Ouch...

[OklahomaTuba]

Been saying the exact same damn thing for weeks now. Hope the dims figures this out ASAP.

WSJ: Obama's Budget and Policies Are Causing a Capital Strike and Driving the Market Down

http://s.wsj.net/public/resources/images/ED-AJ102_1obama_NS_20090302200015.gif

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.http://online.wsj.com/article/SB123604419092515347.html?mod=rss_opinion_main

[Boomer.....]

:pop:

[8timechamps]

The markets are in free-fall beacuse of the financial sector. Until someone comes up with an answer for the banks, it will contine.

[XingTheRubicon]

From election day to now, one couldn't make the Dow worse if they were trying to sabatoge it.

The state of the union, Dow, and housing market was terrible 4 months ago....and now 4 months later we're teetering toward Snake Plissken time.

[MrJimBeam]

The markets are in free-fall beacuse of the financial sector. Until someone comes up with an answer for the banks, it will contine.

That's just it, Obama and the tax dodgers aren't giving us any confidence they know what they're doing, much less have a plan to fix it.

[8timechamps]

As crazy as it may sound, I think nationalizing the biggest offending banks would help this situation in a big way.

[Ike]

That's just it, Obama and the tax dodgers aren't giving us any confidence they know what they're doing, much less have a plan to fix it.

There's no such thing as a "plan to fix it". There are some people that have plans to do one thing or another with the hope that that will help things, but nearly all of them concede that their plans are going to come with a considerable amount of pain. There's no easy fix. There's no course of action that results in suddenly everything being hunky dory. The problem facing the current administration is that they have to essentially decide who the biggest losers are going to be. It will basically boil down to Taxpayers vs. Bank shareholders. And even if the taxpayers "win" that debate and one or more banks are nationalized, Joe taxpayer is still going to be on the hook for a while in the form diminished job prospects. From what I can understand, just nationalizing one bank will essentially wipe out the rest of the banks as stockholders of other banks, fearing nationalization, start selling off like crazy....leading to less lending again. Or we can prop up the banks with crazy amounts of public funds, and just face the fact that we are going to be paying for this for a long time.

There's no magic bullet here.

[8timechamps]

There's no such thing as a "plan to fix it". There are some people that have plans to do one thing or another with the hope that that will help things, but nearly all of them concede that their plans are going to come with a considerable amount of pain. There's no easy fix. There's no course of action that results in suddenly everything being hunky dory. The problem facing the current administration is that they have to essentially decide who the biggest losers are going to be. It will basically boil down to Taxpayers vs. Bank shareholders. And even if the taxpayers "win" that debate and one or more banks are nationalized, Joe taxpayer is still going to be on the hook for a while in the form diminished job prospects. From what I can understand, just nationalizing one bank will essentially wipe out the rest of the banks as stockholders of other banks, fearing nationalization, start selling off like crazy....leading to less lending again. Or we can prop up the banks with crazy amounts of public funds, and just face the fact that we are going to be paying for this for a long time.

There's no magic bullet here.

Well put.

There is one thing about nationalizing the failing banks that most people don't take into account: there is a vast amount of perferred shares that are now held by our goverment. As scary as it may be for investors to face nationalization, staying the current course is even worse.

[fadada1]

yeah, because the dow-jones was rocketing up under the bush plan of "let's ignore the problems at home because iraq needs to be a christian democracy."



;)
:mad:

[Condescending Sooner]

yeah, because the dow-jones was rocketing up under the bush plan of "let's ignore the problems at home because iraq needs to be a christian democracy.



;)
:mad:


It set record highs under the Bush plan, genius.

[OklahomaTuba]

Double Ouch....

On the Today show this morning, Cramer called Pres. Obama's budget a "radical agenda," adding, "This is the greatest wealth destruction I've seen by a President."

http://www.mediabistro.com/tvnewser/cnbc/white_house_knocks_jim_cramer_for_calling_obama_bu dget_greatest_wealth_destruction_by_a_president_11 0203.asp

[Vaevictis]

That would be because this guy only just now started paying attention or he has a very short memory.

S&P500 had a 300 point drop in less than a month Sept to Oct. Obama's had maybe 150 in a month.

Or how about that that DJIA 3000 point drop over the same period?

[Okla-homey]

Three weeks before the Prez took office, the Dow Jones Industrial Average closed at 9034, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997.

Team Obama's wealth transfers-cum-stimulations have induced a market panic and they need to quit monkeying with the darn thing. It is becoming increasingly clear, they are making things worse.

I don't get what they don't understand about the notion that when you find yourself in a hole, you should stop digging! Sometimes, amidst crises, the best thing you can do is take a deep breath or two and wind your watch and avoid radical movements. That can give you time to figure out WTF is going on and whether or not anything can reasonably be done about it.

