Wednesday, February 25, 2009

Is It Sabotage?

There's something about the new president that the markets don't like, because the Dow Jones Industrials have gone down rapidly since he took the reins. Obviously, Obama's rhetoric doesn't contribute much towards optimism, but that won't stop his supporters from blaming George W. Bush anyway.

There is this curious penchant on the part of Obama, however, to interject himself at the most bizarre of times, and I speculate that there is little to contradict the notion that he is doing it on purpose. Today was a good example.

Obama had his first speech before a joint session of Congress last night, a sort of faux-State of the Union address. How did the markets respond to his message? In the first few hours, the Dow Jones was down almost 200 points, and the lower the index gets, the higher the percentage that 200 points represents. Wall Street did not respond well to last night's speech.

Then Ben Bernanke, chairman of the Federal Reserve Board, spoke and reassured investors that there was no plan by the government to nationalize the banking industry. Throughout the day, the DJI fought its way back from a valley of 193 points down. In the last hour, it had struggled all the way back to even and even topped at 55 points up. Then Obama decided to add to last night's speech.

According to Peter Kenny, managing director at Knight Equity Markets in Jersey City, shortly after the president spoke, the market shed it's slight gain and plummeted once again to close at 80 points down. "As we came close to the bell we got the curveball: our president came on TV," he said.

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