The Dow Jones dropped below 7,000 yesterday, raising the how-low-can-it-go question once again. But the stock market over the last six weeks poses another question: What does the market think of President Obama?
Not much, apparently. The Dow Jones dropped Feb. 10, the day after Obama's bailout plan was announced, and again on Feb. 17, the day it was signed. Then last Wednesday, after his hopeful address to Congress, it tumbled yet again.
But it's too easy point fingers with the axis of a graph. The Daily Beast counters the theory with three solid points.
- The recession is over a year old and gained momentum with the fall of Lehman Brothers.
- Whenever the government intervenes, stocks drop; they did the same under former Treasury Secretary Paulson.
- Stocks are known to "rise on the rumor, and fall on the news." Other than that day-to-day fluctuations are random.
So what do you think now?
Ajc
Benefit
Rocket Dog
They don't hate Obama. They just know that his ecconomic policies aren't in the best interest of investors, and their getting out of the market while they can still get something.
1I heard something interesting on NPR last night, BoA CEO said he wished he didn't take all of the bailout money they were granted (20bn) and just took the 10bn they needed. This is because getting govt money didn't have the effect of restoring confidence in BoA, in fact, it had the opposite effect.
2The stock market reflects investor confidence. Obama gave us that before the inauguration. Since then his budget, economic policy and ridiculous spending proposals have spelled doom for investors. After 8 years of Bush and his trillion dollar deficit we now get a guy who wants to spend three times as much. Seriously? He had a chance to correct Bush's ridiculous spending. Not add to it. Obama and his minions have yet to come out in support of capitalism. They are intent on punishing those that befitted from Bush's policies. Well guess what, he is hurting everybody. Wall Street is not just fat cats in fancy suits toweling off in cash. It's every day people who are investing for a better tomorrow in IRA's, SEP's and 401k's. He is sitting back and watching wealth be completely destroyed. This is not Bush's fault. The Democrats own this mess.
3The next time someone complains about liberal this site is, I will remember March 3rd, the day when "Does the Dow Hate Obama" was a headline with no mention of the newly released Bush memos, including the one where he considered restricting the first amendment.
4I don't think it's a hate Obama type market. I just think it is the nature of the market and investors are not very confident in the market right now.
On that note, I will go watch my retirement shrink into nothingness.
5This correlation has been obvious since the day Obama was announced POTUS. The three counterpoints neglect the trend that stocks seem to fall at the mere mention of Obama's name.
6TrueSong- Scary stuff. Our government is out of control. Left or right,it doesn't matter. Appears that very few in Washington believe in our constitution. And it appears that very few Americans really understand what their rights are otherwise they might actually do something about the quality of people that is elected.
7Just noticed "day-to-day fluctuations are random." Is that really an argument?
8The stock market hates everyone. (I know it hates me)
9" Most of all it (the stock market) is telling us that the Chicago style political payoff scheme masquerading as an economic stimulus package won’t help the economy. It is simply transferring wealth from producers to consumers with the expectation that the poor will lead us out of this recession."
10thanks, truesong. that memo scares the crap out of me.
as for people who say this site is liberal...i've never seen so many conservatives on a Website! occasionally it's not a very welcoming place for us lefties!
11Funny video. "The economy is totally f*&*ed!"
12"I'm selling off my opinions in the comments" That's cute
13agree piper. Think it is money in the mattress time!
14Mydia, I think we are seeing the same thing within the auto industry. Ford isn't taking any money - guess which make people are buying? Yep. The guys that are asking for and taking the bailouts, are shooting themselves in the foot. People are flocking to 'stability' in an unstable world....