[Chuck Bao]

Three weeks before the Prez took office, the Dow Jones Industrial Average closed at 9034, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997.

Team Obama's wealth transfers-cum-stimulations have induced a market panic and they need to quit monkeying with the darn thing. It is becoming increasingly clear, they are making things worse.

I don't get what they don't understand about the notion that when you find yourself in a hole, you should stop digging! Sometimes, amidst crises, the best thing you can do is take a deep breath or two and wind your watch and avoid radical movements. That can give you time to figure out WTF is going on and whether or not anything can reasonably be done about it.

I don't know if you are intentially trying to be funny, but you are definitely adding a comic side to it. Your advice is to not do anything, just stand there? :rolleyes:

[Vaevictis]

Homey, you're attributing causality when the case for it is weak.

There's a lot of new information in the market about how we did 4Q08 that has been released recently, and how we're doing 1Q09 that is just abysmal.

I don't see how any of that can be linked to anything the administration did or did not do, and I would bet that it has a lot more to do with the way markets are moving than anything.

[JLEW1818]

I voted for McCain, but was not a huge fan of either candidate. Although, I believe 100% that McCain would have been a "safer" pick for America.

[fadada1]

It set record highs under the Bush plan, genius.

you're welcome.




-bill



p.s. don't **** it up.

[8timechamps]

I have a secret for you, nobody can screw up the market in four months.

Before you jump on me, I am not all into politics.

I'm just speakin from my own history.

The market isn't moved by what stocks the guy across the street is buying or selling. It's moved by big money.

If you don't think the Bernie Madoff fiasco played a role in this downturn, you're kidding yourself.

Big money may have an ear to the white house, but more attention is being paid to the root of this problem....the banks.

[soonerscuba]

I can only imagine how pissed Tuba is at Bush given that the DJIA lost 22% of it's value during his presidency.

[Chuck Bao]

I can only imagine how pissed Tuba is at Bush given that the DJIA lost 22% of it's value during his presidency.

I doubt it. The President Obama haters start about five threads a day about the exact same topic - the stock market and President Obama policies - and if the thread has any arguments against their view, they just start a new thread. Scratch that. They would start a new thread anyway.

[Frozen Sooner]

I have a secret for you, nobody can screw up the market in four months.

Before you jump on me, I am not all into politics.

I'm just speakin from my own history.

The market isn't moved by what stocks the guy across the street is buying or selling. It's moved by big money.

If you don't think the Bernie Madoff fiasco played a role in this downturn, you're kidding yourself.

Big money may have an ear to the white house, but more attention is being paid to the root of this problem....the banks.


I hate those ****ers. This is why you should do business with a credit union. :D

[Okla-homey]

I don't know if you are intentially trying to be funny, but you are definitely adding a comic side to it. Your advice is to not do anything, just stand there? :rolleyes:

Yes. stand there, until you understand the damn problem. Then, take careful, deliberate steps to fix the things you can and enact new regulations to prevent the problems you isolate.

I refuse to accept the notion that government can "fix" this mess. Government is woefully ill-suited to actively manage a free nation's economy. It shouldn't even try.

Whether you admit it or not my friend, this administration is taking advantage of the crisis, or using it as a canard, to make extraordinary things happen in terms of a raft of expensive new entitlement programs we cannot afford, all covered by the smoke and noise of "stimulating" the economy. And Wall Street gets it. Therein, lies the problem.

I'd simply like to know how much more economic cratering we have to endure before the sunshine-pumpers get real.

[8timechamps]

I hate those ****ers. This is why you should do business with a credit union. :D

At this point, I'm with ya!!!

[Ike]

On a different note, can someone explain to me why stock market indexes are used as some kind of proxy for how our economy is doing *right now*? It seems to me to be a very bad measure. As I understand things, a lot of the most recent downturn to <7000 on the dow had to do with Q4 reports coming out for some of the companies that are of major concern....like AIG. So these reports come out and the market reacts, but the reports are having to do with data thats already on average 60 days old, at least. So why, when the stock markets are still, according to the news reports, reacting to Q4 reports, are we laying the blame at the feet of a new president? It doesn't make much sense.

There are a whole lot of reasons that the market ebbs and flows. Policy in Washington is but one of those reasons.

[Chuck Bao]

Yes. stand there, until you understand the damn problem. Then, take careful, deliberate steps to fix the things you can and enact new regulations to prevent the problems you isolate.

