General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy the markets have jumped since the election
The markets have seen sharp increases because Republican economic policies inevitably lead to rampant market speculation. When rich people get tax cuts, they don't use their tax cuts to open a factory in Muncie, Indiana and hand out jobs that pay American middle class wages and benefits.
No, they give their tax cuts to hedge fund managers and tell them to double it in a year, and then double that next year. That makes these hedge funds guys take on more and more risks. And thanks to Trump's de-regulation plans, the big investment banks will also chase these returns and take on these risks. In a low interests rates/low taxes/de-regulated environment, the doors have been flung wide open to the casino known as massive speculation.
Of course this will all come crashing down in a few years and everything will have to re-set, but for right now, the party is on.
unblock
(51,974 posts)strong showing in q3 for gdp, and more encouraging statements from the fed. that largely explains the full extent of the recent increase, which is hardly surprising in a market that has gone up steadily for 8 years.
toxic trump's oval office grab explains some of the gyrations for a day or very few immediately after the election, but not much else, notwithstanding cnbc's blatant propaganda effort in calling this the "trump rally".
what toxic trump does is mostly at this point guesswork, whereas hillary would have been rather predictable, between here actual sanity and the political gridlock that would have resulted from republicans still controlling the house, at least.
remember when cnbc for years kept complaining about "uncertainty" holding back the market? well, can't get much more uncertain than an insane idiot in the white house, yet oh, suddenly that uncertainty is the cause of the increase? yeah, right.
yallerdawg
(16,104 posts)Pundits are saying this is a sociological rally, not an economic-fundamental's rally.
Bush 2.0 and his Great Recession taught the 1% one thing - they need a lot more chips and they know Republican policies will get them!
"Place your bets - only the little people lose!"
Blue Shoes
(220 posts)Which will lead to short term gains which investors want to capitalize on.
It will also lead to market bubbles, fraud, greater wealth inequality, and a ruined environment.
Yavin4
(35,357 posts)By that time, they'll hand power back to the Dems and plead that they bailout the banks or we'll face ruin.
Blue Shoes
(220 posts)pbmus
(12,418 posts)They are trading millions of stocks in milliseconds...the big con has doubled his portfolio since the election.
If you would have invested 1000 in bank stock on Election Day you would have at least tripled your investment by now...
The timing to get out of the market is when the big con starts taking profits...about end of February March 2017
SeattleVet
(5,468 posts)when the GOP tok control of the House, Senate, and White House.
That lasted almost a year, until October 29, 1929. Also known as 'Black Friday' it was the beginning of the crash that marked the US's entry into the worldwide Great Depression.
TheHak
(71 posts)Hedge funds have been the big losers of all this qe liquidity.
And they arent getting fresh money.
Yes companies arent going to create new jobs. They already had so much cash that they were buying back stocks like there was no tomorrow.
Give them an additonal tax credit and they are just worth a little more (simple dcf). As simple as that.
Yavin4
(35,357 posts)That'll happen sometime next year. The bump in the market is an expectation of massive asset speculation including stocks.
MFM008
(19,782 posts)big tax cuts to come?
Holiday spirit?
New Year in general?
smirkymonkey
(63,221 posts)Once reality sets in, those numbers are going to come crashing down hard.
AwakeAtLast
(14,112 posts)My plans have been in the works for awhile, but after recent events, I have never been more convinced that I am making the right decision. I hope I am able to get it done before it crashes.