A rising Dow Jones Industrial Average (DJIA) means better times are on the way, right? Not necessarily, according to CNBC CME floor reporter and tea party movement inspiration Rick Santelli.
Santelli made an appearance on CNBC's Nov. 6 "Fast Money," a show which the host, Melissa Lee, is skittish about a discussion that politics interferes with the market is a reality. Nonetheless, Santelli explained there so happens to be correlation between a rise in unemployment rates and the rise in the Dow Jones Industrial Average.
"[I] think we're building a stairway to heaven in Dow prices on the back of paper and I think that, you know it seems kind of dire to me that 8 percent - 8,000, 9 percent - 9,000, 10.2 - 10,000," Santelli said. "I shudder to think where the unemployment rate is going to be at 11 and 12,000 in the Dow."
Lee challenged Santelli on his premise and applied the conventional wisdom that stocks are forward-looking indicators and that unemployment is a lagging indicator. That's not the case, according to Santelli, who expressed his concern about the pending health care legislation being debated in the House of Representatives under the leadership of House Speaker Nancy Pelosi.
"Not anymore," Santelli replied. "How can it be? What are they going to do in Washington at midnight tomorrow? How can it possibly be forward looking? We don't know what they're going to do with our money - with trillions of dollars, one-sixth of the economy and that's one example."
But here's how the equation works as Santelli explained - as long as unemployment continues to go up, the Federal Reserve will be reluctant to raise interest rates. And that's a bet investors are going to take - that as long as monetary policy remains easy, investors will continue to fuel the market.
"That's the game - that's why stocks keep going up on an unemployment rate, where the unemployment rate is important to America and investors that are invested in the stock market can still profit. Hey - you know, the last three recessions - what size was Google or Amazon? You know, let's look at who used to hire and how recessions used to be. You know, GM hired hundreds of thousands of people. What were their market capitalizations? Look at Google - how many people do they have? Do you really see this changing?"
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BUY or GO TO JAIL
November 6, 2009 - 23:33 ET by ptsonPelosi's plan includes jail and fines if you do not buy a health insurance policy. Up to 15 years and $250,000 in fines. Question, do you get "free" health care in jail? MY reply is simple, READ THE CONSTITUTION YOU OBNOXIOUS BITCH! I just retired and have decided to go back to work full time defeating any and all members of Congress who vote for this CRAP! One other thing, YOU'RE FIRED!
Democrats are
November 6, 2009 - 23:51 ET by TN MomDemocrats are gutting/killing jobs. The double-digit unemployment will have a huge negative impact on tax revenue on April 15th.
We are already in the BIG MUDDY..from NB on 11/5/09
November 7, 2009 - 10:44 ET by Paarlrunning low on funds down in DC....
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Cash Crunch, Press Silence: As ObamaCare Advances In Congress, Uncle Sam's Collections Continue Steep Drop
By Tom Blumer (Bio | Archive)
November 5, 2009 - 16:06 ET
-->
The
August Congressional Budget Office budget forecast for the fiscal year
that began last month says that Uncle Sam will take in $2.264 trillion
from October 2009 through September 2010. That's an increase of 7.6%
over fiscal 2009's intake of $2.105 trillion.
Though it won't be official until Tim Geithner's crew releases
its Monthly Treasury Statement next week, it's virtually certain that
the government's collections will open the year in a deep hole compared
to last year, and probably well behind what CBO expects.
Take a look at this compilation of key items from October's final Daily Treasury Statement, compared to the actual results from October 2008 and 2007:
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This downward spiral continues a trend that began in the summer of
2008, as the public and especially businesses, entrepreneurs, and
investors began comprehending the horrid economic implications of a
Barack Obama electoral victory (assumes that Oct. 2009 will come in at
$135 billion; excludes 2008's stimulus payments, which the government
treated incorrectly in my opinion as reductions of receipts):
In the intervening year since the election, fear and uncertainty
have spread to consumers in general, which of course has significantly
suppressed economic activity and federal collections resulting from it.
It is ironic to say the least that Congress and the Obama
administration are glorifying the idea of a "public option" that would
ultimately lead to government-run health care while Treasury receipts
continue to shrink. If the private health insurance market disappears,
so will its taxes.
To name just one example, Aetna's recorded income tax expense on its financial statements for 2005-2008
(including state and local taxes) averaged roughly $900 million per
year. Put the company's health insurance segment out of business, and a
large portion of those taxes would stop coming in, digging the
country's and various states' debt holes that much deeper.
The establishment press paid very little attention to fiscal 2009's drop of 19.5%
in receipts from economic activity, so I expect similar treatment of
October's continuation of the trend. It would appear that they don't
want any unsettling news getting in the way of the statist agenda.
