Since we've been on the subject of Stock Market pe
Post# of 65629
Posted On: 02/06/2016 6:20:32 AM
Since we've been on the subject of Stock Market performance in relation to which political party held office, and other subjects of the kind, I want to give an example that lends credence to my argument that Presidents don't influence the stock market as much as some believe, or would have you believe.
The following is a recent (three years ago) report published by USA TODAY:
http://www.usatoday.com/story/money/markets/2...n/3662171/
This article states that on the day Kennedy was assassinated, the shock and grief of the event was so strong that it caused the S&P 500 to plunge 2.8%. Even a chief equity strategist at S&P Capital IQ mentioned "It was a shock to the market. There was chaos and total uncertainty, from a political perspective".
It pays to know your history and to have the ability to separate fact from fiction. Here is what really happened on that day:
https://en.m.wikipedia.org/wiki/Salad_Oil_Scandal
The stock market plunge on that day actually had nothing to do with the presidents assassination.
Tino De Angelis, an organized crime member, seeing an opportunity to corner the soybean market, received collateralized loans for soybean oil. American Express is one of the companies that provided Tino with capital on the contingency that the barrels of oil he stored in his warehouse was used as collateral. Soon, Tino had the market cornered and was purchasing soybean futures contracts.
Inspectors would visit his warehouse to inspect the barrels of oil on a regular basis. They'd dip into the barrels, pull out oil, and everything would be fine. Tino would apply for additional loans to grow his operations and American Express was happy to oblige.
Then one day, someone realized that Tino was reporting that he had more oil than the futures market in the U.S. said was even available to trade. The inspectors received a tip that they better look closer into those barrels Tino was storing. The inspectors did, and found that the barrels were filled with water with only the top being oil. Since oil floats, this was a pretty easy scheme for Tino to pull off. The afternoon of Kennedy's assassination, investors learned of the scandal and also learned that Tino had biked $175 million ($1.5 billion in today's money) in loans from American Express and 51 other banks that he could not pay back. The collateral that American Express received...was barrels of water.
The event was completely overshadowed a few hours later when the President was assassinated. The stock market dived and futures contracts on soybeans crashed when investors found that the U.S. supply of soybean oil was much less. The Dow Jones fell 5% on that day.
But according to some passionate writers, whom the public pays the most attention to, no mention of this event was uttered. Only that the world was so distraught over the assassination of Kennedy that the stock market nosed dived on that day as a result.
And now, you know the rest of the story. Partisanship really doesn't play a major role in the stock market, no matter how much the media tells you otherwise.
The following is a recent (three years ago) report published by USA TODAY:
http://www.usatoday.com/story/money/markets/2...n/3662171/
This article states that on the day Kennedy was assassinated, the shock and grief of the event was so strong that it caused the S&P 500 to plunge 2.8%. Even a chief equity strategist at S&P Capital IQ mentioned "It was a shock to the market. There was chaos and total uncertainty, from a political perspective".
It pays to know your history and to have the ability to separate fact from fiction. Here is what really happened on that day:
https://en.m.wikipedia.org/wiki/Salad_Oil_Scandal
The stock market plunge on that day actually had nothing to do with the presidents assassination.
Tino De Angelis, an organized crime member, seeing an opportunity to corner the soybean market, received collateralized loans for soybean oil. American Express is one of the companies that provided Tino with capital on the contingency that the barrels of oil he stored in his warehouse was used as collateral. Soon, Tino had the market cornered and was purchasing soybean futures contracts.
Inspectors would visit his warehouse to inspect the barrels of oil on a regular basis. They'd dip into the barrels, pull out oil, and everything would be fine. Tino would apply for additional loans to grow his operations and American Express was happy to oblige.
Then one day, someone realized that Tino was reporting that he had more oil than the futures market in the U.S. said was even available to trade. The inspectors received a tip that they better look closer into those barrels Tino was storing. The inspectors did, and found that the barrels were filled with water with only the top being oil. Since oil floats, this was a pretty easy scheme for Tino to pull off. The afternoon of Kennedy's assassination, investors learned of the scandal and also learned that Tino had biked $175 million ($1.5 billion in today's money) in loans from American Express and 51 other banks that he could not pay back. The collateral that American Express received...was barrels of water.
The event was completely overshadowed a few hours later when the President was assassinated. The stock market dived and futures contracts on soybeans crashed when investors found that the U.S. supply of soybean oil was much less. The Dow Jones fell 5% on that day.
But according to some passionate writers, whom the public pays the most attention to, no mention of this event was uttered. Only that the world was so distraught over the assassination of Kennedy that the stock market nosed dived on that day as a result.
And now, you know the rest of the story. Partisanship really doesn't play a major role in the stock market, no matter how much the media tells you otherwise.
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"The more numerous any assembly may be, of whatever characters composed, the greater is known to be the ascendancy of passion over reason." - Federalist no. 58
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