Michael Maiello's picture

    About This Nov 7th Stock Crash...

    It's noon and the Dow is down over 300 points (about 2.4% in this age of big numbers) and so, if it hasn't started already, people are going to try to say that the markets are rejecting the public's choice of a second Obama term, and of a larger Democratic majority in the Senate, or both of those things.

    In late 2008, while markets were tanking, I was a guest on Kudlow where the host kept hammering me about how markets were reacting negatively to the impending Obama presidency.  Kudlow, a professional economist, made this argument repeatedly for weeks, with a straight face, even as the financial system collapsed.  Kudlow used to work for Bear Stearns, back when he was a hotshot forecaster.  He knows better.  But, he said it anyway because it made for good television and supports his political preferences.

    If you'd invested on Kudlow's argument that the markets hate Obama, you'd have missed out on a more than doubling of the Dow and the S&P 500, which both bottomed around the time Obama took office.  And, of course, if Kudlow had really believed that markets were tanking in anticipation of Obama, he should later have credited Obama with his first term bull market.

    So, just to clarify about today's action -- it might have something to do with fear of continued gridlock and the fiscal cliff, but I doubt it, as nobody expected the election results to solve those particular issues.

    More likely issues:

    • Greece faces a huge austerity vote amidst crippling protests in Athens.  If Greece's parliament can't pass a budget that the European Union will accept, the possibility of a Greek euro exit returns.
    • Economic growth is slowing in Germany, which has been the EU's growth engine through these lean times.
    • Michele Bachmann retained her house seat. (Just kidding).


    Any headlines you read that blame today's stock losses (which, for all we know, will be reversed tomorrow, or not) on the election can be dismissed as either lazy or partisan.



    WSJ not directly blaming Obama, sez

    Live: Markets Slide Sharply After Election

    U.S. stock markets are falling as investors turn from the election to worries about the fiscal cliff and the European debt situation.  21 min ago

    I imagine Fox News has diff, reasons tho....wink

    FoxNews.com lede story package is: How He Won... ...But Wall Street's Not Happy."

    As I expected.

    Well sure, and Sean Hannity warned 'em, most important election of their lifetime, socialist Obama would uncloak and take all their money away if he won, and don't come crying to him now when he does.

    White male futures have plunged to their lowest depths in the history of the S&P.

    There will be a period of correction.

    Fortunately I had the forethought to short myself before the election.

    HaHa! Good one Peracles.

    I posted on FB that the Dow was down 300 this morning, led by a slump in white male futures, and some other wag replied:

     Perhaps we can bundle the Angry White Male Futures® and sell then as a derivative to some unsuspecting investor or government agency. We can then short or go long on the next election, depending on your risk tolerance.


    I wouldn't read too much into what is happening in the stock market right now. Some of the big boys are pitching a hissy fit. They'll get over it.

    In the waning days of the campaign there were a bunch of Wall St. types who saw the writing on the wall and started shoving some money into the Dems coffers. They have conspired with the repubs to keep job growth low. They can't do it forever.

    Barring some big outside event, the country is poised to see huge job growth in the next few years.

    We were buying stocks today.

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