Fastest Dow drop in at least 90 years

[DarrinS]

http://www.bloomberg.com/apps/news?p...d=aGJ_.gr_awkY


But that mofo sure can deliver a fine teleprompted speech.

March 6 (Bloomberg) -- President Barack Obama now has the distinction of presiding over his own bear market.

The Dow Jones Industrial Average has fallen 20 percent since Inauguration Day, the fastest drop under a newly elected president in at least 90 years, according to data compiled by Bloomberg. The gauge has lost 53 percent from its October 2007 record of 14,164.53, slipping 4.1 percent to 6,594.44 yesterday.

More than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The president is in danger of breaking a pattern in which the Dow rallied 9.8 percent on average in the 12 months after a Democrat captured the White House, according to data compiled by Bloomberg.

“People thought there would be a brief Obama rally, and that hasn’t happened,” said Uri Landesman, who oversees about $2.5 billion at ING Groep NV’s asset management unit in New York. “It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”

A bear market is defined as a decline of 20 percent or more.

Buying shares “is a potentially good deal” for long-term investors, Obama said March 3. He compared daily fluctuations to a tracking poll in politics and said he wouldn’t adjust his policies just to meet market expectations.

Congress last month enacted Obama’s $787 billion package of tax cuts and spending on roads, bridges and public buildings. His 2010 budget indicated the government’s financial rescue may need another $750 billion after an initial $700 billion.

Getting Cheaper

The Dow average has dropped 31 percent since Obama’s election. The 30-stock gauge trades at 8.04 times annual earnings, the cheapest since 1995 and down from 10.06 times on Inauguration Day.

Citigroup Inc. led the plunge, losing 71 percent. The government proposed taking a 36 percent stake in the New York- based bank, cutting the percentage owned by shareholders. Detroit-based General Motors Corp. tumbled 53 percent after the largest U.S. automaker said it needs more government aid.

“It’s the Obama bear market,” said Dan Veru, who helps oversee $2.8 billion at Palisade Capital Management in Fort Lee, New Jersey. “We don’t know what the rules are in so many different areas the government is touching.”

The Dow average lost 0.3 percent to 6,577 as of 11:14 a.m. in New York today.

Bank Losses

The U.S. economy contracted at a 6.2 percent annual rate in the fourth quarter, the most since 1982, the Commerce Department said last week. Unemployment jumped to 7.6 percent in January, the highest since 1992, as Americans fell behind on their mortgages and banks seized homes at a record pace.

Losses at financial companies worldwide that grew to about $1.2 trillion sent the Standard & Poor’s 500 Index to a 38 percent retreat last year, the steepest since 1937.

“Prospects for recovery in the financial sector, despite all the government help, still seem rather remote,” said John Carey, who manages about $8 billion at Pioneer Investment Management in Boston. “We’ve had a weak economy for a couple of years, and we aren’t seeing the stimulus working at this point. That is what weighs on investors’ minds.’’

The Dow average took eight months to decline 20 percent following the inauguration of George W. Bush, reaching the level on Sept. 20, 2001, nine days after terrorists attacked the World Trade Center in New York and the Pentagon in Washington.

Herbert Hoover

The crash of 1929 occurred seven months into the administration of Herbert Hoover, who presided over an 89 percent plunge in the Dow between September 1929 and July 1932, the steepest retreat ever.

Only twice has the benchmark gauge slipped in the 12 months after the election of a Democratic president since 1900, after Woodrow Wilson’s victory in 1912 and Jimmy Carter’s in 1976.

The Dow entered its most recent bear market on July 2, 2008, when a 167-point decrease gave it a 20 percent loss from its record 14,164.53 on Oct. 9, 2007. Unlike the Standard & Poor’s 500 Index, the Dow’s rally from its November low of 7,552.29 fell short of a 20 percent bull market gain, ending at 19.6 percent.

“Obama should be listening to the stock market more than talking to it,” said Kenneth Fisher, the billionaire chairman of Woodside, California-based Fisher Investments Inc., which oversees $22 billion. “He hasn’t gotten out of the gate well.”

[ChumpDumper]

It's good to try to pin it all on Obama now. I don't know what else you can do.

Too bad it's not working.

[DarrinS]

It's good to try to pin it all on Obama now. I don't know what else you can do.

Too bad it's not working.

Everyone's 401k's are turning to dust.


YAY!!! OBAMA!!!


We're gonna spread happiness; We're gonna spread freedom; Obama's gonna change it; Obama's gonna lead 'em; We're gonna change it; And rearrange it; We're gonna change the world.

[ChumpDumper]

Everyone's 401k's are turning to dust.


YAY!!! OBAMA!!!


