Obama's First Year Stock Market Gains more than Twice Trump's

[columbus]

Wasn't the first thing Obama did is lend tons of money to the rich so they could buy up all the poor peoples foreclosed homes dirt cheap and sell them back to them? Yeah that would help the bankers and stock market.

The reason he did that was because Bush II administration had deregulated the banks, making it possible for them to make a ton of money in the biggest Ponzi scheme the world has ever seen, the US real estate market. Then the bankers threatened to shut down the banking system if they didn't get a zillion dollar bribe as well as immunity from prosecution.
The great Blue Wall has nothing on the dark pinstriped Wall.
But let's go back to the OP. Was Sunstone incorrect in some way?
Tom

 

[Revoltingest]

Wasn't the first thing Obama did is lend tons of money to the rich so they could buy up all the poor peoples foreclosed homes dirt cheap and sell them back to them? Yeah that would help the bankers and stock market.

Didn't happen.
Commercial lending under Obama fizzled.
I know cuz I shopped for loans.

I think we have to be careful here.

Much of the messaging by liberals (that I’ve seen on forums anyway) has been that there’s about a year lag for economy attribution. So, 2017, economy-wise, was still largely an Obama’s year. If we are consistent, then 2009 was largely still a W year.

I think there are some caveats, such as “Was major economic legislation passed?” Or “was some economic crisis being handled?”

For Obama, the answer to both is “Yes”. The 2009 American Recovery and Reinvestment Act had a huge and immediate effect on the economy.

He also was dealing with the Great Recession. So his administration had to deal with the economy on a more immediate and critical timescale.

As such, I do give Obama more credit for the economy in his first year.

The Trump administration really has not done anything to directly effect the economy. The tax bill will be a huge effect, but not for 2017.

The stock market did go up in Trump’s first year, which besides the part where it was already going up, i think some can indirectly be attributed to a new president, particularly a Republican one.

In general, elections cause uncertainty and there was more than usual in this one, and markets hate uncertainty. So a final outcome— any outcome— will tend to stabilize and rise from the election year.

Also, Wall Street prefers Republicans. Republicans tends to cut regulations which tend to allow them and corporations to make more money. So a Republican gets elected, Wall Street bets that they will have fatter times ahead, which causes the market to go up. Just to be clear: the fatter times haven’t come yet; Wall Street is just believing that they will. (And the tax bill is an indication that their bet wasn’t completely off.)

I'll add more caveats.....
- The phase lag between enacting policy & economic effect will vary.
- Stock prices are different from economic activity.
- Stock prices are different from wealth...they're based upon expectations of
performance relative to competing interest rates & other investments.
Consider that a company with identical yearly earnings over a long period
can see its stock price vary inversely with T Bill rates.
- Economic health is related not just to the presidency, but also to Congress.
- And finally, events like 9/11 introduce chaotic effects.

 

[Kemosloby]

Didn't happen.
Commercial lending under Obama fizzled.
I know cuz I shopped for loans.


I'll add more caveats.....
- The phase lag between enacting policy & economic effect will vary.
- Stock prices are different from economic activity.
- Stock prices are different from wealth...they're based upon expectations of
performance relative to competing interest rates & other investments.
Consider that a company with identical yearly earnings over a long period
can see its stock price vary with T Bill rates.
- Economic health is related not just to the presidency, but also to Congress.
- And finally, events like 9/11 introduce chaotic effects.

Not consumer loans, too big to fail loans. Bush did it too, Obama doubled down on it. As the housing market collapsed and all the bad loans that propped it up failed, Obama loaned half a trillion dollars to the likes of Goldman sacs, and other "too big to fails". So as the housing collapse devastated anyone not "too big to fail", those recieving the loans could buy them out, scooping up houses cheap to sell later for profit.

 

[Revoltingest]

Not consumer loans, too big to fail loans. Bush did it too, Obama doubled down on it. As the housing market collapsed and all the bad loans that propped it up failed, Obama loaned half a trillion dollars to the likes of Goldman sacs, and other "too big to fails". So as the housing collapse devastated anyone not "too big to fail", those recieving the loans could buy them out, scooping up houses cheap to sell later for profit.

I spoke of commercial loans (the kind used for investment), not consumer loans.
What evidence is there of these loans being used to buy foreclosed upon homes?

 

[tytlyf]

The reason he did that was because Bush II administration had deregulated the banks, making it possible for them to make a ton of money in the biggest Ponzi scheme the world has ever seen, the US real estate market. Then the bankers threatened to shut down the banking system if they didn't get a zillion dollar bribe as well as immunity from prosecution.
Tom

What economic bailout (stimulus) are you referring to where Obama was responsible?

 

[columbus]

What economic bailout (stimulus) are you referring to where Obama was responsible?

