Congratulations Mr. President: you’re in the record books again:
President Barack Obama now has the distinction of presiding over his own bear market.
The Dow Jones Industrial Average has fallen 20 percent since Inauguration Day, the fastest drop under a newly elected president in at least 90 years, according to data compiled by Bloomberg. The gauge has lost 53 percent from its October 2007 record of 14,164.53, slipping 4.1 percent to 6,594.44 yesterday.
More than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The president is in danger of breaking a pattern in which the Dow rallied 9.8 percent on average in the 12 months after a Democrat captured the White House, according to data compiled by Bloomberg.
“People thought there would be a brief Obama rally, and that hasn’t happened,” said Uri Landesman, who oversees about $2.5 billion at ING Groep NV’s asset management unit in New York. “It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”
Recall too, what Francis wrote earlier: the market is a leading indicator. By definition, it reflects the views of investors about the future earnings of business. Right now Wall Street is signaling clearly that it believes Obama’s plans will fail to restore economic growth any time soon.
As Business Week says, Wall Street has soured on the new President — and it may be too late to save the relationship.
Well, Democrats have never been happy when ‘the rich’ are making gains on Wall Street. Now that they’ve put an end to it, they ought to be thrilled.