Will The Market Explode?!

[BFritz21]

I was losing money in the stock market at a pretty steady rate, but now that a vaccine looks to be on the way, I've made some nice gains in the past few days.

I figured that once a vaccine got developed, the market would take off, but, when Biden got elected, I started to fear a huge collapse and figured I'd lose all my money because people would start freaking out about his high tax plans on the wealthy and his instability.

If Biden just keeps his hands off, will the market continue to grow and explode?

I need this money for the rest of my life, and I'd be a HUGE burden on my family without it.

Will it continue to grow? Do you think there's any possible way for Joe to screw it up?

Will jobs come back?

[Goalpost]

It's possible this year there could be a Santa Claus rally. The vaccine news has been a positive for the market. There are some head winds still involved though...the stimulus package and the election in Georgia.

[grampahol]

Personally I don't care about the market that much. I would much rather rely on my own labor and ingenuity to get my daily bread than the whims of investors and * cough* tax rates on gazillionaires.. 

[KillerGoose]

(11-25-2020, 01:39 AM)BFritz21 Wrote: I was losing money in the stock market at a pretty steady rate, but now that a vaccine looks to be on the way, I've made some nice gains in the past few days.

I figured that once a vaccine got developed, the market would take off, but, when Biden got elected, I started to fear a huge collapse and figured I'd lose all my money because people would start freaking out about his high tax plans on the wealthy and his instability.  

If Biden just keeps his hands off, will the market continue to grow and explode?

I need this money for the rest of my life, and I'd be a HUGE burden on my family without it.

Will it continue to grow?  Do you think there's any possible way for Joe to screw it up?

Will jobs come back?

Jobs are going to come back, yes. Biden is likely going to run the economy much like Obama did. Touching on jobs, this is how Obama's administration looked when it came to job gains. 

2009: -421k jobs lost per month
2010: 86k jobs gained per month
2011: 173k jobs gained per month
2012: 181k jobs gained per month
2013: 192k jobs gained per month
2014: 250k jobs gained per month
2015: 227k jobs gained per month
2016: 195k jobs gained per month

Average: 110k jobs per month

Switching to the Trump presidency.

2017: 176k jobs gained per month
2018: 193k jobs gained per month
2019: 178k jobs gained per month
2020: -1.4 million jobs lost per month

Average: -213k per month. The first three years of Trump's presidency averaged 182k jobs per month, which is right in line with how the Obama administration performed during his second term (they averaged 215k jobs per month).

Biden is going to be familiar on some level with the economic issues that we are facing, though the scale of this is larger than the recession of 2009. The vaccine coming out will help. Now, touching on the economy itself, here are the Obama's administration GDP gains. These numbers represent a percentage growth or decrease over the course of the entire calendar year.

2009: -2.5% GDP decrease
2010: 2.6% increase
2011: 1.6% increase
2012: 2.2% increase
2013: 1.8% increase
2014: 2.5% increase
2015: 3.1% increase
2016: 1.7% increase

Now, on to Trump.

2017: 2.3% increase
2018: 3% increase
2019: 2.2% increase
2020: -6.5% decrease.

The reason for all of this information is to show that the economy under Trump was doing the exact same thing as it was under Biden and Obama. This year really hit the economy hard, and including 2020, the average GDP increase under Trump is 0.3%. For Obama's entire presidency, they averaged 1.6% per year, but his second term saw GDP gains of 2.2% per year, on average. There are going to be many similarities between a Biden presidency and the Obama presidency and I don't see any particular reason to believe that the economy is going to be vastly different here. I would also expect the budget deficit to begin shrinking again, though a better measure of economic performance is GDP gains. 

Jobs are going to come back, the economy is going to come back and do fine. Anybody selling nightmare stories of an economic crash under Biden are trying to rile people up and don't really know what they are talking about. He is not a far left figure and his cabinet selections so far should be evidence of that. However, this pandemic hit the country really hard and it may take some time for things to start swinging up again. There were millions of jobs lost and those won't came back immediately.

[fredtoast]

The stock market is artificially inflated due to an injection of over $2 trillion dollars from the federal government in the Covid relief bill earlier this year.

Plus the economy was showing signs of slowing down in 2019 before Covid arrived. The Fed had cut the prime rate multiple times to avoid a recession.

So I think the economy will struggle over the next couple of years, but NOT BECAUSE OF BIDEN. Lots of people will want to blame him, but it would have happened no matter who was elected.

[fredtoast]

(11-25-2020, 11:35 AM)KillerGoose Wrote: The reason for all of this information is to show that the economy under Trump was doing the exact same thing as it was under Biden and Obama.

