Posted by
Jessica Hughes on Wednesday, February 25, 2009 1:44:49 PM
One of my favorite comic lines is from the movie “The Ref,” when Dennis Leary, who has taken hostage an outspokenly dysfunctional family, loses his temper and says, “You know what this family needs? A mute.”
I couldn't help recalling that line this morning.
Yes, this mess began on Bush’s watch. He should have pushed harder on Fannie and Freddie when the Democrats in F&F’s pockets swore they were just fine. Nevertheless, as Bob Beckel is fond of growling the Republicans lost. The progressing failure of the economy cannot be blamed on Bush, especially with such a strong negative correlation between Obama opening his mouth and the level of the DOW.
When the market had a 300 point rally November 4, 2008, CNN Money assured us that the market hates uncertainty and as it was now obvious that Obama would win, the market was recovering its stability. They also repoted:
“…stocks will likely get a boost regardless of who wins, analysts say.”
Then Obama actually won and the DOW tanked by 486 points and CNN Money printed this:
“Investors were taking a classic "buy the rumor, sell the news" response to President-elect Barack Obama's victory over John McCain, said Bill Stone, chief investment strategist at PNC Financial Services Group.”
Classic? If dumping stocks at the news of who the President is, is a “Classic” move then why were “analysts” saying the day before that stocks would get a boost?
An hour and a half before Obama was inaugurated Alexandra Twin of CNN Money was quoting Terry L. Morris, senior equity manager at National Penn Investor Trust as saying that Obama would get a few weeks honeymoon. At the close of the market, when the stocks had the most severe drop in Inauguration history, Alexandra Twin herself was saying that Obama was good for the market.
We saw a plunge of 382 points when the Senate passed the stimulus and another of 288 points when the President signed it. After Obama, this weekend announced his Mortgage rehab plan and Robert Gibbs refused to rule out nationalization of the country’s banks the Dow dropped 250 points on this past Monday. Bernanke came out and assured the public that they never thought of nationalization, which is a patent lie, but the market rallied with DOW back up 236 points.
Unfortunately, never one to miss an opportunity to trash the very foundation of American safety, prosperity and health, Obama proceeded to spend his address to the Congress bashing rich people and businesses and promising to end the recession without their help. Except for the extra taxes they will pay of course, to fund the Democrats pet projects. That help Obama needs.
In response, the DOW was down nearly 180 points within two hours of the opening bell.
Apparently, just being optimistic about fixing the problem is not (sorry Bill Clinton) enough. The people who invest billions in our market are not so stupid that they are betting on rhetoric. They are waiting to hear something, anything that might make America an attractive investment again. Everything Obama has offered: heavy regulation, higher taxes, environmental handcuffs, government directed production, abandonment of our viable natural resources and the classic demonization of the productive – err “rich” – has sent investors running.
Yes, what this administration needs is a mute.