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Is the Market’s decline tied to Obama’s win?

That is a complicated and a very hard question to answer.  If it was an Obama win and 54 Democratic senators and 235 House members my answer might be “no”, but an Obama win with almost total democratic congressional control is scary to lots of business people.  Lets say that Greedy Oil and Drug companies are fearful of Obama & Gang.  How about that hated HMO’s and those nasty polluting utilities and with all their coal plants and nuclear power plants.  Good time to be a defense contractor? 

If there is any business that might claim to be a winner its the American auto industry.  Here is a story

 http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4AA7IC20081111

Can we say payback to MI, OH, IN, IL, WI and IN?  These states elected Obama and they are the heart of the American auto industry and the UAW.  They will be rewarded in a huge money grab.  I say the market will dislike Obama and his policies.

Posted by rdelbov at 8:00 pm
Filed under: General | Comments (29)

29 Responses to “Is the Market’s decline tied to Obama’s win?”

  1. Hellbelly says:

    ……right now, as much as the market fears an Obama presidency, the weakness works absolutely to his political advantage. Why?

    Because he isn’t the president yet. And, if we get a “capitulation bottom” at say 7,000 on the Dow between now and election day, there’s a real good chance that from that base, the market could be up in 2012.

    How’s that for a horrible irony?

    Of course the market could continue to tank over the course of the next four years. That could work to the GOP’s advantage.

    But that would (for want of a better term) really suck.

  2. Hellbelly says:

    i meant, of course, between now and obama taking the oath of office (not election day). My bad.

  3. Rachel-s says:

    How could anyone think the market is reacting this way because of Obama’s win? The market has become consistently radical for weeks no – Obama’s pending term didnt really start until the markets started to crash before the debate in Miss.

  4. l8r says:

    of course not.

    And it’s just making it easier for him to show improvement over the mess he gets Day One.

  5. pitchaboy says:

    For multiple reasons: 1. fear of a long lasting recession 2. fear of Obama’s policy of higher marginal taxes and capital gains.
    Well, Obama won the majority of people making more than 200 grand and these morons voted for him knowing he will raise their taxes. Maybe, tghey are having buyer’s remorse? Raj

  6. Tim says:

    I consider it to be neither complicated or hard.

    The answer is no. The market has been diving since mid-September.

  7. jones says:

    Did you notice how it stabilized when McCain was surging?

    Anyway, President is only one part of the equation. Congress needs to be blamed too.

  8. Chekote says:

    No. I believe it is the “bailout-every-other-day” policy at fault. This constant government intervention makes for a very uncertain business environment.

  9. Big Joe says:

    Hey all,

    We’re only one week removed from the election. Markets go up and down … blaming it on Obama seems like a reach. If the markets were up, would you say it was because of Obama?

  10. Big Joe says:

    The market has flirted with $8000 for the past 6 weeks. That appear to be the bottom.

    If we get below $8000, then we may have a story. Otherwise, its just trading in its recent trading range post Lehman ($8000 – $9500)

  11. rdelbov says:

    Yes Big Joe if the markets had gone up +500 last wednesday and then another 500 points on Thursday I would have hailed it a sign that Obama’s pick was favorable for the market.

    I suspect that market guru Keith Oblerman would have too.

    The Markets (bond, stock and commodities) are certainly sending some sort of message to Obama.

    In the case of GM it might be a call for help, but the market might also be saying if you tax me I won’t rise. Cater to me Obama might be the message of the market.

    I certainly have thoughts on this market move, but are they absolutely certain. By golly no this is the market for pete’s sake.

  12. Big Joe says:

    I hear you rDel .. But you know, if there is something that I’ve learned from this past year, its that we really can kill ourselves dissecting every little piece of news. Sometimes its better to take a breath, zoom out and look at the big picture.

    To me, the market drop last week is not news. If the market rose similarly, it would not be news either. Markets have been choppy and volatile for the past six weeks and I saw nothing last week that was outside of this new “normal.”

    Yes it could be a reaction to Obama’s victory, it could be a reaction to GM, or other bad employment news. It could also be profit taking, it could be big the hedge funds too. There are just too many variables.

  13. rdelbov says:

    Big Joe

    In the market bad news can be good news and vice versa.

    I say this to obama and the democrat. It will be pointless to tax capital gains in 2008 or 2009. Heck taxes collected on dividends will be well down too.

  14. Bitterlaw says:

    As an AIG employee, let me say I hope my company fails. No more bailouts. As for GM, too bad. Get your executives and unions to give back some $$ or go under. It’s that simple.

    As for Bush, stick it to GM. Let Obama take the heat. Don’t do his dirty work for him.

  15. Tim Van says:

    market woes only partly due to obama’s election. fannie easy lending practices started the current financail crises. housing boom then bust and now here we are. kinda screwed in the short term. also long term problems ahead with peak oil and soc security entitlements. future looks bleak.

  16. Rudy says:

    They say that the market should stabilize once obama names his cabinet.

  17. MSM Conservative says:

    Who cares? How are we going to fight the Fairness Doctrine?

