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Stock Market Vigilantes Vs. Obama

March 3, 2009 RSS Feed Print

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Dynamite Dan Clifton, superanalyst with Strategas Research, sums up Wall Street's vote of no confidence on Obamanomics:

With the S&P 500 off close to -8.5 pct. since the budget was introduced, it is clear that equity investors remain skeptical of the government’s plan to lead us out of this financial crisis. Federal government spending is set to increase from 21 to 30 pct. of GDP and the bias is now towards a permanently higher level of spending. However, treasury yields have failed to send the dislocation signal. At this point, it is likely that equity investors are emerging as the new vigilantes, given that higher taxes are going to be needed to finance this permanent increase in spending.

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Oh no!, farthest left President ever and an ignorant mob of politicians (power hungry is redundant), this means of course the sky is falling. Many of us Independents knew the books were cooked under Bush and all his Kenny-boy like friends. So, the reckoning is gonna hurt, The CPAC crowd will do everything in their power to exemplify this with 'plenty of historical data' to imply let's go back to inflating the bubble. If Obama turns out to be correct, and he deserves his chance then the majority of Independents will not be voting Republican, this is what the Conservatives should be appealing to not those lining up to commit political suicide at the hands of a mesmerizing cult leader. As it appears there are two of them out there, a very slim number of Independents will control the next vote. Obviously the campaign has begun. It also seems to me that if the economy does get wores, as it is predicted to do the stronger the populist sentiment grows; this plays to the Democrats hand. Am I wrong or is the Republican strategy of deny the enemy, actually strengthing the Democrats position.

Rubblebeam of FL 1:16PM March 04, 2009

"A preview of the latest Wall Street Journal/NBC News poll: By a 48% to 20% margin, Americans believe the Democratic Party would do a better job of getting the U.S. out of recession than the Republican Party. When this same question was asked back in 1990, the public was essentially split."
Mr. Peth u can blame Obama til the cows come home (meanwhile ignoring earnings, collapsed credit, actual depression conditions in Eastern Europe, Japan etc.) but the broader public perceives things differently. And at a minimum has no interest in going down the path of "failure" as enunciated by the CPAC crowd in order to prove a point.
The forward PE is about 22-23 why should the market be higher, I can argue just as strongly that it is overvalued perhaps propped up by Obama hope.

concerned reader of pethmeth of IL 4:31PM March 03, 2009

Supposedly the political spectrum goes from left (Dems) through the center (indepedents) to the right (GOP). We've had "blue dog" Dems and "southern" Dems and "centrists" etc.
But now we have an entire Democratic party endorsing a MASSIVE tax and spend takeover. There is plenty of historical data that shows how damaging this is and the market is signalling in real time that this is economic poison. In their greed to shove their entire liberal agenda down our throats all at once they are committing political suicide.
We have the farthest left President ever leading an ignorant mob of power hungry politicians.

Pat D of IL 11:21AM March 03, 2009