US Politics: Borrow And Spend Conservatism Marches On

[Mexal]

14 minutes ago, denstorebog said:

How do you see those two as connected?

My mistake. I thought that had to do with the Republican memo, not the Democratic one. I thought he was weighing options on Rosenstein. Ignore me.

[Fez]

31 minutes ago, Morpheus said:

There is speculation that she may be aware of things she wants no part of, like say certain upcoming firings that would have promoted her.

Odd fact, until she gets replaced (which could take forever in this administration), the next in line at DOJ if Rosenstein were to be fired, would be the US Attorney for the Eastern District of Virginia. What's odd is that on January 13, 2017, as one of his last acts as President, Obama signed an executive order removing the USA_EDVA from the DOJ succession for reasons nobody knows. And then one of the early executive orders Trump signed was to reverse that decision, seemingly on the basis of trying to reverse everything he could that Obama did. What compounded the oddness was that Dana Boente was the USA_EDVA under Obama starting in 2013, and somehow was the only US Attorney that Trump didn't fire after taking office (other than two NE ones that were allowed to stay a few months to hit their 20-year pensions, and Rosenstein himself, who got promoted).

When all that news came out last year, there was a fair amount of conspiracy-mongering that Obama's order was an attempt to manipulate Trump into keeping Boente as a liberal bulwark that would potentially have a lot of power if Trump pushed far enough down the DOJ chain of command. Seems unlikely, but there's still never been a statement about why that order was resigned.

Boente resigned his position last month though to become the FBI general counsel at FBI Director Christopher Wray's request (this was after Boente had announced back in October that he would resign due to Trump pressure). And since Trump takes forever with appointments, the new Acting USA_EDVA is Tracy Doherty-McCormick; a career DOJ official who worked in EDVA since 2007.

Likely nothing comes of it all, but it is odd that this sliver of Obama-connected personnel remain so important at DOJ.

[Mr. Chatywin et al.]

7 hours ago, Ormond said:

For Tywin:

Sorry I have been too busy to reply to your question about the Religious Right in the previous version of this thread.

First, you do realize that I am a theologically liberal Presbyterian and Scot is Eastern Orthodox?? Asking the two of us specifically to explain the Religious Right's support of Trump to you is sort of like asking an active member of a Reform Jewish synagogue to explain a right wing Hasidic sect. Scot and I don't necessarily know much more about this than anyone else.

No need to apologize.

Anyways, yes I am aware that you two are not from the same sect, which is actually kind of helpful. And I wasn't really looking for a full blown explanation as much as I just wanted your guys insights because I thought they could give some perspective. 

As far as the Hasidic sect goes, most of my friends growing up in a Reform Jewish synagogue looked at them like I suspect a lot of moderate Christians look at Young Earth Creationists. 

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But --- here is an interview in Vox of a non-supporter of Trump who is an "evangelical" Christian who has written a book trying to explain the issue. I think it gives a pretty good take on it.

https://www.vox.com/2017/10/4/16346800/donald-trump-christian-right-conservative-clinton

One of the most interesting part in the above to me:

 

Interesting, I'll have to check this out later tonight when I get some free time.

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And for a lot of everyday Religious Right voters, as opposed to the leadership, the "appointing the right people to the Supreme Court" itself boils down to just a single issue -- abortion. I really think many everyday evangelical voters who support Trump, especially women, rationalize this because they are really one-issue voters. They truly believe that abortion is equivalent to murdering babies, and no matter how horrible Trump is on everything else, stopping the murder of babies is more important. 

I'm sure this is correct for a lot of people, which I find frustrating. I've always felt like single issue voting is a terrible thing to do, and especially in the case of abortion. It's highly unlikely that Roe v. Wade will ever be overturned, and if it did, Conservatives would quickly realize they made a huge mistake because a lot of people who don't regularly vote would run them out of office in the following election and then just reinstate it via legislation. Furthermore, I never understand why anti-choice activists don't get that overturning Roe v. Wade won't lead to the end of abortions. 

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One could add to the above that many White evangelical voters in the South have always been racist and this is part of Trump's appeal to them. I graduated from high school in Lynchburg, VIrginia, where everybody knows that Jerry Falwell got his start there by founding a "Christian school" as a direct response to desegregation. Today's Religious RIght leaders have given up racist rhetoric, but unfortunately a lot of their followers still harbor those ideas. 

Agreed!