I refuse to accept the notion that government can "fix" this mess. Government is woefully ill-suited to actively manage a free nation's economy

Whether you admit it or not my friend, this administration is taking advantage of the crisis, or using it as a canard, to make extraordinary things happen in terms of a raft of expensive new entitlement programs we cannot afford, all covered by the smoke and noise of "stimulating" the economy. And Wall Street gets it. Therein, lies the problem.

I'd simply like to know how much more economic cratering we have to endure before the sunshine-pumpers get real.

What are you talking about? It isn't like this is a national security for priviledged eyes only issue and the new administration is going to need the security clearance to get up to speed. I'm way over in Thailand and I can clearly see that something has to be done and done now. THERE IS NO WAIT AND SEE. The consquences are too dire to contemplate.

Of course, you have your opinion and I respect that. I think we should all be vocal about our opinions.

In my opinion, the best case is to try to muddle through it. The price tag will still be huge. The stress test, I'm reading as another ploy to restore confidence. Hopefully, I'm wrong. No, wait, hopefully I'm right.

I also read that you don't like a liberal agenda being applied during this crisis period. That is all fair and good, but mixing the two is a bit disingenuous. There is no reason to stop campaign promises and the will of the majority of the people, like it or not.

[jkjsooner]

From what I can understand, just nationalizing one bank will essentially wipe out the rest of the banks as stockholders of other banks, fearing nationalization, start selling off like crazy....leading to less lending again.

I like your post but there is a key difference between wiping out the shareholders of banks and wiping out the banks themselves. The latter will trigger a downgrading of securities and propogate throughout the economy. The former has much less direct impact on the economy.

[Vaevictis]

On a different note, can someone explain to me why stock market indexes are used as some kind of proxy for how our economy is doing *right now*? It seems to me to be a very bad measure.

It is a very bad measure for that. What it is a good measure for is expectation, which is a very different thing.

New information comes out, expectations change, and the market moves. That's basically it.

[jkjsooner]

I don't understand why Obama can't go back 6 months and fix AIG's Q4 problems that are causing the market to tank. Oh, you mean he would have to go back several years when the problem actually started? He's still the Chosen One. Go back in time and fix it!

Seriously, our economy has been collapsing for 2 years and someone this is Obama's fault? Are you serious?

[Jerk]

Seriously, our economy has been collapsing for 2 years and someone this is Obama's fault? Are you serious?

Hmm...That's when the Democrats took over congress. Coincidence?

[Chuck Bao]

On a different note, can someone explain to me why stock market indexes are used as some kind of proxy for how our economy is doing *right now*? It seems to me to be a very bad measure. As I understand things, a lot of the most recent downturn to <7000 on the dow had to do with Q4 reports coming out for some of the companies that are of major concern....like AIG. So these reports come out and the market reacts, but the reports are having to do with data thats already on average 60 days old, at least. So why, when the stock markets are still, according to the news reports, reacting to Q4 reports, are we laying the blame at the feet of a new president? It doesn't make much sense.

There are a whole lot of reasons that the market ebbs and flows. Policy in Washington is but one of those reasons.

It is because the stock market has historically been seen as the "smart” money. But, you have to understand that the market has changed radically over just the last few years, such as more widespread equity ownership, global participation, clout of unfettered hedge funds, new derivative products, etc.

For someone with a science mind, I imagine that you would appreciate these market axioms that play a part, at least in my opinion, in the weird and wonderful world of stock trading.

Axiom 1: The market likes to travel, but never to arrive. The so-called “smart” money has already been there and done that. They sell on good news announcements and buy on bad news announcements.

Axiom 2: Value is just a function of momentum. Stock market analysts are re-rating their fundamental value of stocks all the time based on their arbitrary risk/return perceptions. Never mind that they have been a very poor judge historically of actual risk or even return, just like the credit rating agencies. There are no givens and no fixed values and no universal accounting truths. There is only momentum.

Axiom 3: Herd right, herd left. I was always comforted by the idea that fundamentals win out at the end of the day. This is NOT true! Second choice - consensus wins out? No. The one who talks the longest and loudest wins? Yep. Since the market is looking six months ahead, they are never wrong. And, when they clearly are, there are plenty of backups to take their place on CNBC talking about why they base a short-term recommendation on some long-term historic trend. Think about it for a second. Historic trend? Wow, that’s new information!

Axiom 4: Ceteris Paribus. Just because I like saying Ceteris Paribus. With all other factors or things being the same, I recommend this stock. Like that is going to help.

[JLEW1818]

Hmm...That's when the Democrats took over congress. Coincidence?

True that

[texas bandman]

Hmm...That's when the Democrats took over congress. Coincidence?

And it's also the time when Bush found his veto pen and even though the Democrats had a majority, they could not override his veto. This essentially made it impossible to get legislation through that changed anything. Bush still reigned supreme.

