The Dow Jones Industrial Average "soared" 330 points today. What does that mean? Well... nothing, actually. But there's an interesting story to the DJIA when take in context. Here are the numbers over the past two months:
From July 21st to August 8th it lost 1914.26 points. That's... a pretty substantial drop. Now... Seeing as how it had been an almost consistently upward trend for over a year leading up to that point - up 6097.27 points since its low, about six weeks or so after Obama took office. So... What was going on during that time period that might have given the economy some jitters? Hmmm.... Let me think...
OH YEAH!
The whole stupid DEBT CEILING DEBATE! Thank you, REPUBLICANS! I mean, GOD FORBID the recovery happen when there's a DEMOCRAT in the White House! Keynes might make a comeback or something! (Of course, by stiflingng the stimulus packages, and seeing the recovery falter, they basically PROVED Keynes was right, but don't expect that liberal media (*barf*) to tell you that!) They couldn't bear to see that Obama (and Keynes) were RIGHT, so they invented an issue in order to shit-can the economy. Way to go, Republicans!
And since then, check it out:
UP 429.82
DOWN 519.83
UP 423.37
UP 125.71
UP 213.88
DOWN 77.707
UP 5.017
DOWN 419.63
DOWN 172.93
UP 37
UP 322.11
UP 143.95
DOWN 170.89
UP 134.72
UP 254.71
UP 20.7
UP 53.58
DOWN 119.96
DOWN 369.31
UP 15.04
UP 275.56
DOWN 119.05
DOWN 303.68
UP 68.99
UP 44.73
UP 140.88
UP 186.45
UP 75.91
DOWN 108.08
UP 7.65
DOWN 283.82
DOWN 391.01
UP 37.65
UP 272.38
UP 146.83
DOWN 179.79
UP 143.08
DOWN 240.6
DOWN 258.08
UP 153.41
UP 131.24
UP 183.38
DOWN 20.21
UP 330.06
Now, the trend? On average? Since, August 8th? Is DOWNWARD. OK, yeah, the index is actually UP 193.41 points since the start period, but the trend-line says that we'll lose about 4.65 points per trading day. The thing is? Do you notice how many days there are that the CHANGE (up or down) was in the triple digits? Because I did. Don't bother counting, I'm going to tell you: 32 out of 44. That 72% of the time that the Index changed by roughly 1% of it's overall value. To put that in context - a 1% change in a single day - if it went UP every day by 1%, in a year you'd have roughly THIRTEEN TIMES the money you started with. Now, obviously, that's never going to happen. Down days will cancel out up days and vice-versa. But more than EVER OTHER DAY? THREE OUT OF EVERY FOUR?! That's extraordinary.
So... what does it mean?
Well... You have to understand that the DJIA is nothing but a handful of stocks (30) that the Dow Jones Company picks because they feel that they are a good indicator of the countries overall economic health. (It's actually one of THREE indices for this purpose, but it the only one anyone every talks about, so it's what we're going to talk about.) And you also have to understand what a stock's price actually means. What it is, is the net present value (which assumes some arbitrary inflation rate) of all future dividends (profits) divided by the number of shares. IOW, it's a predictive value of how a company will do. And, obviously, as new information comes in (like quarterly reports?) both that projection, and the price, will change accordingly.
So... what does it mean that "the experts" keep changing their prediction by such a significant amount every day, up and down?
Well, for a start, it may seem that they don't what the hell they're bloody doing! But ACTUALLY, it merely means that there's a lot of economic instability at the moment. Now the Republcians will balme it on all kinds of things that eitehr haven't happened yet (like tax increases) or things that have no chance of happeneing. (Like tax increases.)
But I have an alternate theory, and it's fairly simple.
The economy is trying to recover. It really wants to. There is pent up demand and people are starting to spend money again. Sales of Halloween Candy/Decorations/Cosutems/etc..., for example, is WAY up from the last two years. I can tell you that Automotive sales (and profits) are generally up as well. But then...
