The View From 1776

If Obama Is So Bad, Why Are the Markets Up?

Read John Tamny’s analysis.

Perhaps most important is what the lack of major legislation is telling markets. They don’t so much want presidents of either party to fail, as gridlock in Washington is generally good for stocks. Last spring it was to some degree felt that Obama’s rhetorical gifts would allow him to push all manner of anti-growth legislation through Congress. As noted above, none so far has come to pass, which means we’re experiencing a relief rally over Obama’s legislative skills not living up to their earlier billing.

Markets also serve us best for pricing in the future, and with pundits suggesting that Republicans will achieve House and Senate gains in the 2010 elections, stocks are likely pricing in future policy moderation out of Washington thanks to more pushback from an emboldened GOP minority.

Posted by .(JavaScript must be enabled to view this email address) on 11/09 at 04:01 PM
  1. What a lot of crap speculation on Tamny's part.

    I can understand why The View is drawn to his opinion, because it is so void of reality. Imagine thinking that the markets movement upwards might be in response to a possible GOP win next year. What a lot of cobblers.
    Posted by .(JavaScript must be enabled to view this email address)  on  11/11  at  11:46 PM
  2. David,

    What on earth are "cobblers." Do you mean "shoe makers?" Or is this some bit of wonderful Canadian slang that you could share with us?

    Tamny is probably wrong in saying that the health reform bill will not pass, and he repeats the canard that a "Public Option" would increase costs. The non-partisan budget office has firmly stated that a Public Option would, in fact, tend to keep medical costs in check by giving the monopolistic insurance companies competition.

    While Tamny does not acknowledge it, it is not surprising that the market has recovered before the unemployment situation, since this has been the trend in past recessions.
    Posted by .(JavaScript must be enabled to view this email address)  on  11/12  at  12:01 AM
  3. It'd be much more enlightening to see a statistical break-down of who the investors are and how much each is controlling. How many are "fund managers"? How many are investing their own life's savings? How many are just gamblers? How many are insurance companies, government investment fund managers, pension fund managers? Etc.

    How far ahead does each category tend to look? 10 minutes? An hour? A month? A quarter? A year? A decade? A century?

    How many are simply following the herd while hoping to still miraculously be a bit ahead of the price moves?

    How many pay attention to the quality of the products of the firms in which they are investing? I certainly see no signs of that. There are frequent buying frenzies and sustained prices of equities in firms that produce garbage year after year, decade after decade, while firms with better products are largely ignored.

    How much of it is programmed trading?

    I'm uncertain because I do see, again and again, that stock markets are a leading indicator of recessions (but not so much a leading indicator of recovery). But is that because they trigger the correction? Is it just because they suddenly line up to all discover the unsustainability of the price levels at the same time? Is it because they all knew they were unsustainable but were hoping no one else would notice until they'd taken their gains? Or is it the genius of the markets in equities at work?
    Posted by .(JavaScript must be enabled to view this email address)  on  11/12  at  01:43 PM
  4. J Jay,

    This is what I found on "cobblers":

    Usage: The use of cobblers meaning ``nonsense'' is so mild that hardly anyone these days is likely to be offended by it. Most people are probably unaware of its rhyming-slang association with ``balls'', and therefore take it at its face value as a more colourful synonym for ``nonsense''. The classic formulation ``a load of (old) cobblers'' seems to be particularly popular in the tabloid press.

    It is mostly a British expression.
    Posted by .(JavaScript must be enabled to view this email address)  on  11/12  at  04:58 PM
  5. Thanks, David.

    You may have been entertained last night by seeing Sean Hannity apologizing on national TV for his own load of "old cobblers." It seems that Jon Stuart of the Daily Show caught Hannity in a big lie regarding the recent Michelle Bachman rally ("news conference"). He spliced tape from a protest of several months ago into tape of Bachman's rally to give the impression that there was a large crowd present.

    Hannity claimed, with his trademark smirk, that it was an "inadvertent" mistake (to distinguish it from his "normal" mistakes, I suppose.) In doing so, he was clearly adding a new lie to the old lie, since it was obvious that the splicing had been a completely deliberate falsification, and was not a "mistake" at all.
    Posted by .(JavaScript must be enabled to view this email address)  on  11/12  at  07:06 PM
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