If there's a reason to believe that this ongoing decline won't
continue as long as the current bunch remains in charge and continues
doing what they're doing, I want to know what it is.
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters
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please Jeff Poor
November 7, 2009 - 02:12 ET by sajc05this website has to show some consistency. when i first came upon this site I thought it was great at exposing a well known democrat bias in a lot of areas.
BUT this site touted a GREAT economy when bush was president. always siting gpd, and the dow. I argued (as real conservative not a republican that regurgitated bush and fox talking points) that our economy is not good, based on bubbles created by the fed that inflated the dow average. everybody here argued me.
BUT now a democrat is in office fake conservatives like yourself come out and say the economy is aweful and only started getting bad on january 20 2009.
Hypocrisy is a bad thing and runs rampant here. i don't have the patience to explain to the uneducated how and why our economy is so bad. there is no difference in how we were run during bush and now under obama. but the fake conservatives here can believe the great american hannity and think the only reason we are here is because poor people got loans and bush ran a great economy. sorry to tell you but BUSH STARTED THE SOCIALISM.
"omg" "no way" "you're a liberal" are some of your responses i'm sure, among others. but its true. from some one who doesn't follow one party but is a conservative, bush destroyed this country economically while you all sat around and said nothing and now you CLAIM to be conservative dissenters? no way, go back to fox and go back to sleep US REAL CONSERVATIVES KNEW WHAT WAS GOING ON. we knew for a while but you all said if you criticize bush "you're a crazy liberal"
you're entitled to that belief that bush is great and obama is a crazy nazi but it has a connotation that you are a completely uneducated person who really loves talking points and hannity propaganda. and people like you are adorable don't get me wrong but are not in love with facts.
bottom line - either the dow climb is good or not, because i certainly remember when the republicans and this site touted the dow as an indicator for a great economy even though most people educated on the economy, like myself, knew differently.
I just want consistency from this site and not partisan hated. if you can't offer that then thats okay, but just say "we're here to promote the republican talking points even if and when they run counter to conservative principle"
mediacare part D?... ha, thanks bush my great great great grand kids will thank you for that bill and expansion of gov't that decimated the treasury long before they were born. thank god the tea party protesters stopped - oh wait, they didn't because they dare not say anything about a republican. the founders would love bush, right? well if you listen to hannity i guess you think they probably would... very sad.
You Just Want Consistency?
November 7, 2009 - 06:58 ET by GeneralAlHeres some consistency for you Mr.US REAL CONSERVATIVES! The economy was doing well under Bush until 2007! Does anything about that year ring a bell with you? My wife and I had a succesful business at that time. It did well until the end of June in 2007. Do you know what happened after that? Your Democrat/Communist pals named Harry the Ape and Nancy the Hooker enacted legislation that went into wffect at that point causing the dow to slide! Bush and Conservatives continued to try to get Barney Fag and Chris Fraud to rein in Freddy and Fanny but they did nothing! Our business was connected to the furniture industry which was driven by the housing market! Now we're out of business thanks to your Communist pals in the Democrat party. The ascension of the Obamessiah put the icing on the cake!
Don't attack this site without putting all the pieces of the puzzle together. Personally, I challenge your claim to intelligence or Conservatism!
there is no difference in
November 7, 2009 - 07:35 ET by Jack BauerCome on! That's an absurd and hyperbolic statement.
I will absolutely agree that Bush epitomized a niche of big government, corporate quasi-capitalism that has found a home in the Republican party. Yeah, what else is new?
But plenty of us on NB recognized that -- and commented vociferously about it.
I agree that many felt compelled to support Bush against the vicious attacks from the left because of one thing: America was a nation at war, and he was at least committed to winning, despite the errors he made there too. That had to be supported at all costs.
But the idea that there's no difference between Bush and the crypto-Marxist Obama is an unsustainable farrago.
Obama is Bush times a million of your worst economic and foreign policy nightmare -- then add a few trillion for good measure. For all his faults (such as being no conservative on many issues) he wasn't a conscious socialist
Saying Bush is the same as Obama is like comparing a woman who shoots her violent husband to Ted Bundy and Wayne Gacey. Sure, they all committed violent acts, but there's a massive and discernable difference.
ADDENDUM
I also don't get your reference to "this website." Newsbusters has dozens of writer contributing examples of liberal media bias. It has thousands of posters all commenting. Many old ones go, change their name. Many new join every day.
There is no "this site" in that sense of a party line. I have seen the most vicious posts bounce between people ostensibly on the same side, certainly during the Rep primaries starting 2007. So I don't even accept that collective premise you posit.
You need to post positive comments on where the Reps go from NOW if your purpose it to convert folks to your way.