The Stock market spiked because it anticipates. Looks like the Dems are coming, doesn't it?

Question

That's why the Dow went so high the other day - a harbinger of better days approaching.

Answer 1

It has to do with the way the economy works. George Bush has given tax cuts to the rich. He did this because he believes (as his father and Reagan did) that if the rich have more money, they will use it to create more businesses so that they can get richer; a theory known as "trickle-down economics." The natural side effect of more business should have been more jobs, because you need people to run those businesses. Makes sense on the surface. And it worked to a point, there are more businesses and the ones already there have more money.

What this theory doesn't take into account is how businesses operate. Businesses by nature struggle to hold onto as much money as they can. They hire as few employees as they can at as low a rate as they can to put together the cheapest materials they can get without risking a lawsuit into a product that the businesses force the employees to make as quickly as possible (to avoid overtime) that they will then charge as much as the possibly can at the market. So very little money is trickling down into the middle and lower classes. Added to that, the businesses are charging outrageous prices but on products we need, so we are also having to pay more even though wages have stagnated.

This creates a huge problem. Those formerly of the middle class having had no wage increase but definitely having price increase have slipped more and more into the lower class. That is why the rich/poor gap is getting wider. The businesses have money, which is attracting the rich shareholders and so that bumps the Stock market way high; and yet the money isn't getting to the consumer and so the economy is still very sluggish, because the consumer (who is also the employee) has no money to put into the system.

Which will soon provide another problem. Pretty soon now the middle class (which will essentially be a poor class) will no longer have the money no matter what they do and the products being bought will drop off. This will damage the businesses, and the people will begin to starve or be without clothing or shelter. It may even have the potential to create a new Great Depression, because the money will no longer be going through the system. Incidentally, the first Great Depression (which occurred in the 1930's) started immediately after one of America's stock market hit very high in the 1920's. This is a bad sign actually that the market went so high so quickly, if something isn't done soon we will be in that Depression again.

What we need to do is get the money to the poor and middle classes. They have to spend the money to clothe and feed themselves (something businesses don't have to do). We do this by taxing the businesses with capital gains taxes and estate taxes, while dropping property taxes (which still help the rich, but help the middle class far more). We need to raise the minimum wage so that more employees have more buying power. And I know this is counterintuitive, but welfare helps. Giving money to the poor ends with them using that money to give to businesses to get their food also, so it still gets back to businesses who can then use it to pay more employees. No matter where you cut taxes, it always gets back to the companies; but if you give it to the rich it will only help the rich. If you give to it to the poor, it helps everyone.

Immigration strangely enough helps out as well. Those immigrants don't use welfare (no matter what you are told) because they don't want to be on a government list that is checked often and could end in their deportation (which they avoid at all costs). So they work because they have to. They take that money and immediately put it into businesses so they can feed and clothe themselves, so it always goes back to creating more business which helps everyone. But it does so by forcing the businesses to put money back into the system (which they wouldn't do on their own). Bush is destroying the system because he doesn't understand it, put the democrats in so they can salvage it while there is still time.

Answer 2

The stock market typically moves up when Republicans are expected to win, not Democrats, because of the Democrat "Tax and Spend" policy. Didn't you really know this all along? Everyone else does.

Even if the Senate splits 50/50, which appears likely according to the polls, Dick Cheney breaks any tied votes. Also, if you check the positions of some important Democrat probables, like Jim Webb in Virginia and Bob Casey in Pennsylvania, they're ALMOST Republican!

Since the mid-term elections are close, I don't read anything much into the direction of the stock market, except that the recent all-time market high is a pretty good indicator of the current economy.

Answer 3

No predictions of mass transfer of power to democrats is waning. So the Market still does well.

The stock market has flourished under the current administration since the dip that started under the last 2 financial cycles of Clinton and the 9/11 Massacre. Millions of peoples retirement actually depend on the stock market.... mostly the Middle Class... democrat leaders and a handful of liberal republicans did us a great disservice not allowing a PALTRY 2% of social security to be invested... instead they feared the loss of power that that 2% kept from buying votes with BOGUS programs.

Of course CNN, Katie Couric, ABC, Hollywood and the LA and NY Times shall ignore the Market's importance if it were to falter under democrat purview.

Answer 4

I wouldn't put too much faith in that assessment. The market is doing better because earnings were pretty good for alot of companies.

There is also alot of capital moving back into large cap stocks (and away from real-estate).

Also, consider this. 40-50% of the population is now in the market given IRA's, 401k's etc. So you're getting big money plus the little guy moving stuff in the market.

And for the guy above me-- the market faire much better under clinton than it has under Bush. We were near dow 12k in 2001. It dropped to 7800 at one point (2002 or 2003). It has taken 5 years to get BACK to where it was in Bush's first year in office.

Answer 5

Since when has raising taxes, putting America at risk and just being stupid been seen as a harbinger of better days? Demorats will have the stock market down below 500 within a year. Just like they did with Slick Willie.

Answer 6

Spirit walker...have you ever opened a newspaper or do you get all your info from Rush?

Here is a little something for people to put in the peace pipes. Have you notice how the stock market has been going up as the increase warnings the housing market is going down???

Answer 7

The market is more forward looking than a week.

Answer 8

God I hope so