No Confidence In Obama: Market Loses 9.7% Since Plan Announced

We can add another 131 points from today’s market plunge  (as of Noon Eastern time) to the 800 points and 9.7% of the market lost since Messiah Obama announced his “salvation” plan.

The day after Obama was elected, the market demonstrated its lack of confidence in his leadership by taking the biggest plunge any new president ever received:

NEW YORK, Nov 5 (Reuters) - Wall Street hardly delivered a
rousing welcome to President-elect Barack Obama on Wednesday,
dropping by the largest margin on record for a day following a U.S.
presidential contest.

It was a harbinger of things to come.  And the distrust of Obama has continued to undermine the economy.

And the trend continues to hurt the economy and the American people:

No Confidence: Dow Closes At Six-Year Low

Wall Street Drops 800 Points on Heels of Obama’s Plan to Save Economy

By DAVID MUIR

Feb. 19, 2009—

President Obama has said that turning the economy around will not be easy, or quick — and it appears Wall Street agrees. The Dow Jones Industrial Average lost nearly 90 points today and 800 points, or 9.7 percent, in the 10 days since the Obama administration announced major reforms to stimulate the economy, keep banks afloat and save millions of homeowners from foreclosure.

But since the banking reforms were unveiled Feb. 10, the Dow has reached a new bear market low — the lowest since Oct. 9, 2002.

The series of announcements began last week as Treasury Secretary Geithner announced major reform to the banking system, infusing up to $2 trillion to rescue the nation’s banks.

And, in Denver Tuesday, Obama signed the $787 billion stimulus plan into law, calling the legislation “the most sweeping economic recovery package in our history.”

“Today does not mark the end of our economic troubles,” Obama said at the Denver Museum of Nature and Science. “Nor does it constitute all of what we must do to turn our economy around. But it does mark the beginning of the end — the beginning of what we need to … set our economy on a firmer foundation, paving the way to long-term growth and prosperity.”

Pushing ahead, the president unveiled a $275 billion mortgage rescue plan Wednesday designed to help up to 9 million homeowners stay in their homes and at least 3 million to avoid foreclosure.

Economists say that investors’ message to the Obama administration was clear.

Investors are not convinced that these programs are going to work, that they’re going to be enough,” said Alan Skrainka, chief investment strategist at Edward Jones. “In the meantime, the news in the economy has been very bad and they just don’t see the light at the end of the tunnel.”

Many investors are particularly worried about the so-called banking “stress tests,” which is part of the Obama administration’s plans to dive into the banks’ books and see if they’re worthy of major infusions of taxpayer money.

Bad Assets on Books Concern Investors

Many economists believe investors are concerned about what the Treasury will find.

“Many of these banks are holding on to … assets that are very damaged,” said Andrew Caplin, professor of economics at New York University. “If they were to really value the assets on their books, they could be declared insolvent.”

Investors today traded on those fears. Bank of America closed at $3.93 a share, down from $42.67 last year. Citigroup proved dismal, closing at $2.51 — down from $25.32 and reaching its lowest value in its history. American Express closed at $12.87, down from $44.55, reaching its lowest close since 1971.

At a panel discussion on the state of the financial crisis in New York, Wall Street titans J.C. Flowers, Hank Greenberg and Peter Peterson were bluntly asked how the economy spiraled into this mess. Peterson pointed to Wall Street managers.

“The corporate managers who took ‘extraordinary risks’ by leveraging companies too highly” are to blame, said Peterson, the co-founder of private equity investment giant Blackstone Group.

And it appears that leveraging at the banks is now what has investors most worried.

One quote is particularly relevant: “Investors are not convinced that these programs are going to work, that they’re going to be enough.”

Liberals instinctively would interpret “that they’re going to be enough” as a call for MORE government spending and BIGGER government programs.  They’re wrong.

Let’s say I have a broken toe.  And the doctor operates.  But he operates on my entire body EXCEPT the toe.  Now, I had an awful lot of expensive major surgery, but none of it did me one whit of good.  Because none of it addressed the problem that needed to be resolved.  And that’s the way the Obama “stimulus” has been.