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A final thought -- a lot of the discussion about this focuses on the figure that 80% of those who describe themselves as "Evangelicals" voted for Trump. Now, "Evangelical" has never been completely synonymous with "Religious Right" -- there have always been "Evangelical" organizations like Sojourners that did not fit in with the political Right at all. But one should also point out that just as a bit of the overwhelming support for Trump among self-identified Republicans comes from the fact that some "never Trump" conservatives have stopped labeling themselves as Republicans to pollsters, there are anti-Trump Christians who have stopped calling themselves "Evangelicals" in polls for similar reasons. Here are a few examples:

https://www.washingtonpost.com/news/acts-of-faith/wp/2017/10/18/why-i-am-ditching-the-label-evangelical-in-the-trump-era/?utm_term=.97604cbf6002

https://www.nytimes.com/2017/12/09/opinion/sunday/wehner-evangelical-republicans.html

https://www.theguardian.com/world/2017/nov/03/evangelical-christians-religion-politics-trump

P.S. And here is a link to a recent column about the Religious Right and Trump by Jim Wallis, one of the main Evangelical leaders who has always been critical of the RR:

https://sojo.net/articles/religious-right-will-rise-and-fall-donald-trump

You I have never really thought about that. I didn't think Trump's behavior would lead to people changing how they identify as a Christian. I'll have to check these links out later too.

Thanks!  

[Mr. Chatywin et al.]

6 hours ago, Fragile Bird said:

Lol, you're not paying attention!

I have the best attention! It's bigly and beautiful! I know it, you know it, everyone knows it! It's what all the people are saying!

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I took a look at the list of downturns and the shortest corrections have been three weeks (one was 18 days), with drops just over 10%, the longest 15 months, the average since WW II has been 71 days, so a little more than 2 months.

This one happened in a week. Is there any significance to that, or is it just a sign that since the numbers are so high, they distort the traditional math a bit?

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Interestingly, those 10% corrections were followed later in the year or the following year with bigger corrections or bears.

Way to make a lad feel optimistic! 

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In May of 1928 there was a 10.3% correction over 29 days, and then in November of 1929 the Crash started, down 44.7% over 67 days, with the two biggest hits on Black Monday and Black Tuesday, down 12.82% then 11.73% The crash was slowed down by massive buying by some very wealthy people, the Rockefellers, the Whitneys, William Durant and others, making huge purchases, backed by a coalition of banks.

This is how many people lost fortunes. I always thought that 'the Crash of '29' was the big event. The big event was actually the crash of 1930, when the Dow started dropping and nothing could stop it, down 89% to hit bottom at 41.2. So all told the market fell from a peak of 380 to a low of 41.

To put that in context, that would be like the Dow falling today from a peak of 26,616 to about 2,700. Would Trump still take credit? The market took 25 years to recover, reaching it's previous peak in 1954. 

Can that happen? The economy of the 1920s had serious problems, present day economies are strong. But, and this is the big but, as I mentioned previously governments around the world hold trillions of dollars in debt they issued to pull their nations out of the financial collapse of 2008/09. Some economists believe that debt has to be dealt with, and it's pretty hard to imagine how that will happen without disruption.

I need to do a rant about interest rates, but I will do it in another post, or else no one will read it.

eta: I just want to point out that from 1927 to 1929 the market doubled in value. The DJIA was 17,821 on this day in 2015. It's been a crazy rise, but not like the late 20s.

All jokes aside, that was a helpful summary of what occurred during the Stock Market Crash of 29 and the aftermath. What has me worried about today's stock market is how interconnected the global markets are. If one crashes, it could take the rest of them down with it. 

[lokisnow]

The market may have ended the day up 300 points but there were swings of 1000 points today, that’s just nutty.

[Mexal]

 

[Mr. Chatywin et al.]

Rob Porter's resignation isn't getting enough attention, and honestly two more heads need to roll. It's being reported that White House Counsel Don McGhan knew about the domestic violence accusations for over a year and did nothing about it. And White House Chief of Staff John Kelly knew about it in the fall and he also did nothing. In any other administration these two would have already been out the door. Unfortunately, there's a decent chance that nothing will happen to them. Is anyone shocked that a man who has been repeatedly accused of assaulting women, including his first wife, has surrounded himself with people who don't care about spousal abuse? Their crocodile tears about how they were shocked by the accusations are a f****** joke, and they undermine what little credibility these clowns have left.

On a lighter note, Omarosa confirms our fears.

[Fez]

33 minutes ago, Mexal said:

 

I don't think that's right. I believe the solicitor general could only take over if Sessions appointed him, and because Sessions is recused he can't do that.

