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Like the Mallard Fillmore cartoon a few days ago...

"You know the economy is doing well... the news media has stopped calling it the 'Bush Economy.'"
 

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I think the economy is in deep doodoo. (Economic growth has come from even FURTHER credit expansion, people spending themselves DEEPER into a hole). The economy is generally great when people are packing on debt, ugly when they start paying it off or defaulting heavily.

Regardless, I don't think a president can do much about it (current debt levels), other than make it worse (more socialism), i.e. every time there's some economic apocalypse we come out the other side with more handouts/regulations.

That said, because most people THINK presidents can help the economy, any economic good news has STRATEGIC consequences in the planning of both sides for next year's elections.
 

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Battler said:

That said, because most people THINK presidents can help the economy, any economic good news has STRATEGIC consequences in the planning of both sides for next year's elections.
I could not agree more. This has been a sore spot for me for a very long time. In fact in my original post the stab at the Clintons was indirectly aimed at my in-laws. They LOVED the Clintons. (What do expect from Dems that were raised in Chicago during the original Daly reign.) As far as my in-laws were concerned the entire economic boom of the 90's was a direct result of the Bubba presidency. I have told them repeatedly that they are giving credit to the wrong Bill. Weather you like him or not, I think Bill Gates had more of an effect on the economy than did Bill Clinton.
 

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Battler said:
I think the economy is in deep doodoo. (Economic growth has come from even FURTHER credit expansion, people spending themselves DEEPER into a hole).
I don't know exactly how deep the doo doo is, but the analysts I read yesterday say that the majority of the "good numbers" we are now seeing on GDP are a one-shot result of the tax refund which is just borrowing money (raising the deficit) to give cash to consumers so it increases spending and improves the econmy's vital signs for the short term.

As to whether this is an actual recovery, we have to wait and see. If the numbers dwindle and people start dumping their stock after the recent run-up, we'll know it's back to the same old recession we've been in for three years.
 

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I hate agreeing with Bountyhunter, but I do. We still have totally unrealistic P/E ratios, which means, historically, we are not yet primed for a "true" recovery. Last I looked the S&P still had a Price to Earnings ratio of 30, way to high. Couple that with the unrealistic movement of the NASDAQ, and I hope you folks have put your money in a "safe" place. We have some really big debt, and really low interest rates. Look at the effects on our economy after the Vietnam War, and contrast that with what you see today (economically only here!). I do not believe this recent rally is going to stick with us over the long run.
 

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JTP said:
I hate agreeing with Bountyhunter, but I do. We still have totally unrealistic P/E ratios, which means, historically, we are not yet primed for a "true" recovery. Last I looked the S&P still had a Price to Earnings ratio of 30, way to high. Couple that with the unrealistic movement of the NASDAQ, and I hope you folks have put your money in a "safe" place. We have some really big debt, and really low interest rates. Look at the effects on our economy after the Vietnam War, and contrast that with what you see today (economically only here!). I do not believe this recent rally is going to stick with us over the long run.
You are correct and the worst number I have seen in recent weeks is a "survey" of the sell/buy ratios of CEO's of major tech comapnies. because they are public officers of a company, their trading data is publicly released. The ratio of sell-to-buy of tech stocks among the CEO's of major tech companies is 160. For every dollar spent buying a tech stock, they sold $160 worth of tech stock. Given that they are in a unique position to see the horizon, that is horrible news. And the people who track it said it was the worst the ratio had ever gotten up to. Ergo, the near term outlook for the NASDAQ is pretty bleak.
 

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I agree completely Bountyhunter. I hope people are paying closer attention this time around, then they did the last time...
 

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Few points:

Separate the stock market performance from study of the economy. As pointed out, P/Es are heavily separated from reality. Thus, stock prices may merely reflect the BELIEF of growth of future earnings.

As for the tax cuts - money was not "borrowed/printed" for the tax cuts; but SPENT to pay the various professional voters who receive the money as welfare. This "the money you bought that gun with was stolen by republicans from old people's medicare" s**t has to stop.

Now, for the actual ECONOMY, it's hard to say Bubba had any effect. He may have leaned on the fed to "inject liquidity" - i.e. do stuff that causes the amount of credit to grow. Or maybe he didn't.

Credit growth is cool, credit growth is fun, and credit growth looks like a "boom". Try it - get EVERY credit card you are sent in the mail and max it out one year - say you got 100 grand. Fun, isn't it? Had a good year, didn't you?

Say the next year after that, you don't spend another 100 grand. You actually perhaps start paying off some of that debt. Not fun any more, is it?

In which year were you smarter?

The tax cut wasn't that large compared to the "taking out equity" refinancings.

Cutting wealth redistribution WOULD improve the economy in a positive way. Printing up money and having everyone go harder into debt improves the numbers we're quoting, as well, although this case has an ugly backlash when the music stops.
 
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