Investors may not support Barack Obama, but they do expect him to be the next president of the United States. The smart ones do anyway.If the polls are to be believed, Obama should easily defeat John McCain. Even the ultra-conservative talking heads on CNBC seem to have accepted this reality. Carl Quintinilla recently asked Pennyslvania Senator Bob Casey whether Obama will be "pulled to the left" if the Democrats win in a landslide. Why not ask Casey, who is pretty conservative as Democrats go, about Obama's five-year plan? I guess it's no surprise that the business network has Steve Forbes as a guest host on "Squawk Box." The Arizona senator needs all of the help he can get.
The market already -- wrongly in my view -- views Obama as a tax-and-spend liberal ready to suck away their capital gains and wrap America in bubble wrap to protect it from the ravages of world trade. The truth is more complex than these stereotypes. Obama plans to cut taxes for most Americans and favors fair trade policies. Markets, however, anticipate the future and people are scared. That explains why the Dow Jones industrial average is down more than 29%.
Should Obama win big and the Democrats get a fillibuster-proof majority in the Senate, the stock market will take that badly. The major averages will tumble as investors will be worried that the triple-headed monster of Nancy Pelosi, Harry Reid and Obama will wreak havoc on the country. As a member of the media elite who has campaigned for Obama, I share these concerns. Having one-party rule could create problems, particularly if the Democrats get full of themselves as they did during the 1990s in Congress.
Other possibilities raise their own sets of concerns. If Obama wins and the Democrats keep their power at or about the same levels, government will remain divided. Whether that means government will remain paralyzed is unclear. I think this is an unlikely scenario given the closeness of many state races.
Some investors may be hoping that McCain will pull off a political upset. Should that happen, it would put "Dewey Defeats Truman" to shame. I can't discount this possibility because McCain is gaining on Obama in some polls. Markets would rally, at least for a short while. The euphoria will not last, particularly if the Democrats maintain control of Congress.
Whatever the result of the election, many questions will remain for the next president to answer. That means markets will continue to be volatile for some time.



Reader Comments (Page 1 of 1)
11-03-2008 @ 1:20PM
charlie said...
Obama has said that "they can build a coal fired electrical plant but it will be taxed and fined into bankruptcy due to the co2 levels it produces. Welll how will be generate electricalpower mr obama?
What will happen to the rail traffic that brings the coal, the miners that produce the coal, mr obama?
What other business willyou destroy with taxes and fines mr obama?
11-03-2008 @ 1:26PM
JCH said...
If McCain were to win, the stock market would be down 4000 points in less than a month.
The world would go into both kinds of depression - economic and psychological.
People are, justifiably, done with trickle-down nonsense. Wall Street was given a gigantic amount of money that should have been tax money. Their promise was that ordinary Americans would share in the wealth - jobs doing worthwhile things.
All they appear to have done is make 1.44 quadrillion in derivative and swap transactions and willingly build 6 million houses for people who can't pay for them. Looks to me like they did not have a clue how to handle the extra cash, so why on earth would any sane person continue giving it to them?
If they want to give themselves golden parachutes and bonuses, fine. The people need to take 80% of it back. If they don't like it, let them move to another country. Goodbye and good riddance.
Kudlow in France. It would be simply sublime.
11-03-2008 @ 1:56PM
JCH said...
What Obama actually said was should a company build a coal-fired power plant that did not incorporate carbon sequestration, the cap and trade would make it noncompetitive with coal-fired power plants that do incorporate carbon sequestration strategies. If it's noncompetitive, it would go out of business.
He was not talking about the coal industry, he was talking about a noncomplying coal-fired power plant.
It's virtually the same thing McCain has said about the desirable effect of cap and trade.
11-03-2008 @ 2:28PM
JoJo said...
LOL "If the polls are to be believed, Obama should easily defeat John McCain." EASILY? The polls are too close for anyone to say that it will be an easy win.
I hope that McCain wins simply to avoid the possibility of a super majority.
It's unfortunate that so many people are blinded, or "get a tingle in their leg" by Obama's rhetoric and really think that someone with less than three years experience in the Senate is going to do well in the White House. If elected, Obama might be in the Oval Office, but there will be people in the background calling all the shots. Not him...he'll sit at the card table with the kids while Pelosi, Reid, Frank and who knows...Murtha gather around the Presidential desk to do their scheming.
