Bear Market Obama
October 23, 2008
As Barack Obama's poll numbers go up, the stock market goes down.
The stock market is a discounting mechanism, which is a fancy way of saying that it anticipates the future prospects for the economy and the companies that comprise it.
What is the stock market telling us today about the future?
The Dow Jones Industrial Average closed today at 8691.25, which is 38.64% below its all-time closing high of 14,164.53 on October 9, 2007.
The conventional wisdom (which is almost always wrong) is that the stock market is down because of the credit crisis. But the worst of the credit crisis has passed. The 3-month LIBOR rate has dropped from its high of 4.81875%, reached on October 10, 2008, to 3.54% today.
We continue to believe that the federal bailout was a mistake, but the federal government has bailed out the banks and strengthened their balance sheets with direct investments. Banks are once again lending to one another.
Why haven't stocks rebounded to any significant degree?
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The stock market typically anticipates economic conditions nine months forward. The economic experts are predicting that the recession will have reached bottom by then, yet the market fails to recover.
Perhaps the market is looking at the prospect of a Barack Obama Presidency combined with overwhelming Democrat majorities in the House and Senate and is recoiling at the prospect.
With Obama in the White House and Democrats in control of Congress, there would be nothing to stop the implementation of the Democrats' radical leftist agenda.
Here's their economic agenda:
- A higher personal income tax, business income tax, dividend tax, capital gains tax, death tax, Social Security tax, and Medicare tax.
- No secret ballots for workers when they vote on whether or not they want to join a union.
- A mandate for small businesses to provide health insurance to their employees or pay a fine.
- Strict controls on the use of energy and on the types of energy used.
- Redistribution of wealth.
Redistribution of wealth.
Punish success and reward failure.
Take money from people who pay taxes and give it to people who don't.
Give a $1,000 "tax refund" to the 40% of American workers who don't pay income taxes.
A welfare check written against your account.
Obama let that one slip. We have Joe the Plumber to thank for the revelation.
Obama has tried to hold it in, but the truth keeps leaking out.
Joe Biden says it's our patriotic duty to pay higher taxes.
Higher taxes and redistribution of wealth. Those concepts defeated Jimmy Carter, Walter Mondale, Michael Dukakis, Al Gore and John Kerry.
Americans don't like socialism. Oops. We're not allowed to call Barack Obama a socialist because some genius at a Kansas newspaper says that's a racist slur.
Do you suppose he has ever heard of Karl Marx and Vladimir Lenin? The two white Europeans who fathered socialism and Communism?
Never mind. We'll just call it Obamanomics.
Obamanomics. Take from the middle class and give to Barack Obama's voters.
He doesn't like his full name: Barack Hussein Obama (BHO). He thinks Hussein makes him sound like a Muslim. The names Barack and Obama sound Irish?
We'll just call him Bear Market Obama (BMO).
The stock market shudders.
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