The Kenyan Socialist anti-Christ does it again...

[PLATO]

Interestingly enough the "government takeovers" of the auto industry actually ended up making the US money. Fun that.

A very good result and one that the administration has every right to be proud of. One can still ask the question of if a reorganization through bankruptcy would have produced similar or superior result for GM, but still a sucess for the Obama administration.

[PLATO]

If there's a return to "irrational exuberance" then QE can start being gradually unwound. I'm not jumping and dancing over the Dow, but I think it's funny that it hit a record high on the watch of the President who in some circles has been the most reviled in history, at least since FDR. According to some of those people, the Dow should be about 50, gold through the roof, and we're all loaded down with 30 guns each patrolling our neighborhoods in up-armored SUVs to protect us from the hordes of "takers."

There is still time...

Just kidding! Let's not lose sight of the fact that the market has just now recovered to a level it was at nearly 6 years ago. Between the spending orgies of Bush and Obama, it may yet be some time before we see real growth in equities and the economy. No matter how you spin it, the debt those two put up is a very real drag on the economy and any recovery.

[Kidlicious]

There is still time...

Just kidding! Let's not lose sight of the fact that the market has just now recovered to a level it was at nearly 6 years ago. Between the spending orgies of Bush and Obama, it may yet be some time before we see real growth in equities and the economy. No matter how you spin it, the debt those two put up is a very real drag on the economy and any recovery.

It would be wrong to think about the market as simply recovering from what it was 6 years ago, and I doubt if americans will do that. What matters is the future, and that is starting to look bright.

[Imran Siddiqui]

A very good result and one that the administration has every right to be proud of. One can still ask the question of if a reorganization through bankruptcy would have produced similar or superior result for GM, but still a sucess for the Obama administration.

I think the administration feared (not without reason) that if the auto makers went through bankruptcy there would be no one willing to lend money that would be required for the reorganization.

And, unlike other stimulus like measures, it had an exit plan. Maybe something to look into.

[Kidlicious]

Remember that , because there are no better alternatives, can be a very good cause for growth (post WW2).

[PLATO]

It would be wrong to think about the market as simply recovering from what it was 6 years ago, and I doubt if americans will do that. What matters is the future, and that is starting to look bright.

Most people I know with 401K's think about it that way...

The future is not yet looking bright by a long shot. This is a good sign, but not a definitive indicator. You should look at this more as a lifting of the gloom as opposed to a bright sunny day. I do hope that you are right in any event.

[PLATO]

I think the administration feared (not without reason) that if the auto makers went through bankruptcy there would be no one willing to lend money that would be required for the reorganization.

And, unlike other stimulus like measures, it had an exit plan. Maybe something to look into.

Yes, I think that was definately the administrations concern...and actually a valid one. GM's physical assets should have been sufficient to stimulate investment by all but the most timid, but it was truly a very very crazy time in capital markets. No gripe with what Obama did...just a philosophical difference to how to handle free market situations.

[Kidlicious]

Most people I know with 401K's think about it that way...

The future is not yet looking bright by a long shot. This is a good sign, but not a definitive indicator. You should look at this more as a lifting of the gloom as opposed to a bright sunny day. I do hope that you are right in any event.

I believe it's either/or. There has been so much talk about doom and gloom (mostly politically motivated bull****), and if those lies aren't going to hold true in the beliefs of the common american, the common american is going to be very optimistic. That's his nature anyway.

[PLATO]

I believe it's either/or. There has been so much talk about doom and gloom (mostly politically motivated bull****), and if those lies aren't going to hold true in the beliefs of the common american, the common american is going to be very optimistic. That's his nature anyway.

Consumer sentiment and business sentiment are two drastically different things. It is true that Consumer sentiment drives business sentiment to a degree and in that respect you are totally correct. That is not the whole of what drives business decisions though. Other little nasty things like the marginal cost of hiring that next employee, regulatory issues, access to capital, and the like are equally (if not more) important to the businesses driving economoc growth. Still...this IS a step in the right direction.

[Kidlicious]

Consumer sentiment and business sentiment are two drastically different things. It is true that Consumer sentiment drives business sentiment to a degree and in that respect you are totally correct. That is not the whole of what drives business decisions though. Other little nasty things like the marginal cost of hiring that next employee, regulatory issues, access to capital, and the like are equally (if not more) important to the businesses driving economoc growth. Still...this IS a step in the right direction.

Not in an expanding market. In fact, the true factor really is whether the market is expanding or not. In an expanding market you have to expand or your lose market share, which is tremendously important.

[PLATO]

Not in an expanding market. In fact, the true factor really is whether the market is expanding or not. In an expanding market you have to expand or your lose market share, which is tremendously important.

No...I completely understand the theory, but you are putting the cart before the horse. An expanding market is predicated on the issues that I detailed. Assuming, theoretically, that all businesses in the specific market you are talking about have equal access and equal barriers. Such is not the case in reality.

[Kidlicious]

No...I completely understand the theory, but you are putting the cart before the horse. An expanding market is predicated on the issues that I detailed. Assuming, theoretically, that all businesses in the specific market you are talking about have equal access and equal barriers. Such is not the case in reality.

If consumers are willing to buy, then by definition, a business can expand it's market share, and therefore the market will expand. Market share = profit.

[PLATO]

If consumers are willing to buy, then by definition, a business can expand it's market share, and therefore the market will expand. Market share = profit.

It really isn't that simple. If all consumer spending was done from current incomes it would probably work that way, but it isn't. Consumer borrowing fuels a large part of the economy and they borrow from business. Business is unwilling to lend unless the environment for expansion is present.

Now, don't take that as me saying that consumer demand isn't a large driving factor...it is. It is, however, not the only factor. Something I would imagine that you actually know well, but are just picking an economics debate.

[Kidlicious]

It really isn't that simple. If all consumer spending was done from current incomes it would probably work that way, but it isn't. Consumer borrowing fuels a large part of the economy and they borrow from business. Business is unwilling to lend unless the environment for expansion is present.

I'm not saying it's simple. I'm saying that consumer spending (sentiment) is the economic driver. If consumers have credit and businesses no longer believe in complete economic collapse they will lend money to consumers, because if they don't, their competitors will, because it's a proper business decision.

[PLATO]

I'm not saying it's simple. I'm saying that consumer spending (sentiment) is the economic driver. If consumers have credit and businesses no longer believe in complete economic collapse they will lend money to consumers, because if they don't, their competitors will, because it's a proper business decision.

Yes then...given the bolded limitations it seems we are actually saying the same thing. Although "economic collapse" is too absolute a term to describe what businesses are looking at, I can accept the general premise.