Hamilton, Madison, and Jay

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Wednesday, February 25, 2009

Stocks drop after Obama's non-SOTU address

Let me start by saying we didn't watch the speech last night. Why not, you ask? Don't we have an obligation to readers? Well, yes, we do, but we had better things to do last night than watch President Barry pontificate and lecture the nation. Now we did read the transcript of his speech, and despite what I said on Hugh's show last night, there wasn't nearly as much doom and gloom as I expected. It wasn't, however, Reaganesque. That prediction I made came true. We knew he could never fit in the Great One's shoes.

But Wall Street isn't reacting well to the speech. Already this morning it's dropped almost 100 points at the opening bell:

Stocks fell on Wednesday due to disappointment U.S. President Barack Obama shed little new light about how his administration would stabilize the economy in a major speech before Congress.

Long-standing worries about recession and the fate of the banking sector persisted, sending shares of financial services companies, big manufacturers and energy companies lower.

Bank of America (NYSE:
BAC - News) shares fell 9.3 percent to $4.29 following news that Merrill Lynch & Co lost $15.84 billion in the fourth quarter, about $533 million more than previously estimated by Bank of America, which bought the Wall Street bank.

Shares of Citigroup (NYSE:
C - News) fell more than 14 percent to $2.22 following reports that the bank may sell both its Japanese investment bank and brokerage as the embattled U.S. lender looks to raise cash from a sale of global assets.

"The market is starving for something tangible on which to hang its hat," said Andre Bakhos, president of Princeton Financial Group in New Brunswick, New Jersey. "There was little of anything tangible in Obama's speech to bring hope to the market today."

The Dow Jones industrial average (DJI:
^DJI - News) fell 90.64 points, or 1.23 percent, to 7,260.30. The Standard & Poor's 500 Index (^SPX - News) shed 9.41 points, or 1.22 percent, to 763.73. The Nasdaq Composite Index (Nasdaq:^IXIC - News) lost 16.26 points, or 1.13 percent, to 1,425.57.

Late on Tuesday Obama sought to reassure Americans the country would emerge stronger from the crisis but investors found little in his speech that could help the market sustain its attempted rebound on Tuesday from 12-year lows.

As I type this, the Dow is down a total of 147 points, and it looks like it's going to be another down and rocky day for stocks. Why is this happening? Simply put, he offered Wall Street investors nothing last night in that speech. Late in the speech there was some "we-don't-like-bankers" boilerplate BS, but that hardly qualifies for the drop in the market. He didn't instill confidence to the markets or investors.

I don't really know why the markets are tanking. I can't really put my finger on one specific thing. Well, there was this part of the speech last night:

But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.

You realize what this is, right? It's going to be a tax increase on anything that produces carbon. Those trucks that bring produce to your local grocery store, the trucks that bring your mall fashions to the mall stores, the trucks that deliver Coca-Cola to your local convenient store ... Their prices will go up, and that gets passed onto the consumer. While it may not be a "tax increase" in the general sense of the term, it will be a cost of living increase. He's basically saying that he's going to raise the cost of gas, diesel, and coal so that solar and wind LOOK cheaper. It's a shell game, and it's pathetic. And Congress sat there and applauded this crap.

As I close this post out, the Dow Jones is down 173 points. Wall Street wasn't impressed with President Barry's speech last night at all. In fact, it looks like they have no confidence in this rube running the nation at all.

Publius II

1 Comments:

Anonymous Joe Gringo said...

YOu mean Wall St. doesn't like creating jobs funded by tax payer $$$......running up our debt by TRILLIONS, increasing taxes, killing the entrepreneurial spirit that drives this country?

Barack Obama's plan is dangerous to every facet of what drives this country and he suffers from severe narcissism.

Thank God I have land in Mexico as a back up plan....check that.....beheadings and kidnappings are an almost everyday occurance......cancel that.

Thomas, we're in for some serious gut-checkin'......but I have faith, we're going to overcome this....keep up the fight.

February 25, 2009 at 11:35 AM  

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