Stocks: A presidential chicken and egg

“The general rule of thumb on Wall Street is that a Democrat in the White House, particularly if coupled with Democratic control of Congress, is bad for the markets”

Its only a “rule of thumb” among highly partisan Republicans. The 90’s were not exactly hard on the markets, neither were the 60’s or the 30’s and 40’s for that matter. FOr whatever reasons, the markets have generally done better with Democrats in control.

Of course, right now wall street success depends on having one’s hand in the taxpayer’s pocket and the current bunch of Republicans in Washington are being very good to their friends. Lehman’s mistake was contributing more to Obama than to McCain.

Basics of American government: congress can authorize spending or create new laws (like the CRA or allowing FM/FM to start buying sub-prime mortgages). That said:

Notice how the media doesn’t much mention the stock market during clinton’s first two years, or focus on Bush’s last two years. IN each case, democrats were in charge of congress.

1993-94 stock market almost flat. Rose from 1995 through 2000. (lawsuit against microsoft = drop in VC as VC not sure if allowed to make large profits. Bush tax cuts restore climb in market. Obama/H.Clinton discuss invalidating contract law (allowing home BUYERS who now can’t afford contract they signed to ignore it, and congress discussing allowing judges to invalidate voluntary, legal mortgage contracts) – money dries up.

All the talk about lack of regulation, etc. Why are we not talking about putting anyone who lied on a mortgage financial statement in jail. Instead, democrats seek to punish lenders, not those who committed mortgage fraud (federal felony).

Money dries up as lenders unsure if contracts will be enforced by judges. No money, no loans, no refinancing.

I would suggest that if everyone had paid their mortgages on time as agreed, we would have no “mortgage crisis.

Obama’s redistribution of wealth. I’m again talking to Annuity wholesalers about moving client taxable funds into annuities, particularly if no need for the money. And I can imagine businesses are laying off while they are still legally allowed to, just in case Obama is elected….

Thanks Jeff. I do appreciate that and completely understand about bad days. Please keep reading and posting. And don’t get me wrong, I am not pretending to be Warren Buffett here. I am not claiming to be a financial wizard. My job is to report, write and analyze and then allow the reader to use the information I gather from talking to people to help them make up their own minds. Clearly, many will disagree with me and that’s great. Debate is healthy. I just take offense when people suggest that you need to have a degree in econ or finance to be a financial journalist.

Anyway, you make a great point about there are many factors regarding what happens in the market and it is overly simplistic to suggest that one person can have that much weight. What happens in the next four or eight years for the economy will certainly be influenced by more than just who sits in the White House.

All I was trying to do was ask a provocative question: Is Obama’s lead in the polls contributing to the market volatility or is he benefiting from it?

Thanks again to everybody for contributing to this and other Talkbacks. Keep ‘em coming!

I would like to offer a sincere apology to Paul for jumping the gun. Call it a bad day but my comments were a bit harsh –lesson learned. Thanks for calling me on it.

I agree that heavy involvement in a field does provide a great deal of experience and that there certainly is a psychological aspect to the market.

Still, the issue of how the markets do under different administrations has more to do with the policies of those administrations than who controls them. In fact, do reduce it to the party in power is far to simplistic to even consider. The party of the president obviously carries some statistical weight but this topic requires much more in depth study.

Most of the comments here seem to follow the logic that the fate of the stock market is the be all and end all of the American economy. Therefore, the prospective tax policy of an Obama or McCain presidency is paramount.

There is, however, another key player that we should watch, the Federal Reserve Bank, and its current chairman, Ben Bernanke. When, to the delight of the Wall Street brats and their media buddies, Bernanke lowers already threadbare interest rates, he will be reinforcing an extremely destructive framework for the US economy. This is a framework, in which consumption, speculation, and property are an exalted triumvirate, whilst savings, investment, and such common goods as strong education and health systems are but ciphers.

Americans should note that their excessive spending habits are being fueled by dependency on cash from many socialist states, COMMUNIST China above all. And this dangerous state of affairs is inherent in the Greenspan/Bernanke paradigm of limitless consumption, limitless speculation, and scant domestic savings and investment.