  18. MSM Conservative says:

    (That’s the question you need to be mulling.)

  19. Diogenes says:

    Sadowski drunk the kool aid.

    More regulations and labour inflexibilities are on the way and the market is pricing that in.

    I don’t think Obama will raise taxes. He’s a political opportunist and is seeking to avoid the mistakes of the Clinton administration.

    However, he will face pressure from his interest groups to do what they want, which means no drilling, added labor regulations, and prolifigate spending.

    Obama does NOT have an economics degree
    and his advisors are all Keynsians.

    Keynesians is a poor model for a service-based economy and an even worse one for an economy that is so heavily reliant on technology like the US.

    Expect Obama to tank heavily.

  20. Marcus says:

    You’re giving waaaay to much credit to (American) politicians. In fact, they don’t impact the markets much at all. Movement (up or down) is primarily caused by GLOBAL prospects/uncertainty. International stock markets have been behaving erradic for months now too, and you can’t tell me Obama is to blame for drops in those too? You’re giving him all too much credit.

  21. reynolds says:

    You are a moron. The market was declining before he was president. Please learn to keep up with current events

  22. American Thinker Fan says:

    Uhhhh reynolds

    Stocks are priced based on the NPV of future cash flows.

    However,you might want to go to Oct CNBC archives and see where the market jumped 450 points because the polls tightened.

    Key points:

    Foreclosures. If they stop foreclosures and impliment other “rescues” look out. We will never clear the market.
    There is a another wave of resets and apparently 1 in 6 mortgages are under water. TARP will be useless.

    It’s ironic the the Dims are rewarded for a disaster their FM/FM caused.

    Autos. How many times do these guys need rescue? This banana republic industry is doomed without radical reform.

    Sky high energy prices will not help nor is “conversion” from petrol a real living standard enhancer.

    We will see Dow 5,000 before 11,000.

  23. The Joker says:

    Big Joe and Reynolds:

    If the market had risen after election day, the MSM, Schumer, Reid, Pelosi, and all the looney leftists out there would be giving the credit to Obama. So, I think it is fair, and very legitimate to say that the market decline probably does have to with Obama and his scary tax proposals. All the millionaires, and even wealthy non-millionaires, who have a lot of money tied up in the stock market, are DUMPING their investments now to avoid paying more taxes (as propsoed by Obama). If you can’t see that correlation, then you’re still drunk on the kool-aid.

  24. The Joker says:

    The financial crisis is a referendum on the failure of liberal/socialistic policies and prgrams. I mean, look at what happened. The Democrats in Congress push Fannie and Freddie to approve loans and mortgages to UNQUALIFIED people, especially minorities (can you say “affirmative action”) who consequently become delinquent on their loans, causing mass foreclosures, which caused the housing industry to collapse and home values to depreciate, which caused ALL homeowners to get hurt financially, which caused certain (not all) mortgage lenders and banks to collapse, which caused the CEOs to beg Congress and the President for a bailout, which caused a panic in the stock market because the stockholders in those failing banks and financial institutions paniced and dumped their stocks before they lost any more money, which caused widespread panic to other stockholders every time the dow dropped.

    SUMMARY – giving free handouts (mortgages to unqualified buyers) via affirmative action programs caused the mess. And, who believes in free handouts, affirmative action, and redistribtuion of wealth? That’s right – liberals, democrats, socialists, and marxists.

    Althought the idea of trying to guarantee homeownership for everyone is a noble and humanitarian concept (albeit a LIBERAL philosophy), it is clearly, as proven by this current debacle, a failed philospohy. Making people EARN their keep and work hard to be able to enjoy the privilege (not a right) of homeonwership, which is a CONSERVATIVE philosophy is what this country has to get back to.

  25. Howard Dean says:

    As for Bush, stick it to GM. Let Obama take the heat. Don’t do his dirty work for him.

    Comment by Bitterlaw — 11/11/2008 @ 10:28 pm

    Agreed.

    Let the Dems own this bailout.

  26. The Joker says:

    I forgot one other point. Not only was affirmative action to blame, but the larger implication is that government intervention into the free market is BAD!!!! Trying to fix the market outcomes is more damaging and more problematic than any perceived unfairness in homeownership rates.

  27. American Thinker Fan says:

    Agreed on GM.

    Intersting since $50 billion will not last the “Big Three” till 2010.

    This is especially true if some of the money has to go to standard idiot liberal ideas. “green cars” anyone?

    If we get lucky, it’s 10-12% unemployment Nov 2010.

  28. rdelbov says:

    I have railed against the memphis city government here on home ownership for everyone. They had a plan here where they took $2500 from city funds to provide the closing costs and partial down payment for poorer folks. They got about 4000 homes in this program at the cost of 10 million dollars.

    Its a noble concept, but if someone could not save $2500 for closing and a downpayment could they #1 pay the higher cost of buying a home (compared to renting) or could they save to have any sort of cushion if they lost their job or fell sick for three weeks or so.

    So many of these homes are now in default

  29. Wes says:

    In a word to answer the thread headline: Yes.