Specifically, what are you referring to. Please document the points that you disagree with in Kudlow's article. I am 100% on board with Kudlow, and I have a wealth of economic and financial experience to draw on. Do you?
And yet, if the Bush economic-recovery plan of easier money and lower tax rates is so catastrophic — about to rip through the economy like an Oklahoma tornado — why are both the stock and bond markets enjoying significant rallies? End of the Iraq War!!! What a frickin' idiot. Kudlow has a partisan axe to grind and he is grinding it. Kudlow like you also closely equate Wall Street with the economy. They are related but not in the lock step fashion that Kudlow is suggesting. Wall Street has a speculative side that both of you ignore.
Wow No Worries, that is bad. First of all you call somebody a frickin' idiot, and then say something that illustrates that you have very little knowledge of the markets. I am not in TJ's class when it come to economic analysis, but even I know that since the outcome of the Iraqi War was never in question, that it had almost zero effect on stock market trends.
The end of the Iraq War (although the war on terror continues) has had a beneficial impact on the *stock*market as uncertainty has been removed, although it is harder to draw a parallel between the end of the war and the bond market's stellar performance. Typically the two markets move against one another as money rotates from one to another. The bond market has been driven in large part by the loose monetary policy and lower taxes that Kudlow cites. The stock market has been driven by the same factors, as well as the war. The point that Kudlow is making here is that the liberals have painted Bush's growth plan as pure lunacy and something that will cripple the markets. This has not happened. In fact, the opposite has happened. Wall Street and the millions of people that comprise the investor class have cast their vote with the President on these fiscal issues. They are putting their money with their preference -- and it shows with the strong equity and debt markets. I'm a little surprised you keep coming back to me for economic shout downs. You'd think your ego would be demolished at this point. Fortunately, mine is so big (and deservedly so) that I can go on like this ad infinitum.
The point that Kudlow is making here is that the liberals have painted Bush's growth plan as pure lunacy and something that will cripple the markets. .... and then Kudlow cites market returns in the short term to support his case. This is the height of tom foolery. I know it, you know it and Bob Dole knows it. BTW, certainly the liberals are balking at the President's tax cut package, but so are the moderate Republicans.
Did the liberal media miss the economic boom that followed President Reagan's tax cuts? Methinks only fools see that which is not there. Reagan cut the marginal tax brackets but balanced that cut with removing tax shelters.
Another bad argument. While the impact of the bill will be long-term in nature, the actual passing of the bill has been a *short term* event. It has happened recently, and market reaction has been positive. The millions of people that comprise the investor class have evaluated the proposal with the long-term in mind, and have given it their stamp of approval. Stock valuations are representative of the net present value of expected future cash flows. The market has the *long-term* picture in mind as they have evaluated this stimulus package. Essentially what you are saying is that you have information that is superior to the millions of people in the investor class. This information leads you to deem the stimulus package as bad for the economy. For some crazy reason, I'm willing to go with the opinions of Wall Street and the millions of people before I go with your economic amateurism, No Worries. Your point about Reagan is simply wrong, unless you would like to prove that the revenues from the removal of tax shelters is enough to cancel out the *massive* tax cut that Reagan enacted. I don't think you can do this, but have at it!
Didn't the stock market rise throughout the first Bush recession as well? I'm no genius but didn't I learn back in like, 10th grade or something that the stock market doesn't always parallel GDP and vice versa?
TJ, how can you possibly say one event over another is the cause for the current upterm in the stock market? That is completely silly on face value. Oh right, you are the expert. I forgot.
If anyone can say what effect something is going to have on the stock market *before* it happens, that man should be a multibillionaire just off of trading. Seeing as that's only happened to Warren Buffet and a choice few others, and he's not a member of this board... Not to pick on posters, but I'm kinda sick of the after trading interpretation of the moves of the Dow, S&P, Nasdaq, wider market moves we hear or read if we browse the news. I think the system is too complicated to judge based on that, we need psychohistory...
Absolutely the end of the Iraq war had a positive effect on the stock market. As TJ alluded to earlier, the market hates uncertainty. When the war was decided, the uncertainty was removed, and the markets charged north. Companies are hesistant to commit investments and capital when there is uncertainty, and the market is very timid in these instances as well.
