What Happened to That Stock Market Crash?


You may remember that before the election, many on the right — Fox News in particular — were pushing the idea that if Obama were to win reelection, the stock market would crash. Where are those folks now that the stock market has gone over 15,000 for the first time? Here’s some video of those predictions:

This is not to claim that Obama caused the stock market to go up, or that he was responsible for the good April jobs report. He wasn’t. It’s just to point out the absurdity of the claims from his political enemies.

Comments

  1. slc1 says

    And in fact these so-called pundits will never admit they were wrong, much like the blogs resident physics professor refuses to admit he was wrong.

  2. davidct says

    For those that take their financial advice from FOX news, I have shares in a bridge to Brooklyn for sale.

  3. Ben P says

    And I know there’s no questioning web ads, but the prevalence of the NewsMax “This billionaire says a financial crisis is coming” and “you’re going to lose everything!” ads bug the shit out of me.

  4. says

    much like the blogs resident physics professor refuses to admit he was wrong.

    If you want to continue that debate do it on the same thread. Why do you want to threadjack with the very first comment? Troll.

  5. slc1 says

    Re Heddle @ #4

    Prof. Heddle is not the blog’s only resident physicist. Sir Lancelot, who is a fervent AGW denier, teaches physics at a Midwestern university so he also qualifies as a physicist. I could have been referring to him as he is as adamant in his denials as Prof. Heddle is.

  6. Synfandel says

    slc1:

    a. If you could have been referring to either of two people, perhaps you should make explicit accusations rather than vague insinuations.

    b. You’re still threadjacking. If you have a bone to pick with another commenter, please post it where it belongs.

  7. slc1 says

    Re Synfandel @ #7

    I prefer to let Prof. Heddle and Sir Lancelot guess as to who I was talking about. As for threadjacking, I think that the first part of the comment that refers to pundits who never admit error makes it apropos, as neither Heddle or Sir Lancelot ever admit error.

  8. slc1 says

    Re James Hanley @ #9

    I freely admit to being a troll on occasion. By the way, it’s good to see Prof. Hanley commenting here again.

  9. celcus says

    I’m sure the crash just hasn’t happened yet. Eventually stocks will go down, gas prices will go up, your lawn will get brown spots and it will all be Obama’s fault.

  10. frankb says

    This is the standard Faux News schtick. Deflect blame from the rich and put it on the liberals. The selloff right after the election they referred to is a capitalist money making maneuver. The majority of those that participated were probably Romney supporters. Of course Faux News would claim that was a ground swell of opinion and a predictor of the future. Yawn.

  11. says

    Obviously, Obama is driving the stock market up to record highs in order to set us up for an even bigger crash! Because, socialism, FEMA camps, gun grabbing, and Benghazi.

  12. dogmeat says

    Where are those folks now that the stock market has gone over 15,000 for the first time?

    Ed, the answer to that is simple, they’re talking about how silly the Democrats were about sequestration and that the doom and gloom worries about sequestration were just silly socialists wringing their hands. Some have gone so far as to say “see, austerity works.” (Which requires ignoring much of the European situation)

    From some I also hear that this is despite Obama and that it is actually justification of Bush and his policies. I haven’t heard a coherent reason why; followed by references to Boston or Bengazi.

  13. Doug Little says

    Stock market goes up
    Stock market goes down
    You can’t explain that!

    Checkmate atheists.

  14. steve84 says

    Ironically this is because of the extremely low interest rates and thus cheap loans. Once the economy recovers enough, the interest rates will rise and the stock market either goes down again or won’t go up as quickly.

  15. says

    The crash they were talking about was in comparison to the boom that would happen in the event of a what’s-his-name and Ryan presidency. So there!

  16. raven says

    What Obama has been doing is working!!!

    1. The unemployment rate is down ca. to 7.5%, by 2.5%.
    2. Housing is recovering.
    3. The stock market is setting records.
    4. The deficits have peaked and are heading downward.
    5. He ended one war and is winding down another.

    Needless to say, all this is cleanup from the Bush Catastrophe. And with the active resistance of the Tea Party/GOP who haven’t yet seen a country they didn’t want to wreck, including and especially the USA.*

    In terms of objective facts, Bush was a disaster and Obama was a proficient fixer.

