Wall Street Weekly | 07/24/2009 2:15 pm
Obama Slump Boosts Market, by Liz Peek
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Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 7/20)
Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.
Has Obama’s slump in the polls boosted stock prices? The earth shook in Washington this past week as the administration’s push to enact health-care changes received a massive thumping from voters. Notwithstanding nonstop multiday hectoring from President Obama, polls indicate slipping support for his agenda, causing even his own party to slam on the brakes.To my mind, the sudden drop in enthusiasm for the president (his approval ratings are now below Bush’s at the same time in his presidency – a shocker, right?) means some tempering of his legislative free-for-all. For investors, the setbacks suggest a timeout from the endless stream of anti-business initiatives flowing from the Obama White House.
There has been serious (and in my view reasonable) alarm over the administration’s inclination to meddle with a wide swath of industry. The cap and trade bill, the financial regulatory overhaul, the upending of corporate tax law, the new consumer protection agency, the takeover of the autos – these are just some of the proposals the Obama team have spun out in recent months – creating uncertainty and anxiety while the country sank into a recession. Only a few days ago there was talk of a second stimulus bill, a prospect that scared the pants off inflation and deficit hawks. With Rasmussen reporting that only 25% of Americans believe that the stimulus bill passed earlier this year has been effective, I think we can assign that particular notion to the meat locker.
It is true that there are other reasons for the market’s delightful 38% rally in the Dow that we’ve seen since March and the astonishing 11% jump over the past eight days. Without a doubt the collapse in housing markets has stabilized, and job losses appear to be mitigating. Existing home sales were up 3.6% in June to an eight-month high, reducing inventories of unsold units to 8.9 months, the lowest so far this year. Meanwhile, the four-week moving average of unemployment claims dropped to 566,000 in the latest period, down from the peak of 659,000 in April. A decline of this magnitude has in the past confirmed the end of a recession.
Moreover, second-quarter profits exceeded expectations for about 75% of those companies reporting so far. Reports out have beaten both analysts’ forecasts and in many cases the firms’ own projections, leading to a boost in estimates for the balance of the year. Normally some 60% of companies report better-than-expected results, since corporations know that coming in shy of projections is the quickest route to the doghouse. These surprises, though, seem genuine. When companies presented their outlooks around the beginning of the year, it looked like the U.S. was heading into a depression. Visibility was poor, to say the least.
Though all these factors have boosted the stock market, there remains enormous uncertainty, much of it tied to government policy. It has been decades since the government of the United States has appeared so anti-business, and decades since the need to support business has been so vital. We need people to be put back to work and while job losses may be slowing, companies are still loathe to add to payrolls. Increases in second-quarter profits came primarily from cost-cutting, including layoffs. Consequently, productivity rose to an impressive 3.8%. Revenue growth was weak at best.
Only the government is hiring. Ultimately, government spending can only provide a modest and temporary boost to the nation’s economy since it is coupled to rising deficits. At some point, paying back those deficits requires higher incomes and tax revenues from the private sector.
Read more about: Approval Ratings, Barack Obama, Economy, George Bush, Health-Care Reform, Liz Peek, Money, News, Obama Administration, Paula Danziger, Recession, Stimulus Bill, U.S., Wall Street Weekly
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429 Reader Comments (so far…) Sign In or Register to comment
Andrea, MeeToo is darling. Thank you for saving her.
All I have to say about Mr. Obama, is that he is not acting presidential at all—-he is acting more like a jackass every day. Too bad, because Presidential is a sacred thing—-and we don’t have it right now in our beloved Country.
I wish President Obama would give the public what they voted for. Reform health care and include a public option. To hell with the Republicans they do not want health care reform. They don’t want the economy to improve or the war to end. They want President Obama to fail even it means destruction of the country. They are not true patriots at all. If they were they would work together for the good of the country.
Thank you so much, Wendy — no only for your service as a Marine — but also for your excellent post…….you are right on! =)
Obama is an "ILLEGAL OCCUPANT OF THE OFFICE OF PRESIDENT."
Wow I knew it was a matter of time before the "birthers" joined the conversation. Your right A.P Obama is so smart he has duped the CIA, FBI and military intelligence with a photo shopped birth certificate and fake social security card he bought in Mexico. Some Patriot you are to think our intelligence agencies would be so easily duped. Your comment was so funny I almost fell out of my chair laughing. Because he is not white you are questioning his birth status, did you ever question any of the other presidents of European descent about their birth certificates, I think not. Well since he was smart enough to pull that off he should be able to fix the economy in no time flat, for those of you wanting instant gratification.
I’m amazed at American citizens from every walk of life. Republicans, Democrats, Liberals, Conservatives, Christian, Jews, Muslims, you name it – EVERY American.
What is it that compels you to accept what is being done to this country? Make no mistake about – This Administration is concerned with ONE THING ONLY – the amassing of power and control over every facet of your lives. Congress – The Democrats are in alignment with the Administration and the Republicans are just a bunch of wussies who don’t have the cojones to stand up and say ENOUGH OF THIS CRAP. Both side of the aisle are interested in themselves and could give a rat’s ass about American citizens.
You think I’m joking? Open you damn eyes up and expand your brain to a level of critical thinking if you don’t see what I’m talking about. This is not about taking a political side. What the majority of you don’t understand is that it is not about Democrat against Republican, Liberal against Conservative, one religion against the other.
