Posts Tagged ‘stock market’

Obama Gives America One Of Worst Post-Presidential Market Plunges In History As Businesses And Investors Say Sayonara To Economic Growth, Jobs

November 8, 2012

Businesses and investors told America what they thought of their idiotic choice for president yesterday with the biggest market plunge in a year the day after Obama was reelected.

The Dow dropped 313 points, or 2.4% of its total value on the trading day immediately following the Obama reelection.

Interestingly, Obama has two of the five worst market plunges on the day after a presidential election, and you’ve got to go back to the 1930s and 1940s to see worse market disasters:

Other post-election plunges in the stock market
Posted: Nov 07, 2012 2:35 PM PST Updated: Nov 07, 2012 2:35 PM PST
By The Associated Press

The Dow Jones industrial average fell 2.4 percent, giving it its fifth worst one-day drop following a U.S. presidential election. The biggest, in 2008, came in the midst of the financial crisis on the day after President Barack Obama won his first term. Here are the worst five one-day post-election drops since 1900, according to Bespoke Investment Group:

Election Day: Nov. 4, 2008.

Winner: Barack Obama.

One-day loss in the Dow Jones industrial average: 5 percent.

Election Day: Nov. 8, 1932.

Winner: Franklin Delano Roosevelt.

One-day loss in the Dow Jones industrial average: 4.5 percent.

Election Day: Nov. 2, 1948

Winner: Harry Truman

One-day loss in the Dow Jones industrial average: 3.8 percent.

Election Day: Nov. 5. 1940

Winner: Franklin Delano Roosevelt.

One-day loss in the Dow Jones industrial average: 2.4 percent.

Election Day:

Winner: Barack Obama.

One-day loss in the Dow Jones industrial average: 2.4 percent.

Notice that all five of these turd presidents whom the market rejected were Democrats.  And notice that the only OTHER winner of two “Turd of the Year Awards for Market Disaster” was the guy who kept America in the Great Depression.  You would have thought that America would have learned from the LAST time we got Obama and the market collapsed the most in presidential election history.  Oh, well.  Why not just blame this time on Bush, too?

I don’t know.  Maybe my schadenfreude slip is showing, and maybe I just don’t give a flying damn what happens given that I know Obama will plunge America into the worst economic disaster in the country’s history and figure it might as well happen sooner rather than later.  That and the fact that, given that America voted to collapse in voting for Obama, we might as well get what we actually voted for.  I mean, we sure as hell didn’t get what we voted for the LAST time we voted for “Mister hope and change,” did we?  Rather, we got four years of blame and excuses, which doesn’t even kind of sound like hope and change.

If liberal ideologue MSNBC moron Chris Matthews can be glad Hurricane Sandy hit America so Obama could win, well, I suppose I can pretty much be happy for damn near any disaster and liberals can’t bitch without being hypocrites.  Mind you, that won’t stop them from bitching at me BECAUSE THEY ARE HYPOCRITES.

A lot of your more stupid Americans are still blaming Bush for the terrible economy while exonerating Obama, according to exit poll data.  Don’t worry if you think that trend can’t possibly continue: because those people will be just as stupid in four years when they’ll STILL be blaming Bush for the bad economy as they are now.  Apparently Bush is to stupid people what Bogeyman is to naive children.

The beast is coming after the economy completely collapses.  I really want to make sure everybody knows that.

In other news the deadline for America to fall off the fiscal cliff that Obama set up for us is January 1, 2013.

It gives me great comfort to know that I’ll be singing praises to the name of Jesus Christ in heaven before very much longer.  And it frankly bothers me very little that on that day liberals on earth will be simultaneously cursing the day they ever heard the name of Barack Hussein Obama.

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On The June/August Market ‘Correction’, Obama And QE2

August 5, 2011

There was all kinds of questions and all kinds of answers regarding why the market has been crashing since July 21:

Dow falls 512 in steepest decline since 2008 crisis

NEW YORK (AP) — Gripped by fear of another recession, the financial markets suffered their worst day Thursday since the crisis of 2008. The Dow Jones industrial average fell more than 500 points, its ninth-steepest decline ever.

