Where is that predicted Stock Market CRASH?

Donald Trump was elected president in November of 2016 and the Dow Jones industrial average has risen by some 35%, making the last 14 months one of the greatest bull-market runs in history.

Some $6 trillion of wealth has been created for Americans — which is very good news for the 55 million Americans with 401k plans, the 25 million or so who have IRAs, and another 20 million with company pension plans and employee stock ownership plans.

Let’s look at some of the predictions from “leading economists” around the time of the last election.

“It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? A first-pass answer is never… So we are very probably looking at a global recession, with no end in sight.” Paul Krugman of the New York Times the day after the election.

“If Trump wins we should expect a big markdown in expected future earnings for a wide range of stocks — and a likely crash in the broader market (if Trump becomes president).” Eric Zitzewitz, former chief economist at the IMF, November 2016.

“I have never seen an election in which the markets have so strong of a view as to what was good and bad about the outcome. And what you saw was the markets rallying yesterday because of the FBI thing on Sunday. And the reason I mention this particularly is if the likely event happens and Trump wins you will see a market crash of historic proportions, I think…The markets are terrified of him.” Steve Rattner, MSNBC economics guru and former Obama Car Czar, October, 2016.

And many others, yet even after Trump being in office about 20 months and stocks at all time highs, not one of these “econmists” have the balls to admit they were wrong. And don’t tell me “Oh, the crash is coming!” NO. No. No. YOUR prediction was for a Market Crash when Trump became President.

If people had listened to these jokers and bailed out of the Stock Markets they would have lost out on a 30%-plus surge in their financial wealth

I’m still waiting on my double dip recession that the experts promised me in 2009

The stock market has forecast nine of the last five recessions.

– Paul Samuelson

Is this solidly based wealth, from new businesses, with facilities, stable markets/customers, income flow, etc.?

Or is this “bubble wealth,” a kind of chimerical paper wealth, created by irrational exuberance, speculation and so forth, subject to evaporation in the cold, gray light of dawn?

I thought Mr. Trump had already said that the crash will occur should he ever be impeached.

Because the stock market is entirely dependent on Trump having a government title, doncha know.

How do you tell the difference?

Somebody remind me: how long was Obama in office before he confiscated everyone’s guns?

Well, not entirely sure but it must have been sometime after the Bowling Green Massacre.

Look at price/earnings ratios.
Back in reality, here’s what the stock market looks like. It’s basically been a straight shot upwards since 2010. There was a dip below trendline in 2016, mostly growth at trendline during 2017, a little up and down since then. https://www.motherjones.com/kevin-drum/2018/06/stock-market-still-in-the-trump-doldrums/
Trump has a somewhat heightened ability to set off a recession via eg impetuous sanctions on Turkey, or a global tradewar. But the bigger problem is that he doesn’t have a serious team in place at Treasury if a financial crisis, foreign or domestic, rears its head. Obama had a solid crew, and GWBush had one in place once Henry Paulson was appointed. Paulson made some key errors regarding Lehman, but at least he knew what he was doing.

Here’s a chart of the Dow-Jones Industrial Average over the past ten years:

https://www.macrotrends.net/1358/dow…-last-10-years

Trump hasn’t had that much effect on the market. The market has steadily risen since early 2009, which is the real beginning of the current bull market. Yes, the market rose somewhat faster starting from Trump’s election in November 2016 to January 2018, but it peaked in January 2018, and since then it hasn’t risen at all. It’s actually down a little since then. That doesn’t look to me like the stock market deciding that (based on what he claimed he would do once he took office) Trump was going to be much better than Obama at creating financial policy that would be good for them and continuing to believe it since then. That looks like the market deciding that he would be much better, given his pre-election claims, but after a year of his being in office, they decided that his policies weren’t much better for them at all. Then they let the market go back down somewhat.

The nine and a half years since early 2009 are indeed one of the biggest bull markets in American financial history. So what? Those years are basically a recovery from the big drop in the market from about the end of 2007 to about the beginning of 2009. The usual explanation of that drop over about a year and a half is that it was the bursting of the housing market bubble. It’s not even really clear that the steady rise in the market since early 2009 is an unreservedly good thing. Long market climbs at a fast pace are basically followed by crashes. Do you know what the fastest climb in the history of the Dow-Jones Industrial Average was? (The Dow-Jones Industrial Average has existed since 1896.) It was the nine years immediately before the stock market crash of 1929. The climb from 2009 to the present isn’t as nearly as much as the climb from 1920 to 1929, but it’s enough that it should make us a little worried.

A day or two after Trump was elected, I called our financial adviser and said, essentially, “Oh shit! How do we deal with the coming financial catastrophe?” I was mostly worried about an era of reduced regulation leading to another financial breakdown. She talked me off the ceiling.

I still worry about the economic impact of tariffs, impeachment, or a Constitutional crisis. But I’m glad the most dire predictions made in November 2016 have not panned out. Sometimes even really smart people get things wrong.

Just FYI, Mangosteen’s article was from Dec 2017, and it contrasted statements made immediately after the surprising November 2016 result to 2017 performance. If you must forecast, forecast often.

Krugman recanted and marked his beliefs to market.

