Stock Markets, Tariffs, Coronavirus

We’re back to September 2017 or so. Another 4,000 points down, and we’re back to January 2017.
Looking plausible.


I have a friend who just turned 65 and his wife was planning to retire in August. His statement on this stock market event would, in many venues, be composed entirely of asterisks or censoring bleeps.

They’re not going to starve. They might very well have a much reduced standard of living.


Dead cat bounce today. Will it stay bounced until 4pm? We will see.

You know, D’Anconia, you deserve a better response than the above flippant ‘5am-bleary-eyed-check-the-phone’ reply, so here it is.

Top 20 drops in the DJIA by points:
[li]1 2020-03-09 23,851.02 −2,013.76 −7.79% Republican[/li][li]2 2020-02-27 25,766.64 −1,190.95 −4.42% Republican[/li][li]3 2018-02-05 24,345.75 −1,175.21 −4.60% Republican[/li][li]4 2018-02-08 23,860.46 −1,032.89 −4.15% Republican[/li][li]5 2020-02-24 27,960.80 −1,031.61 −3.56% Republican[/li][li]6 2020-03-05 26,121.28 −969.58 −3.58% Republican[/li][li]7 2020-02-25 27,081.36 −879.44 −3.15% Republican[/li][li]8 2018-10-10 25,598.74 −831.83 −3.15% Republican[/li][li]9 2019-08-14 25,479.42 −800.49 −3.05% Republican[/li][li]10 2018-12-04 25,027.07 −799.36 −3.10% Republican[/li][li]11 2020-03-03 25,917.41 −785.91 −2.94% Republican[/li][li]12 2008-09-29 10,365.45 −777.68 −6.98% Republican[/li][li]13 2019-08-05 25,717.74 −767.27 −2.90% Republican[/li][li]14 2008-10-15 8,577.91 −733.08 −7.87% Republican[/li][li]15 2018-03-22 23,957.89 −724.42 −2.93% Republican[/li][li]16 2001-09-17 8,920.70 −684.81 −7.13% Republican[/li][li]17 2008-12-01 8,149.09 −679.95 −7.70% Republican[/li][li]18 2008-10-09 8,579.19 −678.92 −7.33% Republican[/li][li]19 2018-02-02 25,520.96 −665.75 −2.54% Republican[/li][li]20 2019-01-03 22,686.22 −660.02 −2.83% Republican[/li][/ul]
Now, points are a dumb way to do this, because a 1,000 point drop on Dow 25,000 is nowhere near as bad as 25 points on Dow 200, so….

Top 20 drops in the DJIA by percentage:

[li]1 1987-10-19 1,738.74 −508.00 −22.61% Republican[/li][li]2 1929-10-28 260.64 −38.33 −12.82% Republican[/li][li]3 1929-10-29 230.07 −30.57 −11.73% Republican[/li][li]4 1929-11-06 232.13 −25.55 −9.92% Republican[/li][li]5 1899-12-18 58.27 −5.57 −8.72% Republican[/li][li]6 1932-08-12 63.11 −5.79 −8.40% Republican[/li][li]7 1907-03-14 76.23 −6.89 −8.29% Republican[/li][li]8 1987-10-26 1,793.93 −156.83% Republican[/li][li]9 2008-10-15 8,577.91 −733.08% Republican[/li][li]10 1933-07-21 88.71 −7.55 −7.84% Democrat[/li][li]11 2020-03-09 23,851.02 −2,013.76% Republican[/li][li]12 1937-10-18 125.73 −10.57 −7.75% Democrat[/li][li]13 2008-12-01 8,149.09 −679.95% Republican[/li][li]14 2008-10-09 8,579.19 −678.92% Republican[/li][li]15 1917-02-01 88.52 −6.91 −7.24% Democrat[/li][li]16 1997-10-27 7,161.14 −554.26% Democrat[/li][li]17 1932-10-05 66.07 −5.09 −7.15% Republican[/li][li]18 2001-09-17 8,920.70 −684.81% Republican[/li][li]19 1931-09-24 107.79 −8.20 −7.07% Republican[/li][li]20 1933-07-20 96.26 −7.32 −7.07% Democrat[/li][/ul]

A little more balanced, 15-5 but note the Republicans holds the top nine spots (#Winning). The Democratic losses are Great Depression related (3), our entry into WW1 (1), and the 1997 ruble devaluation and the resulting Long Term Capital Management bailout (1).

… and before you respond with “Well, 6 of the Republican ones are GD related too”, I would like to note that the Republicans directed American economic policy from 1921-1933, so frankly, the Great Depression can be placed squarely on their shoulders, just as the Great Recession can be as well. (Going further, the Panic of 1873 and the subsequent depression was also during a string of Republican administrations (Grant (1869-1877), Hayes (1877-1881)), and I’m happy to discuss the causes of this, but very few are interested in 19th-century economic policy, alas.)