The sell-off wiped out the Dow’s gains for 2011. It put the Dow and broader stock indexes into what investors call a correction — down 10 percent from the highs of this spring.

The day was reminiscent of the wild swings that defined the markets during the crisis three years ago. Gold prices briefly hit a record high, oil fell an extraordinary $5 a barrel, and frightened investors were so desperate to get into some government bonds that they were willing to accept almost no return on their money.

It was the most alarming day yet in the almost uninterrupted selling that has swept Wall Street for two weeks. Since July 21, the Dow has lost more than 1,300 points, or 10.5 percent of its value. It has closed lower nine of the 10 trading days since then.

For the day, the Dow closed down 512.76 points, at 11,383.68. It was the steepest point decline since Dec. 1, 2008.

The “10% decline” is the tipping point that defines a “market correction.”

But what is being “corrected”?  The term “correction” implies that something was wrong that needed to be corrected.

Most of what I heard yesterday had to do with the ongoing fiscal crisis in the European Union, with the P.I.I.G.S. – Portugal, Ireland, Italy, Greece and Spain –  just getting uglier and uglier.

Greece was bad enough.  But now Italy is going into the crapper, and Italy is just “too big to bail,” to play off the phrase “too big to fail” that “justified” so many of the recent unprecedented bailouts.

I don’t doubt that the deteriorating situation in Europe is part of the crisis that is causing the gigantic selloff in the United States that is imploding all of our market indexes.  And of course I could now get up on my soapbox and point out that, given that this failed socialist model is crashing down in Europe, WHY THE HELL IS OBAMA AND THE DEMOCRAT PARTY DOING THE SAME CRAP HERE?!?!?

And of course, that is still a valid question.

But I have a different theory as to what is going on.

I think this major market reversal is merely a delayed result of the completely artificial levels created by QE2.  And QE2, of course, was the result of our own Obama Federal Reserve machinations.

Take a look at this (and notice it was written in May prior to the end of QE2 in June):

* The QE2 Counter-Play:

The end of Quantitative Easing Two (QE2) will occur at the end of June 2011. This article is designed to provide an area for focused discussions about the design of counter-plays for a potential sharp reduction in equity valuations.

* Why would the end of QE2 cause a sharp reduction in equity valuation? In other words, how does QE2 work?

Quantitative easing is a monetary policy used by the Fed to stimulate the US economy. The Fed buys government bonds and other financial assets with new money that the Fed creates (out of thin air), thus increasing the money supply and reserves of the banking system. This action raises the prices of the financial assets bought, which lowers their yield.

As the Fed systematically purchases a substantial volume of long-term Treasury bonds and other financial assets (i.e., equities), large financial institutions (i.e., bondholders) shift their wealth into equities to achieve a higher return. In other words, the Fed’s actions reduce risk in the equities market which makes equities a more sensible investment than bonds. So, simply put, the Fed puts large quantities of money into the markets, inflating the price of equities. Money follows money, and up the market goes.

The resulting rise in equity prices increases household wealth, providing a boost to consumer spending. Figure One clearly demonstrates the effect of quantitative easing.

Figure One

click to enlarge

Of course, a few data points do not constitute absolute proof that quantitative easing is causal to a stock-market rise, or that stock-market increases cause increases in consumer spending.

However, the timing of the stock-market rise, and the lack of any other reason for a sharp rise in consumer spending, makes that chain of events look very plausible. Figure One shows us that shortly after QE1 was announced, the market free fall began to stabilize. After the QE1 program was expanded from 600b to 1.725 trillion, the market sharply reversed. When QE1 ended, the market once again reversed with about a 20% drop. That’s 200 S&P points (2,000 Dow points) over a two month time period.

