On March 6, 2009, the right wing walked into their own trap by laying the current bear market at the feet of the President;
‘Obama Bear Market’ Punishes Investors as Dow Slumps
Now they will live to regret that decision.
Even though I have been previously part of the "vast right wing," I have been very hesitant to attribute stock market performance to the actions of a President. It is bad politics and a sure way to lose money.
To blame stock market performance on a single political party so far away from an election is sheer stupidity and political suicide.
Why? Your answer is below the fold.
If you are going to lay responsibility for the stock markets decline on the President today, then you also have to give credit for stock market gains to that same President tomorrow.
On January 20, 2009, the Dow closed at 7,949. So today, the Dow has declined 726 points (9.1%) on "his watch."
However my friends, there is a whole lot of time between today and November 2010 and 2012.
In 1991/1992/1993 I was guzzling the kool aid, bought into all the Clinton conspiracy theories and lost a whole lot of money waiting for the economy to "collapse."
"The Rally, When It Comes, Will Be a Doozy;"
Look at the following charts. The amount of cash sitting and waiting for a home is staggering. When it decides to flow into equities, the upside could be like nothing we have ever seen.
What makes me think that? Well, the downside we have just seen is a once in a generation event (at least history tells us these are events that happen about every 90-100 years). We also have not seen cash levels this high in a generation.
"Dow 9900 By Year End?"
Many of the PE's for the Dow 30 are at historic lows and appear to be very compelling. As of yesterday's, close, the average PE for the 30 Dow components is under 10. Looking at other points over the decade, that average has been between 17 and 30 according to data from Thomson Reuters. When the markets begin to normalize, it is likely that stocks will move back toward their historical multiples, implying some significant gains.
My friends, the reich wing has decided that "the market" is all about Obama. So over the next few years, they need to be reminded of their words at every opportunity.
At the mid-term election, I remain completely confident that the Dow will be at 8,316 or higher. In the 2012 election cycle, the Dow will be at 10,000 or higher. Each of those values guarantees further defeats for the Republican Party.
This market began the process of turning around at almost the precise moment the reich wing jumped the shark. Their stupidity is amazing.