Monday, March 2, 2009

The Markets in Free Fall

With the S&P barely hugging onto 700, the markets are clearly expecting a dismal future. It isn't just a year or two of bad earnings that is plaguing the market and is no longer just the financials. Everyone is running for the exits. Why? and Why Now?

It is strange that the regular press has not made the connection, but the financial press certainly has. It is not just Rick Santelli, although he makes his points well. It is all across Wall Street and all across the business community of the US. Everyone is scared to death of the new White House. While what Obama says is what we want to hear: "the highest ethical standards in history"..."tomorrow, Secretary Geithner will lay out a plan that you can rely on..."...."we need to get this deficit under control"...etc.

His words, when he is not being specific sound great: a new America, a new vision, post partisanship, high ethics, responsible budgets. These are things we all want. But, it is not clear that Obama wants any of them.

We are now six weeks into this Adminstration and thus far, it is the singularly most inept Adminstration in American history. President Obama entered the White House with the best wishes of everyone - Republicans and Democrats. But, apparently he came to this White House with a very limited understanding of economics and a deep seated antipathy to free markets. He has chosen to be the most partisan and dividing political figure of the modern scene. He listens to no one. The last 3000 points on the Dow are his. He earned them.

It is a growing concern that what is happening -- the collapse of our financial markets -- is not something that disturbs this new President. It is not at all clear that this President is bothered by the complete chaos that he and his Administration have created in the financial markets. Obama is probably not bothered by any of this, because he probably doesn't really consider Wall Street or the stock market very important. He has nothing but contempt for anyone who has ever dirtied his hands in the business world. Someone should pull this President aside and explain to him how jobs get created in the private sector. So far, he doesn't seem to have a clue (or maybe he just doesn't care).

The market will rally at some point just because it's tired of going down. But real economic progress and a vibrant stock market are getting less and less likely with this President. He makes Jimmy Carter look good.