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Thread: It Is Looking More And More Like 1929, Folks

  1. #11
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    Quote Originally Posted by BigLeRoy View Post
    Did you forget that I am hoping to write a novel? I can't very well do that if I am spending (wasting?) ten hours a day on PH!
    You certainly publish a lot of fiction here.

  2. #12
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Libertine View Post
    Hmm, we were above today's levels for most of Clinton's second term, does that explain a couple of recessions? Don't forget that Clinton deregulated Wall Street and excluded derivatives from governance.
    I very explicitly discussed the dotcom bubble of the late 1990's, Libertine. Did you somehow miss it? Here it is again, from the third paragraph of my OP:

    The only time this ratio was higher than it was in 1929 and 2018 was in 1999, when we had another huge stock market bubble, the dotcom bubble. The NASDAQ saw the worst excesses in the late 1990's, but we certainly saw a lot of irrational exuberance in the rest of the market as well.

    I was certainly not absolving Bill Clinton of any blame in the dotcom bubble. However, it was a much more natural bubble than the deliberately-contrived and MUCH larger housing bubble of the 2000's. I'm not sure you'll even understand what I mean by that, but the Internet bubble in the 1990's actually fits an old, old pattern in economic history of people getting overly excited about a new technology and placing bets on it that are, well, just too big. In the 1920's, people got way too excited about radios, refrigerators, and automobiles, and we ended up with the enormous stock market bubble of the 1920's. In the late 1800's, we had some stock market bubbles from folks getting too jubilant about the potential for railroads.


    So, yes, that spike in the P/E ratio in the S&P 500 in the late 1990's is absolutely connected with the recession of 2001 that almost immediately greeted the Bush/Cheney administration upon taking office; it began a month after they were sworn into office. And boy, oh boy, they pulled out ALL the stops to deal with it. A MASSIVE fiscal and monetary expansion.


    What you CANNOT blame that spike in the P/E ratio for is "a couple of recessions". One, yes. Not a couple.

  3. #13
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Libertine View Post
    You certainly publish a lot of fiction here.
    From the true specialist in economic fiction, as I have repeatedly exposed here on the pages of PH. Can't even do valid arithmetic, four sevenths of the time.

    Heh.
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  4. #14
    Spock of Vulcan Ian Jeffrey's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    I was certainly not absolving Bill Clinton of any blame in the dotcom bubble.
    And let us not forget he was dealing with a hostile Republican Congress from January of '95 (though not nearly as hostile as they got under Obama, and remain to this day).
    Thanks from BigLeRoy and Babba

  5. #15
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    Quote Originally Posted by BigLeRoy View Post
    I very explicitly discussed the dotcom bubble of the late 1990's, Libertine. Did you somehow miss it? Here it is again, from the third paragraph of my OP:

    The only time this ratio was higher than it was in 1929 and 2018 was in 1999, when we had another huge stock market bubble, the dotcom bubble. The NASDAQ saw the worst excesses in the late 1990's, but we certainly saw a lot of irrational exuberance in the rest of the market as well.

    I was certainly not absolving Bill Clinton of any blame in the dotcom bubble. However, it was a much more natural bubble than the deliberately-contrived and MUCH larger housing bubble of the 2000's. I'm not sure you'll even understand what I mean by that, but the Internet bubble in the 1990's actually fits an old, old pattern in economic history of people getting overly excited about a new technology and placing bets on it that are, well, just too big. In the 1920's, people got way too excited about radios, refrigerators, and automobiles, and we ended up with the enormous stock market bubble of the 1920's. In the late 1800's, we had some stock market bubbles from folks getting too jubilant about the potential for railroads.


    So, yes, that spike in the P/E ratio in the S&P 500 in the late 1990's is absolutely connected with the recession of 2001 that almost immediately greeted the Bush/Cheney administration upon taking office; it began a month after they were sworn into office. And boy, oh boy, they pulled out ALL the stops to deal with it. A MASSIVE fiscal and monetary expansion.


    What you CANNOT blame that spike in the P/E ratio for is "a couple of recessions". One, yes. Not a couple.
    It was 40% higher under Clinton than in 1929, after the peak Clinton deregulated Wall Street, so you think that played any part in the 2008 recession? The financial instruments that brought about the 2008 recession were illegal, until Bill Clinton's signature made them legal.

  6. #16
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Libertine View Post
    It was 40% higher under Clinton than in 1929, after the peak Clinton deregulated Wall Street, so you think that played any part in the 2008 recession? The financial instruments that brought about the 2008 recession were illegal, until Bill Clinton's signature made them legal.
    Bush had every opportunity to re-regulate, yes? And, the truth is, George W. Bush was the Number One cheerleader for the Great American Housing Bubble of the 2000's. Remember his favorite slogan, "the Ownership Society"? I certainly do, though I bet you'd like all the liberals of America to forget that phrase. We could fetch all of George's speeches where he was pushing home ownership, and especially for minorities! We could fetch the portions of his SOTU speeches where he was bragging about the "growing rate of home ownership in America", as though that is some policy goal that we ought to be trying to maximize. [It's NOT!]


