Wednesday, March 18, 2020

CNBC: The Dow is now negative under Trump's presidency

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The Dow is now negative under Trump's presidency
The Dow's drop pushed the index below the level where it closed the day before Trump took office in as part of a historic sell-off.

Read in CNBC: https://apple.news/ATlC0Z9ucTuC7ADA5P3mkgQ


5 comments:

Ned said...

I am somewhat conflicted about this:

(1) The hit to the economy is going to be huge -- unemployment is skyrocketing and it's increasingly clear that "social distancing" is going to be months not weeks. So this is probably not the bottom for the NYSE.

(2) Trump's lethargy and inaction during the crucial six weeks in February & early March absolutely made the outlook for the USA much much worse than it could have been. Ultimately, thousands of Americans will die because the US federal government did nothing of consequence during those six weeks.

(3) On the other hand, even with a better leader than Trump in the Oval Office, it's unlikely we would have been able to respond as well as the very best (e.g., Taiwan) for a variety of reasons. So we'd still be losing a lot of lives and taking an economic hit, and the DJIA would certainly be down somewhat even in the best case.

(4) On the third hand, I believe Wall Street was seriously in denial for the past three years about the inherent downside risk from a Trump White House. Wall Street basically assumed that the USA can thrive & prosper even with an incompetent nitwit as President. The idea that we'd get through four years without ever having to face an actual crisis was always naive and childish. So in point of fact the DJIA should never have been at 29,000 under Trump anyway, and now people are paying the price.

Ned said...

tl;dr ... the "DJIA at 29,000" thing was irrational exuberance, as Alan Greenspan would say, and now the chickens are coming home to roost.

Layzej said...

it's unlikely we would have been able to respond as well as the very best (e.g., Taiwan) for a variety of reasons.

What are some of the reasons? It seems counterintuitive.

Ned said...

What are some of the reasons? It seems counterintuitive.

Lower level of social cohesion, widely varying conditions across a much larger country, division of government across federal/state/local levels.

I was going to say lower levels of trust, but this suggests that even fewer people in Taiwan than the US say that "most people can be trusted". (Interestingly, that number is a lot higher in mainland China - comparable with the Nordic countries.)

Layzej said...

Interesting. Thanks.