[Okla-homey]

I also read that you don't like a liberal agenda being applied during this crisis period. That is all fair and good, but mixing the two is a bit disingenuous. There is no reason to stop campaign promises and the will of the majority of the people, like it or not.

I think its disingenuous to ram new entitlements into law while decrying the need to do so in order to stimulate the economy.

[Condescending Sooner]

you're welcome.




-bill



p.s. don't **** it up.

The highs were set 8 years after Bill. Don't let facts get in your way.

[Condescending Sooner]

And it's also the time when Bush found his veto pen and even though the Democrats had a majority, they could not override his veto. This essentially made it impossible to get legislation through that changed anything. Bush still reigned supreme.

And exactly what legislation did the dems try to pass to change anything? Was Barney Franks desperately trying to reign in the bad loans?

You seriously need to step away from the Kool-Aid.

[jkjsooner]

Hmm...That's when the Democrats took over congress. Coincidence?

Actually, yes, it is.

We have fundamental problems with our economy and these didn't just begin two years ago. Find me one well known economist who thinks our problems began two years ago. I guarantee you that you can't.

Go read articles in The Economist from 4 or 5 years ago. They wrote plenty of articles about the real estate bubble, the credit bubble, the irresponsible actions of Greenspan, etc.

We can debate which party (if either) is more to blame. It is nonsense to assign this to anyone who has only been in power a couple of years, and it's almost laughable to blame it on someone who has been in power for less than two months.

Guys, there's lots of blame to go around here. I reserve a lot of blame on the systematic destruction of the regulations of our financial industry that began under Reagan and was advanced considerably under Clinton. Everyone (including Clinton) fell into the trap that we're smarter than we were 80 years ago and we no longer needed to regulate our financial industry. Even Greenspan admits that he was terribly wrong about that. If you guys want to blame Clinton, Dodd, or Frank then fine. I'm right behind you. But pretending this problem started two years ago is intellectually dishonest.

I'm just astounded that after all we've learned about credit default swaps, subprime lending, mortgage backed securities, flawed financial models, securitized debt obligations, etc. that there are really people here that think the root of these problems began in the last couple of years. Wow!

I've been reading real estate bubble blogs almost daily for four or five years. Those guys predicted everything we're seeing now five years ago. Even those who were blind to it at least now see it in the rear view mirror.

[sitzpinkler]

I voted for McCain, but was not a huge fan of either candidate. Although, I believe 100% that McCain would have been a "safer" pick for America.

fascinating

[RUSH LIMBAUGH is my clone!]

yeah, because the dow-jones was rocketing up under the bush plan of "let's ignore the problems at home because iraq needs to be a christian democracy."

;)
:mad:AS IF the War in Iraq was responsible for politicians forcing mortgage lending to people who couldn't normally qualify...put down that Jackass kool-aid, fella.

[RUSH LIMBAUGH is my clone!]

Hmm...That's when the Democrats took over congress. Coincidence?Not looking good for the next couple of yrs, is it?

[jkjsooner]

AS IF the War in Iraq was responsible for politicians forcing mortgage lending to people who couldn't normally qualify...put down that Jackass kool-aid, fella.

Rush, I don't agree with those programs any more than you do but let's be serious here. The Countrywides of the world were beating down everyone's door to give out subprime loans. They were all convinced it was a no-lose situation because "home prices never fall" and there was always some mortgage backed security on Wall Street who would buy the loan.

This was a worldwide problem and our entire group of world leaders failed to regulate this new industry.

Your complaints about liberal politicies towards housing (Bush was quite happy to brag about minority ownership, BTW) are well founded IMO but only marginally relevant to our current economic situation.

[Curly Bill]

I doubt it. The President Obama haters start about five threads a day about the exact same topic - the stock market and President Obama policies - and if the thread has any arguments against their view, they just start a new thread. Scratch that. They would start a new thread anyway.

...and we all know the board donks never did this. :rolleyes:

[Chuck Bao]

...and we all know the board donks never did this. :rolleyes:

Seriously, I don't remember the SO ever having so many political threads before this last election year.

These are interesting times and I appreciate the fact that people want to comment on a lot of things and I enjoy reading the different viewpoints.

I think I'm only complaining about starting new threads each time when there is already a good thread to tack stuff onto. Never mind, I will hang up and listen now.

[Frozen Sooner]

I can see Homey's point to an extent, but I have a feeling that if the administration were just standing on the sidelines he'd be one of the first criticizing them for paralysis through analysis. Just a gut feeling there.

Watch the personal attacks in here, folks.

[swardboy]

No problem, Mr. Obama said yesterday that those "profits to earnings" ratios are getting real good and we should be buying....