QE2 was then suggested, and the market reversed. At the moment of decision, the market hesitated, then QE2 was announced, and once again, the market sharply increased. The time line of these events is perhaps more clearly demonstrated in Figure Two.

Figure Two

Note that as the Fed buys Treasures, the yield stabilizes at about 3.5%. Figure Three demonstrates a clear association between the Fed purchases and commodity prices.

Figure Three

* Consumer Spending and Increases in Share Prices:

Note – the source for this section is based on a published interview with Martin Feldstein, Professor at Harvard.

The magnitude of the relationship between the stock-market rise and increases in consumer spending also fit the data. Share ownership (including mutual funds) of American households totals approximately $17 trillion. So a 15% rise in share prices increased household wealth by about $2.5 trillion.

Relationship Between Wealth and Consumer Spending:
Historically, the association between wealth and consumer spending implies that each $100 of incremental wealth raises consumer spending by about four dollars, so $2.5 trillion of additional wealth would be expected to raise consumer spending by roughly $100 billion. That figure matches closely with a drop in household saving and the resulting increase in consumer spending.

Since US households’ after-tax income totals $11.4 trillion, an one-percentage-point fall in the saving rate means a decline of saving and a corresponding rise in consumer spending of $114 billion – very close to the rise in consumer spending implied by the increased wealth that resulted from the gain in share prices.

None of this appears to augur well for 2011. There is no reason to expect the stock market to keep rising at the rapid pace of 2010. Quantitative easing is scheduled to end in June 2011, and the Fed is not expected to continue its massive purchases of Treasury bonds after that.

Without increases in stock-market wealth, will the savings rate continue to decline and the pace of consumer spending continue to rise more rapidly than GDP?

Will the strong economic growth at the end of 2010 be enough to propel more spending by households and businesses in 2011, even though house prices continue to fall and the labor market remains weak? And does artificial support for the bond market and equities mean that we are looking at asset-price bubbles that may come to an end before the year is over?

* The Hedge Shack:

So what does the investor do? Based on what happened at the end of QE1, it appears we can anticipate a 15% to 20% drop in the overall market. Are their any market sectors that would provide safety?

I’ve discussed quantitative easing.  As an example, I said on May 9:

QE2 is the economic equivalent of sugar in nutrition. Will it provide quick energy? Sure it will. Will that quick energy come at the expense of future health? You bet it will.

Right now, as a result of the Obama Federal Reserve’s policy of increasing the monetary supply by buying debt from itself (literally creating money out of thin air), there is more economic activity. Right now, as a result of this policy, credit rates are lower. Fewer banks and corporations are going under because of the ready access to cheap money. Investors see the stability and invest.

We should all feed our children tons of sugar, so we can enjoy the short term bonanza of frenetic activity.

Unless you worry about all the cavities, the weight gains, the diabetes, and of course that huge depressing crash with all of those catastrophic health consequences that necessarily come later.

The first time we ended QE1, the stock market lost 16% of its value in two weeks. Which is to say it didn’t work the first time for the same reason it won’t work this second time. Or a necessary third time, etcetera.

Talking about this new Keynesian tactic of quantitative easing with a financial whiz is kind of like the opposite side of talking to a financial whiz about gold.  Gold is routinely pooh-poohed by financial whizzes because if people bought gold, they wouldn’t need all of the damned financial whizzes, now would they?

Now, let’s just say for the sake of argument that you were watching the Democratic National Convention in August of 2008 and came to the belief that the mainstream media coverage was so blatantly biased and dishonest that Barack Obama was going to win the election.  And you had a vision of the sheer smackdown that would happen in this “God damn America.”

So you made an appointment with your portfolio manager and told her you wanted to cash out all of your stock holdings so you could put your investment nest egg into silver and gold.

What do you expect your portfolio manager would say?  Do the words, “This is a big mistake.  Trust me, the stock market is not going to collapse.  The average gains of the stock market invariably outperform gold indices.  Blah blah blah.”  The bottom line is that if you pull your money out of the fund she manages, she’s not going to get any more of your money.

