Scorecard
SCORECARD FOR DAY THIRTY-FOUR:
| HOPEY-CHANGEY: | 0 |
| REALITY: | 34 |
For those who do not believe the Obamination is having an effect on the market, I suggest you read this analysis by Charles Krauthammer (via NRO Corner):
The markets are responding remarkably, exquisitely, sensitively to political events, much more in than in the past.
And the reason is for the last year we have had huge intervention of the government in the markets and the banks, in autos. So it is not just a reaction to economic news, but to what’s happening in Washington.
As a result of that, we saw, for example, last year, that tremendous swing when the House rejected the first TARP, a drop of 700 points happening overnight.
What’s happening here is that you’ve got a negative reaction to the team. When you had Geithner rolling out the plan for TARP two, it deeply disappointed the markets because the promise had been it would be specific.
So, a, it introduced uncertainty, but, b, you had the impression of a new team that would take over, very smart people, a lot of experience, and you got a sense that they weren’t sure what to do after a month or two or three of deliberation.
And that’s what I think is spooking the markets. We may be in such unknown territory historically and economically, that no one knows. And the idea of nobody knowing at the helm, I think, is what is scaring the markets and dropping the market.