    No, while I won't TOTALLY absolve Bill Clinton of ANY blame for the 2008 recession, THESE men are FAR more culpable: Alan Greenspan, George W. Bush, Dick Cheney, Phil Gramm, Angelo Mozilo. There are others, but that's a start.
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  7. #17
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    Quote Originally Posted by BigLeRoy View Post
    Bush had every opportunity to re-regulate, yes? And, the truth is, George W. Bush was the Number One cheerleader for the Great American Housing Bubble of the 2000's. Remember his favorite slogan, "the Ownership Society"? I certainly do, though I bet you'd like all the liberals of America to forget that phrase. We could fetch all of George's speeches where he was pushing home ownership, and especially for minorities! We could fetch the portions of his SOTU speeches where he was bragging about the "growing rate of home ownership in America", as though that is some policy goal that we ought to be trying to maximize. [It's NOT!]


    No, while I won't TOTALLY absolve Bill Clinton of ANY blame for the 2008 recession, THESE men are FAR more culpable: Alan Greenspan, George W. Bush, Dick Cheney, Phil Gramm, Angelo Mozilo. There are others, but that's a start.
    Are you familiar with Sarbanes Oxley?

    What did GWB deregulate?

    How would Dick Cheney be more responsible than Bill Clinton, what authoriti did he have?

    There is no one that Bill Clinton blames on your list, you know the guys that Clinton blamed and then Obama hired.

  8. #18
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Libertine View Post
    Are you familiar with Sarbanes Oxley?

    What did GWB deregulate?

    How would Dick Cheney be more responsible than Bill Clinton, what authoriti did he have?

    There is no one that Bill Clinton blames on your list, you know the guys that Clinton blamed and then Obama hired.
    Bush signed the American Dream Down-Payment Act of 2003, which allowed many Americans to buy homes with ZERO money down. Do you have ANY notion of just how hare-brained an idea that truly is, how ZANY it is?

    https://www.nytimes.com/2008/12/21/b....18853088.html

    And the Bush Administration BLOCKED all 50 state attorneys general from going after the predatory lenders who were steering gullible consumers into the dangerous adjustable rate mortgage [ARM] loans that were doomed to blow up on them just a few years down the road. There were too many people in high places with political connections to the Bush administration who were making big BIG bucks off the housing bonanza. Gee, I could go on, but I'm tired tonight, and I want to do other stuff, and you're frankly BORING me again. It's like you were fucking ASLEEP all during the Bush/Cheney years, and just weren't paying attention. Shrug.


    Oh, and I could simply NOT make sense of your last sentence; I could not even PARSE it.
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  9. #19
    Veteran Member Isalexi's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    No. I have also had a LOT of cleaning and organizing to do at home!! The life of a teacher! Your home gets VERY messy, and especially in the spring semester. Spring cleaning comes very late. Like, in early summer! And, I have the work of a 40-year career to try to get organized! This is complicated! It will probably be August, maybe even September, before I get down to serious writing, though I have a bit of a prologue, and spiral notebooks full of characters and plot lines and so forth. I think this fall I will be in the 'zone'.
    I have the same problem..my first book was easier to write because the internet wasn’t as luring. My second book is 3/4 done and I actually have a date I have to finish it by and it will be obsolete if I don’t do it soon And no I have a third idea for another book and I’m really excited about it

  10. #20
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    Quote Originally Posted by BigLeRoy View Post
    This just might be the scariest graph you will see this year, folks:

    https://www.gurufocus.com/shiller-PE.php

    The Shiller P/E ratio of the S&P 500 stock market index-----these are mostly America's biggest industrial firms----is at roughly the same level it was at in the year 1929. Just before the Great Crash that ushered in the Great Depression.

    The only time this ratio was higher than it was in 1929 and 2018 was in 1999, when we had another huge stock market bubble, the dotcom bubble. The NASDAQ saw the worst excesses in the late 1990's, but we certainly saw a lot of irrational exuberance in the rest of the market as well. We're seeing a lot of that today, too. There is no justification for these lofty stock market valuations, America, especially as we are about to plunge into a full-blown trade war.

    Ten years ago, we were about to plunge into the worst phase of the Financial Crisis that accompanied the Great Recession. I will probably post some retrospectives on the Financial Crisis and the Great Recession over the next few weeks, before I take a long hiatus from PH. We are headed for another Big Crisis, friends. Prepare yourself. We learned very little, and perhaps NOTHING, from the last crisis, because we are doing many of the same things again. We are, once again, on a massive debt binge. Consumers are racking up debt again. Have you heard that no money down mortgages are making a comeback? Corporations have never been so deeply in debt. And, of course, the Trump tax cuts are causing the budget deficit and hence the national debt to soar. The trade deficit, which was a signature issue of Mr. Trump, is also soaring. [There is a macroeconomic linkage between the two deficits, the budget and trade deficits, which is why we often refer to them as 'the twin deficits'.] Our National Saving rate is plummeting.


    In that last crisis, ten years ago, it was our big banks that really got in trouble. They had leveraged themselves to the hilt. That is not the case this time around. The Fed has been subjecting our banks, our financial institutions deemed 'Too Big To Fail' to stringent 'stress tests', and most of them are in rude health. No, this time, it could be many of our top-line industrial firms that are in trouble, too heavily indebted to withstand a deep economic downturn triggered by a major trade war. The consequences of that for Middle America could be frightening to contemplate.....
    Your predictions are as hilarious as gasbag Krugmans.

    I would have better success than you with the use of a few chicken bones and a witch doctor...lol

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