U.S. Stocks Tumble in Market's Worst Two-Day Slump Since 1987

4 comments on “U.S. Stocks Tumble in Market's Worst Two-Day Slump Since 1987”

1. Kendall Harmon says:

   November 7, 2008 at 5:59 pm

   Art Cashin of UBS Financial Services, a frequent guest on CNBC, had this interesting comment yesterday:

   The markets are worried about the transition period. As we noted in Wednesday’s Comments, the markets would watch each word and economic policy nuance from the President-Elect, since we are still in the midst of a financial crisis. Senator Obama was given the Presidency. He was not given a magic wand to go along with it.

   We contend that a part of Wednesday’s weakness could be attributed to worries about the transition. The market is beginning to realize that it is not just about things like who will be Treasury Secretary or what should the next stimulus package look like. It’s not even about whether Mr. Obama would keep his election pledge to substantially aid the auto companies.

   The market is trying to envision what would happen if another Bear Stearns or Fannie Mae popped up between now and Inauguration. How closely would the Bush team and Obama team cooperate? We don’t need two different fire brigades arguing or disagreeing while the building burns behind them. The fearful and very fragile markets know that action must be quick and decisive. Can that happen in the transition? That is a key concern of the markets. In the meantime, we’ll still be watching for signals from appointments and policy proposals. These next eight weeks have the potential to be quite volatile indeed.

2. Sick & Tired of Nuance says:

   November 7, 2008 at 8:05 pm

   Could it be that the market is reacting to Obama’s proposed capital gains tax hike?

   [blockquote]Mr. Obama is proposing to raise taxes on capital gains and dividends by a staggering two-thirds, moving the rate up 10 percentage points to 25%, which could curtail investment and business on Wall Street, a backbone of the city’s and state’s economy. ~ Source: http://www.nysun.com/business/obama-capital-gains-tax-hike-would-hit-new-york/81902/%5B/blockquote%5D

   In fact he said, “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.” He is willing to raise the capital gains tax even if we collect less money and run up more debt, according to his own ideologically charged rhetoric, [ [i]idiot[/i]ologically charged rhetoric?].

   Facing big increases in capital gains taxes and a personal income tax hike up to about 35%, rich folks seem to be busy shifting their investments from the stock market [where their money employs America’s workforce] to tax exempt bonds and bills [that feed government, not business]. Something like 52% of Americans own stock in some form or another. Now, all those baby boomers of modest income who were counting on retirement via stocks in their 401k plans, and yet voted for the annointed “one”, are about to discover that not only have their retirement accounts decreased in value by about 40% in the last 3 months, but also that they have no hope of recovering that loss because of the protectionist shifting of capital away from the stock market. Meanwhile, those who actually are rich beyond the dreams of avarice, will be relatively untouched by all of this because they will have sheltered their money in ways not available to the common man.

   These proposed tax increases are likely to turn this serious recession into a full scale Depression which will make America long for the 1930’s. News flash, America is basically a post Christian nation now and does not have the social cohesion or moral fiber to withstand that sort of economic stress for long. We have been busy little bees balkanizing our country with things like illegal migration and destablizing it with destruction of basic social institutions like marriage.

   The mere threat of raising taxes is, right this very moment, reducing tax revenues at federal, state, and local levels. Wait until the taxes actually take affect.

   Raise taxes now. Brilliant!

3. Padre Mickey says:

   November 8, 2008 at 1:05 am

   So #2, the market isn’t in the tank because of the bad economic policies of the free-market Republicans, it’s the fault of the guy who was elected a few days ago. Quite a theory!

4. Sick & Tired of Nuance says:

   November 8, 2008 at 2:26 am

   Padre Mickey,

   Nice straw man. Did you enjoy knocking it down? I did not say that “the market isn’t in the tank because of the bad economic policies”. Although, I would disagree that those policies are all Republican. Correct me if I am wrong, but haven’t the Democrats controlled BOTH houses of congress for the past two years? Oh, and how many vetoes did the president do? Yeah, I thought so.

   What I am suggesting [and I am not alone] is that the market contraction of the last two days and likely the continued downward trend and worsening of the prospects for the market recovery ARE [and I am going to go out on a limb here and quote myself so that what I said isn’t lost in the verbage] possibly because the “proposed tax increases are likely to turn this serious recession into a full scale Depression which will make America long for the 1930’s.”

   You might be tempted to blow off my post as the rantings of a sour grapes conservative blogger. Before you do though, have a little read:

   http://www.streetinsider.com/General+News/The+Market+Welcomes+Mr.+Obama+With+A+Smackdown/4130453.html“

   http://news.yahoo.com/s/ap/20081105/ap_on_bi_st_ma_re/wall_street

   http://www.daniweb.com/blogs/entry3458.html