BARACK OBAMA POLICY PART OF MARKET LOSES
As Friday morning trading began Wall Street was forced to shut down as a stop gap measure because Dow futures dropped 500 points. The measure was to give the market pause in order to prevent panic selling when actual trading began. Uncharted territory in an increasingly uncharted market.
While much of the problem in the extremely volatile stock market lately is due to continuing reaction to the collapse of financial institutions due for the most part to the mortgage crisis, there are two other factors that weigh heavily on this current markets somewhat panicked reaction. One is the 24/7 news cycle and the other is the continuing lead by Barack Obama in the polls which has many on Wall Street concerned because of Obama's tax and spend polices.
First the 24/7 news cycle. In 1987 the Stock Market plunged by nearly 25% in one day which caused panic by investors. Yet the crisis ended relatively soon at the market rebounded over the next two weeks. One major difference in the 1986 crash and the one we are experiencing today is the fact that news of what is happening on Wall Street receives a constant reporting because of the 24/7 news cycle that we have now with cable news networks who have a lot of time to fill.
In 1986 when the one day crash occurred news consisted of the usual alphabet, ( ABC, NBC and CBS), evening news broadcasts. Cable News was in its infancy and had a small audience. As a result the country was treated to only occasional reports of the action on Wall Street. Compare that with today when news outlets on cable keep the moment by moment DOW and NASDAQ boards running at the bottom of the screen.
Whenever one tunes into a news channel, of which there are many, the actions of the Dow are mentioned in every segment usually at the top of the segment with a quick reminder again at the end of the segment before going to a commercial break. As such we receive a barrage of coverage which increases anxiety about the markets and cannot help but add to the panic as investors watch numbers move in real time. Those who would normally ride out financial problems on the market panic as they watch the numbers and yell SELL !
The second factor is Barack Obama the candidate. Investors react to political policy. Wall Street is understandable concerned about the policy of Barack Obama and negative reaction is rampant throughout the market. According to the Washington Post one top Wall Street executive who has been an Obama supporter has urged the Illinois Senator to reconsider his tax plan which offers increases for those making over 250K a year, both individuals and small businesses and a token tax credit that Obama calls a tax cut of between 500 and 1,000 dollars to the remaining 95% of Americans which will be paid for through redistributing the wealth of the upper 5% of income earners. This credit will also be available as a refund to the 44% of that 95% who DO NOT pay taxes.
Stock prices represent current market conditions AND best guesses of what is coming down the road. Many cannot predict where this slide will stop because some of it depends on the policy of the next President and the promise of increased taxes especially on small business, ( the highest rate for small business seen in decades), raising the capital gains tax, massive increased spending and token tax credits paid for by the upper 5% to everyone else is getting a no confidence vote on Wall Street for Barack Obama.
Most compare Obama's economic policy to that of Hubert Hoover whose policy ushered in the Great Depression and Jimmy Carter who as President presided over 21% interest rates, double digit inflation, gas shortages due to the institution of windfall profit taxes on oil companies, and negative growth throughout his four years as President. Barack Obama promises to introduce the worst elements of both Hoover and Carter and Wall Street is reacting with great concern that Obama's policies will continue the slide indefinitely and delay the recovery for possibly years rather than months.
Ken Taylor
While much of the problem in the extremely volatile stock market lately is due to continuing reaction to the collapse of financial institutions due for the most part to the mortgage crisis, there are two other factors that weigh heavily on this current markets somewhat panicked reaction. One is the 24/7 news cycle and the other is the continuing lead by Barack Obama in the polls which has many on Wall Street concerned because of Obama's tax and spend polices.
First the 24/7 news cycle. In 1987 the Stock Market plunged by nearly 25% in one day which caused panic by investors. Yet the crisis ended relatively soon at the market rebounded over the next two weeks. One major difference in the 1986 crash and the one we are experiencing today is the fact that news of what is happening on Wall Street receives a constant reporting because of the 24/7 news cycle that we have now with cable news networks who have a lot of time to fill.
In 1986 when the one day crash occurred news consisted of the usual alphabet, ( ABC, NBC and CBS), evening news broadcasts. Cable News was in its infancy and had a small audience. As a result the country was treated to only occasional reports of the action on Wall Street. Compare that with today when news outlets on cable keep the moment by moment DOW and NASDAQ boards running at the bottom of the screen.
Whenever one tunes into a news channel, of which there are many, the actions of the Dow are mentioned in every segment usually at the top of the segment with a quick reminder again at the end of the segment before going to a commercial break. As such we receive a barrage of coverage which increases anxiety about the markets and cannot help but add to the panic as investors watch numbers move in real time. Those who would normally ride out financial problems on the market panic as they watch the numbers and yell SELL !
