Posted on 10/24/2008 8:34:50 PM PDT by Michael Eden
Yesterday's Politico story puts it this way:
Generally, financial analysts say the stock market likes Republicans more than Democrats. And while predicting market movements is as difficult as predicting the winner of the World Series in August, some experts say the market is already anticipating an Obama win on Nov. 4 and has at least partially accounted for it.
“Potentially, you could see a one or two-day rally on a McCain victory, and not much of a reaction if Obama wins, because that’s what’s expected at this point,” said Justin Fishkin, a partner at The Cypress Group, a financial services company in Washington, D.C. Fishkin, who earlier in his career was a hedge fund manager specializing in political, regulatory, and legislative event-driven investments, said the key issue on Wall Street minds is corporate taxation — which is why the market might prefer McCain and his promised rate cuts over Obama.
In other words, a significant part of the massive sell-offs we've already seen were inspired by the belief that Obama would win the White House and start screwing up the economy with socialism.
This adds to the fact that CEOs overwhelmingly (74%) fear that "an Obama presidency would be disasterous for the country," that Obama would "have a negative impact on business and the economy," and that "some of his programs would bankrupt the country within three years, if implemented." Oh, well, what do Chief Executive Officers know about business or the economy, anyway?
Politico isn't the only major news source reporting on the fear of an Obma presidency by the people who understand money and finance. MSN has an article titled, "Why Wall Street Fears Obama":
Investors this summer have been placing their bets on an Obama presidency, and for the most part that hasn't been good for the market.
Without giving him a chance to explain himself in detail on the campaign trail or at the Democratic National Convention, they are voting with their shares by tossing financial, health insurance, manufacturing and high-dividend stocks into the ash can, and are growing skeptical about energy companies as well.
It's not that major institutional investors don't like the man -- far from it. He has many backers among the financial elite, including multibillionaires George Soros and Ron Burkle. And it's not that there aren't many other reasons for investors to sell stocks now, as the global economy tangles with the terrible twin beasts of bank deleveraging and inflation.
It's just that Obama's rhetoric on taxes and health care is scaring common wealthy people with large capital gains from investments made over the past decade, and a lot of them don't want to wait around to see whether it's just populist fluff that might be set aside once he takes office.
The real question for investors after an Obama win is the extent to which Democrats assume control of the Congress, and the more there are the less they like it:
Joe Lieber, a political analyst at the consulting firm Washington Analysis who scrutinizes elections for his clients at hedge, mutual and pension funds, said an electoral lurch that gave the Democrats 60 seats could prompt a dramatic sell-off on Wall Street.
“We’re getting a lot more questions about the Senate than the presidential [race],” Lieber said, “because there’s almost nobody on Wall Street right now who believes McCain’s going to win.” A filibuster-proof Democratic majority (three-fifths of the chamber, or 60 senators) would not be well received by Wall Street traders, he added. “A lot of investment professionals don’t necessarily want to give one party the keys to the entire city. Free markets like gridlock.”
Ah yes, the thrill of one party domination, with the in-the-tank media determined to tell the Titanic that everything is fine no matter how fast the country plows toward the giant iceberg.
An interesting question is to what extent conservatives and Republicans believe we should try to forestall the disaster we think will occur under the Union of Soviet Socialist AmeriKKKa (because that's how Barack's Marxist/anarchist/terrorist pal and his preacher for 23 years spelled 'America,' after all) or just stand back and let the meltdown commence.
If the polls are right, we’re all going to be watching FDR on TV on November 5th.
>Generally, financial analysts say the stock market likes Republicans more than Democrats...<
if true,
then why does the financial community give so much money to
obamao?
I heard from two people today where the word at their companies is essentially - if Obama wins there will be layoffs at both companies. The owners will not waste any time. Everybody will be sitting on cash and cutting costs.
Anyone with a brain knows Obama will go after 401K like the Dems are already talking about (McCain should hammer that HARD), you will see ACORN/SEIU people replacing rank & file union people, taxes will go up, capital gains go up.
Businesses will totally freak out if Obama wins.
Noob: What is The American Sentinel and why is its web site disabled?
Fear and intimidation. HE has made them an offer that cannot be refused.
Already built in.
Markets hate uncertainty. I predict a rally after the election, no matter who wins.
unfortunately this is not true in the long run.
if you look at stock market performance over democrat and gop terms, it is up much higher during the former (even if you limit to post WWII). weird, but true.
of course, if obamanomics is enacted, we could head into another depression. those who do not understand history are condemned to repeat it.
A relief rally, yes. But markets / indices (and many of the stocks) are also "priced for Obama", and that will make a difference longer term, past the post-election relief rally.
Welcome to FR!
Part guilt, part "protection" (Dems, particularly within government, are organized very much like mafia and can hurt "the rich" they don't like - e.g. Spitzer, Clintons, Schumer, Waxman etc. etc.), part por favor (for favors) i.e. government has a lot of money to redistribute to "their" rich in return for political contributions.
Most rich on Forbes 400 list are Democrats, particularly in top ranks, starting with Warren Buffett. Socialism is not really bad for the "right kind" of rich, it helps eliminate competition for the right price and good behavior.
When asked why he robbed the banks, Willie Sutton said " Because that's where the money is". What bigger or better bank is there than the government's bank? Democrats prefer to effectively "own" the "bank", there is no need to rob what can be simply "redistributed".
Bad link.
Your link is bad here as well
http://hillary-n-obama-show.blogspot.com/2008/10/politico-investors-ready-for-dramatic.html
Bad link here as well.
http://dyn.politico.com/members/forums/thread.cfm?catid=1&subcatid=3&threadid=1562666
This link might work.
Who knows?
It's not entirely accurate, if one of several proper adjustments is made:
1. Shift market results 1 year past election, when first policies (like budget) have started to take place instead of former president's "legacy" market
2. Adjust for the market that starts to move down before election if Democrat has a reasonable or likely chance to win.
3. Include the mix of Congress and President of same or different parties. e.g. Carter with all Dem Congress was a disaster for markets which took some years of Reagan's policies to reflect in market price in his term in office, Clinton in first 2 years - 1 year of actual policy decision in 1994 culminated in "Gingrich Revolution" at which point market immediately shot up... with Clinton eventually taking the credit for economy (and getting the credit for the market chart).
One recent and short, but detailed and interesting study of electoral statistics and the market:
Divided Government Is Best for the Market, by Donald L. Luskin
Second time FDR had to go on TV and do that in 79 years per Joe Biden.
Treasury Secretary elect Franklin Delano Raines expounding the hair-of-the-dog plan for economic recovery?
Sorry. As someone using the “noob” word pointed out, I AM new to freerepublic. I looked to see if this article had appeared, and couldn’t find it. I frankly forgot about it.
American Sentinel was attacked by a hacker. It is back up now, but it goes to show you how tolerant and open-minded too many liberals are!
The link should be back up now.
Frantzie,
You’re right. Do you know that Democrats are already PLANNING to take away (socialize) 401Ks?
http://online.wsj.com/article/SB122477680834462659.html
Sounds like you do, but it’s always nice to have a link!
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