Thanks to everyone, as always, for posting comments. I just have to take issue with one of the remarks on this thread though. Jeff in Maple Grove, MN., did you read the entire columnn? I go out of my to suggest that it’s “silly” (that was my exact word) to suggest that the markets were down because of Obama’s lead and quote many people who said Obama is leading in the polls because of the uncertain economy and markets. Furthermore, I included a chart in the story that shows that markets do better under Democratic presidents than Republicans. So the article does have accurate information and does not include any of my own political beliefs.

Finally, I find that my degree in psychology has come in very handy in writing about the markets given how much emotions come into play. Also, let me emphasize that I’ve been doing this for 13 years. I think it’s more relevant to focus on the fact that I’ve been covering the markets for awhile. I’d like to think I’ve learned something by doing that day in and day out for over a decade and talking to a multitude of experts over the years.

PRL

No!!!
The major cause for concern is regulation – or the lack of it.
The stock market is there to serve business in the raising of capitol. It is – or should be a long term investment – with a fair return for the money outlaid.
However, the lack of proper regulation has turned Wall Street into a casino.
It does not make sense to pass the blame.
America likes to see itself as the world leader. So LEAD. Tighten regulations to stop this betting on the market.
This is not speculation on an emerging company – it is betting – and with money that isn’t there.
There has been fraudlent behaviour and it MUST be stopped.

Stocks are down because investors either 1) lost too much money on what has happened so far and/or 2) are sitting on what cash they have while waiting for things to bottom out.

Linking this with stock prices with Obama is as clear as some pundits recent claims that not bailing Lehman was the source of this whole mess. It’s bigger than that.

Greg in Portland,

I could not begin to iterate how wrong I think you are. I intend to NOT VOTE for either one of THESE fools running. I do not at all believe that if I refuse to play the game and actually vote for someone I think is horrible that I give up any right to complain about anything our government does.

People need to stop voting for people they can’t stand. Force the parties to give us good choices. I will cast my ballot, but I will leave the slot for president blank.

And I will continue to be political and make a lot of noise about the stupidity I expect to follow this election.

You are wrong Mr. Ebert. We do not have to choose between a Republican or a Democrat. We have the right to choose something else. And if we do not like the republican or the democrat, then I think we have the moral OBLIGATION to choose something else.

No way

There is no doubt that the market is baking in the many negitive impacts of an Obama presidency combined with a democratic controlled congress. “Spreading the wealth around” means higher success taxes, and more new giveaway programs than you could ever imagine. The stock market fell due to declining housing values and the high volume of sub-prime mortage lending (which continues to fall into default). This American junk mortgage debt was marketed inside packages of crap called CDO’s and CMO’s all over the world with AAA investment ratings, compliments of the major financial/credit ratings firms. The international investment community was scammed into thinking these CDO/CMO investment packages were good investments. This loose lending sub-prime mortage loan problem came about originally due to legislation implemented by prior democratic leaders including President’s Johnson, Carter, and Clinton, who started progams including Fannie Mae, Freddie Mac and the Community Reinvestment Act. The tax law change under Clinton (which I call the National Realtors and Homebuilders Profitability Act), which allowed sellers of primary residences to walk with up to $200k in profit tax-free every 2 years, fueled the run-up in housing values and homebuilding. Therefore, no-doc or low-doc mortage loans with little or no down payment required, combined with the opportunity of a $200k tax-free profit from the sale of a residence every 2 years (where else can you get this deal in the tax code), and lots of attractive new housing to choose from, brought us to this overleveraged mess that brought down both the stock and housing markets. Want more of the same? Just elect Obama and company.

I am traditionally and philosophically a Republican, but let’s face it, markets tend to do much better under Democrat presidents. At least since Hoover, Republicans have been in office in each market collapse and the long bull runs have largely been under Democrats. Why? Your guess is as good as mine, but the numbers are there.
- If Obama is elected watch a massive rally form the next day.

