The Obama/Paulson Market
11/19/2008 - 7:35pm
The stock market market has been down 8 out of the 11 days since the election (through Wednesday), with the S&P 500 down %20% from 1005 on November 4th (the closing price on election day, before the results were known) to 807 on Wednesday. Over that same period, the Dow Jones Industrial average is down 17% from 9625 to 7997.
Despite the howls of protest I received from liberals when I suggested that a market rally a couple of weeks ago might have been sparked by (but not entirely due to) a poll which showed John McCain down by only 1%, I absolutely stand by my assertion that electing a socialist government from top-to-bottom can only be bad for the market and the economy.
Certainly, some of the recent turmoil is due to the chaos surrounding the federal bailout program, or TARP, as I've written about recently.
But if the markets had any confidence that the incoming government would do anything other than bail out unions, raise taxes, and interfere in free trade, I expect that volatility would be a lot lower and prices noticeably higher (but still probably under 10,000 on the Dow...we are in a serious recession, after all.)
Just as Obama got elected by saying close to nothing and doing even less, he's unfortunately staying with that game plan now. I believe he could have impressed the markets by already selecting a credible Secretary of the Treasury to succeed Hank Paulson, and having that person become involved in the process now.
Instead, he's been all but silent, letting the media speculate about whether or not Hillary Clinton will be the next Secretary of State and how many skeletons will come out of Bill's closet during the vetting process.
The only intelligent leadership in recent days seems to be coming, remarkably, from the Senate Republicans...a group which has been all but worthless for several years. Their opposition to the bailout of the Big Three is commendable, but I trust it will be worn down with some sort of "compromise" either in the next week or early in the next Congress. It will be interesting to see whether more or fewer House Republicans vote for a bailout of Detroit than voted for the TARP, should a vote come up. But since there is no filibuster process in the House, the Democrats should easily win that vote. They will probably not wait for the GOP for political cover, as they did with the financial bailout vote.
At this point, the market is screaming "deep recession" and "we don't trust government to get anything right". Obama's stated policy goals before the election and his uselessness on economic issues since the election make it hard to believe the market is wrong.
Despite the howls of protest I received from liberals when I suggested that a market rally a couple of weeks ago might have been sparked by (but not entirely due to) a poll which showed John McCain down by only 1%, I absolutely stand by my assertion that electing a socialist government from top-to-bottom can only be bad for the market and the economy.
Certainly, some of the recent turmoil is due to the chaos surrounding the federal bailout program, or TARP, as I've written about recently.
But if the markets had any confidence that the incoming government would do anything other than bail out unions, raise taxes, and interfere in free trade, I expect that volatility would be a lot lower and prices noticeably higher (but still probably under 10,000 on the Dow...we are in a serious recession, after all.)
Just as Obama got elected by saying close to nothing and doing even less, he's unfortunately staying with that game plan now. I believe he could have impressed the markets by already selecting a credible Secretary of the Treasury to succeed Hank Paulson, and having that person become involved in the process now.
Instead, he's been all but silent, letting the media speculate about whether or not Hillary Clinton will be the next Secretary of State and how many skeletons will come out of Bill's closet during the vetting process.
The only intelligent leadership in recent days seems to be coming, remarkably, from the Senate Republicans...a group which has been all but worthless for several years. Their opposition to the bailout of the Big Three is commendable, but I trust it will be worn down with some sort of "compromise" either in the next week or early in the next Congress. It will be interesting to see whether more or fewer House Republicans vote for a bailout of Detroit than voted for the TARP, should a vote come up. But since there is no filibuster process in the House, the Democrats should easily win that vote. They will probably not wait for the GOP for political cover, as they did with the financial bailout vote.
At this point, the market is screaming "deep recession" and "we don't trust government to get anything right". Obama's stated policy goals before the election and his uselessness on economic issues since the election make it hard to believe the market is wrong.
Bookmark/Search this post with:
Socialist Government? Do
Socialist Government? Do you get your talking points directly from Rush Limbaugh, or do you have to listen to his show first? Bush signed a $700Billion bailout of the banking industry. Sarah Palin proudly said, "And Alaska we're set up, unlike other states in the union, where it's collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs."
http://ap.google.com/article/ALeqM5hgSOF08EZJrEAB34f2kJkANBWguAD9454PNG0
So, who's a socialist?
Drinking Liberally in a SquareState.
Hey Roto Rooter man.
Take my advice Russ. (You take advice from "paid liars" in your profession don't you). Get out of derivatives and into plumbing. I think plumbers with six packs are going to prosper under the coming "socialist" government.
Low flow toilets will be in. Taxes on the rich boys will be up. The perfect combination for the roto rooter man to make real money.
Russ. You don't have to keep covering your rear with the "worthless" Republicans act. We know better.