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Democrats speak, bank stocks tumble
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The more the Democrats talk, the lower bank stocks and the market in general go down. It is a vote of no-confidence from investors.
Shares of bank stock plunged on Friday, February 20, 2009 despite assurance from the White House that United States banks, including Citigroup and Bank of America, would not be nationalized. Senator Christopher J. Dodd, did not help the situation when he remarked on Bloomberg Television that the administration might assume ownership of certain banks for a short time reinforcing what had already been said by former chairman of the Federal Reserve Alan Greenspan and Senator Lindsey Graham of South Carolina.
The non-appearance of Secretary of Treasury Tim Geithner added more unrest to investors worries that if the banks are nationalized, stockholders will be end up being the big losers if government takes over control. Senior officials in the Obama administration are reported to stopped talking to bankers and others, probably because every time they opened their mouths, banking stocks fell even further.
No matter what Obama or the Democrats say these day, investors are not reassured. Bank of America dropped to $3.79 and Citigroup closed at $1.95 a share. A lingering fear is that depositors may panic and start pulling their funds out of the banks because of all the uncertainty and fear of what nationalization may do to their money.
There seems to be a correlations between Obama and Democrats who speak and the dropping confidence in bank stocks and the stock market in general.
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