HERE COME THE REPUBLICANS...
Debt crisis = higher interest rates = harder to borrow = lousy economy
No More Stimulus = hampers demand = lousy economy
Raise taxes on THE POOR (a favorite of Fox News these days!) = hampers demand = lousy economy
Cut Social Security and Entitlements = hampers demand = lousy economy
Cut Government Salaries and jobs = hampers demand = lousy economy
You see the trend?
The ECONOMY? Would be doing just fine if the Republicans did what they always say the Government should do: STOP FUCKING WITH IT!
All of this instability is due to Washington's (read: REPUBLICANS) refusal to simply DO WHAT IS NECESSARY to make things better.
Now... You might hear the Right tell you that their thinking LONG TERM instead of SHORT TERM.
To which I'll answer, "Yeah..." and point out that, to a Republican, "Short term" means the next fourteen months, while "Long term" meand 2013 through 2016.
If I had my way, I'd execute every one of these scumbags for treason. As it is, they should be impeached and jailed for theft, fraud and corruption. But, at a minimum? THEY SHOULD ALL BE VOTED OUT OF OFFICE. EVERY LAST MOTHERFUCKING ONE OF THEM!
I've said it many times on MMFA, and probably once or twice here, and I'll say it again:
Anyone making less than $250,000 a year who votes Republican is either clinically psychotic or functionally retarded. The rest? Are just greedy.
Who IS this guy?!
Political Talk Show Host and Internet Radio Personality. My show, In My Humble Opinion, aired on RainbowRadio from 2015-2017, and has returned for 2021! Feel free to contact me at niceguy9418@usa.com. You can also friend me on Facebook.
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Showing posts with label dow. Show all posts
Showing posts with label dow. Show all posts
Monday, October 10, 2011
Saturday, February 13, 2010
Who does better with the economy?
The economy is something the right likes to harp about all the time but, just like everything else, really has no credibility on. I guess the thinking goes that since all the successful CEO’s are Republican (not true, but whatever), and they all know how to run COMPANIES (like, you know… Enron, General Motors and Citibank?) then the Republicans MUST be better at “running the economy.” Couple problems with that… First off all, the vast majority of Republican politicians, like most politicians in general, are LAWYERS, not businessmen. Second, a company is to the economy what today’s weather is to the climate – the two are related, but a thorough understanding of one or the other requires a completely different skill set. (Go figure that they aren’t on the right side of the global warming debate either!)
Now… it should be clear why these "successful" CEO’s "all" vote Republican: Republican generally don’t put as many regulations on industries and prefer the lesse-faire approach. That this approach has ALWAYS ended in disaster is apparently lost on them, but the CEO’s seem to think they’ll make more money under Republicans.
But will the economy do better? (Will we keep our jobs? Will our investments grow?)
Let's take a look at how the economy has performed under Democrats and Republicans using two of the most common economic indicators: The Dow Jones Industrial Average and the Standard and Poores 500 Index. Here’s how the experiment will work. We’ll hypotyhetically put $1000.00 on the market when one party takes the White House, sell it when they’re voted out, and put it all back in when the regain power. We’ll then calculate what you’d have today if you’d done this over the years. The two strategies will be called “Betting on the Dem’s” and “Betting on the Pub’s.”
