Where will the market be at the end of a second bush term?

[Betty]

It's not as high as it got to under Clinton. I wouldn't be surprised if the moron presides over 8 years of the market either declining or going sideways. Sadly, I predict it's likely to be lower in 2008 if he gets his way with Social Security, starts a few more wars, and slashes taxes even more for all his rich firends. By the time he's done, the deficit should have balooned to the point where NO ONE will be stupid enough to finance our debt.

[Warpy]

1. I can see two things happening

The market will hold steady, but inflation will increase and eat up all those paper profits of the 90s. This is the more likely scenario.

Less likely is that the personal unsecured debt burden, the national debt, and the trade imbalance (another name for debt) will all collide and the whole financial house of cards will come tumbling down very suddenly. I sincerely hope this one doesn't happen, because a lot of us won't survive it, not with a selfish, anti Christian sack of shit like Bush in charge.

[FormerDittoHead]

2. Could be VERY good!

*If* the SS "scheme" goes through, it would mean HUNRDEDS OF BILLIONS entering into the market, vying for the same shares, so it could be doing very well!

Too bad no one in the MSM will tell these young investors that they're paying too much for those shares.

[Massacure]

3. Then the government goes hundreds of billions of dollars into debt.

That on top of 400 billion yearly deficit already and 300 billion in interest payments yearly for its 8 trillion dollar debt.

[FormerDittoHead]

4. Remember what Gov't debt means to the economy in the SHORT Term...

OK, let's be understand this for the SHORT term, the next 4 years, which was the question...

What happens to the money the gov't borrows?

It goes into the economy!

And at what RATE does the U.S. gov't borrow money?

The federal gov't pays THE LOWEST INTEREST RATE IN THE WORLD, like a tick above inflation...

Let's see how it works:

The gov't pays Halliburton, Halliburton pays it's suppliers (cost + percentage), their employees, etc, those parties in turn buy stuff, houses, cars, and so on.

I believe John Maynard Keynes said like every dollar spent by the federal gov't will mean like 4.5 dollars generated in the ripples described above.

The thing IS a house of cards, however, as we are systematically destroying our manufacturing / export base, but I see it lasting a good 4 years at least...

[Massacure]

5. I don't see it lasting.

Other countries are already worried about the debt. They aren't going to invest unless interest rates go up. That will damage the middle class though.

The money will come either domestically or from abroad. I don't see it comming from both though.

[jwcomer]

6. 13,500 but that's not a good thing.

The Dow Jones Industrial Average will be up in December 2008. And here is why.

The last two years of recovery of the DJIA is almost entirely due to the decline in the value of the dollar against the Euro. Put differently, the ratio of the US dollar to the Euro has been essentially flat over that period.
http://tinyurl.com/5d4jx

I predict a continuation of this trend with a 20-30% decline in the dollar and perhaps a further 5% weakening in the DJIA/Euro ratio. That puts the DJIA between $12,500 an $14,500. So I predict $13,500 as the value of the DJIA on Dec. 31st, 2008. Or about 7,600 in euros, slightly below its current value.

[TheFarseer]

7. I think up because......

If he gets his social security reform, it will create a stock market buble which will burst in during the next administration. If not, he will probably have some way to prop up the economy - more tax cuts anyone?????