Exactly what is in that mug of yours, Paul?
Please see this article on CNN/Money (your own website):
http://money.cnn.com/2004/01/21/markets/election_demsvreps/
Clearly, markets have performed better under Democratic leadership over the past 70 years. I have no agenda here except for accurate information.
More importantly, the entire world is in a crisis and it has little to do with our presidential polls. This crisis is much more complex than to reduce it to politics. It could be argued, however, that Republican deregulation, combined with bipartisan support for subprime mortgages sparked this mess.

One final point, Paul: A Bachelor’s degree in Psychology does not qualify you as an expert on finance and markets. You might want to pursue your Master’s or Doctorate in psychology so you can actually use it instead of pretending to be something you’re not. There’s already too much Joe the Plumber going around these days.

Stocks were down because Obama is ahead in the polls. A part of the reason they jumped sharply higher today is because the lead is narrowing as we get closer to the election day.

Anyone with a brain understands that Obama is partly responsible for this. The rest of the responsibility lies on President Clinton’s lap for trying to put every American in a house. I’d explain to you all why, but its a waste of my time. Just go ahead and vote for Obama and put the nail in the coffin.

I’ve heard that Obama is also responsible for the following:
1. You waking up late this morning after you hit the snooze button.
2. Your car not starting after you left the lights on last night.
3. Traffic jam on the highway.
4. The unseasonal cold and freezing rain.
5. The coffee spill & last but not the least:
6. Cubs losing in Round 1 of the playoffs this year.

Really? Was his tie blue on Tuesday, that’s an up day. Did he come off the plane waving his right hand, that signals a sell off, his left – well then buy, buy, buy. You’ve got to be kidding with this crap. How about something measurable. I want to invest in companies that make goods or provide services for a sustainable market that can do so profitably, and in the trade of having my capital pay me a dividend. That’s it. The market corrected because most of the value was paper based, nothing real. I want real, I’m tired of this speculative, wishy-washy horse crap. Buy raw materials, make a widget, sell it for a profit, expand the plant, add a second-shift, make widget 2.0 and so on… If you’re going to spend this much energy thinking, then think of something that fills a need and capitalize on it. Yes CAPITALIZE, as in CAPITALISM. There, I said it.

I concur with several posters who suggest it isn’t just Obama. As long as the republicans have the filibuster in the senate, then the liberals can’t do anything too outrageous. BUT!! if we get Obama and the democrats get a filibuster proof senate — Katie bar the door. The only small protection we would have from the implementation of a far LEFT agenda is the Blue Dogs and the ‘New Democrat Coalition’. Blue Dogs are good, but few in numbers, the New Dems are better than far left, but still to liberal for the market’s and my taste.

Here’s what I think happened :

‘We the people’ told Congress to NOT bailout these arrogant financial companies.

Instead, Congress began the bailout.

So ‘we the people’ did the one thing the arrogant brats on Wall Street never thought we would do – we did a run on the mutual fund industry, taking the cash out and putting it in government-insured financial instruments, where the return is low but the principal is protected.

A run on Wall Street! Who would have thought such a thing could happen?

Now about which candidate is ahead in the polls – irrelevant.

What matters is who is elected to Congress and creates the bills necessary to limit the excesses of the financial industries, as well as reverse the idiotic laws that ‘liberalized’ mortgage lending. Thinks like Adjustable Rate Mortgages, No-Initial-Interest Mortgages, and the like, are either scams or abusive contracts. And flat-out ban Credit Swap Derivatives and their ilk, because if no more are created, the current mess can be cleaned up more easily.

Keep it simple!

You bet a good part of this is Obama driven. But to tell the truth I had to laugh at the post stating both McCain and Obama are elder statesmen. That is only half true as Obama is neither elder or a statesmen give us a break. If the post were any longer I would have fallen asleep. Must have been written by a politician.

I don’t know how there can even be a question or doubt that part of the recent selloff is due to investors taking profit at the reduced cap gains rate. This is a no brainer. You add the increase in cap gains tax to the socialistic tendencies of Obama and fellow democrats and you understand some of what is going on in the markets. Now we here democrats in Congress talking about taking over 401K accounts and redistributing from there. It is starting to get even scarier out here if you think about the possibility of unfettered democrat control of the government given the brazen socialistic ideas. Gives me pause.

I think it is precisely this sort of prognosticating that led to our current economic downturn. To even propose these notions is create a betting parlor mentality about stock ownership. If the buying and selling of financial instruments has degenerated to this level, we will never get out from under these current conditions. There is only one reason to buy or sell financial instruments: as a sensible, rational adult, one has done appropriate research and determined the efficacy of either purchasing or selling a financial instrument.
Basing this very important decision on who is in the White House is beyond absurd.

Obamma has openly advocated descrimination against the rich and corporations. He has also admitted that he will take money from their future profits. Therefore the net profitability of these companies will be less. Therefore people are pulling their money out of the market and are preparing to invest it in areas where there will be a better return on investment. I think the Obamma issues are built into the current stock prices and after the election and the removal of uncertainty, you will see stocks surge. Not because of Obamma winning, but because uncertainty is removed.

the history of the stock market, going back to 1903, is that the market is most likely to fall in the year after the election of a Democratic President and Congress. As a sometimes player in the markets, I am well aware of this.

I am on the sidelines in cash. I won’t be betting again until after the election, and then only if some predictability returns to the markets.

Given what we know of Sen. Obama’s likely programs [not very much], if he wins, I doubt that I’ll be going long on very many issues until next summer at the earliest.

As an example: why would I want to bet long on health insurance companies when Sen. Obama says he’ll force them to cover pre-existing conditions? I know full well that doing so will force them to raise premiums for all policies and that small businesses and individual policies will have to go up the most. My take is that such a mandate will force net profits down and thus fundamental share value. Better to sit on the side lines, or even go short, until the actual program passes Congress.

Obama is leading because of poor decisions by this present administration that resulted in lack of oversight. People look to Obama as someone who will give more guidance and wisdom to the situation.

The damage has already been done; next week we will bring in someone who will heal the wounds. Choose the best candidate:

A. Graduated at the bottom of his class, and as one of the “Keating 5″, was culpable for the last financial meltdown.

B. Was president of the Harvard Law Review, and is now recognized by a majority of Americans and a vast majority of the rest of the world, as the best choice.

C. Neither, meaning you will not vote at all, or you will support someone else who has no possible chance of winning the election. If you choose this option, you forsake any right to complain about what has happenened in the past, and everything that will happen in the next 4 years.

I think Obama is up in the polls because stocks are down. I do not feel he is the right man for the job nor will he know what to do. Doesn’t have enough experience.

Personally, not happy with either canidate nor Congress.

By the way, how come everyone talks about how bad Bush is for the economy when in reality it is the Senate and the House that has to put bills together and pass them before they go to the President. In my opinion it is all of the people in the Senate & House that has put us here. Democrats and Republicans alike…not just the President!!!

The current financial crisis is the result of a lack of oversight combined with the lost ability to track all of these new, crazy ways to bundle loans and grant credit. While I blame the current administration in part for not requiring better tracking of these financial concepts, the administration is not responsible for creating them. I don’t think that the stock sell-off is the result of Obama leading the polls. The idea that because Democrats could control Congress and the White House that taxes will be increased is an old wives’ tale. If enough people believe it, it will come “true” just like the idea that if Republicans control both houses, rich people will end up paying less taxes. It changes for every administration and should be judged on its own merits.

Oh! C’mmon! Are you serious? Are you seriously asking whether the market crash we are painfully experiencing is a market reaction to a possible Obama victory?
Really? Seriously, really?

Looking back several decades at the economic downturn in the United States that began in the third quarter of 2007 and lasted for the better part of a decade, the causes seem predictable and inevitable. The United States had been consuming more than it produced for many years, running massive trade deficits. At the same time consumers were borrowing from international sources of capital to finance consumption , the United States Government was also running budget deficits, financing its expenditures largely from foreign investors and the retirement funds of the baby boom population – some 75 million Americans. Some of this over-consumption was funded through asset sales, especially after the initial decline in the dollar, as foreign investors thought they were getting bargains purchasing US assets.

The cracks in the system began showing up in earnest in 2007 with the great Subprime Mortgage Meltdown. This crisis in the subprime real estate market ultimately spread to the rest of the market and triggered an exodus of capital from the financial system as investors realized they had been taking on too much risk for the promised returns. Notwithstanding valiant attempts by the Federal Reserve to provide liquidity to the banking system, the risk re-pricing forced historic write-downs of assets on the books of the major banks, both commercial and investment, resulting in capital shortfalls at the major institutions. The first bank to experience a run was the 83-year old investment bank Bear Stearns, which was temporarily kept afloat through emergency loans from the Federal Reserve. This marked the first time such a loan was made since the Great Depression of the prior century. The resulting lack of financing into the economy drove investment to levels not seen in decades and unemployment soared. At the same time as the employment picture soured, many in the baby boom generation were retiring. Unfortunately the insolvency of the Federal Government resulting from tax cuts for the wealthiest Americans and deficit spending required massive cuts in health care and social security as well as large tax increases, further depressing the economy. A massive portion of the population retired into poverty.

In an attempt to fight both the re-pricing of assets and the lack of financing in the economy the Federal Reserve lowered interest rates dramatically, from 5.25% to 1%, at the same time inflation was running up. The interest rate targeted by the Federal Reserve at the time, the Federal Funds Rate, was negative in real terms for the second time in a decade. Unfortunately, these lower rates did not pass through to borrowers because the banks’ lack of capital prevented them from making loans regardless of how low their cost of funds was, and the fear of insolvency prevented banks from lending to one another which was how the system worked at the time. In fact, the monetary easing resulted in a further flight of capital as investors sold dollars to invest elsewhere where returns were better. The resulting fall of the dollar was also historic in nature as it hit all time lows against a basket of currencies week after week. This would have been a bright spot due to its impact on net exports, except that the decline in the US economy spread to the rest of the developed and developing nations reducing demand for exports.

Ultimately the Federal Government had to step in and bail out the financial system that had profited so handsomely for many years prior to the meltdown. The size of the bailout dwarfed the S&L bailout that was still visible in the rear view mirror, enraging much of the population. At the same time, those who had amassed fortunes during the boom years were able to acquire vast holdings of productive assets thereby widening the already large gap between the wealthy and the poor . Despite passing law after law and amending regulation after regulation in favor of the banking lobby for two decades, Congress professed shock at the actions taken by some of the major financial institutions during the ensuing hearings. The conflicts of interest of the rating agencies, the off-balance sheet accounting, the lax capital requirements, and several other issues resurfaced in the public view . Once the population at large learned that all of these issues had been brought to the attention of Congress years before, but ignored at the behest of the finance industry, there was a near revolt in the streets. This resulted in what we now refer to as the Great Political Restructuring.

Between the devaluation of the dollar and the massive infusion of funds to rescue the financial system inflation raged out of control for some time until the collapse progressed, after which deflation took hold as the world economy followed suit and demand for everything fell off globally. The lessons of this era remained strong and bank regulation was revised and strengthened. However, due to advances in technology and other systemic changes, the banking industry is now lobbying Parliament for additional powers such as combining their commercial and investment banking operations and allowing them to export interest rates from their home state to other states. They are also seeking reform to the bankruptcy laws and a declaration of Federal Preemption for protection from state regulators. Some argue that we should honor the lessons of the past and deny these powers to the banks, especially since the banks are ultimately backed by the taxpayers as lender of last resort. The neo-neo-conservatives, however, argue that the free markets will provide better competitive results for all consumers and the bankers, notwithstanding their incentives to take excessive risk, will adequately manage any potential risks to a systemic crisis. Paul Krugman, the sage economist now in his 98th year, declared such proposals outrageous and claimed they will lead the economy on a path to great divergence of wealth and the rebirth of the poverty population. Larry Kudlow, the underground talk show pundit whose age none can ascertain, pronounced this to be a great day for America, the likes of which he has not seen since the Great Political Restructuring. Time will tell which of these elder statesmen is still connected to the political economy and which is simply disconnected.