Do your own recent history research. Obama got handed a hot mess and did what he could with it.
I think he could have done better, like more strings on the bailouts and more prosecution of the perps. But he was pulling this country out of a nose dive and the people who wanted the bailouts are the ones who really run the country. Obama just didn't have the experience or clout necessary to do much better than he did.
Tom

 

[Revoltingest]

The reason he did that was because Bush II administration had deregulated the banks, making it possible for them to make a ton of money in the biggest Ponzi scheme the world has ever seen, the US real estate market. Then the bankers threatened to shut down the banking system if they didn't get a zillion dollar bribe as well as immunity from prosecution.
The great Blue Wall has nothing on the dark pinstriped Wall.
But let's go back to the OP. Was Sunstone incorrect in some way?
Tom

The banks were not deregulated, particularly regarding residential lending.
And such lending doesn't resemble a Ponzi scheme.
Ref...
Ponzi scheme - Wikipedia
Which banks threatened to shut down the banking system?
And how could they possibly do this when healthy banks were still able to lend?

Moreover, a clamp down on lending came from the fed, which not only restricted
new loans, but also refinances, & even existing loans were forced into foreclosure
by banking regulators, eg, Citizens NA (owned by RBS, which is owned by the
British government). I saw this firsthand.

 

[Kemosloby]

I spoke of commercial loans (the kind used for investment), not consumer loans.
What evidence is there of these loans being used to buy foreclosed upon homes?

I was a regular at the Catherine Austin Fitts at the time. She was one to know and wrote a lot about it. They bought out entire banks that went belly up because of the bad loans which the government forced them to make. Some democrat scheme of letting people who couldn't afford homes buy homes. I remember those days very well...then it collapsed. Could just as well of been an elaborate scheme to make the "too big to fails" even bigger.

 

[Revoltingest]

I was a regular at the Catherine Austin Fitts at the time. She was one to know and wrote a lot about it. They bought out entire banks that went belly up because of the bad loans which the government forced them to make. Some democrat scheme of letting people who couldn't afford homes buy homes. I remember those days very well...then it collapsed. Could just as well of been an elaborate scheme to make the "too big to fails" even bigger.

Many bad loans were made due to regulatory requirements.
The fed banned red lining, & required more "diversity" in
lending. Fannie Mae & Freddie Mac (government created
secondary lenders) bought the loans.

Buying a bank won't get ownership of homes...only of the
loans receivable. And very typically, banks who gain home
ownership thru foreclosure do poorly with distressed homes,
ie, they lose money on them. It's just not their field of expertise.

 

[columbus]

The banks were not deregulated, particularly regarding residential lending.
And such lending doesn't resemble a Ponzi scheme.

You and I have been around this block a few times.
The Bush administration deregulated the banks in a batch of different ways. The banks proceeded to make a killing by inflating the housing market, resulting in double digits increases in the prices of homes. Even I knew when it was starting to go south, because the banks suddenly developed a need for "bankruptcy reform", giving them more ability to squeeze assets out of underwater borrowers when the market finally collapsed.
Tom

 

[Revoltingest]

Do your own recent history research. Obama got handed a hot mess and did what he could with it.
I think he could have done better, like more strings on the bailouts and more prosecution of the perps. But he was pulling this country out of a nose dive and the people who wanted the bailouts are the ones who really run the country. Obama just didn't have the experience or clout necessary to do much better than he did.
Tom

Even Obama favored bailing out big failures, with crumbs for troubled homeowners.
Those I know who applied for HARP found that they're uneligible if they had a late
payment. Well, if one were troubled, would one have a perfect payment record?
No. So his program was useless.
There wasn't good reason to bail out lenders. Bailing out those who defaulted on
loans would've helped their lenders, & generated more overall economic recovery.
And if a lender fails, only the stockholders lose. The assets (loans receivable)
don't lose value...they're just sold to investors.

 

[Revoltingest]

You and I have been around this block a few times.
The Bush administration deregulated the banks in a batch of different ways. The banks proceeded to make a killing by inflating the housing market, resulting in double digits increases in the prices of homes. Even I knew when it was starting to go south, because the banks suddenly developed a need for "bankruptcy reform", giving them more ability to squeeze assets out of underwater borrowers when the market finally collapsed.
Tom

What deregulation led to riskier lending?
How does bankruptcy reform make failed loans more profitable?

Housing market inflation is due to many factors.....
- Government subsidized loans (Fannie Mae, Freddie Mac, flood insurance subsidies)
- Government tax deductions of interest & property taxes
- Government income tax waiver on capital gains from the sale of a home.
- Government monetary policy which institutionalizes inflation by expanding the money supply faster than growth, thereby making housing purchases a hedge against inflation.

