Signs of turning tide on economy lift Democrats, Obama's hopes

[babylonsister]

Signs of turning tide on economy lift Democrats, Obama's hopes
By Peter Schroeder - 12/05/11 05:15 AM ET


President Obama, with his electoral fate tied to the economy, must be pleased with the momentum he’s getting.

Just months ago, the U.S. credit rating was downgraded and Democrats worried Obama was following in the footsteps of one-term President Jimmy Carter. Maybe he will, but reports in the last week suggest manufacturing and construction are humming, and Thanksgiving saw record-setting shopping by consumers.

The icing on the cake? A jobs report Friday shaved nearly half a point off the unemployment rate. The 8.6 percent rate was down from 9 percent in October and is the lowest unemployment has stood in two and a half years.

“Democrats have a very good chance in 2012 and if the economy gets better that’ll help us,” said Rep. Norm Dicks (D-Wash.). “Things are looking a lot better. A lot better.”

more...

http://thehill.com/blogs/on-the-money/801-economy/197079-signs-of-turning-tide-lift-obamas-hopes

[MineralMan]

1. This will disappoint many people.

There are a lot of people who want the economy to remain in bad shape so that President Obama will lose the election in 2012 and so Congress will gain more seats for Republicans. Can you imagine that? Watch for lots of things to be written poo-pooing this good news and trying to minimize it. I expect predictions of an impending collapse of the economy. :rofl:

[JoePhilly]

3. I'm waiting to hear how THIS is actually the first step in a double dip!!!

[MineralMan]

4. You won't have to wait long, I predict.

You'll hear it soon, I'm sure.

[JoePhilly]

5. This summer, when the DOW dropped under 11k, THAT was the begining of the double dip...

yup ... absolutely.

Today its above 12k .... and so now ... "the DOW is not an indicator of the health of the economy".

So apparently, when it goes DOWN, it is an indicator of the overall health of the economy ... when it goes UP, its NOT an indicator of the overall economy.

Meanwhile, over on Fox News ... Businesses are suffering because Obama hates business. The fact that the DOW has gone from 7500 to about 12k since he took office is also irrelevant.

[MineralMan]

6. It's very instructive to look at the chart for the DJIA over a

10-year period. I like to do that on a regular basis. It adds perspective to the drop in the Dow in 2009. The doomsayers can always find something to say that predicts impending collapse. But, over a 10-year period, the Dow is up, not down. History takes time.

[JoePhilly]

7. YUP ... I look back over a similar time period .... and for much of it

the DOW jumps up and down with a range between around 10k and 12k. The jump to 14k, and the drop to 6500 were very short term events.

If you were smart, you were talking gains as the dow climbed past 12,500 ... and then bought back in after the DOW fell outside of that range.

A friend of mine, in January of 2009, decided to shift his 401k contributions such that he and his wife maxed their 401ks in the first quarter (dual income no kids, young with plenty of time). During that period, the dow was between 7500 and 6500. That he's just about doubled that money as things stand.

[MineralMan]

9. Well, the Dow is just one indicator, and not the most important one,

but it's easy to see, so a lot of people focus on it. In reality, it's been pretty stable for a while, with 11,000 about the center point. Fluctuations don't really mean that much unless they hold higher or lower for some time. A lot of the fluctuation in the DJIA is due to people taking profits and buying at what they perceive as low points. The small to medium fluctuations are often meaningless and turn on a dime whenever news breaks. That's how big traders make their money, working the fluctuations. Long-term investors are a different group altogether.

[JoePhilly]

13. I think that even a small scale long term investor should pay some attention

to the fluctuations and (back to your 10 year observation) the trends.

I'm in for the long term ... so I re-balance my 401k at least quarterly. For the last 5 years, I've done it more frequently.

Back when Bush was President, and the DOW, after being FLAT for 6 or 7 years JUMPED through 13k, then 13.5k ... I saw absolutely no reason for that sudden leap. And so, I moved about 30% of my 401k into an investment that slightly better than cash.

Then the DOW collapsed. When the DOW fell below 10k ... THAT didn't make sense to me either. So I slowly started to buy back in.

