President Trump: The NEW one and only politics thread

They even got Stan Druckenmiller to capitulate. It's really sad. There is no such thing as free-market capitalism. We're basically a Soviet-style command economy, and most people seem to still have no understanding.

Stanley Druckenmiller says his 3% return as the Dow and S&P 500 soared more than 40% from March lows has ‘humbled’ him

That said, Druckenmiller acknowledged that he underestimated the length the Fed would go to help support the financial markets.

 

The S&P 500 is 500 stocks. The Nasdaq 100 is 100 stocks.

They are all soaring again -- divorced from any of the fundamentals that would drive their valuations in a free market.

His point was that the Federal Reserve doesn't "manage" the economy, the way they have too many people convinced. They have no more ability to do that than they do to dribble a football. They used to use very blunt tools to pump liquidity into fractional-reserve banks ,but very gingerly to try to stoke more debt / leverage / margin (whatever you want to call it). When they created a series of debt crises over a couple of decades, and got in over their head, they gave up on the "gingerly" part and totally hijacked our debt markets to price fix the cost of money. It's the most important price in capitalism. And they destroyed that honest price discovery in the wake of the financial crisis.

You are correct that they haven't created economic prosperity. Most people are living with that reality. What they have done is create an insane amount of monetary inflation that their fecklessness has concentrated in things that rich people, but not everyone else, can afford. And it showed up most ridiculously in the stock market.

During the anemic economic expansion, 80, 90 percent of people didn't feel like they were doing very well. People who had one job prior to the financial crisis, were working 2 side hustles to get by.

But thevery rich? They felt like they were getting richer, as stock prices ran up (divorced from the fundamentals that should drive their valuations), homes in expensive markets got pricey again, rare wines and old sports cars and artwork ran up in value, etc.

They created a ton of wealth disparity, created bubbles in those asset classes that are not going to ultimately hold up, and they sold out years of economic growth for that lame party.