The Obama Market

The WSJ has this:

The voters may be full of hope about the looming Obama Presidency, but so far investors aren't. No President-elect in the postwar era has been greeted with a more audible hiss from Wall Street. The Dow has lost 1,342 points, or about 14%, since the election, with the S&P 500 and Nasdaq hitting similar skids. The Dow fell another 4.7% yesterday.

Much of this is due to hedge fund deleveraging, as well as dreadful corporate earnings reports and pessimism that the recession will be deeper than many had hoped. We also don't want to read too much into short-term market moves. But there's little doubt that uncertainty, and some fear, over Barack Obama's economic agenda is also contributing to the downdraft.

The substance of what Mr. Obama has promised for the economy is bearish for stocks. The threat of higher tax rates, especially on capital gains and dividends, now may be getting priced into the market. Add that to investor doubts about Democratic policies on unions, health care and trade -- and no wonder stocks are falling. Lower stock prices in turn reduce household net worth, thus slamming consumer confidence and contributing to what appears to be a consumer spending strike. . . .

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Anonymous Anonymous said...

Talk about poor timing for this WSJ op-ed piece. The DJIA closed up almost 7% today.

The problem that the U.S. economy faces is pretty easy to understand: Collectively we have borrowed more money than we can pay back.

11/13/2008 4:21 PM  
Blogger David said...

I am not certain Obama wants free markets. It seems to me he wants absolute socialism. I wonder if this is his reason for wanting Bush to bail out the auto manufacturers now. He can then tell us how we should let his government take control of each of these businesses, because they have been irresponsible and cannot be trusted to conduct business fairly.

11/13/2008 9:07 PM  
Anonymous Anonymous said...


11/14/2008 11:23 AM  
Anonymous Clark said...

Please justify your claim that he wants "absolute socialism."

11/14/2008 1:25 PM  
Anonymous Anonymous said...

People knew Obama was going to win, so this should have been priced into the market. Therefore, the Dow on the day after the election shouldn't tell us much about what the market thinks.

11/16/2008 2:46 AM  

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