After having lost the argument convincingly, this is all you've got left? Each trading day is characterized by chatter on the trading floor. No one is saying that this chatter, which is comprised of the day's events, is the sole force behind the markets moving. At the end of the day, nothing but earnings and expected future cash flows drives share price valuations. However, there are clearly specific events which impact the stock market. A huge change in fiscal policy, which is what is being proposed, is one of those events. To think this is not the case is simply ludicrous. The only point Kudlow and I are making here is that the markets have *not* responded negatively to the Bush proposal, as the liberal left had predicted. Woofer and No Worries, your thesis that news does not drive stock prices is laughable. It is one piece of the larger puzzle, but it is a piece nonetheless (I can't believe I have to explain this). Woofer, based on your post, I would ask that you please read the Corporate Finance 101 textbook to educate yourself. I have neither the time nor the patience.
That's OK. Just three yes/no questions. Do you actively trade? Are you rich yet? Do you know anyone who's gotten rich trading by using that Econ 101 textbook besides Warren Buffet?
1. Yes 2. Depends on your definition of rich 3. Stupid questions don't deserve answers Woofer, when news is announced, it impacts stock prices, surely you aren't disputing this. The market's interpretation of that news can be gauged by whether share prices go up or down. While it is difficult to isolate the impact of one piece of news, a piece of news as large as a tax cut has an impact that can be readily seen in the market. We are talking about the single largest fiscal policy event since the Republican sponsored tax cuts of 1997. This *will* impact the market. Simple valuation theory says that the more cash flow you expect to receive, the more you will pay for that cash flow stream. Lower taxes means higher cash flow. This is extremely easy to understand, it amazes me that you can't do this. This is a widely accepted truth in the financial community -- a community that you clearly have no experience with.
I'm with TJ on this...I can't believe people are actually arguing that current events...and the day's news in particular...don't affect the market. Since it's all built on our personal expectations, how can it not be influenced by the day's events? Particularly, news related to fiscal policy...??
What I am saying is if you can predict which way the market is going based on some news item, why aren't you getting rich off it right now? It's not that simple. I am sure the news affects the market, but it's amazing to me that the after the market recaps sound like they know that's exactly why things happen the way they happened. If these analysts were any good, they'd be making money before or while these things went down instead of pontificating afterwards. If you make money off the stock market, you should be running a mutual fund, cause most stock pickers (including mutual fund stockpickers) lose money in the long run.
This is *ridiculous*. When I worked for an investment bank in a previous life, I put together a chart that showed that equities have outperformed bonds in terms of total return (share price appreciation plus dividends) since 1930. The average annual return for equities over this period? 11%. To say that most mutual funds lose money over the long run is a bold faced lie. What you probably meant (I'm giving you the benefit of the doubt here, although I'm not sure why I'm doing that) is that most stockpickers underperform that market indices. Big difference.
TJ, The partisan hack who you claim is an economic sage states that the market appraised Bush's tax cut as a good thing for the economy and responded by the recent short term uptick. Now discerning minds will first note that the market does not necessarily track the economy. To imply the recent uptick correlates 1:1 with the news of a tax cut bill is pure ignorance. Discerning minds will note second that short term movements in the markets do not necessary have one profound meaning. Lastly discerning minds will note that the market is built upon specualtion, albeit educated speculation but speculation nevertheless. That the market speculates in one direction does not mean the long term economy will follow in that direction. Thus, laying the foundation of one's argument of the short term speculatory nature of the market is sheer nonsense. For you to believe this TJ show how little you actually know about the economy and the market.
Most mutual funds lose wrt broad market indexes. Funds start off smaller and nimble, then successful ones get to be so big they lose the characteristics that made them successful in the first place along with the relative anonymity to get that done. The classic examples people have are what, Fidelity Magellan and Janus Twenty? Doing a quick search on MSN shows Janus Twenty And Fidelity Magellan a bit worse than the Amex/NASDAQ/S&P/DJI. over the last ten years. Maybe a different time period would show something different but the trend lines match pretty much over the coarse graph. I believe that is the standard comparison, sorry I didn't make that clear up front, no need to keep tossing around statements like "liar liar pants on fire". I should have said lose money with respect to broader market indices. Can't believe how hyper you got with that one... I stand by the *gist* of what I wrote earlier. If one is good enough to know exactly what the market is going to do based on some particular news item, that person should be making money based on their understanding of the market, not reporting why it happened after the fact. I stopped paying attention to them, but IIRC the before the market news reports on what the market would when some critical info was released was wrong half the time... (I'd look even stupider without edit...)