[Martell Spy]

4 minutes ago, Tywin et al. said:

Rob Porter's resignation isn't getting enough attention, and honestly two more heads need to roll. It's being reported that White House Counsel Don McGhan knew about the domestic violence accusations for over a year and did nothing about it. And White House Chief of Staff John Kelly knew about it in the fall and he also did nothing. In any other administration these two would have already been out the door. Unfortunately, there's a decent chance that nothing will happen to them. Is anyone shocked that a man who has been repeatedly accused of assaulting women, including his first wife, has surrounded himself with people who don't care about spousal abuse? Their crocodile tears about how they were shocked by the accusations are a f****** joke, and they undermine what little credibility these clowns have left.

On a lighter note, Omarosa confirms our fears.

They needed a replacement domestic abuser for Puzder.

[Mexal]

I am shocked. Completely and utterly shocked.

 

[Rippounet]

13 minutes ago, Tywin et al. said:

All jokes aside, that was a helpful summary of what occurred during the Stock Market Crash of 29 and the aftermath. What has me worried about today's stock market is how interconnected the global markets are. If one crashes, it could take the rest of them down with it. 

At this point, isn't it a question of when the next big crisis hits rather than if?

We know for a fact that deregulating the banking sector is not a great idea. Yet, this administration seems intent of doing just that.
https://www.thenation.com/article/here-comes-the-next-financial-crisis/

But what worries me in the long-run is this nagging feeling that there might be a far more devastating crisis than we can imagine in the works.

I'm really not an economist so I find it hard to articulate... But it seems to me that the ups and downs of finance somehow tend to eclipse the evolution of what I think of as the "real" economy, that of the actual production of goods and services that is linked to the purchasing power of the masses. In the last decades the economy has become very abstract, with growth being maintained by massive injections of cash. But in Western economies, the purchasing power of the masses has tended to go down proportionally to the economy as a whole, and massively fueled by individual debt.
So I guess this is a "Keynesian" perspective, but I can't help but wonder what happens if we get a crisis so serious that the entire financial sector comes crashing down. Because as I understand it, since 1980 or so, most of the growth has benefitted the top 1% and been concentrated in financial assets. Doesn't this mean that there's like 30+ years of growth that's been built on mostly thin air and trust in the system? And yet, instead of reining in the financial sector, Western governments have kept encouraging it and kept fueling what I can't help but see as "artificial" growth. After the 2008 crisis, the solution to all the bursting bubbles was to bailout huge institutions and make sure that business could proceed as usual... In other words, it seems that the answer to bursting bubbles was to rebuilt trust and... recreate even bigger ones?? But the fundamental flaws in the system were not addressed, precisely because some organizations were deemed "too big to fail."
So what's fundamentally different today compared to 2007? Or, for that matter, to 1990? Is it silly of me to wonder where does today's economic growth actually come from? Computers became widespread in the early 1990s. Since then we've had smartphones I guess, but it's not like most people buy that much more stuff than in the 1980s, right? So I'm not sure I understand why Western economies would keep endlessly growing. Assuming companies relying on the internet do create growth, it seems to me that comes at the expense of other sectors, like Amazon destroying bookstores.
All this is a long-winded way of saying that I wonder whether the current system is really sustainable. The way I see it, it works as long as the injections of cash are reasonable enough so as not to affect the trust in the basic workings of the economy. But when I see the Trump administration intent on both deregulating the financial sector AND injecting tons of cash while doing relatively little to boost the purchasing power of the masses, I wonder if this isn't lighting the fuse of the biggest economic crisis we've ever seen, one that will devastate all modern economies for good and end Western economic dominance.
Or another way to put it: tax cuts for middle-class Americans will expire around 2025. The bet seems to be that by then the economy will have grown enough to allow their renewal. But if that doesn't happen because of a bubble bursting somewhere in the meantime, what then? If growth isn't continuous in the next decade, the middle-class will find itself with even less purchasing power than today, making a recovery even more unlikely. And of course, with the amount of individual debt (the "household debt") being what it is, this could have catastrophic consequences for entire populations.

I dunno, maybe I don't understand all this shit and I'm talking out of my ass.

[ThinkerX]

5 minutes ago, Rippounet said:

At this point, isn't it a question of when the next big crisis hits rather than if?

We know for a fact that deregulating the banking sector is not a great idea. Yet, this administration seems intent of doing just that.
https://www.thenation.com/article/here-comes-the-next-financial-crisis/

But what worries me in the long-run is this nagging feeling that there might be a far more devastating crisis than we can imagine in the works.