I have made this same point many times.

However you forgot to mention that deficit spending in the first three years of Trumps administration was almost DOUBLE what it was the last three years of the Obama administration.  Trump was artificially pumping up the economy with unfunded tax cuts and increased government spending (mostly military).

So Obama was actually doing a better job with the economy than Trump did.  People felt they were doing better under Trump, but it was like feeling rich just because you borrowed a bunch of money.

[Benton]

(11-25-2020, 01:39 AM)BFritz21 Wrote: I was losing money in the stock market at a pretty steady rate, but now that a vaccine looks to be on the way, I've made some nice gains in the past few days.

I figured that once a vaccine got developed, the market would take off, but, when Biden got elected, I started to fear a huge collapse and figured I'd lose all my money because people would start freaking out about his high tax plans on the wealthy and his instability.  

If Biden just keeps his hands off, will the market continue to grow and explode?

Hands off what? Presidents don't direct control the market. There are things they do have control over, but what may cause a dip on one end may cause a rise in another. 

Quote:I need this money for the rest of my life, and I'd be a HUGE burden on my family without it.


Will it continue to grow?  Do you think there's any possible way for Joe to screw it up?

To the first question: he'll most likely take a similar economic approach as Obama did. By and large, stocks went up from 2009 through 2016 at about the same rate as they did from 2016-2020 (pre-pandemic). The market doesn't really care who the POTUS is. 

To the second: sure. Personally, I don't think he will. I think we'll have the slow and steady economic growth we've had for the last decade at the cost of our ever increasing deficit. 

Quote:Will jobs come back?

Not without some significant reforms. Low wage jobs, sure. Service jobs, sure. 

But take the NAFTA reform. It wasn't bad, but it wasn't super beneficial for workers. Good for US farmers and Mexican auto workers (mandated a wage increase for them) but it didn't do a lot to bring jobs back here. It was reform, but it wasn't significant. 

You want to increase jobs, one of the easiest ways is tax reform. Close overseas loopholes and set tax rates high... but give companies breaks for employing US workers. The higher the percentage of US workers, the higher the break. You can still keep a number of the breaks in place and deferments, but it would effectively tie jobs to profits: the more US jobs a company has, the more money it gets to keep, as opposed to a system where companies are paying substandard wages or outsourcing labor overseas and taxpayers are subsidizing that. 

[fredtoast]

(11-25-2020, 01:39 AM)BFritz21 Wrote:  I started to fear a huge collapse and figured I'd lose all my money because people would start freaking out about his high tax plans on the wealthy and his instability.  

Really?

Didn't you see what happened to the market right after Biden was elected but BEFORE the vaccine was announced?

Why would raising taxes on people making over $400K hurt the economy?

What "instability" are you talking about?

[fredtoast]

Just a note on jobs.

Truck drivers account for almost 6% of the full-time jobs in the United States, and over 40% of truck drivers are minorities.

A large majority of these jobs will be eliminated in the near future by self-driving trucks. There are already self-driving trucks on US highways and the technology is getting better at a very rapid pace. It will save businesses billions of dollars because they will be able to keep the trucks on the road 24 hours a day.

A large majority of cashiers will also be replaced in the near future. This will also increase corporate profits.

So there will need to be major adjustments to the labor market and government programs to keep people working. Corporations will keep making more and more money, but at some point they will lose consumers if there are no ways for people to make money.

[BFritz21]

(11-25-2020, 02:20 PM)Benton Wrote: Hands off what? Presidents don't direct control the market. There are things they do have control over, but what may cause a dip on one end may cause a rise in another. 

Biden could remove tax cuts that allowed corporations to make record-setting gains (or close to), and that allowed for job creation and obviously money to be trickled back into the economy.

That also raised consumer sentiment, which is good because then people are spending their money and re-circulating it back into the economy.

(11-25-2020, 02:20 PM)Benton Wrote: To the first question: he'll most likely take a similar economic approach as Obama did. By and large, stocks went up from 2009 through 2016 at about the same rate as they did from 2016-2020 (pre-pandemic). The market doesn't really care who the POTUS is. 

To the second: sure. Personally, I don't think he will. I think we'll have the slow and steady economic growth we've had for the last decade at the cost of our ever increasing deficit. 

Which is what to the first question?  The market cares because things like taxes, regulations, trade restrictions, etc., all impact the bottom line.

The market took off under Trump pre-pandemic.

To the second, I think it just matters what the people pulling his strings do.  I don't think he has shown the ability to be mentally "with it" enough to propose anything that could strengthen things.  Hopefully, he'll just stay in the basement like he did for most of his campaign and won't make many changes.

