The Dow closed down today at it's lowest level in 6 years.
From the Washington Post.
Stocks fell today, and although it wasn't a dramatic one-day decline, it pushed the Dow Jones industrial average to its lowest close in more than six years.
The Dow lost about 1.2 percent, or nearly 90 points, to end the day at 7466, below its lowest level in the midst of the financial meltdown in November. Investors had hoped that the November low signified the bottom of the current slide. The last time the Dow closed lower was Oct. 9, 2002, when it finished at 7286.27, the last bear market low.
The Dow is down more than 6 percent this month and nearly 15 percent for the year.
As Michelle Malkin noted the other day, the market has dropped more than 2000 points since Election Day (it is now down a total of 2159). If John McCain had won the election, every single story from the MSM would be about how McCain's economic policies were not working and that we need to let the Democrats try it their way.
But Wall Street doesn't care about political affiliations, it calls it like it is. And the market seems to have given Obama a grade of "F" on the economy.
Despite frantic efforts in Washington -- both by the Obama administration and Congress -- Wall Street appears concerned about the effects of the recession and that a rebound has not yet begun. The passage of the $787 billion stimulus package last week and the administration's announcement of a new plan to deal with banks and the mortgage crisis that is the underpinning of the recession have not calmed traders' fears, and the continued weak job market is believed to be curbing consumer spending, an important key to economic growth. Also, the Federal Reserve yesterday issued a grim forecast for an "unusually gradual" recovery.
The stock market (and the Fed, for that matter) is a forward-looking entity, and it doesn't seem to like Obama's proposed fix. At what point do we move beyond the "I inherited all of this" line, and start recognizing that Obama and the Democrats may be causing the economy to worsen? For those who of us who have no doubt that the Pork Bill will have little or no stimulative effect, the market is simply reflecting that reality.
What is Obama's explanation? Where is the euphoria that The One's magic will turn this around? Where is the optimism that he is at least on the right track? It is because there is no reason to be optimistic. Nobody feels empowered by the stimulus to go out and start a new business, buy equipment, and hire new employees - their tax burdens are the same as they have been for years. Families don't have any extra money from tax cuts (rebate checks are not tax cuts) to go out and buy big ticket (or even small ticket) items.
A simple experiment would prove the point that Obama is doing exactly the wrong thing to jump start the economy. If the president announced tomorrow that he was cutting the corporate tax rate from 35% to 15%, and lowering each individual tax bracket by 5%, it is very likely the market would jump at least 2,000 points within a week. Tax cuts mean more jobs and more money to purchase goods and services, all of which serve as the primary engine of our economy. But Obama won't do that.
So, is time to start affixing blame where it belongs.
Wall Street seems to have done just that.
Comments
Wow, I seem to recall Bill Clinton being blamed for the country's ills years after Bush took office. A month into Obama's administration and it's all his fault and the bailout plan is a failure.
Time, time, time. Give it time. The Kentucky Derby takes longer than some are giving this plan. Wall Street didn't get to be where it is by one individual, right or left. Calm down. It'll be all right in the end. It always has.
Wall Street was very happy when reckless banks were rescued with my tax dollars...but did little to help home-owners stay in their homes. It bid up oil stocks as gas rose to $5 per gallon hurting all tax payers.
Only the investor class would think that Wall Street represents the economy. Wall Street only exists for companies to get funds for new business operations by selling off a piece of their business. If the market drops, companies can get funds more cheaply or buy back their own stock. The daily swings of the markets are just the risk that investors bear for access to these companies' future profits.
The REAL American economy is measured by jobs and buying power for the working class. In the last decade, US buying power has steadily dropped while that of many Asian economies have increased. Even with the global recession, countries like China and India are able to maintain four times the growth-rate of the US - because they have aggressively invested/spent taxes in roads, mobile, broadband, schools, healthcare and job retraining. Not coincidentally, their rapidly rising middle-class has lifted a whole new private sector..aka Reliance, Tata, WiPro, Samsung, Hyundai, Lenovo, Hutchison, Mitsubishi, NTT...while the democratic and republican parties in the US continue false debates about government spending vs. tax cuts. Wake-up, people. These are just economic policies, not a G*D* religion. They BOTH work at different times depending on the economic situation.
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