  17. Ben P says

    Ed, the answer to that is simple, they’re talking about how silly the Democrats were about sequestration and that the doom and gloom worries about sequestration were just silly socialists wringing their hands. Some have gone so far as to say “see, austerity works.” (Which requires ignoring much of the European situation)

    I do take a bit of issue with this, because like a lot of economic predictions, it can be confirmed but not easily falsified.

    Some economists said that cutting spending would hurt the economy, and that stimulus spending would help the economy. Others (predominately republican economists) talked about the effect of uncertainty and other issues, and said that bringing spending under control would help the economy.

    Spending was cut and the economy has continued to recover. Proponents of the latter theory point to this and say “see look, we made efforts to control spending and the economy is getting better.” Proponents of the first theory can say with almost as much support “well, the economy was recovering before the spending cuts, here’s a model that shows it would have been recovering even faster if he hadn’t made the spending cuts.”

    Europe is a distinctly different set of problems. Greece owes 175% of it’s GDP in government Debt. (it was almost 200% at one point). Economists think debt levels start being unhealthy when they approach a 1:1 ratio with GDP. More importantly, their annual budget deficits are above 80%. That is, they’d have to make almost 50% budget cuts to bring their budget into line. The US’s deficits are more like 25%.

    When the options are borrowing money from Germany or defaulting on sovreign debt, there are no good options. Either forced austerity or default would have the same practical effect of drastic cutbacks in most government support programs.

  18. Ben P says

    Ironically this is because of the extremely low interest rates and thus cheap loans. Once the economy recovers enough, the interest rates will rise and the stock market either goes down again or won’t go up as quickly.

    Not as long as Bernanke keeps the interest rates as low as they are. the recovery is proof in part that his monetary policy is working to some extent, but it does create problems of its own. Very low interest rates encourage stock investment over saving and benefit those with lots of money to invest in stocks, on the other hand, those with little money tend to consume rather than saving. It keeps the economy chugging at the cost of some thinly considered incentive changes.

  19. bmiller says

    raven:

    1. Labor participation rates are at unusually low levels (one factor in the celebrated decline in unemployment rates).
    2. Partly because the 1% and their investment funds have been buying up distressed properties.
    3. Rentier capitalists are always chasing one bubble or another. Plus, given how messed up Europe is, the global 1% need somewhere to put their ill gotten lucre.
    4. Wait until Baby Boomer retirements start in earnest.
    5. American policy has so destabilzed North Africa and the Middle East that there will be firefights and police actions for years to come. Plus, we may not be directly involved, but we are providing weapons to the Syrian “rebels”

  20. bmiller says

    Note: None of the above is solely or primarily the “fault” of the current designated Manager for the machine. But claiming that Obama represents some kind of dramatic shift in policy or approach is inaccurate.

  21. dingojack says

    bmiller – RE: point three
    Have you (and all your 1% friends) ever considered an Australian holiday? Just asking.
    :) Dingo

  22. raven says

    bmiller, all those were in play during the Bush Catastrophe in one form or another.

    It hasn’t been that long since Bush was president and caused the Great Recession. Obama has only been president for 5 years.

    To take just one of your points, the housing market is recovering well. And part of it is investments and not just by the 1%. There are a lot of small time real estate business people. So what? This is capitalism. A recovery is a recovery.

    bmiller 3. Rentier capitalists are always chasing one bubble or another. This is close to a lie. Right now the stock market is reflecting partly the underlying economy and corporate profits. Which have been growing steadily for years.

    Point 5. Nonsense. The world has always been a chaotic place and will be for the forseeable future. Much of the time it has nothing to do with the USA. Bush had choices to make and he made the worst war plans possible. Obama has choices to make and so far he has made very good ones.

    You’ve been watching too much Fox news and Glenn Beck.

    The fact is Bush wrecked the USA economy for a generation and Obama is fixing it. The economy has been growing steadily after a severe contraction and a few years of flat lining. And over the objections and resistance of the Tea Party/GOP.

  23. raven says

    But claiming that Obama represents some kind of dramatic shift in policy or approach is inaccurate.

    Well, at least this is coherent enough to reply to.

    It’s wrong, nonsense, gibberish, dumb.

    Bush = Great Recession, Wall Street and bank collapse bailouts, war.

    Obama = Fixing the economic problems and ending the wars.

    You could say Obama is doing something similar to what Bill Clinton did. While Bush was the one that dramatically shifted US policy. He cut taxes sharply which caused the high deficits and started and prosecuted the wars.