It’s about our current Administration and Congress pitting American citizens against each other. The Administration is rolling out on a daily basis, plans and programs that do one thing and one thing only – GROW GOVERNMENT AS BIG AS POSSIBLE! Your Liberty, your Life, your personal pursuit of Happiness is being taken away at the passing of every bill and program Congress has to offer. Do you get it yet? The American citizen’s opposition is the GOVERNMENT!
I don’t want to hear a thing about how this Administration wants to help Americans. That’s a pile of crap. When a government increases debt at this level, at this overwhelming pace, it only enslaves EVERY American citizen. Spare me the falsities of Keynesian economics, it has NEVER worked. There’s proof throughout history – Japan, England, FDR, and China. Please enlighten me – If deficit spending works, if government programs work, if there is no other solution but government intervention, then please tell that to the 1 billion of 1.3 billion Chinese that live at or below the level of poverty. I’m not here to promulgate the careers of Keynesian economists so they can keep their jobs. I’m here to promote and advance the freedom, power, and potential of every human being. Government will NEVER do that which I can do better for myself. EVER!!!
Stand up Americans! Parents – Get off your lazy asses and participate in your childrens lives! Ensure that children are taught well in schools, that they learn the very principles and foundation this great country was built on. Encourage them in the studies of science and math. Promote the mastery of English to them so that they can communicate clearly. Demand the teaching of critical thinking skills that have been erased from our educational institutions. You have an obligation to your children and you are failing them miserably because of your inherent laziness!
Citizens of America, take back the Greatest Country in the World from a Government who has failed you miserably for DECADES!! Look around you, walk into any store and see the overwhelming abundance displayed. There is enough for everyone! There always has been and there always will be. Look within yourselves closely – there is a never ending abundance of happiness, love, life within you. You’ve been given all that you need with out the help of any government. The Government didn’t create that abundance – YOU DID!!
We have the greatest healthcare in the world PERIOD! You let the Government tell you that our healthcare system is bad? BULL CRAP!! The Government who has systematically inserted itself into healthcare and is now getting ready to take over and control are the ones who have degraded the availability and affordability of this great system. It is up to each and everyone of you to tell our Government – STAY THE HELL OUT OF MY HEALTH. It’s time the Doctors and the Patients take control of their own lives and well being!
Citizens of this great country – Are you not tired of the OVER-regulation that is being foisted upon you by our Government? What does it take for you to understand that over-regulation and not under-regulation is the problem? You merely have to look at the hundreds of thousands of pages of government regulations, explanations, and addendums to see that each one of us are being regulated to death. Our Founding Fathers were prescient in establishing one of the primary foundations of this great country – LIMITED government.
Aren’t you tired of the Government, the Media, etc – creating fear out of every little thing in your life? When will you as an American stand up and realize that FEAR is False Evidence Appearing Real? Seriously think about it – fear is created from a hypothetical situation that hasn’t happened. When will you ever realize that you and you alone can rise above fear, lift yourself above your current state and create an abundance like none has ever seen? Here’s a hint – For thousands of years individuals have proven it. Wake up and LOOK!
Your Government is interested in one thing right now – controlling you as much as possible in every way possible. I will not stand idly by and let a government nor anyone control my unalienable rights. For the lazy, the definition of unalienable – incapable of being repudiated or transferred to another. Right now the Government is in the process of transferring your unalienable rights to them. The question is – How lazy and stupid are you going to be in order to let them do it?!!
A.P It doesn’t bother me if you like him or not, you said he was illegally in office and that’s just crap. By the way I’m not I’m Irish American, and I’m playing no race card, I’m calling it how I see it.
The big dog in my pic was rescued from the Shelter, dumb Elitest, wow an Elitest saved a little yappy dog from the shelter lets cheer them. I saved a big dog, cost more to feed, more to house and vet bills are larger, so you wanna keep comparing, oh yeah it was the Marines and other branches of the service that fought for your rights and why you are aloud free speach, freedom isn’t free, someone died for it, but not people like you that disrespect the office of President and say saving a little rodent dog is more important than serving your country. Now I see why such crap is typed by you. Keep on hating, while I sit back happy with the choices I’ve made. Your so funny.
It seems there a few women out there who fill this column without understand the facts. I believe you should all meet and have a "hate party". This was quoted and you know who you are, that when President Obama’s popularity goes down the stock market goes up, it is the price of the future profitable of the corporations quote in the stock market that has that say! Its relevant to President Obama’s popularity. The lack of intelligence and accountability are the fuel into growing this fire. Sen. John McCain was born in Panama, off the Panama Canal Zone and not a word has been mention about it.
People are against the health reform without knowing it’s a profit for the Insurances and drug companies. But no one questions what’s going on with the Federal Reserve. No one ever question Bush on this lack of responsible to this country and its people.
Ms. Orly Taitz whose determination to make a false issuse of President’s Obama birth certificate is herself an Israeli Citizen. She should go back to her own country and fix the chaos there. Lou Dobbs is ridiculous. I guess he sees the money Rush is making and wants it to. This is all about many issues especially GREED! and POWER!
A. Brandon says….. it doesnt do much good to focus on the past (what Bush left us with) to stay in the here and now, well that all sounds like a nice sunny day in the park, but guess what? The here and now is the RESULTS of yesterday years. It’s irresponsible of you to even make such a statement.
It’s OK for Bush to dump this mess on us, but it’s not OK for President Obama to fix it. Can’t go forward until you clean up this economy. The banks were given so much money and then turned around and gave millions to the employees as bonus. ONE person received 100 million. Why? This is economy suicide for these times. Then you wonder, Gee, what happen OH dear, really? They should all be sitting in the can with Bernie Madoff.