But, you know, movements in the DJIA are not exactly proof of my claim… just indicators… so let’s take another approach, shall we?

Since 1948 the Federal Reserve has published the Z1 report, entitled “Financial Accounts of the United States”. This report, for all intents and purposes, measures the balance sheet of our country to determine (line 31 in Appendix B1) the total National Net Worth of the US of A. And, as we all should’ve learned in high school:

Net Worth = (Assets – Liabilities)

So you take the complete value of the US’s assets (human capital, physical capital, stocks, land, etc) subtract all of our debt (government, corporate, civilian), and you have the National Net Worth. And I prefer this yardstick because the growth of wealth is what’s truly important. GDP is a far more commonly used figure, but [analogy alert!] GDP measures income while the Z1 report measures wealth. Lord knows I’ve heard a variant of this a million times, even on the SDMB: You’re better off making $50k a year and saving $1k than you are making $100k a year and spending $110k. “GDP” wise, person 2 is doing better, but “Net Worth” wise, person 1 is doing better. [/analogy alert!]

Fortunately for us, I’ve reviewed 70 years of Z1.B1 reports, adjusted for inflation (2015 dollars), and correlated it to Presidential Administrations. And what did I find?

That Republicans just suck at creating wealth, that… with the exception of Eisenhower… the party is addicted to debt-fueled growth, and while this addiction might boost GDP and make it appear the country is growing wealthier, in fact, it isn’t.

Post 1948 Presidential Administrations ranked by Year-over-year compounded increases in National Net Worth as determined by the Federal Reserve’s Financial Accounts of the United States:

[li]1. Clinton, 5.08%, Dem[/li][li]2. Eisenhower, 5.06%, Rep[/li][li]3. Truman, 4.94%, Dem[/li][li]4. Johnson, 4.56%, Dem[/li][li]5. Kennedy, 4.46%, Dem[/li][li]6. Obama, 4.27%, Dem[/li][li]7. Ford, 3.38%, Rep[/li][li]8. Reagan, 2.85%, Rep (! Remember what I said about debt-fueled growth? You can lie to the GDP, but you can’t lie to the NNW!)[/li][li]9. Carter, 2.42%, Dem[/li][li]10. Nixon, 1.22%, Rep[/li][li]11. GHW Bush, 0.94%, Rep[/li][li]12. GW Bush, .14%, Rep[/ul][/li]
(Disclaimer: Partial data for the Truman Administration (1944-1948 was not measured), no data for the Trump Administration)

That last is amazing – Under Bush2, the total net worth of this country grew at an annual compounded rate of .14%! Not 14%, not 1.4%, but .14%! And his Dad wasn’t much better, tbh.

So… politics aside… there is strong correlative evidence published by the Federal Reserve which proves that Republican Administrations are horrible, simply horrible, at creating wealth.

I stand by my statement: The Republican party doesn’t really know how to manage a post-1860, post-slavery economy. They just don’t, and we’re seeing it (AGAIN) today.

Looks like the dead-cat bounce lasted about two hours. After “roaring” to a near-800 point rise, the DJIA is down $77.

What is the administration’s plan? Tax cuts, of course! Cut the payroll tax and gut the Social Security trust fund! What could go wrong?

Broke: Let’s coordinate a drop in oil prices to destroy Russia.

Woke: Let’s coordinate a drop in oil prices to destroy Texas.

Oh, no. It’s not that simple. They’re also going to bailout the vacation industry. Which includes hotels. Especially hotels owned by a two-bit con artist cum President.

That whole post was fascinating. Thanks.

And now it’s up $169. Do you have an actual factual point to make?

Post 135 for facts.

Do you?

JohnT goes to the work of composing a post that reviews over 70 years of economic history. You “refute” him by mentioning the latest 1-hour fluctuation in DJIA. :smack: Have you considered seeking a job in newscasting? :smiley:

He already has one. Almost always lands them on the porch.

That was worthy of Elucidator. Good job!

Hope he has some bond funds, some of which are doing really well.
I had a friend who worked for IBM, and who got laid off near retirement just as IBM stock cratered. He had his entire 401K in IBM stock. Ouch.

We all know Ike was a Rino. Look at the tax rates during his term!

Awesome post! Thanks.

Guys, apparently all the bailouts floated by the Trump Administration, including

… Cruise ships
… Hotels
… Airlines
… Fracking companies
… The Oil Industry
… the shipping industry

has raised the DJIA by 1,100+ points.

Again: Americas economic system is socialism for the wealthy and connected, capitalism for everyone else.

You may not get a check, but your employer will get a payroll tax deduction which should… what was the term… trickle down to you.

(Please note that Trumps remarks today were all about the economic impact, and nary a word about the human impact. This, D’anconia, is why him… and his ideology… are monstrous.)