re: #408 Sigma_x

Gee, there’s quite a prediction there. The stock market has seen a 50%-60% runup in the past 12 months after bouncing off the multiyear lows. A 10% correction wouldn’t be unprecedented and should actually be expected, but to claim that anyone is clamoring for such an outcome on partisan political grounds is just nuts.

The economy was never as bad as the Democrats (including President Obama) claimed; the credit collapse was a fraction of the mess that the S&L scandal was (TARP is 43% of the S&L bailout, and equivalent to about 1% of GDP, whereas S&L was 3%).

It isn’t nearly as good as Obama is now claiming (and he’s out to make the situation from the past year look as bad as possible such that any improvement in the past few months looks even better than it is), but sentiment still shows quite a bit of pessimism on Main Street because unemployment (a lagging indicator) is still high, and the real estate market is a mess (and will continue to be for some time to come) because easy credit days are over (good riddance!) and low interest rates are going to come to a close. Since many people have their wealth tied to their homes, a depressed real estate market means that disposable income is tied to how well real estate rebounds and some markets are so far underwater than they’re in Marianas Trench territory. High unemployment further contributes to a poor real estate outlook because it crimps both on the foreclosure side, and on the buyer side, reducing demand on homes and curbing supports for pricing (further contributing to slides in prices in many markets). That makes some housing markets more attractive to buyers who can afford to buy, but sellers aren’t nearly as inclined to sell when they are underwater - short sales - or don’t have the capital to buy another home.