15The stock market has no politics; it is not Republican or Democrat. Yes, folks who participate in the market have political positions. The market itself looks to the future, and makes a best guess as to what that future will be. The economics of our MASSIVE deficits means there will be less disposable income in the future for investment in private industry, and for consumer spending, which is key to any recovery. Additional proposed taxes that effect our means of production, puts us at competitive disadvantage with things like the carbon tax, the costs get passed down to the consumer and puts American industry at a serious disadvantage compared to the likes of India and China, which flat out reject any proposal that attempts to limits there emission of carbon. To say that it will force polluters to come up with a better cheaper alternative to pollution, is a joke in the case utilities, there is no real competition, nor is there any cost effective way to set up such competition, Those who live in areas where electricity is produced by coal, oil or natural gas will pay the carbon tax, not the utility itself. What are you going to do, not turn on your lights, refrigerator, etc., or heat your home? It is clear these taxes will cost jobs, not create jobs.
16True song, when you say "The next time someone complains about liberal this site is, I will remember March 3rd, the day when "Does the Dow Hate Obama" was a headline" You are implying that facts can be liberal or conservative. Facts are merely facts, it is how you go about interpreting those facts that you can say there is a bias left or right. In those cases it comes down to the cogency of the interpretation of that fact that the philosophy becomes operable.
17Looks like that argument won't be too strong, TS.
18The Dow hates Obama and Obama doesn't care what the Dow thinks about him. That's what I think. That said, I'm not pulling anything out any time soon - I'm sure it will rebound and I don't want to take any losses. Plus, I have like 30 years until I'm going to need it anyway.
191.) This is happening because things were way too over valued. Regardless of who was president, value has to come down to worth. People and especially companies have been propping up other businesses with credit they could never pay back. Essentially, their profits were fake. Things have to come back down to reality. A house built on poo poo falls. If we would stop the fall before true worth is found, we will once again build a house on poo.
2.) The market does not exist in a Obama vaccume, where he is the only thing in contact with them. They have received TERRIBLE news recently, including a massive increase in terrible information that had been underestimated for January. Do you really think the job loss numbers, AIG stats, car sales, consumer confidence polls, etc. don't have an affect on the market, and that they are only tuning into Obama?
3.) Much like a teenager caught breaking curfew, of course Wall Street mavins are going to give Obama the stink eye. They have been allowed to run rampant for so long, of course they would rather do whatever they like. Bracing yourself for regulation isn't "fun", but much like curfews for teens, it is better for long term success.
204.) On Sept. 18th, we had near global financial meltdown. On the 15th, Lehman Brothers went under. On Thursday Sept. 18th they noticed at 11:00am that over the past hour and a half, over $550 Billion had been drawn out of money market accounts. There was an electronic run on banks. The Treasury, trying to stop the flow, put in $65 Billion, but that didn't stop the rapid withdraw of money out of money market accounts. They quickly insured to $250,000 the amount that is backed by FDIC. This stopped the draw down.
They estimated that if that had continued until 2:00pm (3 hours later!!!!) that $5.5 Trillion would have been pulled out of the banking system, and financial markets and governments around the world would have crumbled! This is what we are dealing with, folks. That is why some institutions can not fail, like AIG. It is involved in too many global banks and institutions. Now, yes, they shouldn't have spread their debts, and other banks shouldn't have placed so much faith in AIG. But this is the situation we are in. The Republican idea to do nothing and just let it all go up in flames is not realistic.
21Grandpa, "Does the Dow Hate Obama" is not a fact.
22Also, my point was that there was an article about Obama's possible negative affect on the DOW with no mention (at the time of my comment) of a HUGE story about the Bush memos.
23Here are links:
http://www.economicpolicyjournal.com/2008/09/run-on-money-market-fund-re...
http://www.nypost.com/seven/09212008/business/almost_armageddon_130110.h...
http://www.dailykos.com/story/2009/2/9/234340/6189/142/695504
24jillness, all you point to was known while Bush was in office, and had already been factored into stock prices, which is why almost everyone, including me unfortunately thought we had hit the bottom in October. The current decline is a reaction to the "stimulus" package, and the debt incurred, the current 440 Billion dollar spending bill, that increased 8% well above the inflation rate, the proposed future spending as laid out by the president, and MOST of all Treasury Secretary Tim Geithner, failure to articulate a plan to ease the current credit crises.
25"which is why almost everyone, including me unfortunately thought we had hit the bottom in October."
Who thought we hit bottom in October????
