Trump says he hopes Fed gets involved soon over markets

The media trotted out the 'record highs' mantra for months as a message of solid economic performance of this administration and presumably a message of hope and confidence in the future. Here, I have pointed out many times the futility of using record high indexes as a message of anything other than that the total value of the sharemarket index you are looking at has never been lower - similarly, record high public debt levels, record high fiscal deficits, and so on and so on (though these are never pushed in the media as much as record high sharemarket indexes).

Now we have a chance again to promote the correct way of valuing shares which is using some variant of price to earnings (profits) ratios over a long period and suitably adjusted for consistency. Robert Shiller for example publishes his on his website. Share markets are forward looking since the value of a share today depends on the stream of future dividends appropriately discounted back to the present. When the confidence intervals around the forecasts of dividends are widened - such as in current circumstances - then value of shares will drop until there is greater certainty and the confidence intervals shrink back.

The share market participants will decide when those circumstances start to return and not politicans nor policymakers. A straightforward return to orthodox economic capitalism by this administration, abandoning protectionism, balloning debt and deficits, and vote buying policies would help.

But he doesn't! When people said "UNFIT TO HOLD OFFICE OF PRESIDENT" this is what they meant. Glad you finally realized it.

To add to his own incompetence, his toxic personality makes him dismiss everyone who is not a grovelling sycophant. And this is the kind of results that you get from administration made up of grovelling sycophants.

You deserve what you voted for. Enjoy!

That administration really needs to realize that rate cuts will NOT help people to get out and buy more, much less get out and produce more, if many are sick and even more are fearful of getting sick !!! The virus problem itself requires a fiscal hand, and worldwide coordination, something which the new wave of populists are allergic to of course.

Mr Trump is always saying something...Funny man

The say " It's all about the economy "

.....and he's feeling the heat .

The only thing that EU bureaucrats are good at is creating new taxes and increasing the old ones. So maybe a corona tax is on the horizon?

+1! Fiscal response is the correct approach in this case, I agree.

There are those who compare the magnitude of "panic" selling of the last 5 trading days with the financial meltdown of 2007-2008 and use that to push for immediate and deep rate cuts. This is wrong because it does not take account the important difference between the two:

1. The financial meltdown of 2007-2008 originated within the then grossly over-leveraged finance industry and from there the rot spread to an otherwise healthy, even a bit overheated, real economy. Here we are facing exactly the opposite situation, where we have an exogenous shock to a lukewarm real economy but a health-ish financial system.

2. The 2007-2008 episode began with interest rates across the developed world averaging between 4 and 5%, and record high commodity and oil prices. The realized benefit of the initial cuts was thus very strong. With the current interest rates, there will be little stimulative effect per dollar. On the other hand, they render the cost of fiscal stimulus not exorbitantly hard. With some governments being paid to borrow from, it would be foolish not to take an advantage of it.

We understand that the financial talking heads would love to persuade the public to give them more free money. Based on what we have seen over the last 12 years, the monetary stimulus will be squandered (back in 2008 they called this "moral hazard", a word that has but disappeared lately, even if it shouldn't) into more market speculation and very little of it will "trickle down" to where it is needed.

I hope the Western governments will avoid this mistake if only out of sense of political self-preservation, if not for duty to the common good. The 2008 recovery rally was the most hated in history, and the inequality that it exacerbated is threatening the very fabric of the society. This time they ought to do better, provide the stimulus and then make sure it goes to where it is needed, rather than sitting passively and shifting the responsibility to the central bank.

... as in beer tax for Mr Simpson.

Candidate Trump said the stock market was a massive bubble. I guess he then found out what his tweets could do.

Just wondering why FF puts tweets of @Russian Market in news section.

Is he? I dunno, it is a bit hard to see it when he is bent over licking Putin's boots.

Fairly foolish to make markets the scorecard for an effective administration.
He should know better and left that to the people he had chosen for economic team.
Way too much hands on and now it backfires.

According to Trump it's the democrats fault that the virus is spreading to USA. Now we know who to blame for that.

You are correct at last. I did, I did vote for the Donald and will do so again.
Have you by any chance looked at what he is running against? By comparison he is a Titan.

And by the way most people are not running their lives by what happens on Wall Street. Only the Banking system stains their pants by what happens as result of Fed policy.

China the Globalists Pet Horse just stepped into a woodchuck hole.
(note will correct this: CCP the Globalists Pet Horse just stepped into a woodchuck hole.)
Also if you happen to have missed it, Main Street will take note of where the Virus originated. Which fills well the anti globalist sentiment brewing that got Donald elected in the first place.

You make an interesting point. EU economic model is going to get tested, certainly in the short term and if the disease goes rampant, well something to keep in mind about if this really turns Bad.

Budget shortfall certainly as Trade derived revenues going to fall. How do they fund EU? With that kind of mindset raising Taxes a distinct possibility and if Japan is a precusor when Abe raised Sales tax, consumption fell.
Bears watching what gets implemented.

I remain of mind that this will benefit GBP in negotiations as EU now more then before needs someone to buy from them.

Many people posting here don't seem to have the slightest idea how EU works and how things are funded. It would be good to know which things are funded from national budgets and which from EU budget. The same applies to taxes. In case someone doesn't know, EU does not have a direct role in collecting taxes or setting tax rates.

Money still has to come from someplace within EU so each Nation need contribute.
How Tax or call it funding or whatever the buzz word that applies, the economic model which generates money is getting stressed. EU remains a net exporter and a Large customer China is offline whom they sell into. This directly affecting revenue stream.

Does it imply financial leverage shifting towards UK, in a normal world the buyer has upper hand. In the world of distorted economics created by CB's nobody has any way to discover price and demand.

The EU, hmm wonder if there is anyone in Brussels that is capable of realizing they have a problemo.
Nah, too much to ask for.