The market is down because it’s all a bubble. First the Tech Stock Bubble, then the Real Estate bubble, the Oil Bubble, now the General Stock Market Bubble. We have been witnessing the last bubble for while.

We have been borrowing money faster then we can spend it. Five trillion from the Reagan/Bush years, now another 5 trillion from Bush’s kid.

No matter who gets in, the new reality is 10 trillion in debt, headed much higher for a few years.

Also I don’t undestand the fear of a democrat, look at history and the market does better under a democrat. Don’t beleive it, look it up.

To the poster about the demcrats plan to take 401K money and put it into T-bills. Where on earth do you right wingers get thses ideas??? Do you just make it up, and figure if it’s on the internet it’s true????

You are absolutely correct! The article is correct in many ways but skips over lightly some of the more pertinent reasons the U.S. is in the position it is in today. It started when Jimmy Carter approved the Community Reinvestment Act, initiated by a Democratic Congress. The Republicans and the banking industry did not have the guts to fight off some of the provisions included, as they were afraid of being called racist. Most the people Congress wanted them to make home loans to were minorities. The act was in limbo until the Clinton years and his Atty General Janet Reno started putting the pressure on the banking industry to make housing loans to people who had no business buying a home. Bankers, again afraid of being called racist and instead of saying making these loans is bad business (I have been, as you know in the credit busines since 1964 and do have some knowledge of the difference between a good loan, marginal loan and don’t loan that individual any money because he either does not have the financial resources to repay it OR due to a past history of not paying back money borrowed) went along with the program. Plus the bankers said, Fanny Mae and Freddie Mac would buy them, which as we now know became a corrupt agency, which the U. S. Gov had to bail out. Now, having stated all of this, which I have breviated somewhat, Congress again, with the support of the President Bush saying he wanted more people to own homes, early in his first term, the house of cards got higher. Yes, Wall Street jumped in with both feet and we got derivitives, with NO controls on them and they only compounded the problem. As the article states the whole thing began to collapse. Plenty of blame here, both politicians of both parties, bankers and Wall Street.

There were a few voices in Congress that recognized the problem. Three years ago McCain and some others said there needs to be oversight of Fannie and Feddie Mac because there are some serious problems, but he was shouted down by both Republicans and Democrats. Barney Frank should be the poster child for sleezy politicians along with Chris Dodd, Jim Johnson, Jamie Gerlich and yes Obama. Frank was the #1 one recipient of funds given by Freddie & Fannie and Obama was #2. The records are factual in this case.

In addition Congress has been on a spending spree for the past several years. Yes, the Republicans are to blame along with the Democrats and I abhor the fact that Bush went along with Congress and signed all the spending bills. Congress got the money from people like me who made more money and paid more in taxes, but yes as a percentage of income my taxes went down. But the Government took in more money by the billions, in fact boat loads, due to the tax cuts, but didn’t cut spending they spent all the tax receipts and then some. Then, two years ago the Democrats took over Congress and said they would change the way things were done in Wash. and be transparent for the public. However, just the opposite has taken place and consequently they have made matters worse.

It appears we may be looking at not only a Democratic President but a Democratic Congress with a super majority in both houses and they want to RAISE TAXES in a declining economy. No where in the history of mankind has a nation been able to tax themselves into prosperity. Its basic economics and remember my major was Economics and basic economics hasn’t changed, ever. Aili, they want to raise the taxes on your mothers and my investments that we have made and built up over the years, back up to the capital gains rate of 38%, which we have to start withdrawing when I am 70 1/2 which means we will have a whole lot less to retire on. We have no time to make up for the market losses now. They also want to tax (this is a new tax and on top of the 11.25% the State of WA takes on every home sales price, not just the gain) the sale of everyone’s home at a rate of 24% on any gain you, me and everyone else over what we paid for it. What risk did the government take to earn this amount of money. Absolutely none. This money the government (as Obama has stated) is to use to give the money to the less fortunate, in other words income redistribution or giving my money to those who don’t pay taxes. That is socialism, pure and simple. Of course all of this may be a moot point if the market continues to go down and we lose so much that we have nothing to pass onto you and Dana. Mom and I had always hoped we would be able to pass on to the two of you a considerable sum of money, but right now it isn’t looking so good. I hope to hell I am wrong, wrong, wrong!!!!!!!

