S&P Now negative since Bush took office (7yrs ago)

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Jan 19, 2008 6:46 pm


After both Reagan and Clinton were in office for 7 years the S&P was up over 100%.   Bush has now been in office for 7 years. Total return is negative. I know he is probably just in the wrong place at the wrong time, but that's pretty bad.

Jan 20, 2008 12:24 pm

Yeah, it's all Bush's fault.

 
(Sarcasm for those of you in Rio Linda)
Jan 20, 2008 12:50 pm

Well, he walked into a colossal market meltdown seven years ago. Clinton's term was propped up by inflated, imaginary earnings, and PE's of 125 (on blue-chip stocks). It all disinigrated in a matter of months. If Bush were that lucky, the whole mortgage meltdown would have held on another year or so until he was out, and left it to the next administration.



It's a good example of why NOT to invest in indexes.

Jan 21, 2008 11:15 am

Exactly.  Had you invested in something like CAIBX or CWGIX you'd have averaged well over 10% sine 1/20/2001. 

 
I don't remember the chapter in my Series 7, 63, 24, AAMS studies or any of the CE classes that I've had to do over the last 10 years that have said it is the president's job to control the stock market.  Maybe the Fed.  More often than not, it's the general public that decides when the stock market goes up and down.   
Jan 21, 2008 11:46 am

Broker24 - It's not about what the Pres walked into in 2001, it's about what he made out of it in the past 7 years. Was this guy bookended by bad markets? Yes. Could there have been an alternative ending? Maybe.



Choices he made:



- Not vetoing anything during the Republican led Congress:

Source: Alan Greenspan's comments in regards to Bush's lack of financial prudence: "My biggest frustration remained the president's unwillingness to wield his veto against out-of-control spending,"



- The cost of the war in Iraq. $400 Billion as of 7/31/07.

Source(See page 14): http://www.cbo.gov/ftpdocs/84xx/doc8497/07-30-WarCosts_Testimony.pdf

I'm counting this as a choice that the Bush team made. Say what you will, but Iraq was not supporting Al Qaeda(and we knew that prior to invasion) & there were several elements in the intelligence community that were running counter to the Iraq has WMD argument(Hans Blix, Joseph Wilson)



- Not insisting that tax cuts & spending be offset by reductions in spending elsewhere(Congress writes the laws, but Bush certainly didn't use the bully pulpit to address this important matter.): “We need PAYGO, which is an important—in my judgment, critical—issue in budget programming… I think it was a mistake not to extend PAYGO, both for tax and expenditure programs, and let it expire in September 2002.” —Alan Greenspan, Chairman, The Federal Reserve Board (July 21, 2004)

Jan 21, 2008 11:53 am

none the less...this was the worst administration in any of our lifetimes...not my opinion, just the fact.

Jan 21, 2008 12:23 pm

He does not care about having a balanced budget; consequently, the national debt has balooned to over 9 trillion.





The only time budget was balanced was when he took office and instead of paying off some of the national debt, he gave out rebate checks.

Jan 21, 2008 12:47 pm

Still, is it the president's fault that the market moves up or down?  Would we have seen the market of the 90's without Clinton?  If Bush wouldn't have won in 2004, could the sub prime mortgage and financial stock blowup have been avoided?

 
BTW, PAYGO wasn't a Clinton bill.  It was George H. Bush bill.  The Congress started finding ways around the bill in the mid and late 90's.  Clinton's solution?  Raise taxes.  He's the one who created the larger marginal tax rates that Bush eventully did away with.  
 
Every president has done some sort of tax reform.  All of them trying to undo the mess the previous president started.  Blaming the president for what happens in the financial markets is stupid.  It's like your clients blaming you for the market going down.        
Jan 21, 2008 12:48 pm

paygo is a fraud because they do not include social security and medicare/medicaid in the calculations.  Lyndon Johnson is the worst president in our lifetime.  Jimmy Carter is second.

Jan 21, 2008 1:02 pm

Spiff - never suggested that PAYGO was a Clinton thing. Don't really care, in fact.



I am faulting(and so is Greenspan) GWB for not taking the bully pulpit to insist that Congress renews the PAYGO program.



I am also not suggesting that Bush is at fault for the sideways market. I am saying that we may have had a different result had there been more restraint on spending, and a call for sacrifice while we were spending big money on a war. Would we have avoided this subprime mess if someone else was president in 2001 - 2008... Obviously, we don't know. So, we have the history that we have... It's the same question we ask about our businesses. If the market had gone up instead of went down, that client would have... I think it's fair to want to stick to the reality we have and hold people accountable from there.



henry - you suggest PAYGO is a fraud. I guess that you're smarter than Bernanke & Greenspan, then. Because they both suggest that such a program is critically important.

