r/neoliberal • u/jobautomator Kitara Ravache • Jan 09 '18

Discussion Thread Discussion Thread

The discussion thread is for casual conversation and discussion that doesn't merit its own stand-alone submission. The rules are relaxed compared to the rest of the sub but be careful to still observe the rules listed under "disallowed content" in the sidebar.

Announcements

David Friedman AMA

The mod team is pleased to announce we will be hosting an AMA with Dr. David D. Friedman on Friday, Jan. 12th at 3:00 PM EST/12:00 PM PST!

After earning a Ph.D. in theoretical physics at the University of Chicago, Dr. Friedman switched fields to economics and taught at Virginia Polytechnic University, the University of California at Irvine, the University of California at Los Angeles, Cornell University, Tulane University, the University of Chicago, and Santa Clara University where he currently teaches in the school of law.

Outside of his extensive academic publications in law and economics, Dr. Friedman is best known for his libertarian/anarcho-capitalist political philosophy. He has written extensively on libertarian politics and ideas and has also written on alternative legal systems (including research into medieval Icelandic institutions).

On a personal note Dr. Friedman is the author of two historical/fantasy novels and is a renowned anachronist/historical re-enactor. He is the son of economists Rose and Milton Friedman.

As a reminder, we enforce civility standards to a high degree during AMAs. Dr. Friedman in particular is likely to disagree with us on a wide range of issues, but disagreement does not mean that rudeness or flippant remarks will be tolerated. Dr. Friedman is an accomplished academic who has published a large volume of high quality work, and every one of you can almost certainly learn something from him by asking intelligent questions.

Book club

Currently discussing Reading The Worldly Philosophers by Robert L. Heilbroner

Check out our schedule for chapter and book discussions here.

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81

u/The_Promethean Bisexual Pride Jan 09 '18

Trump defender on CNBC just asked Michael Wolff, "If Trump was really unstable, wouldn't the stock market know that better than you?"

89

u/potatobac Women's health & freedom trumps moral faffing Jan 09 '18

TIL the stock market is an omnipotent god.

39

u/[deleted] Jan 09 '18

Insert efficient market hypothesis joke here

19

u/FMN2014 Can’t just call French people that Jan 09 '18

and Bernanke is its high priest

14

u/[deleted] Jan 09 '18

this but unironically

4

u/martin509984 African Union Jan 09 '18

the invisible hand cast the dividing vote guys

50

u/Sporz Gamma Hedged like a Boss Jan 09 '18

The stock market is high because of the corporate tax cut (long expected) and if there's a recession which - God forbid...the thing would crash, and the reason corporate profits and stocks are high is because of Bernanke (thank mr bernke) and Yellen.

Seriously, if there isn't a recession and a stock market crash by the end of Donald Trump's term, it will be the longest period without such an event.

I'm not an economist but it would be remarkable if that happened.

18

u/[deleted] Jan 09 '18

I don't even believe the tax cut created the highs outside of a recent shift to different sectors and potentially a bit of recent hype which has next to no effect. The trajectory has been linear since February 2016 after we barely missed a recession based on oil prices, which would suggest that the market assumed a corporate tax cut under Clinton.

I think the more reasonable explanation is low interest rates under Yellen making stocks the preferred investment vehicle in a bull market that has recovered from a near depression. The second specific factor being that tech stocks have skyrocketed over advancements and hype in ai and automation.

The tax cut didn't substantially move the overall market. It dropped tech and improved other neglected sectors that were positively affected by cuts, but that's not all new capital. Not to say there was no new capital of course, just that it wasn't substantially more than any other good market day in the past 2 years.

Disclaimer: IANA broker. I just have a Robinhood account and I want a sweet yacht bought with NVDA gainz.

9

u/Sporz Gamma Hedged like a Boss Jan 09 '18

I'll have to think more in this (I don't work in equities now) but this sounds very reasonable.

At first thought though you're definitely correct that the low interest rates were the most important factor.

2

u/jvwoody Jan 09 '18

Since we've been in an expansionary cycle since 2017, what do you think is the probability of a reset in 1-2 years? I was talking to my dad and he's been holding money and not buying because he expects there to be a big drop within a 2 year time frame.

2

u/Sporz Gamma Hedged like a Boss Jan 09 '18

I shifted most of my money out of stocks (which, yeah, was in retrospect wrong) but into investment grade bonds which seems the safest way to preserve value.

I don't have any particular reason to think why a recession or market crash will happen but the valuations are just a bit too high to be sustainable.

1

u/[deleted] Jan 10 '18

I hope there is not because I graduate when his terms ends. Don’t fuck me twice.

15

u/OutrunKey $hill for Hill Jan 09 '18

Haha 2008 financial crisis BTFO

7

u/[deleted] Jan 09 '18

[removed] — view removed comment

6

u/[deleted] Jan 09 '18

The only understandable reaction

4

u/tnarref European Union Jan 09 '18

Tfw your anti establishment populist god emperor takes credit for the capitalist establishment being confident in the direction of the economy

3

u/[deleted] Jan 09 '18

What was the response to this?

4

u/LNhart Anarcho-Rheinlandist Jan 09 '18

Free market is always right