July 23, 2011

JOHN PODHORETZ: The President Is Actually Trying to Talk the Markets Into a Panic. “Perhaps for the first time in American history, this president is literally using this press conference to create a financial panic over the weekend about the opening of the markets on Monday. He is warning of disaster on Monday. Clearly, he wants to use this as leverage to frighten the GOP into passing the plan proposed by Senate Minority Leader Mitch McConnell, which will push the debt ceiling problem into 2013, but it’s still an entirely new and astonishingly reckless gambit.”

Related: Prof. Jacobson: “If nothing else, Obama does ‘panic’ well.” “Obama’s Friday afternoon press statement was not the first time and it will not be the last time. Crisis and panic are, in the words of Rahm Emanuel, just opportunities.”

UPDATE: A Wall Street reader emails: “Unlike most politicians, markets learn and adapt. The main topic among macro investors these weeks is how predictable the panic/response political functions have been in both Europe (Greece default risk) and Washington (debt limit drama). For all the screaming and headlines, US stocks have gone sideways all year. The most cynical investors are placing side bets on where the next US military action will be, as it seems to take ever-greater crises to trigger an exploitable panic.”

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