Thursday, January 28, 2010

A Weakened Wall Street


Yeah, I feel real sorry for the billionaire banksters and their political enablers!


"Political tremors spotlight vulnerability on Wall Street; Investors rattled by unease in D.C." by Bernard Condon and Tim Paradis, Associated Press | January 25, 2010

NEW YORK — It was the fat cats’ fault before. But now it’s becoming President Obama’s.

With the unemployment rate stubbornly high, people were already shifting blame for their economic woes to President Obama one year into his presidency. Last week, investors joined them.

For 10 months, the stock market climbed at breathtaking speed. But the Dow Jones industrial average suffered its worst week since dropping to a 12-year low in early March. It fell 552 points Wednesday through Friday, including 216 on Friday.

One big reason investors scrambled to sell: Fear over a wave of populism that swept a Republican to an upset victory in the Massachusetts US Senate race on Tuesday. When Obama responded on Thursday with a broadside against big banks, the market plunged. On Friday, investors feared mounting opposition in the Senate could derail Federal Reserve chairman Ben Bernanke’s reappointment. Disappointing corporate earnings and concern that China will slow its economy added to the jitters.

The question now: If the bad news continues, will Obama, who is trying to win votes in the fall elections with his populist attacks, end up losing them instead? Can Obama win over Main Street by vilifying Wall Street if people fear opening their 401(k) statements again?

‘‘The longer we’re in [power], the more it becomes our problem,’’ said Tad Devine, a Democratic media consultant and former senior adviser in Senator John Kerry’s 2004 campaign for president. ‘‘This is a pivot point in the presidency when he needs to reassure voters that their future is secure.’’


I mean, that would look PRETTY OBVIOUS right now, wouldn't it?

And that’s especially true for voters who have a stake in the stock market....

Not this one.

Even before the events of the past week, the stock market was jittery. Investors had driven shares up at their fastest pace in decades, and analysts said many were looking for an excuse to sell.


Last Tuesday after the Martin Luther King Jr. holiday, the indexes hit 18-month highs in anticipation of Republican Scott Brown’s likely victory in the race to replace Senator Edward Kennedy’s seat in Massachusetts. Health insurance and pharmaceutical companies led the gains because a Brown victory endangers the massive health care bill favored by Obama and the Democratic majorities in Congress. But stocks began falling fast on Wednesday when China announced plans to slow its economy.

They fell again the next day after Obama’s speech calling for limits on the size of banks and their risk taking. The coup de grĂ¢ce for the market came Friday. In a nod to voter anger at Wall Street, a few Democrats said they wouldn’t vote to reappoint Bernanke, whose term ends Jan. 31. But many investors have faith that Bernanke has the tools, the know-how, and the political backbone to reel in the unprecedented amount of money pumped into the economy during the financial crisis and avoid a crushing round of inflation. Bernanke still has Obama’s support.

The Senate is expected to vote on giving him a second term by the end of the week.


Also see:
Backing Up Ben Bernanke