Bill Maher Drops Another Commentary That Obliterates This Gen Z Tendency
There Is One Pollster Who Says Outright Kamala Isn't Winning This State
We Have an Interesting Development About Kamala's Univision Town Hall Event
Democrats Are Hitting the Panic Button Early
I’m A MAN! (From those who can’t define a woman
Cowardice or Conviction: Why Christians Must Choose Trump to Uphold Biblical Principles
A Quick Bible Study Vol. 237: What the Bible Says About Truth -...
Watch JD Vance Obliterate ABC Reporter
Report Reveals Hamas Tried to Persuade Iran to Join Oct. 7 Attack
Republican Candidate for Congress Endorsed by Border Patrol Council in Key NY Race
Arizona Will Allow Over 200,000 People With Unconfirmed Citizenship to Vote
Here's How JD Vance's NYT Interview Went
Co-opting Christ: Pressing Scripture Into Service of Our Political Agendas
Loving With Truth and Wisdom in a World Filled With Pain and Lies
Why Aren’t Christians Voting This Year?
OPINION

Family Feud

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement
I hope everyone had a chance to watch my debate with Dr. Keith Ablow who suggests the bull market is possibly detached from reality, an illusion, reminiscent of the Internet bubble and gambling.  He made several references to 1929 and buying gold.  Dr. Keith is a brilliant psychiatrist, but what he was talking about was pure emotional responses to the stock market.  
Advertisement

We went at it pretty good and both believed in our convictions, and we remain friends, but something is happening to the once happy family that was America. There is hardly anything that's universally thought of as good for the nation. It's not good enough to have an opinion, but we must hate the other guy's opinion.

Of course every family needs a peacekeeper, and sometime it's not the most obvious person, the smartest, nor the most boisterous.

I get where Dr. Keith is worried about the administration's policies and the potential destruction that comes with pulling an economy apart and putting it back together with upside speed bumps and rewards that favor those with the least amount of effort. I don't think there is any doubt of the outcome if President Obama's wish list came true, it's just that some people think such an outcome would be great (think Voltaire) and others think it would mean the end of America's greatest (think Payne & Ablow).

The thing is, I've been careful not to allow my disdain of socialism deter my goal of living a great and a long life that's well-funded. The irony is that so many that have the same disdain have retreated from investing in the market and in themselves, so in effect making it easier for this economy, already built to last, to stumble. It's difficult seeing through the anger, but it must happen in order to avoid self-destruction. Heck, you don't have to be a psychiatrist to know this, and yet, all day long I fight with smart people embracing irrational thoughts because of enmity.

It's not that there can't be several opinions on what's moving the market, but what's behind those opinions?

Take this Rally and Shove It

Frankly, I'm shocked in general at how divisive the Dow hitting an all-time high has been this week. So many people are simply pissed off and ripping the move to shreds.

Republicans seem pissed because it could be perceived as good news for President Obama and signify his economic policies work.

Democrats are pissed because after the sequester, the economy was supposed to become an overnight sinkhole. Moreover, the move mitigates the notion capitalism doesn't work and we need to re-work the economy into "built to last."

As I've written over and over the rally is more about the rest of the world embracing capitalism and marching toward better lives. The world has come a long way since Sally Struthers used to weep all night long for us to help out the poor Chinese. All that time, they were saving 40% of their meager earnings while most Americans were spending 100% of their huge earnings. Now, we're crying because China has $1,000,000,000,000 of our debt, and we are begging them to buy even more.

Fed Hikes Not Rally Killers

Let's take a look at the general beef with the market - Ben Bernanke and Fed policy.

The Internet bubble burst and stocks came crashing down, and the Fed moved in to clean things up with their magic money machine. We learned from recent periods of Fed intervention that rapid rate cuts come too late to stop massive sell offs. The question is how does the market react when the bull is interrupted by rate hikes. Hikes that began in 2004 stalled a 44% move from the bottom but didn't crash the stock market. Instead, the Dow dipped 6% and traded sideways for a year before regaining its momentum that eventually lifted the index to an all-time high and one hundred percent above the October 9, 2002 low.

That rally was stealthy and unloved, even as home ownership climbed to a record. At this point, we see that Fed policy actually takes time to impact the economy.

Advertisement

1929???

The Roaring Twenties were accompanied with a roaring stock market- times were great.  That Bull Market began August 24, 1921, and finished -with a thud on September 3, 1929, after rallying 497%!

The Crash didn't come in a straight line but in a series of moves that actually resulted in 13 Bear and Bull markets (20% moves that come after 20% moves in the other direction).

For the current Bull market to duplicate that scenario, the Dow would have to rally to 39,600. I'm known for wearing rose-colored glasses, but even I'm not that enthusiastic. But, if it did happen, I wouldn't hate it but would be disappointed with the crowd that keeps so many people on the sidelines with talk of fire and brimstone. Of course a move like this could bring the nation together like one big happy family.

Yes, Dr. Keith, this would be impossible with the administration's policies, but don't write off how far we can go as the rest of the world aggressively plays catch up.

Today's Market

I said earlier in the week the Bureau of Labor Statistics could post a jobs number with a '2' handle-meaning north of 200,000 and that's what's happened this morning. Now the trick is to see if the street can celebrate this news even as it means the Fed would be exiting sooner rather than later if this is the beginning of a trend. On that note 130,000 people dropped out of the jobs market and that is one thing I think has to improve before the Fed raises rates. If another couple million people leave the jobs market and unemployment hits 6.5% I suspect the fed would maintain its easy money policies.

I wonder if a good (not great and even mediocre to pass recoveries) could piss off as many people as Dow all-time high has.

Advertisement

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos