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When Obama Speaks, the Market Tanks

Wall Street investors send White House a message

By: Robert Bluey (Diary)  |  February 25th, 2009 at 10:29 PM  | 

RESIZE: AAA

The best thing President Barack Obama can do for the economy is keep quiet. A day after delivering an address that won widespread praise from the chattering class, Obama’s big-government policies were rejected by traders on Wall Street.

Wall Street’s negative reaction to Obama is nothing new. Ever since Election Day, Obama’s words have failed to inspire investors. “When the President speaks, the market listens … and crumbles,” said Family Research Council chief Tony Perkins, who outlined the following pattern of the Dow’s drop after notable Obama addresses:

  • Nov. 5, 2008 (Wednesday after Election Day): -486 (5.0%)
  • Jan. 9, 2009 (one day after Obama speaks at George Mason University on “need” for $800 billion stimulus package): -143 (1.6%)
  • Jan. 20, 2009 (Inauguration Day): -332 (4.0%)
  • Feb. 10, 2009 (one day after Obama declares that without a stimulus, “an economy that is already in crisis will be faced with a catastrophe”): -382 (4.6%)
  • Feb. 17, 2009 (market opens for the first time after Congress passes $787 billion stimulus on Feb. 13; Obama signs bill into law, declaring, “The stimulus lets Americans claim destiny.”): -298 (3.8%)
  • Feb. 19, 2009 (one day after Obama announces potential mortgage relief plan): -90 (1.2%)
  • Feb. 25, 2009 (one day after Obama’s first speech to the full Congress): -80 (1.1%)
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  • Rod_Patrick

    especially when all the people are under the spell of the Obamessiah.

  • http://www.scottbomb.com scottbomb

    After all, he’s not listening to Bush, Reagan, or even JFK when it comes to truly rescuing a tanking economy. But of course, the Obamassiah doesn’t care much for the economic policies of any of the above. The following news bit makes me happy for Israel. Netanyahu plans for a round of multiple tax cuts:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a6f9TlJgBdUU&refer=worldwide

    Imagine if The One made such an announcement. That would probably reverse the trend about which Bluey writes. Such are not the ways of a Marxist, and that is what we have for a president.

  • weave

    Being the eternal optimist, every time Obama causes the market to bleed, I rejoice. I think right now the market is entering a territory where emotion and speculation is causing it to go lower than it should be naturally. So that means a buy opportunity.

    But not quite yet….

    Obama can afford to be gloom and doom to manipulate emotions into getting what he wants now, because this is an off-year for elections. But come 2010 if the mood of the country is still down, Democrats will have big losses. So you know what is going to happen. This time next year the news and story is going to become far more upbeat. People will start to regain confidence, start spending again. Businesses will be caught with a shortage of inventory and less competition due to all the businesses going under in 2008-9, and that will cause prices and profits to rise rapidly. Investors will regain confidence, and stocks will rocket up. Then when Republicans regain control in 2010 of Congress, stocks will rally again.

    I’m going to bet money on this one.

    • http://impudent.blognation.us/blog kyle8

      and you better take your profits quickly because when cap and trade takes effect the whole thing tanks again.

      • rbdwiggins

        The next shoe will drop on the mortgage markets well before “cap and trade” has a chance to cause lasting harm to the economy.

        About the same time the interest rate is adjusted on the remaining ARM’s.

  • erp

    Ever think this is what they want to happen?

    Destroy the economy, scare everyone to death then make everything better through the miracle of socialism.

    It’s worked time and again.

  • mom2oneson

    I don’t understand how it changes so much in response to him. Do people hear him give a speech and think get on to their ameritrade account and sell? He is always talking about something every week or every few days. I can understand people heard him twice and then sell but I how does this work so many times? He isn’t saying anything new it has always been tax investors and increase public assistance. If one speech would make people sell wouldn’t they have done it already?

    My other question is why is it so bad when the market drops? I thought people that buy options made money when prices drop? I know people who bought the stock lose but it doesn’t seem like everyone is losing if the option traders are making money.

  • hmmcontrib

    “Wall St. drops after data, banks fall ? NEW YORK (Reuters) -Stocks added to losses on Wednesday after data showed the pace of existing home sales unexpectedly fell in January, while bank shares slid on continuing worries over the fate of the sector. ? The tone was set early ?” 2/25/09
    I know it’s fun to blame the stock market’s performance on words from the politicians we don’t like, but I thought ‘after therefore because’ was considered pretty shallow thinking for this site.

    • Achance

      now run along.