Raiders,
The stock market is turning on expectation of corporate friendly tax benefit and freebies, that is not an intangible, that is for sure a solid expectation...but so far almost a year in it has not materialized but we will see. I am not in support of this as corps are very healthy and do not hire or give raises based on tax benefit or more cash in the bank, but that discussion has been had many times.
The reason for the stagnation in the economy for the last almost ten years is due to the actions which mute growth, but protected corporations especially banks and financial firms. So at the cost of stunted, flatline growth we saved the banks and financial firms and quieted the implosion that Obama inherited. I do not agree with these decisions either but they are not Obama centric as central banks everywhere are doing this and Japan has done this for what like twenty years.
When these central banks decided to crush interest rates so banks and corps and governments can get cheap debt, this did not boost economic growth for the same reason any of this bogus tax changes will. Corps will use freebies to give themselves raises, to reduce their float and shore up their balance sheets, to maximize that free cash in the safest way possible. Corps are not going to hire and expand unless demand dictates and even NEGATIVE rates will not stimulate demand unless those rates and benefit are given to the buyer of goods and services, the end user. And in the case of the consumer, the trickle down theory has not panned as of yet...mortgage rates have benefitted and that has boosted the real estate market, but that is limited as to its impact and with tighter lending rules and banks being a little less moronic the multiplier effect of low rates has not caused heavy inflation like it did in 2005-2007.
Bush does get blame for what Obama inherited, there is no way around it..the drop started prior to the election and it is considered as I mentioned above, a systemic shock...it was one of the largest shocks we have experienced that I can recall. And the decisions made after by central banks are sucking out future growth because they are wrong in thinking low rates stimulates growth...all they needed to do was look at Japan and see that theory is moronic.
The cycle time for policy change might actually be MORE than 18 months to 24 months, if you think about the time it takes to enact policy change, have that change impact whatever the target is, that activity to translate to a benefit, that benefit to be realized and monetized, then hopefully transferred down the line and realized, it might be more like three years to see the effects of whatever the crap Trump is getting credit for today with no cause.
Feel good is fine, but feel good does not pay the bills, leadership which has not been defined (and does not exist) is a feel good experience unless it is turned into action and policy...and how has that happened yet?
The stock market is not moving on feel good hope and intangibles...they are forecasting and baking in corporate freebies and this yield curve flattening is telling them that the good cheap times for debt will continue, and THAT is moving the market more than the big mouth is right now.
IT
moments....."breathes fresh OPTIMISM" to our AND the world's economies.....
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..I'm getting tired already..
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