I was able to find DIJA data going back to 1900. We’ll do the Pub’s first. The idea is that you’ll BUY udner McKinnley, SELL with Wilson, BUY with Harding, SELL with Roosevelt, BUY with Eisenhower, SELL with Kennedy, etc… through to the present day, when you would SELL when Obama took office. And I’m going to show 6 different scenarios, depending on which President you want to start with. Also, it should be noted that I’m using the Jan-1 closing data, rather than the day they actually took office. This is because that’s the only data I have. If I can find some more precise data, date-wise, I’ll re-calculate it. Here is the data I’m using:
Date:_____DJIA: _____Incoming (Incumbant) Presdient:
2/12/2010_10,099____(Obama-D)
1/1/2009__8,000_____Obama-D
1/1/2001__10,887____Bush-R
1/1/1993__3,310_____Clinton-D
1/1/1981__947_______Reagan-R
1/1/1977__954_______Carter-D
1/1/1969__945_______Nixon-R
1/1/1961__648_______Kennedy-D
1/1/1953__290_______Eisenhower-R
1/1/1933__51________Roosevelt-D
1/1/1921__72________Harding-R
1/1/1913__88________Wilson-D
1/1/1900__68________(McKinley-R)
Using this data, and calculating the number of shares and values you’d have at each stage, if you used the “Bet on the Pub’s” strategy, starting with McKinley, your $1000 would be worth $5311. today. If you started under Harding, your $1000 would be worth $4104 today. If you started under Eisenhower, your $1000 would be worth $5794 today. If you started under Nixon, your $1000 would be worth $2593 today. If you started under Regan, your $1000 would be worth $2568 today. And for the poor saps who thought they’d bet on George W. Bush, their $1000 would be now worth only $735. Now… these returns account ONLY for the growth under Republicans. If you figure out the number of year involved (starting date through 1/1/2009) and calculate the annual rate of return [ (Final value / Initial Value) ^ (1 / number of years) -1 ] you get the following, based on which President you start with:
McKinnley: 1.5%
Harding: 1.6%
Eisenhower: 3.2%
Nixon: 2.4%
Reagan: 3.4 %
Bush: -3.8%
Here’s how “Betting on the Dem’s” performed: Starting with Wilson, your $1000 would be worth $28,089 today. Starting with Roosevelt, your $1000 would be worth $34,341 today. Starting with Kennedy, your $1000 would be worth $6038 today. Starting with Carter, your $1000 would be worth $4140 today. Starting with Clinton, your $1000 would be worth $4171 today, and starting with Obama, your $1000 would be worth $1268 today.
Figuring the yields the same way, (only going through to the TODAY, rather than ending on 1/1/09) you get this for the Dem’s:
Wilson: 3.5%
Roosevelt: 4.7%
Kennedy: 3.7%
Carter: 4.4%
Clinton: 8.7%
Obama: 23.7%
That’s right – the WORST CASE scenario under the “Betting on the Dem’s,” (Wilson, 3.5%) still gives a better return than the BEST CASE scenario under “Betting on the Pub’s,” (Reagan, 3.4%) So according to the DJIA, the economy not only does better under Democrats, it does much, MUCH better!
But who knows… MAYBE the DJIA has a liberal bias or something. So how about the S&P 500? Now, the S&P only goes back to the 1950’s. So we’ll start with Eisenhower. Here’s the raw market-close data:
Date:_____S&P:___Incoming (Incumbant) President:
2/12/2010_1078___(Obama-D)
1/1/2008__826____Obama-D
1/1/2001__1366___Bush-R
1/1/1993__439____Clinton-D
1/1/1981__130____Reagan-R
1/1/1977__102____Cater-D
1/1/1969__103____Nixon-R
1/1/1961__62_____Kennedy-D
1/1/1953__26_____Eisenhower-R
And here we go again. If you started with Eisenhower, your $1000 would be worth $4822 today. If you’d started with Nixon, your $1000 would be worth $2022 today. IF you’d started with Reagan, your $1000 would be worth $2042 today. And the poor sap who bet on George W. Bush would only have $605 left of his initial $1000 investment. Using the same formula, here are the returns, starting with:
Eisenhower: 2.8%
Nixon: 1.8%
Reagan: 2.6%
Bush: -6.1%
Back to the Dems… If you’d started with Kennedy, your $1000 would be worth $8598 today. If you’d started with Carter, your $1000 would be worth $5176 today. If you’d started with Clinton, your $1000 would be worth $4061 today, And betting only on Obama, your $1000 would be worth $1305 today. So, again, using the same formula, here are the returns, starting with:
Kennedy: 4.5%
Carter: 5.1%
Clinton: 8.5%
Obama: 27.0%
AGAIN, the worst case scenario under the “Dem’s” strategy (Kennedy, 4.5%) is STILL better than the best case scenario under the “Pub’s” strategy (Eisenhower 2.8%).
