After the Election – Review Part 1

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I posted some statistics on the day of the Presidential Election. I noted seven things to watch for after the political hoopla had a chance to cool off. Here are some interesting updates to those comments I made on November 4th, 2008 (click here to read that post):

The first item in my post was about the $700 Billion bailout plan. My comment was to watch how the plan effected the stock market (see the next two bullet points) and how closely the spending has stuck to its original proposal. Result: The plan has been extended to include the car manufacturing industry and reports show the total bailout will cost us more than $3 TRILLION (that’s $3,000 BILLION). Also, newly elected President Obama is talking about a stimulus package of $825 BILLION. Keep trying, one of these bailouts is bound to work (sarcasm).

PS – The bailout creator Henry Paulson will not remain the Treasury Secretary. Great accomplishment in your final six months Hank! Glad you could leave your mark on American history.

The second item highlighted the crazy stock market swings during the six weeks prior to the election. The DOW fluctuated more than 500 points on five occasions in that time frame, but only twice since the election. If you look at 300+ point swings then compare 14 occasions from 9/29/08-11/4/08 to 12 from 11/5/08-1/16/09. A tad bit less volatile, but still not good (I was hoping it would calm down after the election).

The DOW closed at 9,625 on 11/4/08 and has gone down another 1,000+ points to close at 8,281 just before the inauguration. That bailout plan really worked well!

The Fed dropped the interest rate to 1% back in November. Guess what, they lowered it to .25% and might take it down a bit lower. You know, to stimulate the economy.

Compare interest rates that were offered on 11/4/08 to today:

15yr mortgage: 6.04% compared to 5.12% today (30 year was 6.41% compared to 5.42%).

6-month CD was 3.03% compared to 1.93% today (Money-market was 3.00%, is now 1.83%).

Phone calls to my “no-call list” home have dropped substantially. Yay!

The proposed bill H.R. 7223 is stagnant. Why remove regulations that choke publicly traded companies when you can just keep introducing stimulus packages and bailouts? (Again, sarcasm).

I hope you found this comparison interesting. I welcome any insights or comments. Let’s talk!

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About Steve Stewart

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Comments

  1. maddog2012 says:

    I don’t believe that the stimulas package is by President Obama is designed to make the stock market go up. The market is based on speculation (i.e. investors doing their research on what they think will happen) for the government to focus on the stock market would just not make sense. However, if the governement can create jobs accross numersous sectors, and people become employed, they will pay taxes, buy things, maybe invest in the market. Thus turning the market around (hopefully) and increasing the likely hood that the next generation will not be stuck with a huge debt bill. Personally I don’t think lowering taxes for anyone will do much good alone.
    Not to mention no bail out or plan would be even worse. The american people got us into this mess by buying more then they could afford and not being smart. The american people will now suffer, and the american people are the only ones who can get us out of this….

  2. Agreed, lowering taxes alone is not the entire solution. If few trillion dollars have not helped our economy, then the government probably can’t get enough money to throw at these companies that will solve the problem. And where will the money come from for a stimulus package? Tax increases, whether on the rich or middle-class, will only hurt small businesses who hire more people in this country than large companies – increasing the unemployment rate.
    I believe that the government needs to go on a financial diet and CUT SPENDING, allow companies to work the problems out themselves (otherwise they have a broken business plan and wouldn’t last anyway), and not raise taxes or even do another stimulus check. The money most of us got last year in Bush’s stimulus package was ours to begin with anyway.
    Great comment Maddog! I think we agree on much, but I love to hear your thoughts.

  3. maddog2012 says:

    I don’t agree with cutting spending. Mostly because if you cut spending you cut jobs. Even so called “pork barrel” spending creates jobs. Those jobs then create more jobs…. When 1% of our federal budget is for pork, I would rather not waste the time or effort on eliminateing it.
    However, the government can do a lot more buy cutting wasteful engergy consumption, becoming more productive through efficiency, and as you said stopping bailouts. If the insurance industry goes belly up, so be it. If the car industry loses a company and a few lines of product so be it.

    Too bad we don’t have enough political power to change things….

Trackbacks

  1. […] Election (click here to see post) and did a follow-up of those same observations on 1/23/09 (click here for that post).  It has been about 90 days since that post, so I thought it would be fun to review it one more […]

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