Out of the mouths of babes, the Drudge Report has this account of high school students analysis of Obama’s program:

Senior Syna Daudfar took some notes during the speech and was among the most vocally opposed to Obama’s words.

At one point, when he talked about the costs of his stimulus plan, senior Maaike Albach and Daudfar looked at each other and said, “uh-oh.”

“Overall I think it’s a good idea, but he’s not addressing the issues of the economic crisis,” said Daudfar, a John McCain supporter who added he leans more toward being a moderate conservative. “The spending bill he just passed is just progressing the Democratic agenda rather than addressing the economic issues in the country.”

Daudfar thinks Obama’s plan is backward and deals with the “less important stuff” first. “Bailing out businesses” and “providing better regulatory systems for giving out money to businesses” should have been first, he said.

“If businesses can’t afford to hire people, then people won’t be able to work and pay off their mortgages,” he said. “It’s kind of like putting money into20a funnel.” Albach, who is also a Republican, said Obama’s plan sounds good but questioned how Obama can want to rely on “people’s responsibility” when that is “what got us in this economic crisis in the first place.”

“This puts us more into debt,” said Albach, 18. “It’s a horrible situation we’re in.”

Other students said this:

“Even though I don’t support him, I think it’s cool he’s here,” said Miller, 18. “I just don’t believe all the things he’s telling us. His goal is just too big and broad.”

Miller wanted to hear more about the costs and guidelines the stimulus bill entails.

Senior Katelyn Meyer, who also leans more toward being a Republican, said Obama’s plan sounds good, “but it’s easier said than done.”

“I like the refinancing part, and I like the part about mortgages, but I’m afraid we’re going to put the money in but won’t s ee any effect,” said Meyer, 18, who still thought it was “cool” to say the president was at her school, even though she didn’t get to see him live.

Quite frankly, these kids hit the head on the nail far better than most of the pontificating talking heads on television.

Obama’s “stimulus” is largely a giant accumulation of liberal social spending programs that have little to do with the creation of jobs.  And it will cost FAR more than Democrats or most journalists have let on: not $787 billion, but $3.27 TRILLION.

Why didn’t Obama pursue a bill that dealt with the housing market or the financial market?  The short answer is he didn’t want to.  Rather, he fearmongered the country into supporting a bill that didn’t touch the actual issues affecting the economy as the urgent solution to the country’s needs.

Had he passed legislation dealing with the actual economic issues, there would have been very little public interest in “Porkulus.”

Too bad those children were wiser than many of their parents.

2 Responses to “No Confidence In Obama: Market Loses 9.7% Since Plan Announced”

  1. Matt Says:

    Where we at?

  2. Michael Eden Says:

    It’s a valid question.

    We’re at 10% unemployment, which is actually 17% unemployment – and with said unemployment set to go up even higher.

    We’re at the very real prospect of a double dip recession/depression.

    We’re at a point where Barack Obama’s federal deficit for just one year is now greater than all 8 of Bush’s deficits COMBINED. And Obama continues to demand that trillions more be spent on his healthcare agenda and his crap and trade agenda.

    I wrote an article on December 3, 2008 that I believe puts the current situation into perspective. It cites the events of the Great Depression, and then I make a prediction:

    The Great Depression was not triggered by a sudden, total collapse in the stock market. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929.[7] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the summer of 1930.

    In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the American economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.

    I then said this:

    Keep in mind that OUR stock market began to tank only a little over two months ago. And if the exact same thing were to happen now that it did to the United States in the 1930s, we actually would expect our market to pick up significantly in the coming months – and our economy to even appear to be rebounding – shortly before a downward slope into collapse that would occur one to three years later. It wasn’t until March 1933 – 3 years and 4 months after the Black Tuesday stock market crash – that the bottom really fell out of our economy.

    In other words, I as much as predicted that the stock market would rebound, didn’t I? DIDN’T I? But the problems facing this economy have not been touched. What caused the 2008 disaster? The housing mortgage meltdown. And what have we done about that? Absolutely nothing. Meanwhile, unemployment is going up, our deficit is skyrocketing, our dollar is devaluing, and our long-term is looking bleaker and bleaker.

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