I remember the days of Jimmy Carter with 17-21% mortgages, 10% unemployment, and how he gutted the military. Obama will be no different...actually, he'll be worse, and I didn't think that would be possible.
So, for those of you in fairy tale land that vote Obama and a super majority into office, you get what you deserve.
11-03-2008 @ 3:40PM
nick said...
For one I would lay off about 20 per cent of my workforce to get ready for the stupid taxes that REP Pelosi and Sen Reid have in store. Their will be no turn around until the elections in 2010 and by then the folks who were hit up beside the head with a 2by4 will understand that going radical left was the worst thing that could happen. Their will be scandal after scandal in the DEMOCRAT party during the next 2 years. The left media have succeeded in telling the spoon fed blacks how they need to get their titty bottle from them and they know how much ripple they need to drink each day. It is hard to understand how 95 per cent of the blacks went off the cliff for these slime balls.
11-03-2008 @ 3:41PM
Will said...
I'm an Ivy League Graduate. I've been running companies and creating jobs for over 30 years. What saddens me most is that the people voting in this election are totally clueless to Obama and what he stands for. I actually saw a women exit a voting station and comment that she vote for him because he's going to give her free gas and get her a house! Is she representative of the type of people who are supporting him? If so, thgis is the beginning of the fall of America. When people start thinking that they can vote themself gas or vote themself money, we're doomed. Here's a well spo0ken guy that hasn't really had a job in his entire life. When has he ever had to make a payroll? When has he ever had to make difficult management decisions? When has he ever had to decide between two difficult alternative, when neither choice is pleasant? America, be careful for what you wish for. We are going to experience first hand the fall of American....and we'll have no one to blame but ourselves.
11-03-2008 @ 3:56PM
Patches said...
For 10 years we've been hearing the market wants this and the market wants that.......interests rates have been slashed, there have been bailouts and the banks have been all but nationalized. All things I understand that "the market wants". Oh yes we've had a republican administration and mostly a republican congress.
If anyone has not notice, by granting it all it's "wants" the stock markets have gone Down, DOwn, DOWn and DOWN !
There is little reason to worry about the market
and it's wants in this election. It will go where it
goes, and if the last 10 years is any indication, that means down no matter who wins.
11-03-2008 @ 4:01PM
Harry Strachan said...
Obama's tax plan is to increase the burden on the top 5% already paying 60% of all personal income taxes and "spread the wealth around" to many who have no tax liabilty. Isn't that called welfare? Al least with many charities that ask for donations for overseas children, you get to see pictures of those you have adopted. Shouldn't the family I'm working for get to know me, maybe we can spend holidays together.
11-03-2008 @ 4:18PM
marvin said...
THIS ELECTION IS ALL ABOUT RACE BUT THE WHITE PEOPLE CAN`T FIGURE THIS WHEN MORE THEN 90% OF ONE GROUP THE BLACKS VOTERS HAVE KNOWN IT ALL ALONG
11-03-2008 @ 4:32PM
Roger said...
Once again the elite media gets it wrong. America will never be France and Obama and his socialists views will not be the next President. So please order your pills right now to deal with this headline on November 5... Obama wins BIG the popular vote but loses the electoral vote by the closest of margins.
But don't worry you'll be better off by it. McCain/Palin will bring the real CHANGE America needs, and is where Bush failed, less taxes and less government expending. We need more fiscal and individual responsibility and less hand outs.
11-03-2008 @ 4:49PM
JCH said...
No real businessman is going to lay off workers to pay for the Obama tax increase.
In fact, many businessmen who look at this see something few in the media have said anything about. One of my best friends owns a large trucking company. His drivers make a good income, and under Obama's plan they will get a large tax savings. It far exceeds the amount of additional income tax he expects to pay as an individual.
I've never heard him cry that he is going to have to fire a driver to pay for his additional tax. Get real. He's giddy that his drivers are going to have way more take-home pay. They're going to go to the Mall and buy a lot more stuff. The stores are going to call him to get it shipped into town. He looks at how much the national debt has gone up under McBush, and he knows 35% is not working. He's figured out that he has been getting a free ride that is not working for his country.