Well, the fool who did that would have bought all kinds of silver at about $13 an ounce and gold at about $825 an ounce.  And that fool would have more than doubled his money while everybody else lost their shirt, then got part of their shirt back if they played the game right, then lost their shirt again.

And, of course, if that fool happened to be watching CNBC yesterday, he would have listened and laughed as the same sort of experts pooh-poohed gold because it went up in value to an all-time high before taking something like a $30/ounce hit.  And the smart guys said, “See what happens when you put your money in gold and silver?”

And the fool was thinking, “Yeah.  I more than double my money and laugh like a drunk monkey while everybody else runs around screaming like a bunch of Chicken Littles.”

It’s pretty much the same sort of thing with quantitative easing.  Only it’s a lot more technical, and you’ve got to be a whole lot smarter and a whole lot more informed to make any money before the whole economy comes crashing down.  And in the age of quantitative easing, boy do you ever need your financial whiz kid to help you plot your course

QE1 and QE2 were abject disasters.  And I don’t doubt for a second that the “correction” that we saw yesterday – and from all accounts will see again today given the Asian market bloodbath – was in large part a delayed reaction to the end of the sugar high of QE2.  Particularly given that Fed Chairman Ben Bernanke said, “There will be no QE3 for the moment, but QE2 won’t come to an abrupt halt at the end of June either.”  Which is to say that nobody really knew when to start the selloff after the end of the last sugar high.

But what do I know (or the above fool, for that matter?)?

But here we are – all promises aside – at the door to QE3:

ROUBINI: QE3 Has Begun
Joe Weisenthal|Aug. 4, 2011, 7:05 AM

With markets tanking, and the economy weakening, buzz about the Fed doing QE3 has really heated up.

The FOMC meets next week, and the Jackson Hole conference (where QE2 was announce) happens soon thereafter.

But arguably, the next round of general easing has begun.

Yesterday at 3:00 AM the Swiss lowered interest rates to stem the rise of the Franc, and last night Japan intervened to make its currency weaker.

And then today, the ECB confirmed more bond buying, so however you slice it, the central banks are back into easing mode.

On Twitter, Nouriel Roubini declares that the latest currency interventions from Switzerland and Japan represent the start of QE3, ultimately ending in more Fed easing

Here’s a video that is just looking more and more likely to be history before the event:

Media Pitches Market Increase As Confidence In Obama; What About Market Drops?

December 1, 2008

For the last week I kept hearing stories like this one:

Stocks soar on word of Obama’s choice to lead Treasury
BY KEVIN G. HALL AND MARGARET TALEV
McClatchy News Service

WASHINGTON — New York Federal Reserve Bank President Timothy Geithner is expected to be President-elect Barack Obama’s choice to head the Treasury Department. Reports of his selection sent stocks soaring at the close of trading Friday.

A couple Associated Press headlines:

Obama urges bold action on economy; stock market soars

Stock Market Soars On Reports Geithner Will Head Treasury

Boy, that Barack Obama, he’s just … magnificent, isn’t he?  You can almost hear the reporters discussing as he walks by, “Should we prostrate ourselves before him, or would that not appear objective?”

There’s that obvious question that needs to be asked: if you say the market “soared” because of Obama’s appointments, shouldn’t you have to figure they tanked because people started second guessing those selfsame appointments when it drops nearly 700 points only a few days after “soaring”?

Not when you’re crazy in love with Barack Obama, you don’t.

Historically, the market almost ALWAYS goes up in the days immediately prior to Black Friday.  There were clearly reasons OTHER than, “Boy, those Obama picks sure are awesome!” to account for the market increase last week.

I found this funny: the market goes up, and Obama is over-the-top wonderful ruling and reigning from his just-invented “Office of the President-elect.”  The market totally tanks only FOUR business days after the “soaring” stories and the AP headline – “Dow plunges 679 to fall to lowest level in 5 years” conveniently omits any link to Obama.

