NYC Letter: Obamanomics 103

Day 38 of CHOPE

Obamanomics, bend the markets to your will.

PRESIDENT OBAMA’S 2,000-POINT TUMBLE

February 17, 2009 (MM) - On Nov. 4, after Barack Obama clinched the White House, the market closed at 9,625.28.

In mid-morning trading today, the day President Obama signs his massive Generational Theft Act into law and a day before he unveils a massive new mortgage entitlement, the Dow dropped to to 7,606.53.

Marshal your forces to affear private capital.

MAYBE IT WASN'T SUCH A CAPITAL IDEA

February 22, 2009 (WaPo) - A little after 1 p.m. on Friday, while speaking on Bloomberg television, [Christopher Dodd (D-CT), (D-Conn.), the powerful head of the Senate Banking committee] said that nationalization of some of the nation's unhealthiest banks may be necessary "for a short time."

... It's usually a mistake to link market fluctuations to moment-by-moment news. Not this time.

The Dow Jones industrial average and the Standard & Poor's 500 instantly dove nearly 3 percent following Dodd's comments.

... Dodd's comment was so potent, the White House felt compelled to chime in quickly, saying "a privately held banking system is the correct way to go."

CONSUMER INDEX HITS RECORD LOWS --
STOCK MARKET REACHES PRE-BUSH 1997 LEVELS
February 23, 2009 (Gateway Pundit)

WALL STREET SINKS AS OBAMA WARNS OF OVERSIGHT

NEW YORK February 25, 2009 (Reuters) - Stocks fell on Wednesday after President Barack Obama warned of stricter oversight for Wall Street, raising the specter of greater regulation that investors fear could sap profits.

Obama's comments near the market close rattled investors when he said financial institutions that pose a serious risk to markets should be subject to serious government supervision.

There are those who argue that these are just unconnectible dots,* but consider the following:

• The Dow has fallen about 11% since Election Day.
• The Dow's fall on Obama's Inauguration Day was the worst Inauguration Day decline in history.
• The Dow fell 384 points on Feb. 10, the day Treasury Secretary Geithner unveiled his financial stability plan.
• The Dow fell 298 points on Feb. 17, the day Obama signed the Stimulus Bill.
• The Dow fell to an 11-year low on Monday, following weekend reports about the government's potential new plan to bail out Citigroup.
• The Dow fell nearly 200 points intraday Wednesday following Obama's generally well received speech Tuesday evening. (The index did recover some lost ground, even briefly trading positive in the afternoon, before closing down 80 points as Treasury announced yet more bailout options for banks.)

If market fall-off is not tracking to this administration's pronouncements and actions, just what is the market responding to? [We search the stars.]

The dots are big and uncannily complementary.

CHOPE.

Crush your enemies. See them driven before you. Hear the lamentation of their financiers.

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* As does financial strategist Paul Kedrosky at the link provided. Mr. Kedrosky denies any mono-causal driver (scil., Mr. Obama's economic policies) for markets, but illustrates this with a hypothetical in which the market declines every time an administration minion (in his hypothetical, then-Treasury Secretary Paulson) makes a public pronouncement. To our lights Mr. Kedrosky seems infatuated with a general theory that ignores the extraordinary government policies reshaping the American economy.