Obama policies either.



Huh? I'm not blaming Obama or Bush for the current situation. I'm just saying that Obama's ideas are not going to help it.



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Historically, the economy does better under democratic presidents.



Thats all fine and dandy, but historically we've never had a democratic president that has ever passed anything like Obama is proposing except maybe FDR.

Congress really has the final say in these measures, so saying that the economy is completely tied to who the president is can be a stretch. While there is correlation, its not the full picture.

A presidents ideas are meaningless if he's overridden by congress everytime.



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>Thats all fine and dandy, but historically we've never had a democratic
>president that has ever passed anything like Obama is proposing except
>maybe FDR.

In 1964, the top tax bracket was 91%. Given that Obama is proposing maximum tax rates far less than half that, no - I don't think Obama is proposing historically high taxes.

>Congress really has the final say in these measures, so saying that the
>economy is completely tied to who the president is can be a stretch.

Agreed.

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>Thats all fine and dandy, but historically we've never had a democratic
>president that has ever passed anything like Obama is proposing except
>maybe FDR.

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In 1964, the top tax bracket was 91%. Given that Obama is proposing maximum tax rates far less than half that, no - I don't think Obama is proposing historically high taxes.



But, Fox news told me that Obama's tax policies are going to ruin the country. You have to be wrong. ;)

Ok, in all seriousness. I don't have all the facts as far as what president has done what thru history, nor do I really care. I'm only saying that I don't see his tax ideas helping our current situation.

Here's something that I would like some honest input on. Something I've been pondering? Why even have a corporate tax? I don't have a source, but I think corporate tax accounts for around 4% of the countries tax revenue. Now, if they are not taxed, then they can choose what to do with the extra revenue, whether that be save it for hard times to ensure no layoffs, or pass the profits onto their employees in forms of raises or bonuses which will get taxed probably just as much anyway, or expand to create more jobs. Think of how much the business could grow. I know my raises are directly related to the companies profits in almost every job I've worked, not to mention bonuses. I will pay a good amount of tax on that and also have the extra money to pump back into the economy. Think of all the jobs we've lost to other countries because of corporations trying to avoid taxes and find tax loopholes. Ideally all the extra jobs and income taxes seem to me would more than make up for that 4%. And so what if the corporation wants to get greedy and give all the extra revenue to their upper execs in bonuses and salary. If thats the case the govt, is gonna see that money anyway in income tax.

I've been wondering this for awhile. I'm curious what the cons to this would be.



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> I'm curious what the cons to this would be.

Taxes would have to be raised elsewhere.

>Think of how much the business could grow.

Think how much more people would spend and contribute to the economy if you cut income taxes and raised corporate taxes.

There ain't no such thing as a free lunch.

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Taxes would have to be raised elsewhere.



My theory was that they wouldn't have to be raised because the extra taxes received on income tax because of it being passed down as well as the more jobs might make up for it. Just a thought. I'm not saying its not flawed. It just seems that money is going to get passed on to people in the company who will be paying income tax on it anyway. If its not passed on and used to expand the business, then more jobs would be created and hence more income taxes collected. Someone mentioned this to me a long time ago, and I've been thinking a bit about it lately.



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Think how much more people would spend and contribute to the economy if you cut income taxes and raised corporate taxes.



I understand that is the concept behind liberal economics. You've got two opposing views saying that one is better than the other and one of them is, but both swear that its theirs.

If only 4% of tax revenue is from corporations is accurate, then it seems cutting corporate taxes would make a much bigger difference for the economy than a 4% tax burden being widely distributed to the rest of personal income taxes would be. Just something to think about. If I ever get really bored, I may have to crunch the numbers sometime to see how much personal income tax would really have to be raised to make up for that difference. That's assuming we don't even see any economic benefit from it.



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