The market is forward looking. If it is unhappy with a president, it does not wait almost eight years before the numbers reflect it. If it really anticipated good times under Mr. Obama, the market would have gained 40% in anticipation of the transition. By losing that much, it seems to be saying the opposite.
The silver lining in all this is that the market has already "discounted" an Obama win, so if that happens you won't wake up on Nov. 5 to find your remaining savings down the drain. If the unexpected happens, you may be in for a pleasant surprise.
I recommend reading the full article, but am interested especially in your comments as to the quoted section of the article.
3 comments:
Come one, WSJ. The market is down because the economy is terrible. Sheesh. The market sometimes reacts to this that or the other thing -- and sometimes it reacts to the same thing exactly the opposite as it did a month earlier. And sometimes is doesn't react at all.
I always laugh when anybody makes one of those "the market is down because" or "the market is up because" statements. Saying "Sony stock is down after the company indicated a lower 3rd quarter profits than expected" makes sense -- it's a direct cause-action.
But to say the market is down because it doesn't anticipate "good times under Mr. Obama" is patently ridiculous. That list of things to consider that the market has already considered and passed judgement on? Puhlease.
First, apparently Mr. Newman is assuming an Obama win on Tuesday. I'm not. I don't think much of anybody is actually. Secondly, despite the headline about the "candidates" being "lousy," the story is all about Obama being lousy -- and McCain making some mistakes in how he ran his campaign.
What a line of crock this is:
Nothing reveals Mr. Obama's visceral hostility to business more than the constant urging of our best and brightest to desert the productive private sector ("greed") and go into public service like politics or community organizing (i.e., organizing people to press government for more handouts). Who in his ideal world would bake our bread, make our shoes and computers, and pilot our airplanes is not clear.
Pressing government for handouts? Gimme a break. And I'll tell you who will bake the bread and make ths hoes and pilot the airplanes -- the same people who are, in the copious spare time, doing the community organizing.
Those questions he says McCain should have been asking -- if the price of oil went up because of greed, should it's drop be an outbreak of altruism? God no. It's realism. With the economy in the crapper, people aren't driving like they were. They are using less oil, less gasoline, trying to save money. The price of oil is down to entice people to buy more.
If a bank is guilty of redlining and approval crap mortgages, how about if the banker doesn't redline and doesn't approve crap mortgages? Mr. Newman's obvious assumption is that the people who are redlined are the same ones who are getting the ridiculous loans.
Then he goes on to blame Congress in the last two years of creating this mess. Puhlease again. This mess has been coming for 35 years. It's been ignored and ignored and ignored and now it can't be ignored any longer.
Domestic drilling will not solve the crisis.
And I'd be a lot less unhappy with the Congress we got in 2006 if we'd had 60 vote majority in the Senate and/or a Senate Majority Leader who wasn't afraid to make the minority party actually do all the filibustering they keep threatening.
My very strong feelings about Mr. Newman's piece of garbage have absolutely nothing to do with being a "fan" of Obama. They have to do with knowing bull when I read it. And that article is complete bull.
The market is down because the economy stinks. And even if you give his thesis a tiny bit of credit -- that maybe the market might have shown a little life in anticipation of "good times" -- there won't be any good times for quite some time, regardless of who wins on Tuesday. That's how bad this economy is. It's taken us nearly 40 years to get this deep. It's gonna take some time to get us out of it.
It's becoming a pattern the first intro paragraph:
With the federal government demonstrating its willingness to spend any sum of money in any manner necessary to prevent a collapse of our banking system, why is the stock market predicting such a gloomy economic future? Perhaps because it can read the political writing on the wall, and it doesn’t like what it sees. Over the past couple of weeks, it has become increasingly clear that Barack Obama may not only win the presidency but may also gain sufficient Democratic majorities in both houses of Congress to hammer through his radical economic agenda. This agenda includes tax increases, protectionism, massive new spending programs, empowered labor unions, and crippling government regulations.
It's just as reasonable to blame the current market on Bush, many have done that, and it is true that if the Market was optimistic then they would be responding better. Which could mean what both of these writers is suggesting is true, or that no matter who wins the market does not feel confident.
Which at times the market appears to be not grounded in common sense with the way some of the things that is reported has set them off, does so.
The WSJ article made some pretty strong statements that I would not say I agree with in total, which is why I stuck to just the one portion.
Personally, I don't believe the Democrats are going to do as they promise, so for me it's a bit easier to not believe in the panic syndrome. I don't believe health care or millions of jobs in alternative energy are going to be able to be funded. Nor do I believe we are going to gain billions in saving by ending the war in Iraq when we are merely moving into Afghanistan. Nor do I believe that Pelosi and Reed will do a better job in getting the elected Democrats to do what they want.
I think you're absolutely right that little decent is going to happen with the next Congress. The trick will be to move it forward in 2010 rather than the usual backwards after a Congress like the next one is gonna be.
This Congress may do little we'd like to see, but a GOP dominated Congress would do even less.
But the market is responding to the hideous economy, and maybe it realizes, rightly, that it's gonna take some time to get out of the funk. No president is going to miraculously cure our ills.
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