Now... Obama's market is obviously still in play, and so the final Democratic returns can vary. But as it stands right now… if you want to be better off financially, you’d better do what you can to help the Democrats WIN!
------------------------------------------------------------------------------
BTW… there are some flaws with this whole exercise. I’m not going to point them out yet, since I’m not particularly motivated to go help the Right bolster their case here. (Plus I'm just curious to see what any of them come up with.) However, I have been challenged with several pretty clever arguments given to me by Conservatives, pointing some of these out in an attempt to undermine this, and the conclusion still stands. Maybe some conservative who knows what’s what will eventually shoot something my way that will stump me. But I’m not holding my breath!
Also, I’d be happy to explain how I calculated any of the above returns, if anyone does their own number-crunching and comes up with a different number. I’ve tried several different methodologies and they all give the same final answer: Dem’s rock, Pub’s are the suck. This is just the one that I felt was most defensible.
Now… it should be clear why these "successful" CEO’s "all" vote Republican: Republican generally don’t put as many regulations on industries and prefer the lesse-faire approach. That this approach has ALWAYS ended in disaster is apparently lost on them, but the CEO’s seem to think they’ll make more money under Republicans.
But will the economy do better? (Will we keep our jobs? Will our investments grow?)
Let's take a look at how the economy has performed under Democrats and Republicans using two of the most common economic indicators: The Dow Jones Industrial Average and the Standard and Poores 500 Index. Here’s how the experiment will work. We’ll hypotyhetically put $1000.00 on the market when one party takes the White House, sell it when they’re voted out, and put it all back in when the regain power. We’ll then calculate what you’d have today if you’d done this over the years. The two strategies will be called “Betting on the Dem’s” and “Betting on the Pub’s.”
I was able to find DIJA data going back to 1900. We’ll do the Pub’s first. The idea is that you’ll BUY udner McKinnley, SELL with Wilson, BUY with Harding, SELL with Roosevelt, BUY with Eisenhower, SELL with Kennedy, etc… through to the present day, when you would SELL when Obama took office. And I’m going to show 6 different scenarios, depending on which President you want to start with. Also, it should be noted that I’m using the Jan-1 closing data, rather than the day they actually took office. This is because that’s the only data I have. If I can find some more precise data, date-wise, I’ll re-calculate it. Here is the data I’m using:
Date:_____DJIA: _____Incoming (Incumbant) Presdient:
2/12/2010_10,099____(Obama-D)
1/1/2009__8,000_____Obama-D
1/1/2001__10,887____Bush-R
1/1/1993__3,310_____Clinton-D
1/1/1981__947_______Reagan-R
1/1/1977__954_______Carter-D
1/1/1969__945_______Nixon-R
1/1/1961__648_______Kennedy-D
1/1/1953__290_______Eisenhower-R
1/1/1933__51________Roosevelt-D
1/1/1921__72________Harding-R
1/1/1913__88________Wilson-D
1/1/1900__68________(McKinley-R)
Using this data, and calculating the number of shares and values you’d have at each stage, if you used the “Bet on the Pub’s” strategy, starting with McKinley, your $1000 would be worth $5311. today. If you started under Harding, your $1000 would be worth $4104 today. If you started under Eisenhower, your $1000 would be worth $5794 today. If you started under Nixon, your $1000 would be worth $2593 today. If you started under Regan, your $1000 would be worth $2568 today. And for the poor saps who thought they’d bet on George W. Bush, their $1000 would be now worth only $735. Now… these returns account ONLY for the growth under Republicans. If you figure out the number of year involved (starting date through 1/1/2009) and calculate the annual rate of return [ (Final value / Initial Value) ^ (1 / number of years) -1 ] you get the following, based on which President you start with:
McKinnley: 1.5%
Harding: 1.6%
Eisenhower: 3.2%
Nixon: 2.4%
Reagan: 3.4 %
Bush: -3.8%
Here’s how “Betting on the Dem’s” performed: Starting with Wilson, your $1000 would be worth $28,089 today. Starting with Roosevelt, your $1000 would be worth $34,341 today. Starting with Kennedy, your $1000 would be worth $6038 today. Starting with Carter, your $1000 would be worth $4140 today. Starting with Clinton, your $1000 would be worth $4171 today, and starting with Obama, your $1000 would be worth $1268 today.
