Why did the Markets Crash after the Election?
November 5th, 2008 - 8:26 pm
I don’t buy the explanation that the stock markets were spooked by Obama’s election; such things are discounted in advance, and virtually all of the polls predicted the outcome. So why, then?
Well, the Russians announced they were deploying short-range missiles along NATO’s northern border, which is certainly disconcerting to investors desperately looking for stability…
Don’t you think?
You are right, markets discounted Obama quite some time ago. Discounted McCain too as both candidatges guys were promising to replicate everything both Hoover and Roosevelt did wrong.
Investors probably overlooked those Russian missles. Right now the market is buy (a little bit) on hope and sell (a whole lot) on nerves.
We live in interesting times.
Well let us put positive spin on what has happened. Particularly, let us see if Liberal world and Europeans who have had so much hate for US and President Bush are willing to follow the suit.
First of all, election of Obama is another American act of ingenuity, and presenting a real model to liberals to put their foot where their mouth is.
On the global side here are few examples. I predict a Gipsy president in Italy, a Jew Chancellor in Germany, an Algerian president in France, and an Arab King and a Pakistani PM in UK, if they want to be really as progressive as they pushed for Americans. In addition, all dictatorial government particularly Islamists, will let their people to become human and have human rights and freedom.
Then on domestic side, I think the whole entertainment world including Hollywood and people involve with sport and the media, should join the progress. I am sure they will offer movie tickets, CD, concert tickets, Cable connection, Football and Basketball tickets, Newspapers free of charge to those people who can’t afford health insurance and others in need. I believe, Madonna will follow McDonald model of offering cheap products. She will have a Free world tour for all Africans, Arabs, and other 3rd world countries including soon become 3rd world USA. Bruce Springsteen and others will follow Madonna model shortly. In addition Nike, Addidas, Columbia, and other big sport wear companies, will use Kohl’s and Wal-Mart to provide $1 foot wear and $1 Football / Basketball gears and sport clothing to those unfortunate people who have not been able to get full benefits of this society. The plan include, stop production of Limousine, and private jets, taking all first class seats from airplanes, and no first class trains or other transportation. The terms Red Carpet will be eliminated from the dictionary, and the Hollywood stars are not allowed to Cat walk since it will emotionally affect people who can’t afford the glitzy dresses and jewelries.
As a matter of fact, the fashion houses will be turn to the public and designers work for the poor and needy people. The first five years designers’ only design for African children, and will get maximum $30K salary. More importantly, there will be a cap on salaries of entitlement, sport stars, and particularly media stars. Hollywood stars cap will be $50K per movie, sport stars cap is $45k, and media stars $40k. People like Opera will receive $10k per show. This way the wealth will be distributed equally and poor people can afford going to the movies, concerts, and are able to buy clothing which would not be able to afford otherwise. Let us spread the wealth in real sense. There is no other way. You can’t mix free market and capitalism with socialism. Who is more important to the society? A company that provides jobs to millions of the people, or an entertainment figure who contributes nothing but possible fun? How could you have fun when you are hungry?
Interesting theory. But probably one that was to be expected: Obama, while not even elected caused the market to crash. Ideology is something wonderful, it helps to shape reality, makes it more usable.
I would like to suggest a different rule. The democrats will never get anywhere since they basically are only needed to clean up, to stabilize the markets after a GOP king was in power.
Concerning Russia. Well it took quite some time till they reacted. The bear is a little slow. But I guess, Biden convinced them that matters would change much.
correction: them that matters wouldn’t change much.
Stability is upon us, Supposedly the market’s already been priced for an Obama victory, who knows how I come up with it, but look for a 7,900 day, followed later by maybe a 7,500 day, ‘we’ll have fluctuating support btwn 8,500 – 9,500 until nxt yr., shop wisely,’ dollar menu’s popular this winter, we’ve all got to eat, MCD, BKC, YUM, WEN
Kourosh,
Honestly, I rarely agree with anyone who post on this site, including you. But reading your last post, I find you interesting and having interesting points. Keep up the good perspective! I can’t believe I’m saying this.
Now Re. Real stuff, I find it interesting that the human resources chief for Obama is someone with great connections to Israel. So it is no wonder that over 70% of American Jews voted for him. Dr. Ledeen and Jo Lieberman are the endangered and exotic version of things, and they must be protected. Otherwise, everyone else is on the left.
Regarding Joe Lieberman, I can’t stand this traitor anymore, and it looks like still Democrats are stuck with him. He is bad omen if in case he wants to join or support your cause. Stay away from him!
As far as Rahm Emanuel, I was reading an article on Prisonplanet.com, which I find it disturbing about his father’s connections in Israel. On the other hand, I sense he might be trying to make up what has happened in the past. Here is the article:
http://www.prisonplanet.com/obamas-first-appointment-is-son-of-zionist-terrorist.html
Sir,
As everyone, I have listened to and read on what are the subprime crisis and its impact on trade market, and as a direct cause of today’s economic problems.
However – unless I passed over something – I have been frustrated by the total absence of any opinion on the possible influence of oil price upon these problems; be it a fanciful or farfetched one…
While I’m still waiting for this hypothetical paper written by a daring economist or some intrepid journalist, I keep wondering what the worst could have been: a subprime crisis; or oil for about $200 a barrel?
I am not qualified enough in economic matters to dare elaborate on the possible cause to effect relationship between these two a priori unrelated parameters.
In the meantime, for wants of U.S. withdrawal from the greater Middle East, Russia may deploy some missiles in the Baltic Sea region.
Yawn…
Respectfully,
“such things are discounted in advance”
Nothing could be further from the truth. I strong disagree. You conveniently forget that the snob elites who attended our “best” universities believe that Barack Obama would only lie to the unwashed blue collar masses. Have we, for instance, already forgotten his anti-free trade rhetoric in Ohio—while Austan Goolsbee was telling officials within the Canadian government that it was all bovine excrement? No, what is occurring on Wall Street is the realization that Obama is truly unhinged regarding economic matters. in his heart of hearts, Obama does indeed adhere to the doctrines of Saul Alinsky.
Sorry, it was the ISM numbers. The Institute for Supply Management released their October survey this week, and it was a shocker, helping send the Dow down by 10% on Wednesday and Thursday. The manufacturing number was a very weak 38.9. Anything below 50 shows negative growth. We are now down to levels not seen since September 1982. The internal data were even worse.
“Sorry, it was the ISM numbers.”
Nope, that is no more than half of it. The investor class is worried that Barack Obama is not sending out the right signals concerning his near future economic policies. They are realizing that he may really be a European styled socialist. Buyer’s remorse is starting to set in.
Who knows. The market is in so much angst a whisper sounds like a roar. Any event-du-jour is likely to cause wild changes. It really isn’t the event but the angst that needs to change. Besides, where can we put our money to make it grow? Tech stocks, long gone. Home speculation, fuggedaboudit. Oil futures, lost 57% from its high. Dow Jones, going fast. Bank accounts offering 1 or 2%, bupkus.
We need to improve our infrastructure and our electric grids especially if we’re to plug in a new generation of electric cars. Some suggest putting bailout money into improving roads grids and new powerplants, etc. I suggest tax free government bonds paying 4 or 5% for projects concerning the public i.e. roads and bridges. Corporate bonds for private industry projects such as oil refineries, new powerplants, reactors, grid system, etc. We could save some of the bailout money and create jobs without the “Socialist” tag associated with it. Government’s job should not include running a business. They do a lousy job.