(11-25-2020, 02:20 PM)Benton Wrote: Not without some significant reforms. Low wage jobs, sure. Service jobs, sure. 

But take the NAFTA reform. It wasn't bad, but it wasn't super beneficial for workers. Good for US farmers and Mexican auto workers (mandated a wage increase for them) but it didn't do a lot to bring jobs back here. It was reform, but it wasn't significant. 

You want to increase jobs, one of the easiest ways is tax reform. Close overseas loopholes and set tax rates high... but give companies breaks for employing US workers. The higher the percentage of US workers, the higher the break. You can still keep a number of the breaks in place and deferments, but it would effectively tie jobs to profits: the more US jobs a company has, the more money it gets to keep, as opposed to a system where companies are paying substandard wages or outsourcing labor overseas and taxpayers are subsidizing that. 

You think Biden has shown the mental ability to be creative enough to do all that?

[fredtoast]

(11-25-2020, 06:33 PM)BFritz21 Wrote: The market took off under Trump pre-pandemic.

The market had been growing steadily before Trump took office.

The only reason it continued to rise under Trump was because the government was borrowing more money to pump into the economy.  Defict spending in the first three years of Trumps administration was almost double what it was the last three years of the Obama administration yet the market di not rise a lot faster.

Trump bragging about how great his economy was is like a guy borrowing a million dollars and bragging about being a millionaire.

No matter who is President if you reduce taxes and increase government spending the economy should rise.  Un fortunately that is based on more government debt instead of real wealth increase.

[fredtoast]

(11-25-2020, 06:33 PM)BFritz21 Wrote: You think Biden has shown the mental ability to be creative enough to do all that?

Didn't you believe that Biden had the mental ability to run complex criminal business operations all over the world and get away with it scot-free? 

[NATI BENGALS]

I think there is pain ahead.

Millions will lose unemployment benefits next month if congress doesn't do something.

The CDC eviction moratorium ends at the end of the year.

The stupid long lines at foodbanks.

None of that adds up to a strong economy. JPMorgan is predicting our GDP shrinks by 1% in the first quarter of 2021.

[Benton]

(11-25-2020, 06:33 PM)BFritz21 Wrote: Biden could remove tax cuts that allowed corporations to make record-setting gains (or close to), and that allowed for job creation and obviously money to be trickled back into the economy.

Trickle down economics has been debunked at just about every turn. When companies receive tax cuts, there's no indicator they return that to the labor pool. It's good for the bottom line and shareholders, but that doesn't equate to more jobs.
Think about it.
If your employee comes to you and says "Hey, we can have $1 million in profit or we can have $2 million in profit" which are you going to pick? Are you going to ask "How do we save that million?" Are you going to care if it means outsourcing but you get a six figure bonus?
The job creation that existed under Trump was the same job creation that existed under Obama: record setting deficits. We're employing more people based off taxpayers, predominantly from the middle and upper middle classes.

Quote:[quote pid='956426' dateline='1606340024']
That also raised consumer sentiment, which is good because then people are spending their money and re-circulating it back into the economy.


Which is what to the first question?  The market cares because things like taxes, regulations, trade restrictions, etc., all impact the bottom line.

The market took off under Trump pre-pandemic.

To the second, I think it just matters what the people pulling his strings do.  I don't think he has shown the ability to be mentally "with it" enough to propose anything that could strengthen things.  Hopefully, he'll just stay in the basement like he did for most of his campaign and won't make many changes.

You think Biden has shown the mental ability to be creative enough to do all that?

[/quote]

The market didn't "take off" during Trump pre-pandemic. It continued the same rise as it had after the first couple years of the Obama administration. Dow, GDP, average wage, unemployment, etc., the Trump years were basically just a continuation of the Obama years.
The difference, down the road, is likely the tax breaks. Up until top earners got bigger breaks under Trump, we were borrowing less money to pump into the economy; the tax breaks, boiled down, mean we're borrowing more money to pump into the economy. 
As far as Biden's mental ability, that isn't really how it works. It's more about the people he puts into place. It's not like Biden (or Trump or Obama) sat down and said estimated what raising interest rates in the same year as lowering taxes would do (or vice versa). He has people for that. Basically, Biden (as Trump and Obama did before him) says what he wants to happen and his advisors try to make it so.
The stock market isn't going to collapse. Are we headed for a cooling off period? Probably. Are we going to keep borrowing at an unhealthy rate to offset that? Probably. Are we going to institute real reforms to change that? Probably not.