I think you mean to ask if Obama being ahead in the polls is influencing the stock market. Not if they are down *because* he is ahead in the polls. Obviously the world markets are down for a lot of reasons and we are pretty arrogant to think that the markets care THAT much for who we elect.

But on that modified question, I do have thoughts. First is that of more influence is the fact that we might have a dem in both white house and in control of congress. As Paul mentioned, pretty much everyone knows that things will go off the deep end because it always does when one party is in control.

My second thought is that I think we have the rare situation here that many people think things will actually be better for business if Obama wins. Not for any real reason other then the “other guys” are being blamed for screwing it all up. (They did of course, but they had lots of help from those other “other guys”. And We The People too.)

Me, I think that the bottom line is that both candidates have the wrong idea of how to fix it. They both want to give away more of what they can’t afford. Both want to cut taxes, both have piles of programs and stimulus and neither one has a way to pay for it. They want to give us Bread and Circuses when we need temperance, hard work and a lot of belt tightening.

Curiously, I’d noticed this in the spring and was joking that when Obama’s poll numbers looked good against Hillary Clinton, within a day or two the stock market took a dive (and vice versa)

The markets are for sure going down because of obama possibly winning. My husband comes from a well to do family in another country. We sure are glad obama will not be able to get his hands on our assets. We are not willing to help spread the wealth. We have no intention of retiring here. They would tax us to death during our retirement. I love this country, but if obama wins and brings in new tax lawys against the well off citizens, we are out of here!!!

I could not believe the irony in seeing this today. First off, Obama is not to blame for the problems we are having. As a Republican, I blame both sides for extreme back scratching since they both have been puppets to the same lobbyists.

Here is the ironic part. I am just a peon professional with a house hold income just under $200K (poverty in the SF Bay Area). Last night I was on a call with medium to large business owners that I met during a failed attempt to acquire a loan for a convenience store 5 years back (loans were plentiful for unqualified buyers of homes, but not entrepreneurs that can pay the loan back easily with their day job salary). These people own various businesses and when it became clear that a Democrat would control the White House with Democrats controlling Congress and the Senate, they started cutting FTEs. They have been investing heavily in software and IT and cutting people in HR, Finance, etc. that are more for regulatory reasons and can be automated. They have also been selling as much stock personally ahead of capital gains taxes. I can tell you that I sold off my stock at the top by pure luck (well I did kind of saw it coming).

In short, change is scary especially when everyone had agreed months ago we were heading in to a deep recession. Now a depression with the bail out.

The democrates plan to take all the 401k money out of the market and put it in t-bills is not helping

Neither. This presidential race has nothing to do with the markets volatility and downward trend.

The next President has a lot of work to do. He will have to intervene and regulate this unstable economy. It does not matter who it be, but it will be done, one way or another!

The loss of market confidence is tied to the lack of accountability in the criminal actions of some of the top players in Wall Street and in our elected officials in Washington. It has nothing to do with the Obama effect.
We the People are not stupid. Wall Street robbed us of our retirement, we want someone going to jail.

Voters will most likely come to regret for voting in Obama as president. Remember Bush? By voting in an inexperienced senator, charismatic as he may be, voters appear to be banking on a presidency where the costs of learning for Obama will be manageable. If history is any precedent, 9/11 was a costly lesson, and what followed is an even costlier exercise.