I'm not advocating wild speculation ... but I do advocate "re-balancing", at least quarterly, more frequently if you think a recent market move will reverse (either direction).

My sense now is that the DOW should stay roughly between 12k and 11k for a while. It could go higher because companies are making large profits, and also hoarding cash (to avoid getting caught needing credit as happened in 2008) ... but cash doesn't build profits ... and so, they will be looking for ways to leverage that cash while still maintaining sufficient liquidity should credit tighten further (which I don't think is likely).

And so ... they will be looking for ways to use at least some of that cash to expand.

Having said this ... on the flip side ... the GOP will be working hard to stop ANY economic improvement. And so, they will do everything they can to ensure that businesses can not predict future events. The inability to predict future events causes businesses to be more cautious.

Which is exactly what the GOP wants.

[MineralMan]

14. I'm not invested in the market at all, so it's just a matter of

interest for me. If I were, I'd feel differently, I'm sure.

[JoePhilly]

15. I agree with you actually ... the market is an indicator ... not THE indicator.

The US economy is very complex. And so there is no single indicator.

What concerns me on DU is that if ANY of the indicators moves DOWN ... that is an indication of the end of the world.

But ... if any single indicator goes up ... that is only ONE piece of data, and should be ignored.

I absolutely understand why the GOP does this when they are out of power. What escapes me is how "democrats" on DU also model this behavior.

[pnorman]

10. Also probably disappoint a few good people here on DU.

n/t

[MineralMan]

12. DU's just a microcosm of a much larger set of the population.

So, that wouldn't be surprising, really. I was speaking more generally.

[livetohike]

2. Many of the anchors on CNBC have a look of fear in their eyes

and sad faces, so that's a good thing!

[Tarheel_Dem]

8. K & R

:kick:

[Hutzpa]

11. Gas price has been going down slowly too

As long as the president is able to grab the bull horn which is gas price, you will see drastic improvement on the economy overnight, you can
bank on it. Gas prices has been the killer to the economy around the world.

[Liberal_Stalwart71]

16. I live in the D.C. and gas prices were astronomically high. The other day when I was

pumping gas, I noticed that the price is going down. It typically requires over $40 to fill my tank. This time, it was like $37.

[Hutzpa]

17. And they are working on getting it back up as we speak

just take a look at this lil gem I found; http://www.bbc.co.uk/news/business-16038154
Now we know why the shouting and prancing of Iran has been turned up a notch.

This game is not over yet, we're just in the third quarter.

[Liberal_Stalwart71]

18. I hear you. I'm not at all naive about the ReThugs are about. They are aided and abetted

by a lazy Corporate Media that is hoping that we'll all blame Obama for everything. Sadly, it has partly suceeded here at the DU forum. :(

[Awsi Dooger]

22. Gas prices will soar next spring and summer

I'm a handicapper and always focus on variables that aren't in the current focus. We're in a misleading calm period right now. Once Citizens United resurfaces, and more disgraceful than ever, along with potentially record gas prices thanks to right wing speculators, Obama is faced with obstacles far beyond anything we envision right now, impacting his approval rating.

[joshcryer]

19. The Republicans will be obliterated in 2012.

[mwb970]

24. Right now, the republicans are acting like they WANT to be obliterated.

Their obsession with helping only the super-rich and corporations, formerly hidden and denied, is right out in the open now. At the moment, they are insisting on a budget-busting continuation of tax cuts for the super-rich while stonewalling a cut of the payroll tax for the middle class. How much more blatant can you get?

They must be really, REALLY sure that the fix is in for the 2012 election. Clearly, they are no longer bothering to try for actual legitimate votes.

[AlecBGreen]

20. Boy I sure hope the economy can pick up some speed

There are a lot of people hurting out there who want nothing more than the OPPORTUNITY to work hard and support their families.

Personally Im just glad to have my job. Almost lost it in 09. Havent had a raise in 4 years but I count myself pretty fortunate.

[Name removed]

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[eridani]

23. The recovery is to an absolutely disastrous "new normal"

No beltway folks give a damn, though.