Well, this graph shows that economic growth and the stock market follow the same general trend, which is somewhat reasonable. But it also shows that the stock market strongly oscillates, while the slope of economic growth is much steadier. In layman's terms, your graph shows that the stock market is capable of falling, even when economic growth is positive, and that it is able to strongly exceed economic growth. As such we can infer from your own graph that a massive hike in the stock market does not mean that there is a matching change in economic growth, implying that there is not necessarily a causal relationship between the two. It seems more likely, from your graph, that both variables are influenced by similar root factors in part, but also by different ones, weakening the relation further.
All in all, I would say that your graph could serve as proof of correlation, but certainly not causation. If you wanted only to prove the former then, sure, but you can also plot the number of pirates against global temperatures and find that. If you wanted to prove the latter, I would say it is not very convincing.
My point stands as you've provided NOTHING that refutes the fact that a huge number of people benefit during periods of economic growth...including the poor. Please post constructively.
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Your point? That stock prices and GDP growth are merely a happenstance correlation and not related to causation? That's insane.
Last edited by DocSavageFan; 2019-07-02 at 12:51 PM.
"Never get on the bad side of small minded people who have a little power." - Evelyn (Gifted)
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The poverty rate significantly declines when the economy is good. See the graph I previously posted and Fed article below.
The connection between poverty and the economy
https://www.minneapolisfed.org/publi...nd-the-economy
Last edited by DocSavageFan; 2019-07-02 at 01:27 PM.
"Never get on the bad side of small minded people who have a little power." - Evelyn (Gifted)
The original point was that stock market performance doesn't really affect the majority of Americans since they do not own stocks. If you want to go into the weeds it's not even that if you have a 401K because first you cannot touch it until retirement and second those funds are severely eaten up by wall street management fees that considerably lower their benefits.
When the market goes up it benefits a very small percentage of the population, the very rich that is a fact. You are trying to tie it to the broader economy but the stock market performance is not solely based on that.
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I say that your graph does not prove what you want to say. The insanity here, if there is any, would be all yours. The difference between correlation and causation is a huge one though, and generally not something a singular graph could show, anyway. As noted, both variables show a similar overall trend and often have a correlation in that one of them moving a certain way is often accompanied by the other doing so. However, that is not a strong correlation, since the stock market is perfectly capable of heading negative for a while without growth doing the same. That is in part due to the stock market having a higher elasticity, and being able to react much more quickly to changes. Both variables are influenced by similar factors and in some way one another, but to say that there is a strong causation, especially from the stock market to GDP grow in general, when the latter seems mostly resilient to the oscillation of the former, that would need more compelling proof.
A majority of Americans own stocks either directly or part of a fund (e.g. 401k, pension, etc.).
https://news.gallup.com/poll/211052/...er-income.aspx
And that said, there is no argument here that the richest do indeed own the most stock....funny how that works.
"Never get on the bad side of small minded people who have a little power." - Evelyn (Gifted)
"Never get on the bad side of small minded people who have a little power." - Evelyn (Gifted)
It's like you don't even read the articles you link. And we're not even talking about the headline that @Elegiac pointed out that undermines your whole point for linking it.The stock market has performed well in 2017, but proportionately fewer Americans are benefiting from today's bull market than did so in bull markets before the financial crisis. The gains in stock values in recent years seem to have done little to persuade people who may have divested themselves of stocks to get back in the market.
Nor has the recovery encouraged new investors to join the market. Although young adults are understandably less likely than their elders to own stocks, the percentage of 18- to 29-year-olds investing is down 11 points since before the financial crisis.
It appears the financial crisis and recession may have fundamentally changed some Americans' views of stocks as an investment. The collapse in stock values in 2008 and 2009 seems to have left a greater impression on these people than the ongoing bull market that has followed it, as well as research showing the strong historical performance of stocks as a long-term investment.
"Never get on the bad side of small minded people who have a little power." - Evelyn (Gifted)
Yes. Which is why we ignore the opinions of the right wing on a variety of subjects ranging from teen pregnancy to climate change - because "trends" are liberal witchcraft.
The majority of Americans own stock in some way, whoop de doo. The main reason people call it a Bull(shit) Market is the increasing level of wealth inequality, something that is mirrored by the decline in the percentage of Americans for whom the stock market is relevant.
But hey, at least a majority of Americans own stock which totally means the economy isn't heading into recession for some reason...
Originally Posted by Marjane Satrapi
I actually did not, I just noted that you can show any number of correlations with single graphs, but that does not imply any kind of causation. It's a commonly used example, nothing more. Correlations can indicate such dependencies, but they can never serve as sufficient proof for it. That was kind of the point of my post. A single graph like that does not tell us much, aside from "there might be a dependency". Using it as proof for a causal relationship though, that is fallacious.
https://www.macrotrends.net/1319/dow...ar-historical-
Start in 2009, when Obama took office.
Because it seems like a dip in that first month (he was only president for 10 days), bottoming out in February, his first full month, followed by a steady, steep trend upwards increasing from just over 8K to just under 21K before he left, that's a nearly 300% increase in value. Trump, who came into a market already trending upwards (unlike Obama) with a comparitively lower increase from just under 21K to just under 27K, an increase of around 30% on a significantly lower curve.