I'm really not an economist so I find it hard to articulate... But it seems to me that the ups and downs of finance somehow tend to eclipse the evolution of what I think of as the "real" economy, that of the actual production of goods and services that is linked to the purchasing power of the masses. In the last decades the economy has become very abstract, with growth being maintained by massive injections of cash. But in Western economies, the purchasing power of the masses has tended to go down proportionally to the economy as a whole, and massively fueled by individual debt.
So I guess this is a "Keynesian" perspective, but I can't help but wonder what happens if we get a crisis so serious that the entire financial sector comes crashing down. Because as I understand it, since 1980 or so, most of the growth has benefitted the top 1% and been concentrated in financial assets. Doesn't this mean that there's like 30+ years of growth that's been built on mostly thin air and trust in the system? And yet, instead of reining in the financial sector, Western governments have kept encouraging it and kept fueling what I can't help but see as "artificial" growth. After the 2008 crisis, the solution to all the bursting bubbles was to bailout huge institutions and make sure that business could proceed as usual... In other words, it seems that the answer to bursting bubbles was to rebuilt trust and... recreate even bigger ones?? But the fundamental flaws in the system were not addressed, precisely because some organizations were deemed "too big to fail."
So what's fundamentally different today compared to 2007? Or, for that matter, to 1990? Is it silly of me to wonder where does today's economic growth actually come from? Computers became widespread in the early 1990s. Since then we've had smartphones I guess, but it's not like most people buy that much more stuff than in the 1980s, right? So I'm not sure I understand why Western economies would keep endlessly growing. Assuming companies relying on the internet do create growth, it seems to me that comes at the expense of other sectors, like Amazon destroying bookstores.
All this is a long-winded way of saying that I wonder whether the current system is really sustainable. The way I see it, it works as long as the injections of cash are reasonable enough so as not to affect the trust in the basic workings of the economy. But when I see the Trump administration intent on both deregulating the financial sector AND injecting tons of cash while doing relatively little to boost the purchasing power of the masses, I wonder if this isn't lighting the fuse of the biggest economic crisis we've ever seen, one that will devastate all modern economies for good and end Western economic dominance.
Or another way to put it: tax cuts for middle-class Americans will expire around 2025. The bet seems to be that by then the economy will have grown enough to allow their renewal. But if that doesn't happen because of a bubble bursting somewhere in the meantime, what then? If growth isn't continuous in the next decade, the middle-class will find itself with even less purchasing power than today, making a recovery even more unlikely. And of course, with the amount of individual debt (the "household debt") being what it is, this could have catastrophic consequences for entire populations.

I dunno, maybe I don't understand all this shit and I'm talking out of my ass.

Change a few minor details and that could almost be one of my posts on this site from 2007.  There were quite a few people here who flat out refused to believe how severe that fiasco was until everything blew up.  There were posters here ardently supporting what looked like blatant financial fraud on a gargantuan scale.

 

[Mexal]

Are we living in a SNL skit?

 

[Jace, Extat]

1 minute ago, Mexal said:

Are we living in a SNL skit?

 

Does anything matter?

[LongRider]

5 minutes ago, Pony Queen Jace said:

Does anything matter?

I wanna say it, but I just won't.

 

[Altherion]

3 hours ago, aceluby said:

Mattis confirmed today that planning has begun for Trump's military parade.  With how strapped for cash the pentagon is, isn't it surprising they have money to waste on a parade?

It would have been, but today's bill gives them a lot of money. It's surprising how little attention it's getting (as I write this, CNN's front page is dominated by a story about some memo or other), but Congress has actually managed to get something done for a change -- and on a bipartisan vote, no less!

[OldGimletEye]

On 2/9/2018 at 11:35 AM, Fragile Bird said:

Can that happen? The economy of the 1920s had serious problems, present day economies are strong. But, and this is the big but, as I mentioned previously governments around the world hold trillions of dollars in debt they issued to pull their nations out of the financial collapse of 2008/09. Some economists believe that debt has to be dealt with, and it's pretty hard to imagine how that will happen without disruption.

While the Stock Market crash didn't help matters, the probably bigger issue was the hoarding of gold by the Bank of France and the United States Federal Reserve. Because the world was on an international gold standard, the hoarding of gold pushed deflated worldwide commodities. And then the Federal Reserve made matters worse by trying to prick the stock market bubble. That was a mistake.

