AN OBAMA PANIC?: MARKETS FEAR HIS POLICIES - Mercedes-Benz Forum

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post #1 of 21 (permalink) Old 10-24-2008, 09:42 AM Thread Starter
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AN OBAMA PANIC?: MARKETS FEAR HIS POLICIES

By CHARLES GASPARINO

Barack Obama has re mained cool and confident amid the financial melt down, even as John McCain at times has been embarrassing, lurching from one proposal to the next. But while the polls are reflecting Obama's steady hand, the markets haven't. In fact, they're getting worse by the day as Obama's lead widens.

Most investors know the devil is in the details - and the details of Obama's economic plans are anything but reassuring.

Of course, the market turmoil is first a reflection of grim reality - the bursting of the housing bubble and the billions upon billions in writedowns and losses that have forced upon the hugely leveraged financial firms companies that had cranked big profits during the bubble years.

The resulting credit crunch is hitting Main Street harder than ever before. The country is headed for recession; the only question is: Just how low can the markets and economy go?

It could be a lot lower - it all depends on the policies of the next president.

And, as it looks increasingly likely that Obama will be that man, the markets are casting a vote of "no confidence."

To be fair, McCain hardly instills confidence among the Wall Streeters I speak to. Why has his campaign spent the last week focusing on Obama's friendship with former terrorist William Ayers - when it should be hitting Obama's blind loyalty to policies that bring together the worst elements of Herbert Hoover and Jimmy Carter?

Recently, Obama said he wants to expedite loans to small businesses, so he seems to have a clue that they produce much of the country's job growth. Yet his income-tax hike on upper brackets will hit vast numbers of small businesses - they'd face the highest rates they've seen in decades.

Overall, his plan includes some of the most lethal tax increases imaginable, including a jump in the capital-gains rate. He'd expand government spending massively, with everything from new public-works projects to increases in foreign aid to a surge in Afghanistan - plus hand out a token $500 welfare check that he calls a tax cut to everyone else.

This is clearly the wrong way to go in the wake of an economic meltdown - yet Obama, for all his talk of how willing he is to compromise, of how he'd bring people together, is sticking to his tax guns.

I know at least one top Wall Street executive, an Obama supporter from the start of his campaign, who has recently urged Obama to rethink his tax plan - and that was before last week's record losses on the Dow.

But if Obama is rethinking, he's not saying. As his running mate, Joe Biden tells us that it's patriotic to pay higher taxes, Obama remains committed to squeezing businesses even if the recession grows.

The closest evidence I could find of compromise from Obama on taxes came in a June interview with CNBC, when he said: "Some of those [tax hikes] you could possibly defer. But I think the basic principle of restoring fairness to our economy and encouraging bottom-up economic growth is important."

It's easy to understand why so many of my colleagues in the media have fallen head over heels for Obama. He's smart, ambitious and cool under pressure. But what is he really like under the surface?

Some reckon that a President Obama won't go through with his plans. They look at his (thin) record and see a wimp who's never taken a firm stand on much of anything, much less enacting tax hikes during the worst economic crisis since the Great Depression.

I look at Obama's record differently. From his days as a community activist, to his years in the Illinois Senate and now his brief time in the US Senate, he has shown little inclination to deviate from his party's tax-and-spend orthodoxy.

And if he governs like a liberal ideologue - with a belief that the government that works best is the one that's biggest and raises taxes the most - he won't even have to work hard to get his way. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid won't stop him - the Democratic majorities in Congress are only likely to grow.

And the markets know this - even if pundits (even many of the financial ones) refuse to face it.

No one can blame the faltering stock market solely on Obama's tax plans or McCain's own inanity on economic issues. But stock prices reflect current market conditions plus best guesses of what's coming down the road. And I keep hearing nervous traders and investors talk about "a lack of leadership from Washington."

Charles Gasparino is on-air editor at CNBC and author of the forthcoming book "The Sellout" about the current financial crisis.

AN OBAMA PANIC? - New York Post

Don't believe everything you think
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post #2 of 21 (permalink) Old 10-24-2008, 09:47 AM
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The Obama panic, if there is one, will happen on November 4th. I'm confident, as of now, everyone who says they'll vote for him, has full intentions of doing so. But, what they really do on Nov. 4th, is what counts.

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post #3 of 21 (permalink) Old 10-24-2008, 09:48 AM
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But...but... McCain is up in the polls! Obambi is never going to win, you told me!

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #4 of 21 (permalink) Old 10-24-2008, 10:22 AM Thread Starter
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The Obama panic, if there is one, will happen on November 4th. I'm confident, as of now, everyone who says they'll vote for him, has full intentions of doing so. But, what they really do on Nov. 4th, is what counts.
"...if there is one?" I think we are already seeing Obambi panic in the stock markets!

Don't believe everything you think
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post #5 of 21 (permalink) Old 10-24-2008, 10:23 AM
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The Obama panic, if there is one, will happen on November 4th. I'm confident, as of now, everyone who says they'll vote for him, has full intentions of doing so. But, what they really do on Nov. 4th, is what counts.
Are you calling it the Bradley Effect?
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post #6 of 21 (permalink) Old 10-24-2008, 10:34 AM
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I like the implication that the stock market is in the shit because of the Obama candidacy. WHAT a load of shit from you guys today. Don't let the dog catcher find you foaming at the mouths like this, they'll put you down.
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post #7 of 21 (permalink) Old 10-24-2008, 10:34 AM Thread Starter
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Are you calling it the Bradley Effect?
Let us hope...

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post #8 of 21 (permalink) Old 10-24-2008, 10:39 AM
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It'll be just the opposite, which you'd already know, if you watched anything other than polyps growing on your colon.
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post #9 of 21 (permalink) Old 10-24-2008, 10:48 AM
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I like the implication that the stock market is in the shit because of the Obama candidacy. WHAT a load of shit from you guys today. Don't let the dog catcher find you foaming at the mouths like this, they'll put you down.

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Let us hope...
........
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post #10 of 21 (permalink) Old 10-24-2008, 11:03 AM
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Street does not like uncertainty, either Obama or McCain wins, the hot sector of growth in Wall street, for next 4 years, will not be the same, it depends on the government's policy. Just remember, WHO CAN FIGHT THE FED ?
In the mean time, every sector in Street will drop below its fair value at least by 30%. This is the election effect, which is a short term trend. A word of advise: do not bet your house on anything.

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