It’s like rephrasing the sign to say, “The Buck Stops Here – Unless Of Course The News Is Bad.”

What I DID see when I clicked on the 679-point drop story was a nice big picture of Bush with the question, “How would you rate President Bush?”  And the obvious answer is, “Well, not real darn good when the stock market  tanks 700 friggin’ points!”

market-crashes_media-credits-bush

So you have the essence of the media strategy: market goes up: “Way to go, Obama!”  Market goes down: “That damn Bush!”  Expect to see every iteration of that under the sky for the next few years.

The neverending media narrative: Economy goes up; credit Democrats.  Economy goes down; blame Republicans.

Politico: Investors Ready For Dramatic Sell-Off If Democrats Win

October 24, 2008

Yesterday’s Politico story puts it this way:

Generally, financial analysts say the stock market likes Republicans more than Democrats. And while predicting market movements is as difficult as predicting the winner of the World Series in August, some experts say the market is already anticipating an Obama win on Nov. 4 and has at least partially accounted for it.

“Potentially, you could see a one or two-day rally on a McCain victory, and not much of a reaction if Obama wins, because that’s what’s expected at this point,” said Justin Fishkin, a partner at The Cypress Group, a financial services company in Washington, D.C. Fishkin, who earlier in his career was a hedge fund manager specializing in political, regulatory, and legislative event-driven investments, said the key issue on Wall Street minds is corporate taxation — which is why the market might prefer McCain and his promised rate cuts over Obama.

In other words, a significant part of the massive sell-offs we’ve already seen were inspired by the belief that Obama would win the White House and start screwing up the economy with socialism.

This adds to the fact that CEOs overwhelmingly (74%) fear that “an Obama presidency would be disasterous for the country,” that Obama would “have a negative impact on business and the economy,” and that “some of his programs would bankrupt the country within three years, if implemented.”  Oh, well, what do Chief Executive Officers know about business or the economy, anyway?

Politico isn’t the only major news source reporting on the fear of an Obma presidency by the people who understand money and finance.  MSN has an article titled, “Why Wall Street Fears Obama“:

Investors this summer have been placing their bets on an Obama presidency, and for the most part that hasn’t been good for the market.

Without giving him a chance to explain himself in detail on the campaign trail or at the Democratic National Convention, they are voting with their shares by tossing financial, health insurance, manufacturing and high-dividend stocks into the ash can, and are growing skeptical about energy companies as well.

It’s not that major institutional investors don’t like the man — far from it. He has many backers among the financial elite, including multibillionaires George Soros and Ron Burkle. And it’s not that there aren’t many other reasons for investors to sell stocks now, as the global economy tangles with the terrible twin beasts of bank deleveraging and inflation.

It’s just that Obama’s rhetoric on taxes and health care is scaring common wealthy people with large capital gains from investments made over the past decade, and a lot of them don’t want to wait around to see whether it’s just populist fluff that might be set aside once he takes office.

The real question for investors after an Obama win is the extent to which Democrats assume control of the Congress, and the more there are the less they like it:

Joe Lieber, a political analyst at the consulting firm Washington Analysis who scrutinizes elections for his clients at hedge, mutual and pension funds, said an electoral lurch that gave the Democrats 60 seats could prompt a dramatic sell-off on Wall Street.

“We’re getting a lot more questions about the Senate than the presidential [race],” Lieber said, “because there’s almost nobody on Wall Street right now who believes McCain’s going to win.” A filibuster-proof Democratic majority (three-fifths of the chamber, or 60 senators) would not be well received by Wall Street traders, he added. “A lot of investment professionals don’t necessarily want to give one party the keys to the entire city. Free markets like gridlock.”

Ah yes, the thrill of one party domination, with the in-the-tank media determined to tell the Titanic that everything is fine no matter how fast the country plows toward the giant iceberg.

