Noticing a pattern

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44 AMP

Staff
It just hit me the other day, as I was driving, listening to the AM radio news. It appears to me (and if I am wrong, please tell me) that the "economy" (or at least the reporting on it) gets worse every 4 years. It has its ups and downs in between, but it is ALWAYS bad and getting worse in a presidential election year.

I'm not trying to say that it isn't bad now, or that it wasn't bad then, but it seems like ever since "its the Economy (stupid)" (and maybe before, I can't remember clearly) that it is the economy, but only in election years. It doesn't seem to tank every two years, when we elect governors, senators and representatives, only during the presidential cycle. Or is it just that so much more is made of it during the presidential election years? When it gets bad in a non-election year is it just as bad, but we don't focus on it as much? Or does it actually get worse every 4 years? It is a leap year thing?

Like high profile mass murders done by "deranged gunman", there seems to be a convenient (for their side) shooting anytime there is major gun legislation pending. It doesn't happen every time, but it happens enough to pass beyond my concept of coincidence. So what do you think, is there actually a cycle tied to the elections?, or is it just the skillful manipulation of the media focusing our concerns? or maybe, both?
 
J

jdc1244

New member
Or is it just that so much more is made of it during the presidential election years?
Click to expand...

That and the economy has been bad in some election years: 92, as you noted and this year. But the economy was booming in 96 and 00. We had the post 9/11 recession but that cleared up by 2002 or 03 at the latest. I refinanced my house in 04 and cashed out a ton of money from equity.

The economy was struggling in 88, strong in 84, and struggling in 80. And of course we were in the ‘Great Recession’ in 72 and 76.
 
J

JB Books

Moderator
The economy is bad. The costs of basics are up, and we are defnitely in the beginning of a recession. On the other hand, energy stocks and royalties are through the roof!

Oil will be a $150 per barrel by the end of the summer, and maybe $300 a barrel at its peak.

The market is down, but this is the time to buy. And if you don't understand the stock market, here is the basic you need to know to make some money:

Buy low
Sell high

It's gonna get worse before it gets better, no matter who wins in November.
 
T

The Tourist

Moderator
The ups and downs you notice are the business cycle. It has gotten shorter and shorter over my lifetime.

When I was in high school, conventional wisdom opined that the business cycle went from a high through a low and back to a high in the span of 25 years. People were quick to notice that wars seem to pop up every 25 years, or the span of a recognized generation.

As innovation quickened the pace, the cycle got shorter. When I was still working the recognized cycle was at 12 years, and shortening quickly.

I learned the reasoning in purchasing "bread." One of my economic professors pointed out that if I bought a loaf of bread, I didn't need another loaf the next day. In fact, my economic needs and contributions lessened for all things in the bread--milk, flour, eggs and shortening.

When I ran out of bread, I spurred on the bread industry once again.

We still do the same thing. When I get a raise, buy a new car, either repair or buy a new house and "stop" to consume these goods, I essentially bow out of the market. I do not spur on the economy until I need more to consume. Hence the idea of "consumers."

Right now, no one seems to need or can afford a new home. The housing market crashed. However, in my neighborhood there is a cadre' of suburban housewives who are collaborating with UPS drivers to find out when the next shipment of Wii products will hit our local electronics store.

That's what has shortened the cycle. "New" products not available in earlier cycles, and a diversity in consumers. A guy who wants to purchase a Wii is probably not looking for housing. I have a house, I'm looking for chrome. Forty years ago someone of my age demographic was not a motorcycle consumer. The cycle is all over the map.

BTW, the smart money says we will have two more bad years before the cycle turns around. Retire your debts.
 
J

JB Books

Moderator
Tourist is right

Get rid of your debts.

As a rule, you should put away as much tax-deferred money as possible (pay yourself first), and then get rid of debt. Pay off the debts with highest interest rates first. Get out of debt and stay out.
 
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