Eeveryone living in America today has a higher standard of living than the President and his family had 90 years ago. Goldman Sachs' Charlie Himmelberg and Marty Young find evidence that "animal spirits" are driving sentiment along party lines Sentiment indicators have rallied hard since the election of Donald Trump. There is active debate over the reasons for this improvement. To some extent, it likely reflects improvements in the underlying macro data leading up to the election.
The unemployment rate, for example, fell from 5. On the other hand, many investors believe that the rally in US sentiment and asset markets reflects post-election expectations of tax cuts, infrastructure and defense spending, and deregulation.
Indeed, our US economists expect fiscal easing will cumulatively add 0. While it is often difficult to distinguish animal spirits from rational expectations, we think differences in sentiment along demographic characteristics can help shed some light. A fascinating feature of post-election sentiment is the divergence in assessments of the economic outlook along party lines.
As of April 2, the gap between Democrats and Republicans in the Bloomberg Consumer Comfort Index BCCI had increased to its widest level since early The correlation between economic sentiment and political affiliation is also visible in regional data.
The regions that voted strongly for Trump are the regions that are most optimistic about the future. Interestingly, these expectations do not appear to reflect current conditions; the regions that voted for Trump are the regions that have the lowest assessment of current conditions, suggesting the jump in expectations was a response to the election.
Sentiment differences along party lines could well be rational. There are reasons sentiment may have been more vulnerable to animal spirits following this election. Voters like many economists were likely puzzled over why the last recession was so severe, why the recovery was so sluggish, or why many real incomes failed to rise. Or as Akerlof and Shiller put it in their book: The distinction between rational and irrational sentiment matters.
Go ahead… show me the difference between dancing boys and the notional equity and PM markets. When the Fed has a mandate that effectively devalues the purchasing power of existing fiat currency then what will be lost when it all goes tits up?
Goldman Asks: Are Markets Rationally, Or Irrationally, Exuberant? | Zero Hedge
Home Contributors Newsletter Donate More Store ZH-TShirt Glossary Archive Manifesto RSS. INTRoDuCiNG ReBu, THe WORLD'S FiRST RoBoT CeO Apr 18, 7: Perspectives along party lines A fascinating feature of post-election sentiment is the divergence in assessments of the economic outlook along party lines.
Rationally or irrationally exuberant? Printer-friendly version Apr 18, 7: Comment viewing options Flat list - collapsed Flat list - expanded Threaded list - collapsed Threaded list - expanded. Date - newest first Date - oldest first. Select your preferred way to display the comments and click "Save settings" to activate your changes. Engali Apr 18, 7: Are Policy Tools Rationally, Or Irrationally, Exuberant?
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There, fixed that headline for ya Tyler. Engali Apr 19, 4: I am Jobe Apr 18, 7: Wall Street Giant Blames Politics For Trading Woes http: Sonny Brakes Apr 18, 7: Pareto Apr 18, 7: Not Rationally, Or Irrationally, Exuberant or a bubble. Blankfuck Apr 18, Create new account Request new password.
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