Maybe he's smarter because he didn't go to an Ivy League school.
11-03-2008 @ 5:02PM
Jim said...
McCain will win the election. Do not care what the poles say. He has already been picked by the "elite society" who actually controls our elections. The society is made up of very wealthy individuals from across the world. It does sound very fishy but it is true. With todays tech. you could be hitting a vote for Barack and could register for McCain. Who knows? And then we have to take into consideration the Bradley factor. Well it will be a fun one to watch. In my opinion both seem week and unrealistic on some of their policies they would like to put into place. Whom ever is the next President I wish them the best of luck for they have one hell of a mess to clean up and deal with.
11-03-2008 @ 5:28PM
jeff said...
the worst part of an Obama presidency? All the clueless Republicans crying.
Obama is your hangover, suckers.
11-03-2008 @ 6:10PM
Steve said...
In 2000, I would've voted for McCain when he was a maverick. But because his party hated him, he didn't get the nomination. Now the new McCain just sold out to his party and if he gets elected, then nothing will change. He says he will not raise taxes but how are we going to pay back this 10 tril deficit? How much of the U.S. does China own? And then we hear about the terrorist scare. People, we have 2 oceans on either side of us. The Coasties wont let immigrant or drug runners in, so I doubt if terrorist can come that way. On top of us is Canada and their borders so tight that some Americans can't get thru. Below us Mexico and we wont even let the Mexican thru so no terrorist passage there. I'm a Gulf war vet, I didn't like going to Kuwait to protect Bush oil and Hate the fact that we are in Iraq based on a threat on Bush Senior by Saddam. Meanwhile, Bin Laden is relaxing in a Villa in Pakistan. Oh, and I thought ALL military men had integrity but with ALL the lies McCain has told, it makes you wonder.
11-03-2008 @ 6:24PM
your lord and master said...
one could only hope some true american hero rises to the occaison if hussien gets elected.
11-03-2008 @ 6:59PM
Gary said...
Many "real" businessmen will be laying off workers if Barry gets his way. Hopefully Pelosi and Read will not want to get voted out in 2010 and put the brakes on him. If Barry increases business taxes, as he's said he will do, then those cash managed businesses will need to find places to keep their flows up. The most expensive cost to any business is labour, so guess what's cut? That return due to the stockholders will be maintained. Now, if you're a small private company and you're willing to see your take home go down to subsidize your workers, more power to you comrade. And any savings to business after Barry takes over healthcare will be more than offset by the increased taxes to fund it and the sick time lost by workers who can't get to a doctor due to rationing...I'd give it 10 years to get there. Up the revolution...Fidel Obama rules!!!
11-03-2008 @ 7:22PM
dave said...
Obama seems like he most likely will win. He is horrible for the economy. Its built from the bottom up? What kind of ridiculous model is that? How can the workers generate money to employ themselves. I can't wait to have an egotistical idiot with absolutely no experience and few if any views of his own to determine the fate of this country. I just hope we'll find out who the real President is (the person pulling his puppet strings) before his term is over.
11-03-2008 @ 9:37PM
nicco said...
I think there need to be a change ,but Obama is not the answer. His plan i'snt the answer. I bilieve the answer is getting people to work. Invest in the infrastruture of the country, road work, power, solar, clean energy from coal. Presently, there is roufley around 8%of people who do not work lets change this to 1% and leave all the taxes alone. This is something the congres should do and leave politics out of this factor of people getting back to a job.
11-04-2008 @ 3:01PM
Klaus said...
Terrorists all over the world will cheer as Hussein
takes over America.
11-05-2008 @ 10:26AM
nicco said...
Well, it dosn't matter if any of us like the result of 11-04-2008. The picture is very clear mr. obama is gone to be the winner of election 2008. History is made. Now, I hope that everyone gets behind the new president and support him. I hope he has the ability to stand firm against any foreing aggressors and any terrist that try to harm any infrastatures of our country. I'm a registired republican, and I must console myself that we have lost this election. For, the next four years there will be spending that is unparelel to the past. The only hope that I would have as a responsiable american that mr. Obama, would forget many of his taxes proposels and concantrate on creating job so people can get back to work and care for their families and work toward a retirement whith aproper pension. Best of luck to all.