This is rather simplistic, but I rember early last year when the markets reached new heights, and "democrats" were praising the many year bull run as the success of Bill Clinton, certain pundits claimed that the economic boom of the 90's was a result of the Reagan/Bush years and/or the reupblican controlled congress.

Now that we are in a bear market, some have posted here that Bush is causing the economy to tank. These republican pundits now claim that the economy is tanking because of Bill Clinton's policies.

Forgive me for being confused, but you cannot have it both ways. Does anyone wish to attempt to explain this apparrent contradiction?

*disclaimer-I am not an economist and do not know jack about why any of this is happening in the large scheme of things.

-- FutureShock (gray@matter.think), March 22, 2001

Answers

It's really very simple. Economic booms are caused by Republicans. Economic busts are caused by Democrats. Also, Democrats are the cause behind Mad Cow and Hoof and Mouth disease and Y2K problems.

Hope that helps.

-- (Those@Evil.Democrats), March 22, 2001.

FS,

*ALL* such claims have to be passed through a malarky filter. As usual, the truth lies somewhere in the middle.

When you see a *trend* in the markets, you're actually looking at the result of decisions made many months (if not years) ago.

In the case of the Japanese, their entire empire was built on a house of cards, anyway. In downtown Tokyo, real estate is so outrageously expensive that a high-rise can be worth billions ... ON PAPER. Therefore, they had almost limitless "collateral" to borrow as much money as they wanted.

But once the Koreans and other Asian nations began cutting into their traditional markets, all of sudden they were in deep doo doo (to quote the elder Bush[g]).

They forgot the oldest rule of all: real estate is actually worth what people are willing to pay for it. If they were to put these high-rises on sale, no one would buy them. So ... the Japanese banks are facing a real crisis; they've got all this HUGE loans out, and the big Zaibatsu who owe the money are having trouble making the payments.

-- Stephen M. Poole (smpoole7@bellsouth.net), March 22, 2001.

In the case of the Japanese, their entire empire was built on a house of cards

Gee Steve...you mean Paul Milne was right?

-- how (about@that.!), March 22, 2001.

If Milne said that, then yes, he was right.

He HAD to be right on SOMETHING. Even a stopped clock is right twice a day. :)

-- Stephen M. Poole (smpoole7@bellsouth.net), March 22, 2001.

Greenspan is beginning to realize he isn't as powerful as once thought. Wall street just thumbed its nose in his direction. I think that the market is an entity unto itself. I used to think it had something to do with the value of American businesses; I'm beginning to think it's its own commodity. How it relates to the economy is a mystery.

-- Maria (anon@ymous.com), March 22, 2001.

Maria:

Try thinking of the stock market as the net vector describing how people think the economy will do within, oh, the next 6 months or so. This is a pure psychology play, since economic health seems based more on psychology than anything else. Yeah, fiscal and monetary policy have some impact, but it's a global economy. So playing the market means trying to guess what everyone else will guess that everyone else will do.

In the long run, fundamentals are important. Businesses must make profits. But the long run is even harder to guess. So there isn't a whole lot of connection with reality. Happy guessing!

-- Flint (flintc@mindspring.com), March 22, 2001.

Flint is trying to say that momentum runs the auction. Yep, and the auctioneers are crying right now.

-- Carlos (riffraff@cybertime.net), March 22, 2001.

Flint is trying to say that the crying is dripping into our beer. Yep, and the beer is tasting might skank right now.

-- ??????????Question Mark???????????? (?????????????@question.mark??????????????), March 22, 2001.

"They forgot the oldest rule of all: real estate is actually worth what people are willing to pay for it. If they were to put these high-rises on sale, no one would buy them. So ... the Japanese banks are facing a real crisis; they've got all this HUGE loans out, and the big Zaibatsu who owe the money are having trouble making the payments."

Steve, your are correct in your statement above. It goes even further than just real estate, it's everything that we purchase. The run up in the stock market was an over-evaluation of company stocks. Some of those companies (high tech), didn't generate cash they generated a Ponzi scheme. There's plenty of market/day traders who are waist deep in sh*t! They borrowed against their homes, their credit cards, their investments, only to see it evaporate overnight. If any of you have access to the San Jose Mercury, take a look in the used car section and look at all the BMW's, Jags, Mercedes, Lexus, etc., that the unemployed dot-comers are trying to unload. Housing should be real cheap in Silly Valley very soon. Those million dollar cracker boxes will soon be valued at their real worth - $50,000.

BTW, office space in San Francisco is at a high vacancy rate now, rental space is getting cheap!

-- watching it all happen (watchingitallhappen@watchingg.sad), March 22, 2001.

BTW, for those of you who have some money to invest I suggest investing your money in I Savings Bonds. The current return is 6.49%, and is based on inflation. I just purchased a $10,000 bond - safest place I know of right now, and one that's paying the best return.

http://www.publicdebt.treas.gov/sav/sbiinvst.htm

You can purchase these bonds directly from banks, savings and loans and some credit unions.

-- scardey cat (scaredycat@scared.$$$$), March 22, 2001.