  24. says

    bmiller “But claiming that Obama represents some kind of dramatic shift in policy or approach is inaccurate.”
    He does so! Never before have so many previously bipartisan policies and old Republican ideas been so poorly fought for, so vociferously fought against, so poisoned, and so incompletely implemented, and never before has so much foundation been spackled over, nor so many edges been meekly, apologetically, nibbled around as they have been over the last four years.

  25. Ben P says

    Obama = Fixing the economic problems and ending the wars.

    I think I have to go against you here. Obama’s done shit-all to fix the economic problems. He got a meager stimulus bill and the auto-bailout bill passed. He got a hard-won tax increase at the beginning of 2013, but that doesn’t particularly fix any economic problems in and of itself.

    That said, I’m of the opinion that presidents are wrongly credited with being able to effect the economy at all. It more or less does what it will do, operating on time scales long beyond any individual president’s term in office. The roots of the 2008 financial collapse lay in part in policy changes made 20+ years ago.

  26. says

    That said, I’m of the opinion that presidents are wrongly credited with being able to effect the economy at all. It more or less does what it will do, operating on time scales long beyond any individual president’s term in office.

    I agree Ben P. There are definitely long term structural changes at work. With regard to jobs, it was little more than a decade ago that high school and college kids liked to work in places like book stores, record stores and video rental stores. Those places are largely gone now and what is there to take their place?

    Or take people in their 40s and 50s who worked clerical and administrative jobs all their lives being laid off because technology has made their jobs obsolete. Some of these people are still trying to pay off their mortgages and/or their childrens college tuition. And if they try to go back to school to get another degree or some technical skill, they either have to burn their savings or take out a loan and there’s no guarantee they’ll even find a decent paying job once they’ve finished.

  27. raven says

    I think I have to go against you here. Obama’s done shit-all to fix the economic problems. He got a meager stimulus bill and the auto-bailout bill passed. He got a hard-won tax increase at the beginning of 2013

    Well, OK.

    Those were better than nothing. The stimulus bill wasn’t huge but I wouldn’t call it meager either. The federal reserve has done a lot to get the economy moving again too, mostly because they could act without congressional approval.

    It all started to go wrong with the Bush tax cuts. Clinton left us with a budget surplus and Bush left us with immense deficits. The tax cuts starved the federal government and left it without a lot of options when the economy cratered.

    You have to remember, for much of the time, Obama has had a house that is an obstructionist headwind, controlled by the GOP who have been a giant speed bump.

    I’ve got responsibilities and am out of here for now.

    To summarize, Bush = disaster, Obama = recovery.

    It seems a lot of people consider Obama “lucky”. Maybe so, but often enough, lucky people seem to make their own luck.

  28. Ben P says

    To summarize, Bush = disaster, Obama = recovery.

    You keep repeating this, but I’m not sure you understand what it means. It makes you look like a blind partisan.

  29. pjsurfer says

    Actually there are more people worried about a stock market crash right now than before the election. Common trends show gold is on a downward slide, the debt to spending ratio is larger than it has ever been, more people are using borrowed money to invest in stocks than ever before, the largest tax hike on every American (3% average across the board) starts in 6 months, unemployment has settled at 7.5% + or – .5%, and many fear the Fed ran out of money due to a poor showing in tax returns. Washington is on the brink of three separate scandals that would have buried G.W. Bush; People are scared inflation is around the corner, so… one of the most trendy searches on Google is Stock Market Crash 2013.

    Nobody can predict a crash. I have about as much faith in stock market predictions as I do in Miss Cleo and her Jamaican/English/Japanese/Swahili accent…

  30. pjsurfer says

    Of course the Fed can’t run out of money…. Look at me! you guys have made me argue with myself!

  31. dingojack says

    Ben P – Let’s have some nice graphs.
    Dow Jones Index since 2000 (note the trend of the period Jan 2009 onward).
    S&P 500 since 2000 (note the trend of the period Jan 2009 onward).

    Any questions?

    Dingo

  32. dingojack says

    pjsurfer – and let’s have a few more graphs (I like graphs):
    10 yr Gold prices. A measure of fear in the market of currency weakness.
    24 yr Copper prices. Nicknamed ‘Dr. Copper’, a measure of expected economic growth.

    So the market seems to trust currencies more (specifically the US$), and growth seems to be trending down from a period of growth not unlike before the sub-prime crash.
    Having said that, a crash tomorrow due to a hoax e-mail, rogue trader and/or computer glitch is certainly not unfeasible, watch that space.

    Dingo.

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