Jan 21, 2008 1:34 pm

I sure henryhill meant to add IMVVVVVHO (V=Very)

Jan 21, 2008 1:59 pm
Ashland:

Broker24 - It's not about what the Pres walked into in 2001, it's about what he made out of it in the past 7 years. Was this guy bookended by bad markets? Yes. Could there have been an alternative ending? Maybe.

Choices he made:

- Not vetoing anything during the Republican led Congress:
Source: Alan Greenspan's comments in regards to Bush's lack of financial prudence: "My biggest frustration remained the president's unwillingness to wield his veto against out-of-control spending,"

- The cost of the war in Iraq. $400 Billion as of 7/31/07.
Source(See page 14): http://www.cbo.gov/ftpdocs/84xx/doc8497/07-30-WarCosts_Testimony.pdf
I'm counting this as a choice that the Bush team made. Say what you will, but Iraq was not supporting Al Qaeda(and we knew that prior to invasion) & there were several elements in the intelligence community that were running counter to the Iraq has WMD argument(Hans Blix, Joseph Wilson)

- Not insisting that tax cuts & spending be offset by reductions in spending elsewhere(Congress writes the laws, but Bush certainly didn't use the bully pulpit to address this important matter.): “We need PAYGO, which is an important—in my judgment, critical—issue in budget programming… I think it was a mistake not to extend PAYGO, both for tax and expenditure programs, and let it expire in September 2002.” —Alan Greenspan, Chairman, The Federal Reserve Board (July 21, 2004)

 
I just made a simple statement.  I'm not getting into a political debate.  Whenever you talk about the administrations and the economy, it usually turns into a lot of shoulda-woulda-coulda talk.  Hindsight is 20/20.
Jan 21, 2008 2:35 pm

9 trillion dollar national debt is about 85% of our GDP.



This would be equivalant to someone who makes 100,000 a year and having $85,000 in credit card debt. This country is in terrible financial condition now

Jan 21, 2008 2:42 pm

josephjones - What's your source, please?

Jan 21, 2008 3:19 pm

http://www.treasurydirect.gov/NP/BPDLogin?application=np





National Debt went up 35% while Clinton was in office, it went up 60% while Bush has been in office (so far).



I thought I was voting for a fiscal conservative when voting for Bush, apparently it was the exact opposite

Jan 21, 2008 3:56 pm
Broker7:

none the less...this was the worst administration in any of our lifetimes...not my opinion, just the fact.



I gather that means you weren't alive during either the Carter or Ford administrations?

Jan 21, 2008 4:24 pm
joedabrkr:
Broker7:

none the less...this was the worst administration in any of our lifetimes...not my opinion, just the fact.



I gather that means you weren't alive during either the Carter or Ford administrations?



Watchit Joe....I have fond memories of the peanut-eater, and his beer loving brother, Reagan's still my hero though, we shoulda made that man king.

Jan 21, 2008 4:33 pm

josephjones - if you take a look at which presidents borrowed the money you'll see dramatic upticks in the Reagan, Bush I & Bush II years. There was a moderation of the growth of the debt during the Clinton years(if he only wasn't such a lying ..., but aren't a great many politicians?) The pace certainly picked up dramatically in and after 2002. The numbers under Carter are hidden, of course, because of the size of the recent numbers, but he was no slouch at borrowing money, either.



Sacrifice was not and is not part of Bush's vocabulary, but these folks get voted in & reelected for the money they promise to spend on and for their constituency, not for the restraint they show.



Source: http://www.cedarcomm.com/~stevelm1/usdebt.png

Jan 21, 2008 6:52 pm

Based on what I'm seeing, you'd all best stop playing the blame game and start calling your clients to give them a heads up on what's coming tomorrow.  Are we near the bottom after that?  I'm inclined to think we're at least close, but wherever we are, you'd best be talking to your clients and either reinforcing their strategy or deciding what needs to be changed and quickly.  Nothing is worse for a client than seeing a tough decline and hearing nothing from their advisor.

 
Back to the phone...
Jan 21, 2008 7:30 pm
Indyone:

Based on what I'm seeing, you'd all best stop playing the blame game and start calling your clients to give them a heads up on what's coming tomorrow. Are we near the bottom after that? I'm inclined to think we're at least close, but wherever we are, you'd best be talking to your clients and either reinforcing their strategy or deciding what needs to be changed and quickly. Nothing is worse for a client than seeing a tough decline and hearing nothing from their advisor.



Back to the phone...







Feels alot like Jul 2002 and Oct 2002 right now, hard to tell if it's bottom but it sure feels like it