Stocks are down due to a massive credit meltdown that has escalated into the largest sell off in world economies since the great depression. Thanks to George W Bush, America is heading into a recession that is affecting everyone, everywhere else in the world. Barack Obama is hope and the face of change– he has a lot of hard work to do if he wins the presidency, and it will be a tough and challenging road ahead for all. Obama has been the most truthful in this election and with Joe Biden by his side I think they are the best chance America and the rest of the world has at stability in the global economy.
Obama/Biden 2008

easy- Obama is ahead because stocks are down.

how can you even consider any other way. i remember your past articles where either you said it, or an interviewed senior analyst said it— that wall street is not affected by political events. it goes to show how arbitrary any event in focus on wall street is or can be.

to be sure, markets are down for obvious and now in retrospect, empirical reasons…housing, credit, and a shared sense of global economic decline.

the up and coming election is simply an excuse wall street may be giving to focus on something other than all the crap going around now. whichever candidate wins, neither will be able to change housing, credit woes, and…

earnings— unless McCain or Obama work for or are Santa Claus themselves, consumers are going to be waking up with a bunch of coal under their christmas tree. the election is not going to change what is anticipated to be one of the worse shopping seasons in a long time. gobble gobble

Obama is ahead in the polls for many reasons, including the recent decline in the stock market.

The past eight years have proved that “trickle down” economics doesn’t work. The money poured in at the top to corporations and executives doesn’t trickle down, it flows offshore.

CEO’s don’t use the extra income from their tax breaks to invest in America. Instead, they use it to expand their operations overseas. As a result, the U.S. loses jobs while the CEO’s get even wealthier.

Obama will grow our economy from the bottom up by giving tax breaks to the middle class and by providing incentives to corporations to create jobs here in America.

An Obama presidency will restore the peace and prosperity that we enjoyed during the Clinton administration. We should all hope that Obama is elected.

Your crazy if you think investors are not concerned about Obama. You can’t even price enough into this market to predict the slide that will occur if he is elected. Wake up!

Stocks are down because the world economy is entering a recession, credit has been frozen, and major firms are deleveraging andunwinding equity positions.

Obama is winning because the current administration has bankrupted our country and his message of change resonates with voters at a time when the status quo is miserable.

If lower taxes were such a great thing for the economy, and we’ve had the largest tax cuts in history in 2001 and 2004, why isn’t the economy booming? Tax cuts creating jobs is just voodoo economics, Americans are brighter than that. Also, historically, since 1928, the market always does better with a Democrat as president. Want your stocks (401k) to go up, vote for Obama. It’s a no brainer! And according to the American Enterprise Institute the average Joe does much better under Obama’s tax plan.

Historically the stock market has done slightly better iwhen democrats are president, but I doubt if that is influencing the current market. I think many investors realize that the current crisis is much worse than it could have been because there has been too little regulation. Given this, I think the biggest effect that the presidential election has had on the market recently is simply that things are uncertain. Nevertheless, I doubt that any polls have had a major influence on stock prices.

of course, he would be the worst thing ever to the markets. He does not even understand anything in regard to the business world. All he know is how to help poor people.

Probably the latter: Obama is leading the polls because the economy is a little soft and the Street is a mess.

A little economic history: the last time this happened, it took 4 Democratic terms (Roosevelt) to recover from 1 Republican term (Hoover). Let’s see, Bush had two terms, and 4 x 2 is … it could take a long time to recover from the past 8 years.

The American people don’t fear a Democratic government; we’re waiting and ready for it. And, let the recovery begin. If it’s going to take a long time, we need to get started in January.

I think stocks are down because consumer sentiment is changing. People are starting to buckle down, pay off debt, and save their money. Investors have realized this and stocks are being revalued accordingly.

If Barack Obama is elected, tax changes won’t take place for months or even years. I highly doubt investors are thinking that far ahead, given that they can barely see beyond the current quarter’s financial results.

My bottom line thoughts? If anything, Obama is up in the polls because stocks are down, if middle America is using the stock market as its economic barometer. However, I think most everyday Americans are far more worried about their job security, energy security, and social safety nets than they are about the stock market right now.

Absolutely, the spector of an Obama presidency with a super majority of liberal Democrats in Congress is pulling the market down in anticipation of higher taxes and regulation.