On 2/9/2018 at 11:35 AM, Fragile Bird said:

Some economists believe that debt has to be dealt with, and it's pretty hard to imagine how that will happen without disruption.

If the world goes back into another ZLB situation "expansionary austerity" will be disastrous. For those just starting to "recover" from the last disaster, their lives will be effectively over if another prolonged liquidity trap situation hits. Those countries with the fiscal capacity will or should issue more safe assets. Countries like the US and Germany for instance. That of course will probably not happen, because of the current political environment, it will be left to central banks to deal with the issue as best they can, or in the case of the US Fed, probably not dealing with it very well, given Trump's appointments.

And again, the biggest issue right now, around the world is that Central Bank policies rates are very low.

[OldGimletEye]

On 2/9/2018 at 7:46 PM, Rippounet said:

snip

I know I've beat this drum about a billion times. But, the main problem is that policy rates are extremely low. If the FED rate was at 6% like it was back in the 1990s the current bubble wouldn't be so worrisome. But, the low FED rate is what makes the current bubble a bit worrisome, plus paired with the insane political environment, brought on by you guessed it the conservative clown crew. They were incapable of dealing with the last ZLB episodes, and it doesn't seem they have changed their views much, although they have been consistently wrong over the last 10 years.

Also:

1. Between equity and real estate mispricing, real estate mispricing seems to be more deadly.

2. Wealth inequality likely drives down the real rate of interest, making ZLB episodes more likely.

3. Obviously, the attempts by conservatives to water down financial regulation isn't helpful.

4. When interest rates are low (ie central banks inject cash to maintain the policy rate), bonds and cash become almost perfect substitutes. That's why you end up with a ZLB problem or a liquidity trap.

On 2/9/2018 at 7:57 PM, ThinkerX said:

 There were quite a few people here who flat out refused to believe how severe that fiasco was until everything blew up. 

Conservative clowns gonna clown.

[Fragile Bird]

2 hours ago, Tywin et al. said:

This one happened in a week. Is there any significance to that, or is it just a sign that since the numbers are so high, they distort the traditional math a bit?

Way to make a lad feel optimistic! 

All jokes aside, that was a helpful summary of what occurred during the Stock Market Crash of 29 and the aftermath. What has me worried about today's stock market is how interconnected the global markets are. If one crashes, it could take the rest of them down with it. 

This correction has happened very quickly, and it's not the big numbers that are important, it's the percentages, though I agree the large numbers are distracting. Just hitting 10% does not mean the correction is over, it just means the market is "in correction territory". It's over when the market stops making new lows. If the market now turns around and gets back over 26,600 in a week, I'd really start worrying.

I don't think it's over - this would be the shortest correction in history if it was. There are a lot of people who pooh-pooh technical indicators, but some important things happened on Thursday. There's a chart technicians draw that map out the ups and downs of the market, called a moving average. Typically the charts are for 50, 100, 150 and 200 days. What they literally do for a 100 day moving average, for example, is take the closing price of a market (or a stock) from every day for the last 100 days and average it. Then they do the same thing the next day for the previous hundred days, and then the next day etc etc. They plot this line on a graph, and if the line moves up to the right the market is going up and if it moves down to the right the market is dropping. It shows the trend in the market.

Different lengths of days are used for different purposes. Longer term trend lines are used to show support and resistance. So....the S&P 500, which many technicians use instead of the Dow, since it is a broader market, had a support level of 2650, which it crashed through on Thursday, closing at 2581. The next level of support (a longer term trend line) is 2300. And 2650 now becomes what we call the resistance level. If the S&P 500 can close above 2650 and stay above that level, the correction may be over. But it's called the resistance level because what happens in a falling market is that the market will bounce up to the resistance level, may even stay there for a while, but then start falling below it again. Technicians are now expecting the S&P 500 to fall to the next support level, 2300.

Of course the stock market has many prognosticators, and you can certainly find people who are saying the correction has touched bottom and the time to buy is now. However, having spent numerous years in the industry I can tell you that many of these people are sales people and it's in their interest to predict the correction is over. They tend to put a positive spin on things.

The Dow has similar numbers to the S&P at the moment, and the current support level is 23,500, but it's considered a weak support level, with stronger support at 22,500.

If the S&P and the Dow fall through those support levels, the next support levels are quite a bit further down. I think we'd be getting to bear territory then, though most people are not expecting a bear right now.

 

[KingintheNorth4]

5 hours ago, Mexal said:

Are we living in a SNL skit?

 

Tune in next week for a new episode of "As the White House Turns "