Deeply down day on the Dow as post-election fiscal reality hits Wall Street

www.boston.com ^ | Nov 7 2012

[NoLibZone]

he Dow Jones Industrial Average fell sharply Wednesday following President Obama’s re-election, as investors absorbed the reality that the same political players in Washington, D.C., now must address the nation’s so-called fiscal cliff, which looms at year’s end.

“You’ve got pretty much the same recipe as before -- a Democratic president and House Republicans,’’ said Nigel Gault, chief US economist for IHS Global Insight in Lexington. “If Obama says, ‘I insist on there being a tax increase for high-income Americans,’ and you have Congress saying, ‘No tax increases,’ you hit the cliff.”

The Dow was down by about 280 points at 3 p.m., just over 2 percent, to under 13,000, after falling as much as 369 points earlier in the day. Financial and energy stocks were hit particularly hard.

Bernard R. Horn Jr., president and portfolio manager of Polaris Capital Management, a Boston investment firm, said that between the coming threat of higher taxes and budget cuts, as well as ongoing financial troubles in Europe, there was little in the near term to calm financial markets.

“We spent huge amounts of money and incalculable amounts of human capital” on the election, Horn said. “And after that whole process, we basically get that same gridlock government. And everybody’s hoping things will somehow change.”

[Jack Hydrazine]

Karl Denninger says “watch for market dislocations.”
http://www.youtube.com/watch?v=vyUSvy4LUZk

[depressed in 06]

Now that the election is over, can defense contractors issue layoff notices?

[dynachrome]

There will be no gridlock. At the last minute, after the stock market really tanks, the kenyan POS will executive decree a debt ceiling increase and a tax hike on the evil rich. Stock market goes up, the House desends into irrelevant status.

[St_Thomas_Aquinas]

-—There will be no gridlock. At the last minute, after the stock market really tanks, the kenyan POS will executive decree a debt ceiling increase and a tax hike on the evil rich. Stock market goes up, the House desends into irrelevant status.-—

I don’t see courage anywhere. Sarah was our last, best hope. And she punted.