‘Obama Bear Market’ Punishes Investors as Dow Slumps

Discussion in 'Economy' started by toomuchtime_, Mar 6, 2009.

  1. toomuchtime_
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    toomuchtime_ Gold Member

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    President Barack Obama now has the distinction of presiding over his own bear market.

    The Dow Jones Industrial Average has fallen 20 percent since Inauguration Day, the fastest drop under a newly elected president in at least 90 years, according to data compiled by Bloomberg. The gauge has lost 53 percent from its October 2007 record of 14,164.53, slipping 4.1 percent to 6,594.44 yesterday.

    More than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The president is in danger of breaking a pattern in which the Dow rallied 9.8 percent on average in the 12 months after a Democrat captured the White House, according to data compiled by Bloomberg.

    “People thought there would be a brief Obama rally, and that hasn’t happened,” said Uri Landesman, who oversees about $2.5 billion at ING Groep NV’s asset management unit in New York. “It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”

    A bear market is defined as a decline of 20 percent or more.

    Buying shares “is a potentially good deal” for long-term investors, Obama said March 3. He compared daily fluctuations to a tracking poll in politics and said he wouldn’t adjust his policies just to meet market expectations.

    Congress last month enacted Obama’s $787 billion package of tax cuts and spending on roads, bridges and public buildings. His 2010 budget indicated the government’s financial rescue may need another $750 billion after an initial $700 billion.

    Getting Cheaper

    The Dow average has dropped 31 percent since Obama’s election. The 30-stock gauge trades at 8.04 times annual earnings, the cheapest since 1995 and down from 10.06 times on Inauguration Day.

    Citigroup Inc. led the plunge, losing 71 percent. The government proposed taking a 36 percent stake in the New York- based bank, cutting the percentage owned by shareholders. Detroit-based General Motors Corp. tumbled 53 percent after the largest U.S. automaker said it needs more government aid.

    “It’s the Obama bear market,” said Dan Veru, who helps oversee $2.8 billion at Palisade Capital Management in Fort Lee, New Jersey. “We don’t know what the rules are in so many different areas the government is touching.”

    The Dow average lost 0.3 percent to 6,577 as of 11:14 a.m. in New York today.

    Bloomberg.com: News
     
  2. mascale
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    mascale VIP Member

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    Obama has created enormous buying opportunities for the poor!

    Thread Starter must not be a Christian Liberal, praising the West Wing for helping bring the Wealth of America: To so many who can now invest!

    Praise Jeremiah Wright, Who called upon the Heavens to wreak that wrath upon America!

    Praise Jesus Christ, who told the rich young ruler to sell out, and give to the poor, so clearly they could buy in! Surely the Kennedys have done this personally! Surely Mrs. Biden has done this personally.

    See how Christian America is becoming. For Shame that the will of Jesus Christ be thought a subject, set in motion, to somehow denigrate: The One Now Annointed!

    "O Christ! O Christ!" Marvel at how easy it is to say it.

    "Crow, James Crow: Shaken, Not Stirred!
    (For even it is written, "How will ye know that the Spirit of Christ be in you, except that ye be reprobate(?), (Wholly Consumed With Sin!) The Obamas even sent their two little (high-priced girls), to one of the pricey schools. There they learn the wrong things, from people doing wrong things--in our nation!
     
    Last edited: Mar 6, 2009
  3. xsited1
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    xsited1 Agent P

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    Maybe if Obama would just spend another trillion dollars that we don't have, the market would rebound.
     
  4. wimpy77
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    wimpy77 Member

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    the short sellers are killimg this market.
     
  5. elvis
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    elvis BANNED Supporting Member

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    the Obama bear market. I'm loving it.:lol:
    so much for being the Messiah.
     
  6. editec
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    editec Mr. Forgot-it-All

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    Perhaps they have Napoleonic complexes?

    You know how those sellers of diminutive stature can be.
     
  7. raceright
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    raceright Member

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    Bar Stool Economics

    Suppose that every day, ten men go out for beer and the bill for all ten
    comes to $100. If they paid their bill the way we pay our taxes, it would go
    something like this:

    The first four men (the poorest) would pay nothing.
    The fifth would pay $1.
    The sixth would pay $3.
    The seventh would pay $7.
    The eighth would pay $12.
    The ninth would pay $18.
    The tenth man (the richest) would pay $59.

    So, that's w hat they decided to do. The ten men drank in the bar every day
    and seemed quite happy with the arrangement, until one day, the owner threw
    them a curve. He said, "Since you are all such good customers, I'm going to
    reduce the cost of your daily beer by $20. Drinks for the ten now cost just
    $80."

    The group still wanted to pay their bill the way we pay our taxes, so the
    first four men were unaffected. They would still drink for free. But what
    about the other six men -- the paying customers?
    How could they divide the $20 windfall so that everyone would get his "fair
    share"? They realized that $20 divided by six is $3.33.
    But if they subtracted that from everybody's share, then the fifth man and
    the sixth man would each end up being paid to drink his beer. So the bar
    owner suggested that it would be fair to reduce each man's bill by roughly
    the same amount, and he proceeded to work out the amounts each should pay!

    And so:

    The fifth man, like the first four, now paid nothing (100% savings).
    The sixth now paid $2 instead of $3 (33%savings).
    The seventh now pay $5 instead of $7 (28%savings).
    The eighth now paid $9 instead of $12 (25% savings).
    The ninth now paid $14 instead of $18 (22% savings).
    The tenth now paid $49 instead of $59 (16% savings).

    Each of the six was better off than before. And the first four continued to
    drink for free. But once outside the restaurant, the men began to compare
    their savings.

    "I only got a dollar out of the $20," declared the sixth man. He pointed to
    the tenth man, "but he got $10!"
    "Yeah, that's right,' exclaimed the fifth man. "I only saved a dollar, too.
    It's unfair that he got ten times more than I!"

    "That's true!!"shouted the seventh man. "Why should he get $10 back when I
    got only $2 ? The wealthy get all the breaks!"

    "Wait a minute," yelled the first four men in unison. "We didn't get
    anything at all. The system exploits the poor!"

    The nine men surrounded the tenth and beat him up.

    The next night the tenth man didn't show up for drinks, so the nine sat down
    and had beers without him. But when it came time to pay the bill, they
    discovered something important. They didn't have enough money between all of
    them for even half of the bill!
    And that, boys and girls, journalists and college professors, is how our tax
    system works. The people who pay the highest taxes get the most benefit from
    a tax reduction. Tax them too much, attack them for being wealthy, and they
    just may not show up any more. In fact, they might start drinking overseas
    where the atmosphere is somewhat friendlier.

    David R. Kamerschen, Ph.D.
    Professor of Economics, University of Georgia

    For those who understand, no explanation is needed.
    For those who do not understand, no explanation is possible.
     
  8. raceright
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    raceright Member

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    This has been happening ever since Obama and Hillary said they are going to tax the rich more watch and see history will repeat
     
  9. Ravi
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    Ravi Diamond Member

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    This is very misleading. On 1/20/09 the market closed at 7949. The biggest drop happened under Bush.
     
  10. Toro
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    Toro Diamond Member

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    The market has lost confidence in Obama, who, if not hostile to business, is seen as apathetic towards the market.

    That's sort of ironic in a way. Generally, it is the Austrians who say that government should let the market fall to its clearing price and not come to its rescue. This is what the market perceives Obama as doing.

    Of course, FDR was far more antagonistic towards business and the stock market did very well during his tenure.
     
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