Ok so it looks like the GOP is all set to take control of the house. What do you think will the impact be on the US economy, positive or negative and why?
Market will pop as people celebrate that companies can do what they want again and won’t be regulated anymore and taxes are likely to go down for them. Government spending will be cut or at least stalled. Unemployment benefits will no longer be extended. Aggregate demand will drop. It will be double-dip time for the US economy, and there will be no one at the wheel to coordinate any response, except perhaps Ben Bernanke. QE2 is unlikely to be very effective in the absence of fiscal policy, since money will flow to banks who will simply sit on it to repair their own balance sheets. The tax and regulatory changes will make it easier for companies to hire and grow, except that there won’t be much demand for them to grow into. Those savings are more likely to be invested abroad. Markets will eventually realize that the recession is back or that growth has slowed in the US and will either do a big jolt downward (if they still see the US as a core engine of global growth) or slide slowly (if they decide that US companies can keep afloat based on selling to foreign markets). QE2 may help exporters by devaluing the dollar and making our exports less expensive (and our workers more productive in global terms).
the market was up today…looks like positive news
It will be better if the Republicans capture a majority of seats in the house. Democrats are probably going to retain the Senate majority, and generally, stupid crap happens when the same party controls Congress, the Senate, and the Presidency.
Already factored in. Buy the rumor sell the news.
bchadwick Wrote: ------------------------------------------------------- > Market will pop as people celebrate that companies > can do what they want again and won’t be regulated > anymore and taxes are likely to go down for them. > > > Government spending will be cut or at least > stalled. Unemployment benefits will no longer be > extended. Aggregate demand will drop. It will be > double-dip time for the US economy, and there will > be no one at the wheel to coordinate any response, > except perhaps Ben Bernanke. QE2 is unlikely to > be very effective in the absence of fiscal policy, > since money will flow to banks who will simply sit > on it to repair their own balance sheets. The tax > and regulatory changes will make it easier for > companies to hire and grow, except that there > won’t be much demand for them to grow into. Those > savings are more likely to be invested abroad. > > Markets will eventually realize that the recession > is back or that growth has slowed in the US and > will either do a big jolt downward (if they still > see the US as a core engine of global growth) or > slide slowly (if they decide that US companies can > keep afloat based on selling to foreign markets). > QE2 may help exporters by devaluing the dollar and > making our exports less expensive (and our workers > more productive in global terms). Double dip = 1 term presidency for Obama
Numerous historical studies have shown that the party in power has no significant correlation with market returns. Honestly, I am extremely pessimistic that either party has the power to positively alter the trajectory of our economy. At this point, structural fundamentals created over the past two decades will simply have to run their course and we will basically have to wait and see how the international economic debacle pans out as well. Actually, let me say, forcing China to either float its currency or face trade restrictions would be a huge help. US demand growth has been outpacing US GDP growth by more than 2:1 since this recession stabilized. Other than that, as long as no unexpected massively restrictive regulatory overhauls are passed, the govt is out of the big picture.
former trader Wrote: ------------------------------------------------------- > bchadwick Wrote: > -------------------------------------------------- > ----- > > Market will pop as people celebrate that > companies > > can do what they want again and won’t be > regulated > > anymore and taxes are likely to go down for > them. > > > > > > Government spending will be cut or at least > > stalled. Unemployment benefits will no longer > be > > extended. Aggregate demand will drop. It will > be > > double-dip time for the US economy, and there > will > > be no one at the wheel to coordinate any > response, > > except perhaps Ben Bernanke. QE2 is unlikely > to > > be very effective in the absence of fiscal > policy, > > since money will flow to banks who will simply > sit > > on it to repair their own balance sheets. The > tax > > and regulatory changes will make it easier for > > companies to hire and grow, except that there > > won’t be much demand for them to grow into. > Those > > savings are more likely to be invested abroad. > > > > Markets will eventually realize that the > recession > > is back or that growth has slowed in the US and > > will either do a big jolt downward (if they > still > > see the US as a core engine of global growth) > or > > slide slowly (if they decide that US companies > can > > keep afloat based on selling to foreign > markets). > > QE2 may help exporters by devaluing the dollar > and > > making our exports less expensive (and our > workers > > more productive in global terms). > > > Double dip = 1 term presidency for Obama Probably, but it’s not a foregone conclusion. Both Reagan and Roosevelt were re-elected after double dips, and, in fact, if you listen to the useless statistics spewing of the sort that passes for analysis on CNBC, you would say that every Sitting president that presided over a double dip in the last 100 years was reelected, so, obviously, double dip is great for Obama. (gag!)
I thought about Reagan, but wasn’t the first recession during the last year of Carter’s presidency?
And your point is? This recession started in 2007.
i think the results will be net positive as the gop generally pushes pro-economy measures and will fight extra regulations. they will also fight for free trade and won’t let china off the hook in this currency battle. another reason for this to stimulate the economy could be obama checking his watch to see how much time he has left to start accomplishing some of the goals he set out for his tenure…the market hates uncertainty and anything he can actually map out would be a net positive.
Agree with Black Swan, there is actually little the government can do. Actually, in the short term the less disruptive the g’ment is while all this sh!t moves through the system, probably the better. The US is a massive cruise ship and they need to make slow turns, pay attention to the long term, most unpopular items (HC, SS, all that doom and gloom stuff that needs to be addressed). Too bad all anyone cares about is attributing the most recent quarter’s CPI and unemployment numbers to the government policies. Give me a break.