 

[Kemosloby]

Many bad loans were made due to regulatory requirements.
The fed banned red lining, & required more "diversity" in
lending. Fannie Mae & Freddie Mac (government created
secondary lenders) bought the loans.

Buying a bank won't get ownership of homes...only of the
loans receivable. And very typically, banks who gain home
ownership thru foreclosure do poorly with distressed homes,
ie, they lose money on them. It's just not their field of expertise.

My memory is coming back on it. The government bought the bad loans from the too big to fail banks. So as it was collapsing Goldman sacs bought up the bad mortgages dirt cheap and then the government gave them a nice price for them.

 

[Revoltingest]

My memory is coming back on it. The government bought the bad loans from the too big to fail banks.

Government bought the loans because that was what it
created Fannie Mae & Freddie Mac specifically for.

So as it was collapsing Goldman sacs bought up the bad mortgages dirt cheap and then the government gave them a nice price for them.

What evidence do you have for the fed buying loans from Godman Sachs?

 

[columbus]

Even Obama favored bailing out big failures, with crumbs for troubled homeowners.
Those I know who applied for HARP found that they're uneligible if they had a late
payment. Well, if one were troubled, would one have a perfect payment record?
No. So his program was useless.
There wasn't good reason to bail out lenders. Bailing out those who defaulted on
loans would've helped their lenders, & generated more overall economic recovery.
And if a lender fails, only the stockholders lose. The assets (loans receivable)
don't lose value...they're just sold to investors.

I pretty much agree with all of this.
I think that if Obama had more time, more experience, and more clout, he would have done vastly better.
Like healthcare reform, the banking disaster response could have been done a lot better by someone who had the connections and clout, was ruthless and experienced, who had better insider info and advisors.

I regret not supporting Hillary Clinton for president in 2008. I believe that a lot of things would be much better now if she'd been the Democratic nominee.
Tom

 

[Revoltingest]

I regret not supporting Hillary Clinton for president in 2008. I believe that a lot of things would be much better now if she'd been the Democratic nominee.
Tom

Gay guys are known for their wicked sense of humor.

 

[tytlyf]

Do your own recent history research. Obama got handed a hot mess and did what he could with it.
I think he could have done better, like more strings on the bailouts and more prosecution of the perps. But he was pulling this country out of a nose dive and the people who wanted the bailouts are the ones who really run the country. Obama just didn't have the experience or clout necessary to do much better than he did.
Tom

You're talking about the emergency stimulus bill in October 2008?

Barack Obama says banks paid back all the federal bailout money

 

[Falvlun]

What deregulation led to riskier lending?
How does bankruptcy reform make failed loans more profitable?

Housing market inflation is due to many factors.....
- Government subsidized loans (Fannie Mae, Freddie Mac, flood insurance subsidies)
- Government tax deductions of interest & property taxes
- Government income tax waiver on capital gains from the sale of a home.
- Government monetary policy which institutionalizes inflation by expanding the money supply faster than growth, thereby making housing purchases a hedge against inflation.

While I don’t discount these factors, do you really think that Wall Street, the banks, and the credit ratings agencies didn’t have anything to do with the housing bubble? Have you watched the Big Short by any chance? I know it’s a movie, so needs to be taken with a grain of salt, but it does explain the financial downfall side of things rather well.

 

[tytlyf]

While I don’t discount these factors, do you really think that Wall Street, the banks, and the credit ratings agencies didn’t have anything to do with the housing bubble? Have you watched the Big Short by any chance? I know it’s a movie, so needs to be taken with a grain of salt, but it does explain the financial downfall side of things rather well.

They're all in bed together lobbying republicans mostly and writing their own laws.

 

[Revoltingest]

While I don’t discount these factors, do you really think that Wall Street, the banks, and the credit ratings agencies didn’t have anything to do with the housing bubble? Have you watched the Big Short by any chance? I know it’s a movie, so needs to be taken with a grain of salt, but it does explain the financial downfall side of things rather well.

I saw The Big Short.....fun movie, but limited scope.
I don't blame the lenders for the housing bubble.
Lending enabled it, but isn't causative.
They'd still make plenty of money if the fed (& states)
didn't have the inflationary policies I criticized above.
Instead, I blame the lenders for cadging for bailouts.
Their failure wouldn't have hurt the country one whit.

I generally oppose bailouts for businesses, but some
are relatively justifiable.....
- Major insurers (because of massive ripple effects)
- Major manufacturers (because the vertical supply chain would crash)
- Strategic industries in time of war or imminent war

Lenders who fail & disappear from the landscape don't matter
(except to their stockholders). Their portfolios (loans receivable)
would be sold off to solvent companies, & loan servicing &
lending would continue unabated.

As for the wasteful bailouts, I blame politicians for cozying up
to Wall St...."crony capitalism" I think some call it. I prefer
"corruption" which should put people out of office or in jail.