Nov 9, 2016 bad prediction: https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016/paul-krugman-the-economic-fallout

Nov 11, 2016: Retracts prediction: https://krugman.blogs.nytimes.com/2016/11/11/the-long-haul/?_r=0

Nov 14, 2016: Maintains retraction: https://www.nytimes.com/2016/11/14/opinion/trump-slump-coming.html
Jan 2018: [INDENT] On election night 2016, I gave in temporarily to a temptation I warn others about: I let my political feelings distort my economic judgment. A very bad man had just won the Electoral College; and my first thought was that this would translate quickly into a bad economy. I quickly retracted the claim, and issued a mea culpa. (Being an old-fashioned guy, I try to admit and learn from my mistakes.) [/INDENT] https://www.nytimes.com/2018/01/01/opinion/can-the-economy-keep-calm-and-carry-on.html

June 2018: [INDENT] Just to be clear, the U.S. economy is still doing quite well overall, continuing the long expansion that began during Obama’s first term. Those of us who thought the economy would be hurt by political uncertainty have been wrong so far. [/INDENT]https://www.nytimes.com/2018/06/30/opinion/trumps-potemkin-economy.html

Conclusion: Investor Business Daily doesn’t really practice great journalism, does it?

It took him eight years, but by dog, he sabotaged the gun industry by leaving office. Now the gun industry has to cater to minorities and LGBTQ. Do you know how expensive it is to come up with an entirely new marketing strategy?

The President has little positive effect upon the stock and commodities markets as a whole. However, they can certainly have a negative effect, say, by unilaterally applying tariffs and engaging in trade wars with major trading partners, which is something skilled financial experts would tell him to avoid doing, especially given how poorly that worked for Bush in 2002.

Stock market crashes, on the other hand, are never the work of a single individual or even a single cause. They are a result of excessive speculation resulting from rumor and overvaluation resulting in a massive overcorrection as investors lose confidence and start shortselling or dumping overvalued stocks. It is basically a result of everyone uncritically following a trend of growth and assuming it will continue indefinitely until enough investors lose confidence.

Stranger

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.” – Warren Buffett

"The only value of stock forecasters is to make fortune tellers look good.” – Warren Buffett

First, the serious answer to your question: Conservative Republican here: I still believe the markets are in trouble, long term. The combined weight of unpayable public debt, infrastructure deterioration, the Western drought and its future threat to California’s farming industry, and the structural changes in “work” cannot be ignored. I don’t know if it will be sudden and bubble-ish, triggered by a political or natural event, or if it will be like a long term receding wave that depresses returns for decades. Either way I expect a reckoning, and I’m trying to prepare myself and my family (adult kids) for it.

I didn’t, and became 6 figures richer in a very short time.

I’ve been selling and transferring at each high, placing those gains in the most secure cash-like investments I can find. I’ve also been using some gains to pay off remaining debt.

I came to the conclusion a long time ago that anyone who’s found a secret to investing surely isn’t going to share it. Doing so would negate any gains for them. If they’re on a screen or book cover and advising you, they’re almost certainly full of shit. I ignore all of them.

According to the knee-jerk reactions on election night here apparently by the end of 2017 the entire country was suppose to be a crazy fascist dictatorship with LGBT and minorities being lynched in the streets.

Basically don’t believe what anybody says when they’re talking solely from election jitters emotion.

You forgot the master…

“It’s tough to make predictions, especially about the future.” – Yogi Berra

Given how much markets tend to like predictability, I have been pleasantly surprised at how little negative impact there’s been from a president who prides himself on being unpredictable.

I was expecting a downturn right after the new administration took over, but my situation is such that I won’t need to touch my stocks for a long time, if ever. So I left all my stocks in, and have benefited nicely along with the optimists.

I think the markets are currently overpriced, due to speculation caused by cuts in taxes and regulations. Whether an acute correction (or more) occurs in the medium term, I think the likely increase in the deficit (even more likely if growth slows), leading to even faster growth in the national debt (combined with rising interest rates) will have a long-term dampening effect on the markets.

If you look at the stock charts, around January 2018, the steady upward march became a downturn that lurched up and down, never reaching those earlier highs. This was when Trump launched his ill-advised trade war. If you’d bet money on the market at that time, you’d be losing by now. Are you putting more money in?

I admit to someone who thought a crash would come sooner, if by nothing else than regression to the mean. My best explanation is that the Obama economy was already going full steam, and it never wavered until Trump took a break from bashing immigrants to stick his babyhands into the economy with this dumb tariffs. The economy hasn’t reached those highs.

The only question is what other “smart” things will he do, and when? Once he starts dismantling the regulations that stabilize the financial system, 2-4 years should be enough for systemic risk to accumulate and blow up. I now believe this is the Republican’s MO. Loot the treasury and leave land mines to blow up in the face of a Democratic administration.

I have a co-worker who asks my opinion about the market, and she asked my thoughts after Trump won. I said that short term, the market would probably be good. I believed that Trump’s policies would favor business by reducing regulations and looking the other way about questionable practices. Long term, three to five years, I thought that it could be a catastrophe.

Part of the current run up in the US market is due to the huge tax cut favoring big business. A lot of companies are buying back stock, which is increasing the overall market. I looked at the current S&P 500 P/E ratio and it is at 25.10. The only times that it has been higher is pre-2008 meltdown, pre-tech bubble meltdown (1999-2001), and 1895 or so. I don’t see this ending well.