Friday, March 06, 2009
Obama, the Stock Market and Foriegn Policy
The Grand Old Party (GOP) is known for supporting big business. So it pays to elect Republicans to the White House, right? If you analyze the stock market performance under Republican and Democratic presidents, the answer is a resounding NO. Democratic presidents generate average stock market returns in excess of the risk-free rate of 10.69% -- roughly six times the 1.69% earned under Republican administrations.It appears Obama is going to buck this trend.
From Election Day 2000 to Election Day 2008, the S&P 500 fell 29.8%. From Election Day 2008 til this afternoon, it’s down 33.3%.I wonder what part of Obama has more impact - his policies reflected in the "stimulus" bill and proposed budget or his ineptitude reflected in his comments.
"The stock market is sort of like a tracking poll in politics," said the president,...While not directly related to economics, Obama further demonstrated his cluelessness by giving visiting British Prime Minister Gordon Brown a DVD set of 25 classic American films.
Brown, the first European leader to visit Obama since his Jan. 20 inauguration, was presented with a "special collector's box" of DVDs during his two-day visit to Washington.Obama doesn't seem to know the difference between a child's birthday party and meeting with the leader of our greatest ally.
Downing Street, which reportedly tried to keep the present a secret, declined to say what movies were included in the set.
"One reason for the secrecy might be that the gift seems markedly less generous and thoughtful than the presents taken to Washington by the Prime Minister," London's Evening Standard newspaper reported.
Brown, who is not known to be a movie buff, gave the president and his children several uniquely historical gifts.
The first of which is a pen holder fashioned from the oak timber of HMS Gannet, a Navy vessel that served on anti-slavery missions off Africa.
Another treasure given to Obama is a framed commissioning paper for HMS Resolute, a Royal Navy ship that came to symbolize British-American goodwill when it was rescued by the U.S. from icebergs and given to Queen Victoria. It is the sister ship of the HMS Gannet.
Finally, Brown gave Obama a first edition of Martin Gilbert's seven-volume biography of Winston Churchill, whose World War II partnership with President Franklin Roosevelt symbolized the U.S.-Anglo alliance.
For Sasha and Malia, Sarah Brown, the Prime Minister's wife, gave each an outfit from Topshop, a British chain of clothing stores, and selected six children's books by British authors which have yet to be published in the U.S.
In return, First Lady Michelle Obama presented the prime minister's two boys with toy helicopters modeled after Marine One.
And more recently, when Hillary Clinton met with Russian Foreign Minister Lavrov she gave him an "easy button" that was supposed to say "reset" in Russian. But, the button actually said "overcharge". Besides the stupidity of imitating an office supply store gimmick in international politics, they couldn't even get one word translated correctly.
God help us all.
Since stocks are usually valued more than the actual companies and expected dividends are worth due to scarcity, their value rests on credibility and faith. We buy stocks at overvalued prices hoping they become even more overvalued.
It takes a lot of trust to make that sort of an investment. Take away nearly all that trust on the parts of the businesses themselves, their regulators and their watchdogs, and the stock market is going to have a bad, bad year.
This would be happening even if McCain was President, because this isn't based on faith in the President right now, it is based on (our lack of) faith in our busniesses.
I don't agree with this. I do agree that we'd be having problems if McCain had been elected. How many and how big is open to debate. But, Obama's stimulus package and his budget proposal don't address the problems but rather just signal be beginning of a wild spending spree without clear paths to help the economy.
Since January 20th, when Obama actually took over as President and the Dow closed at 7949, it's only about 8%.
Of course as you probably know, the previous administration's high water mark was over 14000 in September 2007 and dropped more than 30% by Election Day and about 45% by January 20th. I'll be searching your blog to find information on that, but why do I suspect I won't find any?
Since January 20th, when Obama actually took over as President and the Dow closed at 7949, it's only about 8% down.
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