Political Lipskip

The Stock Market and Obama

If you believed in government conspiracies you might believe that the Democrats want the stock market, investments and small businesses to fail. That way they could be the savior and take care of everyone. I don’t believe anyone in Washington is smart enough to cobble together a conspiracy but they sure seem to want big government like we’ve never seen before.

Remember Bush? He wasn’t much of a fiscal conservative. He and his cronies put us into a massive deficit and added to our debt like never before. I don’t think anyone was too pleased. Democrats and Republicans alike bitched and moaned about Bush’s spending for eight years.

So what do the Democrats do? Instead of solving the problem of government waste and too much spending, they spend three times as much. As Jim Rogers said on CNBC today:

“The idea that you have too much debt, too much borrowing and too much consumption and you’re going to solve that problem with more debt, more consumption and more borrowing? These people are nuts.”

As it is Obama’s plans are not wildly popular on Wall Street. A lot of investing is perception, confidence and certainty. Wall Street can make do with whatever is thrown at them from the government as long as they know what the plan is. In free markets there is opportunity to make money in all sorts of ways, with and without the help of government policy. As long as Wall Street knows what is going on there will be ways to make money.

But the market is telling you that it doesn’t know what Obama is doing. Once Obama was elected the market had hope that he was going to stimulate the economy. The early year rally has now given way to a 20% decline since he came into office. He is crushing wealth though his budget proposal. And it seems that he and his cronies are enjoying it. He may think he is punishing the Bush people, but dammit, he is punishing everyone that has skin in the game through an IRA, 401k or SEP. Maybe the conspiracy is to destroy all that wealth so we become even more reliant on the government.

Jim Cramer on Mad Money last night was trying to make sense of it all. Some of his explanations:

… but until the Obama administration starts listening… until they start paying attention to what you are watching, to the stock market… until they realize that their agenda is destroying the life savings of millions of American… then all I can give you is caution…I just want some sign that Obama realizes the market is totally falling apart… and that his agenda has a big part in that happening…

…I don’t know about you but I felt it…It is the feeling of capitalism vanishing… businesses capsizing under their own weight… thanks to administration that doesn’t seem to know, or maybe doesn’t care…it won’t stop until we get recognition from the President that the agenda has caused some horrible reaction… would it be so hard for Obama to come out and say here are my goals… I want to do this cap and trade thing, I want to make it so we are being prudent about health care, I want to balance that budget, I want to raise taxes for the wealthy, but I also recognize that the moment is so perilous that maybe we ought to put the whole agenda on hold…

Just some kind of recognition from Obama or from his invisible Secretary of Treasury, Tim Geithner… that given the enormous destruction of wealth that is happening in this country… much of it now thanks to Obama’s agenda… that maybe it is time to hold it back a little…

… you can’t trash the market, along with housing, without causing a tremendous surge in poverty… maybe social unrest… and Obama is doing both with his budget of his… the stock market isn’t everything… but it does matter… and I am seeing no signs from the administration that they even acknowledge that it does.

… with what seems like a policy of government mandated wealth destruction… on top of the worst economic environment since the Great Depression…

Jim Rogers says the best thing to do is simply go buy some land and start farming again. Apparently he has put his money where his mouth is and has begun buying up farm land and started putting them back to work.