An interesting question is to what extent conservatives and Republicans believe we should try to forestall the disaster we think will occur under the Union of Soviet Socialist AmeriKKKa (because that’s how Barack’s Marxist/anarchist/terrorist pal and his preacher for 23 years spelled ‘America,’ after all) or just stand back and let the meltdown commence.

Democrat’s Ideological Stand Against Domestic Oil Terrible for US Economy & Security

July 4, 2008

According to most sources, oil could soar to as much as $400 a barell (that’s over 2 3/4 TIMES its current price of $144 as of July 2) if Iran shuts down the Strait of Hormuz.

The problem is that Iran promised the world that it would do precisely that if Israel attempts to attack its nuclear facilities.

An impending Israeli attack is itself a result of the failure of liberalism.  The European Union – in refusing to implement ANY truly tough sanctions against Iran – is forcing Israel’s hand.  Liberals will decry “warlike” Israel, but will be those weak, gutless, spineless liberals who refused to stand up against Iran’s nuclear program in a meaningful way that are responsible – NOT Israel.  When (note: not if) Israel strikes Iran, it will be doing so as an act of sheer survival against a country which has for years promised to wipe Israel off the map as soon as it possessed the means to do so.

Genuinely tough UN sanctions, combined with a united international stand against Iran being allowed to even come close to developing nuclear weapons, would have very likely had a good chance of success.  But the liberal/socialist world never learns.  We are repeating the failures that led up to the Iraq invasion, during which time rampant UN corruption (the oil for food program) and corrupt countries (Russia and France) opposed any sanction that would have forced Iraq to truly declare its WMD capabilities.

Teddy Roosevelt said America should speak softly and carry a big stick.  Modern liberals argue that we should throw the stick away altogether and give holier-than-thou lectures.

The primary reason the United States assumed a strong foreign policy stance – and created a powerful military to back up its foreign policy – is because two world wars and millions of American deaths served to demonstrate the fact that enemy tyrants will make us pay dearly for being weak in the face of threats against us.  Yet American liberals look longingly at the demilitarized socialist states of Europe, and at their laissez faire attitude toward despicable and vicious regimes, and they want to pursue a similar  approach in the United States.  The fact remains, however, that it was the strength and resolve of American power that permitted the Europeans to be free to embrace their new attitudes – first from the Nazi conquest and then from Communist expansion.

But let us put this gargantuan failure of liberal foreign policy aside and instead focus on another issue which is more important to most Americans (although certainly not to Israelis facing a new Holocaust at Iranian hands): the shockingly high prices that will most assuredly ensue when Israel attacks Iran’s nuclear sites.

About half the world’s oil supply flows through the Strait of Hormuz.  It is about 25 miles wide, and provides Iran with a easy choke point to stop the oil flow.

A Jun. 11, 2008 Time Magazine story titled, “How Iran Has Bush Over a Barrel” puts the U.S.’s dilemma thusly:

If wasn’t crystal clear before it certainly should be by now: the Bush Administration can’t afford to attack Iran, even if it finds it necessary to do so for the sake of preventing the very real probability of World War III. With gas already at $4 a gallon and rising almost every day, Iran figuratively and literally has the United States over a barrel. As much as the Administration is tempted, it is not about to test Iran’s promise to “explode” the Middle East if it is attacked.

The Iranians haven’t been shy about making clear what’s at stake. If the U.S. or Israel so much as drops a bomb on one of its reactors or its military training camps, Iran will shut down Gulf oil exports by launching a barrage of Chinese Silkworm missiles on tankers in the Strait of Hormuz and Arab oil facilities. In the worst case scenario, seventeen million barrels of oil would come off world markets.

One oil speculator told me that oil would hit $200 a barrel within minutes. But Iran’s official news agency, Fars, puts it at $300 a barrel. I asked him if Iran is right, what does that mean?