Nobel economists Paul Krugman and Joseph Stiglitz, economist Jeffrey Sachs, Financial Times columnist Martin Wolf, Warren Buffet, even Barney Frank - ALL cautioned that we were in for a tough new year if not longer - not one said all the bad news was in before the election, or anytime after that. In November, even Secretary Paulson said he couldn't predict when we'd hit bottom.
26jillness, Like Grandpa said, the fact is the stock market is non partisan & is down because investors in the market have no confidence in what is happening. Can't dispute that fact.
27" all you point to was known while Bush was in office"
I don't think you guys understand that this is all based on "credit default swaps" and bundling. No, they don't know where the bottom is. Are you kidding me? They don't even know the extent of their toxic assets because they have been sliced and diced and sold off to other people and bought from other people.
Pamela, you didn't lay out any facts so I will dispute your comment. The market is down because investors have no confidence in the value of what they are supposed to be buying and trading. If the Government had a magic wand and could *poof* make all of the toxic assets disappear, then they would get confidence back, sure. But we have to deal with reality. And it wouldn't take a government action...it would take GLOBAL governmental action, since this is spread through financial institutions across the globe.
Oh, and
285.) International Markets- Europe and Asia have their markets open before the US market opens. If they go down significantly in a day, it is more likely that the US will take that as bad news and follow them. Also, it was recently discovered that the big economic engine China is possibly in a recession. You think our market isn't affected by that?
Are we arguing over the meaning of "is" here? (btw, thanks for reminding me of that Grandpa)--
It is a fact the market is down and down big since our new President takes office. How can you say that is NOT a FACT Jillness?
The market doesn't see the Stimulus package (spendulus package) as a fix for anything other than big big government and historic deficits. period. fact. fact fact. Who has time to argue nonsense.
The market is an indicator of the future- and its predicting bad things to come. fact.
29Pamela, you can't say that the market' activity since Obama has been in office is ONLY based on the President. That is just absurd! It has far more to do with what is IN the global market, the toxic assets. Do you not understand how colossal this problem is? It is like our Stock Market got termites. A new president swearing in does not make the rot just fall away.
Yes, the market is predicting bad things to come. But that has to do with many things, not just the President of one country. Your simplification might make you feel better, to have a clear cut scape goat, but reality is a bit more complex. And many, many economists and nobel prize winners are saying that the stimulus package will do a lot of good, but there is no one single bullet solution that will solve all of our problems. It is like Republicans are expecting a magic wand. This is a VERY complex situation Wall Street got us into.
30Oh spare me your condesencion. Obama essentially promised the moon to America. Instead of helping our economy he's spending like a wild man with no tomorrow. This is only sinking us more and more- thats a fact and not a simplification.
31"thats a fact and not a simplification."
You may want to check the meaning of the word 'fact'.
32steph, the definition of the word is is?
33Simplifications and pseudo-clever retorts are so much more fun than thinking aren't they?!?!
34OMG Stephely, wouldn't you say the above "Simplifications and pseudo-clever retorts are so much more fun than thinking aren't they?!?!", is the pot calling the ketle black?
35Nope.
36Stephley, ever heard of KISS? just know you have.
KEEP IT SIMPLE STEPH! lol!
37http://www.nypost.com/seven/03052009/postopinion/opedcolumnists/brain_tr...
38Pam
39
40Ouch Pam, that is harsh. Steph, you are going to have to think long and hard to come up with an adequate retort.
41One more thing, do you ladies prefer I fill the rink with jello or mud? I guess the red bikini for Pam, and a blue one for Steph. Hey UnDave, you handle the hot dog concession, and I will take the beer, we will split everything down the middle.
42How enterprising of you
I'm in but only if you and UnDave split the profits -
what with the bad economy Steph & I need our fair share! 
43Hmm, Gp - I would have thought you had me figured out better than you apparently do.
44GP: I'm practicing up---here I go~
getting better with practice
45awww, lighten up Steph. I guess you are right though if you could not accept my post in the spirit it was made.
46Passive-aggressive?
47Post New Comment
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