The second factor is Barack Obama the candidate. Investors react to political policy. Wall Street is understandable concerned about the policy of Barack Obama and negative reaction is rampant throughout the market. According to the Washington Post one top Wall Street executive who has been an Obama supporter has urged the Illinois Senator to reconsider his tax plan which offers increases for those making over 250K a year, both individuals and small businesses and a token tax credit that Obama calls a tax cut of between 500 and 1,000 dollars to the remaining 95% of Americans which will be paid for through redistributing the wealth of the upper 5% of income earners. This credit will also be available as a refund to the 44% of that 95% who DO NOT pay taxes.
Stock prices represent current market conditions AND best guesses of what is coming down the road. Many cannot predict where this slide will stop because some of it depends on the policy of the next President and the promise of increased taxes especially on small business, ( the highest rate for small business seen in decades), raising the capital gains tax, massive increased spending and token tax credits paid for by the upper 5% to everyone else is getting a no confidence vote on Wall Street for Barack Obama.
Most compare Obama's economic policy to that of Hubert Hoover whose policy ushered in the Great Depression and Jimmy Carter who as President presided over 21% interest rates, double digit inflation, gas shortages due to the institution of windfall profit taxes on oil companies, and negative growth throughout his four years as President. Barack Obama promises to introduce the worst elements of both Hoover and Carter and Wall Street is reacting with great concern that Obama's policies will continue the slide indefinitely and delay the recovery for possibly years rather than months.
Ken Taylor
posted by The Liberal Lie The Conservative Truth | 9:51 AM
7 Comments:
I posted on this today too, Ken, among other things. I too believed that Obama had something to do with the drop. It seemed that when the polls favored Obama the DOW dropped, but when the polls tightened up, the DOW rose. But today the polls are tightening up, yet the DOW still dropped, so there's something else at play here.
Ken, this is the single worst post I have ever read on your blog. You are parroting the ridiculous comments of Karl Rove yesterday on Faux News.
Jeez, I know you have a sketchy understanding of economic issues, but if you think the stock market collapse has anything to do with Obama's future economic policies you are even more lost than I thought.
I told you a couple of weeks ago that the problem is the tens of trillions of dollars in unregulated derivative products that banks and financial firms are trying to unwind is the problem.
No matter who is President, this is a problem that will linger for at least 18-24 months. During the next 2 years we are going to see a lot of bank/financial firm failures and consolidation in the financial sector. The reason is quite simple for anyone who understands what is going on. There are many banks, insurance companies, hedge funds, and other financial firms that are heavily exposed to these worthless mortgage-backed securities and credit default swaps. We just don't know which firms they are yet because these derivatives are completely unregulated.
Rob, first I did NOT see the Rove interview you are refereing to. I can read and come to conclusion on my own without you, "telling," me what I can figure out for myself.
There is also an article in the Washington Post among others that echo what I have posted here. The polocies of President's do have an affect on the market and you have eluded do that yourself many times.
While Obama IS NOT President and I still beleive that come election day he will still not find his way to the Oval Office after losing to McCain, polls have him ahead for what they are wroth and the market IS going to react to what a possible Obama Presidency could mean down the road.
Many economists have gone on the record stating that his tax increases are NOT what is needed in this economy. His tax credits that he has called tax cuts are not going to have any affect especially when his spending out distances the money he takes from the 5% who will get an immediate increase. Then in order to pay for his spending he will lower the thresh hold of tax increases to match the money he will spend on massive programs.
I was against entitlements with Bush and you know this and I will continue to be against massive spending if Obama wins. And spedning he will do to the tune of one trillion dollars. This cannot be denied because he has stated it and it is his policy.
Bush is leaving a federal budget deficit of $1 trillion to the next President next year. The economy is in recession and will almost certainly be in a deep and extended recession (perhaps even a depression).
Obama does not raise taxes on anyone above the tax rates under Clinton and Reagan - in fact the capital gains tax rate is lower than under Reagan.
The fact is that the explosion in the deficit and national debt now threaten the very sovereignty of the United States. The money has to come from somewhere. I don't know what solution you offer, but borrowing more from the Chinese seems irresponsible to me.
In the end, it doesn't matter if you and I agree or disagree. It is fairly clear that Americans understand and agree with the tax plan that Obama is proposing. That is one of the major reasons he will win in a landslide on November 4.
Define entitlement? Your grandmother's social security check?
Did you ever read the preamble to the US Constitution - the part about the public welfare?
Rob,
Not worth your time, the last dying breaths of a group of out of touch conservatives. Conservative = selfish, it is a group that only worries about me and not about the anyone else. But of course if they get in trouble they want the government to bail them out. Oh, conservatives = hypocrites.
Wealth redistribution: cut taxes of wealthy, move $$ from middle class to the top 5%, when the banks lose it due to greed and stupidity, blame those who had the least to do with it, bail them out with taxpayer money...now they are using it to buy up other banks, pay out dividends and hand out bonuses. The voters may have a cure.....
Post a Comment
<< Home