“Four-dollar-a-gallon of gasoline only reflects $100 oil because the refiners’ margins are squeezed,” he said. “At $300, you have $12 a gallon of gasoline and riots in Newark, Los Angeles, Harlem, Oakland, Cleveland, Detroit, Dallas.”

But it didn’t have to be this way – even given gutless socialist Europe’s abject refusal to provide any real deterrant that would have made Iran think twice about continuing its nuclear ambitions.

Had Democrats allowed the United States to utilize its own massive oil resources, the United States would have been almost completely immune from this looming crisis.  For information on the Democrat’s culpability in refusing to take advantage of our own energy independence, read my article available here.

The United States is literally sitting on about 170 billion barrels of oil, according to the Geological Survey and Congressional Research Service.

One of our best [short-term] prospects is Alaska’s Arctic National Wildlife Refuge, which geologists say contains billions [the official estimate is 15.6 billion] of barrels of recoverable oil. If President Clinton hadn’t bowed to Wilderness Society demands and vetoed 1995 [Republican-sponsored and supported] legislation, we’d be producing a million barrels a day from ANWR right now. That’s equal to US imports from Saudi Arabia, at $50 billion annually.

Instead, we are currently paying over $4.00 for a gallon of gas, and we are staring into the terrifying prospect of having to pay $12 for that gallon in the near future.

One day, untold years into the future, archaeologists and anthropologists will come to realize that political liberalism invariably resulted in the suicide of nations and of Western civilization in the 20th and 21st centuries.  But tragically, that day of realization has not yet arrived.  And so the United States trudges along on the same path once taken by the Dodo bird.

The dodo bird will be less responsible for its downfall than the United States.  The dodo bird needed something for survival it didn’t have.  The United states, by contrast, refused to use what it actually had in its possession even when it needed it.

Even if the United States and the world manages to dodge the looming confrontation between Israel and Iran, the price of international oil will continue to go up, and it will continue to be subject to one crisis after another as it is produced in and passes through the world’s most chaos-prone nations.  Oil will become more and more scarce as China, India, and the developing world continue to gobble it up.  And the price of gasoline will contine to rise.

And the dramatic rise of the price of gasoline does not just affect our travel plans.  It is directly tied in with our national productivity and our economy.

In a AP story titled, “It’s official: The market is in bear territory: Stocks drop after oil hits new high, concerns that GM could run out of cash,” it was reported that:

NEW YORK – Wall Street resumed its sell-off Wednesday after oil hit a new record and a bearish analyst report renewed concerns that General Motors Corp. could run out of cash.

The stock market’s pullback, which accelerated in the final hours of the week’s last full trading session, left the Dow Jones industrial average officially in bear market territory, with the blue chips having fallen more than 20 percent from their October highs.

Oil surged to new records above $144 a barrel as the government reported a bigger-than-expected drop in U.S. supplies and as investors worried about tensions in the Middle East.

The July 1 DOW figures and analysis about those figures demonstrated how market performance was exactly proportional to the rise of the price of oil.  Oil is the grease that lubes our entire market structure.  More expensive oil makes virtually every product more expensive even as it cuts down on American’s individual purchasing power.

And the Demcorats have for decades now resisted any effort to produce a stable long-term source of domestic oil.  Even in the aftermath of the OPEC embargo that ravaged our economy in the 1970s, Democrats have refused to allow the United States to separate itself from OPEC and other foreign oil.

Hopefully, Americans will recognize the threat that Democrats are to our economy, our security, and our way of life this November.  If not, I can guarantee you that America will continue to suffer the consequences of rising fuel prices until it comes to its senses and elects enough Republicans to overturn the irrational Democrat-implemented drilling bans.

I only hope that we come to that moment of national lucidity before the next crisis strangles our weakening economy.  If we do not act to ensure a stable domestic energy supply in the very near future, we may well find ourselves quickly bleeding to death and desperately needing a transfusion that will not come in time to save us.