Recession

tw · 03-22-2001, 08:27 PM

The market was due for some serious corrections. But George Jr is doing everything he can to push the nation into recession. He keeps talking down the economy to the point that consumers now fear for their jobs and have stopped purchasing anything. Yes the economy will not have the growth rates of the Clinton years. Those were abberations created, in part, by a sudden release of new technologies stifled in the late 70s and 80s.

There is no intelligent reason to make all think we are in recession. However there are campaign promises to certain big, legalized bribers. They want lower taxes - let government debt remain a worry ten years from now. What better way to get useless tax reduction legislation than to talk badly about the economy. Bush Jr is meeting his campaign promises without regard to the damage he does accordingly.

Even Alan Greenspan in his fear of irrational exhuberance never talked so recessionary.

elSicomoro · 03-22-2001, 09:20 PM

I don't remember where I was reading this...ah yeah! It was in an issue of Newsweek. They were talking about how some of the younger people that have been recently laid off don't know what it's like to look for a job in a "regular" economy.

I still don't think we're in a bad spot just yet. Let's face it...what we saw over the last 5 years was unusual. Everything was go-go-go don't stop. Now, we're putting the breaks on a bit...and some people have been thrown off. (I for one am glad my money is not in the stock market just yet.) The REAL investors KNEW that this was going to happen. True, I'm sure that everyone has lost some money with the past year's stock market. However, the true investor was there for Black Monday in 1987. They were there during the recession of the early 90s. They'll be here when the dust settles on the activities of this week. I think the NASDAQ has finally come back to Earth and hopefully, the Dow has as well. (Although, I think the S&P is a better gauge of the economy than the Dow.) Things could get worse though if Dubya is so hell-bent on this damned tax cut that is really more trouble than it's worth.

I wonder what Greenspan and his wife talk about after hours. Does he say things like, "God, why oh why did I raise rates last year? Stupid stupid stoopid!" Furthermore, I would imagine that his finances (along with his wife Andrea Mitchell's) are the most carefully watched out of anyone else in the US. After all, he IS in a precarious situation.

adamzion · 03-23-2001, 09:35 AM

Here's how the entire market works, in a macro-sized sense.
Ready? Here we go.

If people, as a whole, believe that the market is going to go up, they, as a whole, buy stock. If people, as a whole, buy more stock than they sell, the stock market goes up. Therefore, if people believe that the stock market is going to go up, it will.

On the other hand, if people, as a whole, believe that the market is going to go down, they, as a whole, sell stock. If people, as a whole, sell more stock than they buy, the market does down. Therefore, if people believe that the stock market is going to go down, it will.

To expand things further, if President Quayle... I mean Bush says that we're entering a recession enough, then people will feel, as a whole, that the market is going to go down. Therefore, they sell more stock than they buy. And, therefore, the stock market will go down, perhaps helping to propel us into a recession.

So, to wrap it all up, the entire market- and, to some extent, the economy- acts according to the idea of self-fulfilling prophecy. Bush clearly wants a recession, so that he will have an easier time pushing his tax cut through Congress. Myself, I don't get it, but then again, I actually thought about this, an activity with which our <caugh> President is clearly unfamiliar.

Sad, no?
Z

russotto · 03-23-2001, 05:02 PM

Oh, it's even worse than that, because it isn't just perception. There's other positive feedback cycles involved as well. When the market goes down, it becomes harder for companies to obtain capital by issuing stock. Not being able to obtain sufficient capital restricts opportunity for profit and sends some companies into bankruptcy. This causes earnings to go down which causes stocks to go down.

03-23-2001, 09:35 AM	#3
adamzion Coronation Incarnate Join Date: Jan 2001 Location: Philadelphia, PA Posts: 97	Self-fulfilling prophecies Here's how the entire market works, in a macro-sized sense. Ready? Here we go. If people, as a whole, believe that the market is going to go up, they, as a whole, buy stock. If people, as a whole, buy more stock than they sell, the stock market goes up. Therefore, if people believe that the stock market is going to go up, <b>it will.</b> On the other hand, if people, as a whole, believe that the market is going to go down, they, as a whole, sell stock. If people, as a whole, sell more stock than they buy, the market does down. Therefore, if people believe that the stock market is going to go down, <b>it will.</b> To expand things further, if President Quayle... I mean Bush says that we're entering a recession enough, then people will feel, as a whole, that the market is going to go down. Therefore, they sell more stock than they buy. And, therefore, the stock market will go down, perhaps helping to propel us into a recession. So, to wrap it all up, the entire market- and, to some extent, the economy- acts according to the idea of self-fulfilling prophecy. Bush clearly <b>wants</b> a recession, so that he will have an easier time pushing his tax cut through Congress. Myself, I don't get it, but then again, I actually <b>thought</b> about this, an activity with which our <caugh> President is clearly unfamiliar. Sad, no? Z

03-23-2001, 05:02 PM	#4
russotto Professor Join Date: Jan 2001 Posts: 1,788	Re: Self-fulfilling prophecies Oh, it's even worse than that, because it isn't just perception. There's other positive feedback cycles involved as well. When the market goes down, it becomes harder for companies to obtain capital by issuing stock. Not being able to obtain sufficient capital restricts opportunity for profit and sends some companies into bankruptcy. This causes earnings to go down which causes stocks to go down.

03-22-2001, 08:27 PM	#1
tw Read? I only know how to write. Join Date: Jan 2001 Posts: 11,933	The market was due for some serious corrections. But George Jr is doing everything he can to push the nation into recession. He keeps talking down the economy to the point that consumers now fear for their jobs and have stopped purchasing anything. Yes the economy will not have the growth rates of the Clinton years. Those were abberations created, in part, by a sudden release of new technologies stifled in the late 70s and 80s. There is no intelligent reason to make all think we are in recession. However there are campaign promises to certain big, legalized bribers. They want lower taxes - let government debt remain a worry ten years from now. What better way to get useless tax reduction legislation than to talk badly about the economy. Bush Jr is meeting his campaign promises without regard to the damage he does accordingly. Even Alan Greenspan in his fear of irrational exhuberance never talked so recessionary.

03-22-2001, 09:20 PM	#2
elSicomoro Person who doesn't update the user title Join Date: Jan 2001 Posts: 12,486	I don't remember where I was reading this...ah yeah! It was in an issue of Newsweek. They were talking about how some of the younger people that have been recently laid off don't know what it's like to look for a job in a "regular" economy. I still don't think we're in a bad spot just yet. Let's face it...what we saw over the last 5 years was unusual. Everything was go-go-go don't stop. Now, we're putting the breaks on a bit...and some people have been thrown off. (I for one am glad my money is not in the stock market just yet.) The REAL investors KNEW that this was going to happen. True, I'm sure that everyone has lost some money with the past year's stock market. However, the true investor was there for Black Monday in 1987. They were there during the recession of the early 90s. They'll be here when the dust settles on the activities of this week. I think the NASDAQ has finally come back to Earth and hopefully, the Dow has as well. (Although, I think the S&P is a better gauge of the economy than the Dow.) Things could get worse though if Dubya is so hell-bent on this damned tax cut that is really more trouble than it's worth. I wonder what Greenspan and his wife talk about after hours. Does he say things like, "God, why oh why did I raise rates last year? Stupid stupid stoopid!" Furthermore, I would imagine that his finances (along with his wife Andrea Mitchell's) are the most carefully watched out of anyone else in the US. After all, he IS in a precarious situation.

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