The PJ Tatler

The Dow Lost 634 Points Today

The stock market has been on a major slide of late, losing more than 1100 points in the past two market sessions, 634 points today and more than 500 Friday. It’s a bloodbath.

The Dow Jones Industrial Average plunged well-below the psychologically-significant 11,000 mark, led by BofA [BAC  6.51    -1.66  (-20.32%)   ] and Alcoa [AA  11.33    -1.46  (-11.42%)   ].

The S&P 500 and the tech-heavy Nasdaq finished down more than 6 percent each. August is already on track to be the worst month for both indexes since Oct. 2008.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, spiked above 40 to touch its highest level since Mar. 2009.

All 10 S&P sectors were lower, led by banks, energy and materials. Financials have plunged more than 20 percent this year.

Take a look at the Dow’s 5-day trend from Yahoo! Finance. The worst market run since 1978 just keeps on coming.

And just a reminder: Our debt now equals 100% of GDP.

The president can go around quoting Warren Buffett and calling us a “AAA nation” all he wants. But if our government was run along European parliamentary lines and Obama was the prime minister, there would have already been a vote of no confidence to drive him from office by now. The Constitution he seems to despise so much is the only thing keeping him in power after the last couple of weeks. It was clear during the debt ceiling debate that not only was not leading, he wasn’t even capable of leading. Every time he spoke his own poll numbers went south.

Now, he has shown even less ability to lead, by making no substantive moves at all to calm the markets. He was silent for days while his political team engaged in one of the most obviously dishonest responses in living memory, and then he was late to his own speech today. Everything shouts instability. One move he could have made was to fire Treasury Sec. Tim Geithner and replace him with someone with something approximating an actual strong reputation. That would have at least shown that the president’s head wasn’t in a golf round or in his fundraisers tonight, and was engaged in our economic problems. That would have been the easy move, but the president didn’t do it. To date, he has done nothing else.

But he is proceeding with his two fundraisers tonight. The press will not be allowed in so chances are we will not hear what he has to say to the party faithful. What case can he make for his re-election now? By what possible criteria does he deserve another day in his job, let alone another four years?