[Goalpost]

Here's the history of our debt.

https://www.self.inc/info/us-debt-by-president/

[*TheLeonardLeap*]

(11-25-2020, 03:11 PM)fredtoast Wrote: Just a note on jobs.

Truck drivers account for almost 6% of the full-time jobs in the United States, and over 40% of truck drivers are minorities.

A large majority of these jobs will be eliminated in the near future by self-driving trucks.  There are already self-driving trucks on US highways and the technology is getting better at a very rapid pace.  It will save businesses billions of dollars because they will be able to keep the trucks on the road 24 hours a day.

A large majority of cashiers will also be replaced in the near future.  This will also increase corporate profits.

So there will need to be major adjustments to the labor market and government programs to keep people working.  Corporations will keep making more and more money, but at some point they will lose consumers if there are no ways for people to make money.

Yeah, it's why I don't think we're QUITE at the time where we will need UBI, I have come to believe it is something that is probably a needed eventuality sooner rather than later.

[CKwi88]

Stocks only go up

Wall Street doesn't actually care who is president. Heck, they barely care about the legislative branch. No matter who is in charge, there will be stocks that move up, and stocks that move down. Just have to find which ones are which based on the current situation.

That said, it's tough to project at the moment with a Biden presidency but republicans in control of the senate. If Biden isn't allowed to govern, I imagine growth will be quite slow.

Then the republicans can get back control, balloon the deficit to pump money into the economy and say that everything is dandy

[BmorePat87]

(11-25-2020, 11:35 AM)KillerGoose Wrote: Jobs are going to come back, yes. Biden is likely going to run the economy much like Obama did. Touching on jobs, this is how Obama's administration looked when it came to job gains. 

2009: -421k jobs lost per month
2010: 86k jobs gained per month
2011: 173k jobs gained per month
2012: 181k jobs gained per month
2013: 192k jobs gained per month
2014: 250k jobs gained per month
2015: 227k jobs gained per month
2016: 195k jobs gained per month

Average: 110k jobs per month

Switching to the Trump presidency.

2017: 176k jobs gained per month
2018: 193k jobs gained per month
2019: 178k jobs gained per month
2020: -1.4 million jobs lost per month

Average: -213k per month. The first three years of Trump's presidency averaged 182k jobs per month, which is right in line with how the Obama administration performed during his second term (they averaged 215k jobs per month).

Biden is going to be familiar on some level with the economic issues that we are facing, though the scale of this is larger than the recession of 2009. The vaccine coming out will help. Now, touching on the economy itself, here are the Obama's administration GDP gains. These numbers represent a percentage growth or decrease over the course of the entire calendar year.

2009: -2.5% GDP decrease
2010: 2.6% increase
2011: 1.6% increase
2012: 2.2% increase
2013: 1.8% increase
2014: 2.5% increase
2015: 3.1% increase
2016: 1.7% increase

Now, on to Trump.

2017: 2.3% increase
2018: 3% increase
2019: 2.2% increase
2020: -6.5% decrease.

The reason for all of this information is to show that the economy under Trump was doing the exact same thing as it was under Biden and Obama. This year really hit the economy hard, and including 2020, the average GDP increase under Trump is 0.3%. For Obama's entire presidency, they averaged 1.6% per year, but his second term saw GDP gains of 2.2% per year, on average. There are going to be many similarities between a Biden presidency and the Obama presidency and I don't see any particular reason to believe that the economy is going to be vastly different here. I would also expect the budget deficit to begin shrinking again, though a better measure of economic performance is GDP gains. 

Jobs are going to come back, the economy is going to come back and do fine. Anybody selling nightmare stories of an economic crash under Biden are trying to rile people up and don't really know what they are talking about. He is not a far left figure and his cabinet selections so far should be evidence of that. However, this pandemic hit the country really hard and it may take some time for things to start swinging up again. There were millions of jobs lost and those won't came back immediately.

Great post!

Brad, I don’t think you have to worry about Biden tanking the market.

We may see some scares when he fixes the foolish tax cuts, but it’ll even back out and we’ll be in a great spot for the next, inevitable recession.

[Truck_1_0_1_]

(11-25-2020, 08:38 PM)Goalpost Wrote: Here's the history of our debt.

https://www.self.inc/info/us-debt-by-president/

How the hell did they manage that during Lincoln's presidency?!

Civil War?

[Belsnickel]

(11-26-2020, 05:23 PM)Truck_1_0_1_ Wrote: How the hell did they manage that during Lincoln's presidency?!

Civil War?

Yeah, the Civil War did it. Keep in mind that the page has quite a few errors in it and doesn't get into the nuances of things very well, touching only the surface layer of the information. It glosses over things that have a major impact on the context.