U.S. stocks were poised to open higher Wednesday, as Wall Street cheered a number of Republican election wins ahead of the Federal Reserve's latest policy meeting decision.
And later in the story:
But positive market momentum appeared as investors were encouraged by several Republicans victories, including the governor races in both New Jersey and Virginia.
More broadly, the wins reflect a sharp rebuke by Americans of current policies in Washington, including massive spending programs that have helped grow the federal deficit.
"The election results suggest that perhaps the referendum of the Democratic Party, more specifically President Obama, is being challenged in the marketplace," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
So the stock market, which has been going mostly up for 8 months (apparently cheering uh...something), is set to go up some more this morning. And this is proof that investors are happy about the races for Governor in NJ and Virginia. Nevermind that a lot of investors, like Warren Buffet, George Soros, etc. are Democrats, apparently it is just a given that:
1. Investors are Republicans
2. Happy political results for Republicans = market goes up
Of course the market has been going up and down for the last month. I guess that's because, on some days, Republicans are feeling happy and confident and on other days they are feeling sad.
Obviously this is just as ridiculous as the "markets hate Obama" meme from last February which mysteriously faded away when the markets began moving upward. Amazingly this story is not posted as an editorial but asa front page story on CNN Money.
Anyway, even if you accept the premise, what does that say about the markets? "We like it when Democrats lose because then the gap between the rich and poor widens and we can buy another chateau."
Another, more optimistic estimate is that the Dow has gained about 1.64% a year, adjusted for inflation, from January 1924 through the present. However, even this optimistic estimate pales in comparison to historic bond yield rates (warning: page takes a while to load). All of this makes you wonder why, as a nation, we have invested in the stock market as a means toward retirement via 401ks. It also makes you wonder about today's news that forty-four million Americans could find their pensions wiped out by a decision at Pension Benefit Guaranty Corporation to shift from bond to stock investments last year.
Lately there's been a lot of talk about how Barack Obama is responsible for the Dow Jones average and the generally bearish market we're in. This is an oversimplification of the situation because it doesn't explain how he does it. Conservative critics just assume because the market is generally going down that it must be doing that just because Obama is President.
The evidence for how Obama does it is right before your eyes. The picture above is from an event yesterday. Notice that the President is wearing a red tie. That is the key to Obama's control of the markets. Yesterday the Dow went up about 280 points.
Now, this photo is from the stem cell order signing on Monday. Obama, as he often does, is wearing a blue tie. On Monday the markets went down. Obama's preference for blue ties is having an unfortunate effect on our economy. Still, he sometimes he goes for the red:
Here's Obama addressing Congress last month. Red tie, huge market rally that day!
So there you have it. It's not Obama's Presidency causing the bear market but his general preference for blue ties. I hope this clears things up.
In my last diary, "What Does Fiscal Responsibility Look Like?", I tried to provide an example of how one might begin laying out a sane discussion of economic policy. But, of course, in the world we live in today, that sort of thing virtually never happens. So here I want to do a 180, and take a snapshot look at an example of why that's the case, why our economic discourse is so totally crazy.
Going back to my old ways, you know I would say it's an example of hegemony--the existing institutions that shape everyday reality for people also shape the limits of what they can think or see in extraordinary circumstances as well. And so it is that the daily repetition of news sources like CNBC--however ludicrously inaccurate and inept they may be--have an outsized influence, just at the very moment when everything they stand for, every assumption they rely on has been cast in the utmost doubt.
Think of it like high school. The only place where the right answer matters is on the test-if there. In the hallways, the locker room, the football field, the cafeteria, everywhere else, the only answer that matters is what the cool kids say it is. And who's cool? Whoever has the power-one way or another. Being wrong doesn't even begin to register in the equation.
This is what's been behind the all-out effort to rewrite economic history (so that FDR caused the Great Depression), along with basic empirical facts (such as the fact that poor folks spend everything that comes to them, while rich folks don't, and thus stimulus spending that reaches the poor is far more efficacious than that which reaches the rich). Perhaps these inconvenient facts can't be changed, but they can be clouded, they can be rendered "debatable," simply because people who want to make these facts go away are not about to go away themselves.
It's not so much that they have access. It's more like they are access. This is the larger context behind CNBC and it's merry band of trolls, constantly yelling that the stock market is falling, and it's all Obama's fault! It matters not one whit that the stock market falling is far from the main show. GDP, unemployment, mortgage foreclosure rates, consumer confidence-all these are significantly more important than the Dow Jones Average. But they aren't up there on the ticker, changing moment by moment for all America to see. To watch as if it were an oracle source of omnipotent wisdom.
And, of course, it's not just CNBC. Because the entire media conglomerate-o-sphere is all so tightly wired together. Hence, on Tuesday's Hardball uber-troll Chris Matthews bloviates, counterposing hard facts-folks aren't buying the absurd fiction that Obama's to blame-with hot-headed fantasies....
The financial markets are again getting pummeled, both domestically and globally; the nearly $800 billion stimulus package signed with fanfare by President Obama has done little to alter the mood. In fact, if you read through financial websites and assorted blogs on politics, economics, or anything related to those, you will find a nearly endless sea of misery. The level of anger, pessimism, despair, and sheer hopelessness seems to reach new peaks every week, in inverse relation to the movement of global equity prices and the size of individual retirement accounts.
The last few weeks have seen our nation's economic and financial institutions in the most critical condition since the days in 1929 when the stock market crashed and banks failed sending the country into the Great Depression. This morning I came upon an online headline that read "Bush team, Congress negotiate $700 Billion Bailout". At first glance, the general public probably feels that this is welcome news. However, there are many troubling details about this plan by the lame duck Bush administration that the American people need to be aware of. Below are some of the details about the plan found online at http://apnews.myway.com/articl...
1. The rescue plan would give Washington broad authority to purchase bad mortgage-related assets from U.S. financial institutions for the next two years. It does not specify which institutions qualify or what, if anything, the government would get in return for the unprecedented infusion.
STATE BLOGS