Figuring the yields the same way, (only going through to the TODAY, rather than ending on 1/1/09) you get this for the Dem’s:
Wilson: 3.5%
Roosevelt: 4.7%
Kennedy: 3.7%
Carter: 4.4%
Clinton: 8.7%
Obama: 23.7%
That’s right – the WORST CASE scenario under the “Betting on the Dem’s,” (Wilson, 3.5%) still gives a better return than the BEST CASE scenario under “Betting on the Pub’s,” (Reagan, 3.4%) So according to the DJIA, the economy not only does better under Democrats, it does much, MUCH better!
But who knows… MAYBE the DJIA has a liberal bias or something. So how about the S&P 500? Now, the S&P only goes back to the 1950’s. So we’ll start with Eisenhower. Here’s the raw market-close data:
Date:_____S&P:___Incoming (Incumbant) President:
2/12/2010_1078___(Obama-D)
1/1/2008__826____Obama-D
1/1/2001__1366___Bush-R
1/1/1993__439____Clinton-D
1/1/1981__130____Reagan-R
1/1/1977__102____Cater-D
1/1/1969__103____Nixon-R
1/1/1961__62_____Kennedy-D
1/1/1953__26_____Eisenhower-R
And here we go again. If you started with Eisenhower, your $1000 would be worth $4822 today. If you’d started with Nixon, your $1000 would be worth $2022 today. IF you’d started with Reagan, your $1000 would be worth $2042 today. And the poor sap who bet on George W. Bush would only have $605 left of his initial $1000 investment. Using the same formula, here are the returns, starting with:
Eisenhower: 2.8%
Nixon: 1.8%
Reagan: 2.6%
Bush: -6.1%
Back to the Dems… If you’d started with Kennedy, your $1000 would be worth $8598 today. If you’d started with Carter, your $1000 would be worth $5176 today. If you’d started with Clinton, your $1000 would be worth $4061 today, And betting only on Obama, your $1000 would be worth $1305 today. So, again, using the same formula, here are the returns, starting with:
Kennedy: 4.5%
Carter: 5.1%
Clinton: 8.5%
Obama: 27.0%
AGAIN, the worst case scenario under the “Dem’s” strategy (Kennedy, 4.5%) is STILL better than the best case scenario under the “Pub’s” strategy (Eisenhower 2.8%).
Now... Obama's market is obviously still in play, and so the final Democratic returns can vary. But as it stands right now… if you want to be better off financially, you’d better do what you can to help the Democrats WIN!
------------------------------------------------------------------------------
BTW… there are some flaws with this whole exercise. I’m not going to point them out yet, since I’m not particularly motivated to go help the Right bolster their case here. (Plus I'm just curious to see what any of them come up with.) However, I have been challenged with several pretty clever arguments given to me by Conservatives, pointing some of these out in an attempt to undermine this, and the conclusion still stands. Maybe some conservative who knows what’s what will eventually shoot something my way that will stump me. But I’m not holding my breath!
Also, I’d be happy to explain how I calculated any of the above returns, if anyone does their own number-crunching and comes up with a different number. I’ve tried several different methodologies and they all give the same final answer: Dem’s rock, Pub’s are the suck. This is just the one that I felt was most defensible.
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