How much more of this are we going to take?
The election of Barack Obama offered the promise of a new set of fixes for the financial crisis and the economy, a do-over that might help nurse the stock market back to health.Since then, the market hasn’t just gotten worse — it’s turned in its worst performance ever for a new president.
The Dow Jones industrial average has fallen 21 percent during Obama’s first seven weeks in office. Count back to Election Day and the results are even bleaker: That afternoon, the Dow closed at 9,625. Now it stands at 6,547, a loss of 32 percent.
Obama’s ardent defenders will try to shift blame on Bush, but the markets clearly aren’t comforted by Obama’s proposals, and instead of easing tensions, he exasperates them.
Market analysts usually play down the influence of presidents on the market but say this time could be different as taxpayer dollars prop up private companies and Obama’s first proposed budget stands at $3.6 trillion, with a gaping deficit.
In this case, said Wachovia Securities chief market analyst Alfred E. Goldman, investors are saying “they have no confidence in the stimulus package doing much stimulation anytime soon. And they’re greatly concerned about the size of the budget.”
On some of the most wrenching recent days in the market, it’s been easier to connect cause and effect.
The Dow sank 4 percent on Feb. 10 as Treasury Secretary Timothy Geithner unveiled a new bank bailout plan that Wall Street immediately criticized as laughably light on details.
Several weeks later, investors shaved another 4 percent off the Dow after the government agreed to give insurer American International Group an extra $30 billion, bringing its loan total to $180 billion.
Now the Dow seems to drift lower day after day, with Wall Street waiting for clarity and selling in the meantime.
Investors want to know when and how the government will cleanse banks of bad debt and whether it will suspend accounting rules requiring companies to value assets at current market prices.
As the brilliant Thomas Sowell said, Obama should resign… maybe then the economy will get better.
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