We're gonna spread happiness; We're gonna spread freedom; Obama's gonna change it; Obama's gonna lead 'em; We're gonna change it; And rearrange it; We're gonna change the world.

It's good to try to pin it all on Obama now. I don't know what else you can do.

Too bad it's not working.

[DarrinS]

It's good to try to pin it all on Obama now. I don't know what else you can do.

Too bad it's not working.

Neither is hope.

[ChumpDumper]

You expected everything to turn around less than two months into the presidency?

You are a fool.

Everyone said this would get worse before it got better.

[coyotes_geek]

Obviously it's foolish to try and place all this on Obama. However, this still has to be a pretty significant sign that investors really aren't liking what Obama is pushing.

[ChumpDumper]

Investors don't currently have the best track record in predicting the economy.

[DarrinS]

Investors don't currently have the best track record in predicting the economy.

Well, evidently they aren't predicting growth.

[MannyIsGod]

If I wasn't lazy I'd find my posts last September pointing out that when 2009 came things would be bad at the beginning of the year. It was pretty ing obvious then so when people like Darrin try to attribute this to Obama I know how smart - or moronic rather - they are. It is like putting on a big red hat with the word DUNCE printed on it.

I just don't get it. Do you think that if Obama hadn't come out with his budget plan the investors would ignore the unemployment reports, quarterly reports, and financial sector troubles?

[ChumpDumper]

Well, evidently they aren't predicting growth.

They didn't predict this recession either. That's why they lost all that money in the first place.

[DarrinS]

If I wasn't lazy I'd find my posts last September pointing out that when 2009 came things would be bad at the beginning of the year. It was pretty ing obvious then so when people like Darrin try to attribute this to Obama I know how smart - or moronic rather - they are. It is like putting on a big red hat with the word DUNCE printed on it.

I just don't get it. Do you think that if Obama hadn't come out with his budget plan the investors would ignore the unemployment reports, quarterly reports, and financial sector troubles?

Note: these aren't my words

“People thought there would be a brief Obama rally, and that hasn’t happened,” said Uri Landesman, who oversees about $2.5 billion at ING Groep NV’s asset management unit in New York. “It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”

[LnGrrrR]

So when the economy recovers in 2011, you'll make sure to pin the greatest gain on Obama as well, correct?

[coyotes_geek]

Investors don't currently have the best track record in predicting the economy.

No doubt. It's just an observation that Obama is scaring the out of them and that, combined with other factors, is contributing to this decline. That doesn't prove anything one way or the other about whether or not what Obama is doing is good for the economy.

[Bartleby]

“It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”

so does that mean the measures went too far or not far enough?

[ChumpDumper]

So what measures would they prefer?

[George Gervin's Afro]

So when the economy recovers in 2011, you'll make sure to pin the greatest gain on Obama as well, correct?

No silly. Conservatives will say the economy turned around in spite of Obama. See conservatives like to have it both ways. They will never give this credit for anything.

[LnGrrrR]

No doubt. It's just an observation that Obama is scaring the out of them and that, combined with other factors, is contributing to this decline. That doesn't prove anything one way or the other about whether or not what Obama is doing is good for the economy.

My feeling is that the economy has to contract until supply catches up with demand. There's really nothing anyone can do to change that fact. No matter how great the tax break is, people aren't suddenly going to go buying cars right now, or refitting their house with solar panels, or anything along those lines. You might get a small percentage to respond, but not enough to counteract the contraction.

Who stands to lose the most? Investors. They're the one who are going to see their money supply lose the most on paper, so they're flipping out. The average household that loses 10% of their income probably goes from 70K to 63K. The millionaire has suddenly lose 100gr though. Course they're going to be pissy.

Most normal people can recognize this... that's why they're saving instead of spending. Some financial types are too stupid to recognize this, having spent years living the high life... hence all the 'retreats'.

[MannyIsGod]

Who thought there would be an Obama rally Darrin? Every economic forcast I read called for no such thing. Please provide me with something that backs up those words, even if they aren't yours.

[LnGrrrR]

No silly. Conservatives will say the economy turned around in spite of Obama. See conservatives like to have it both ways. They will never give this credit for anything.

Of course.

These are the same conservatives that asked for how many Friedman units? That decried 'patience' in dealing with Iraq? And yet they want the President to fix the economy with a magic ing wand less than two months in office? In the words of Eminem, get the out of here.

[DarrinS]

Of course.

These are the same conservatives that asked for how many Friedman units? That decried 'patience' in dealing with Iraq? And yet they want the President to fix the economy with a magic ing wand less than two months in office? In the words of Eminem, get the out of here.

Hey, I'm just a selfish conservative waiting to go "all in" again with my stock money. Until this er stops free fallin, there's no way in I'm moving my money.


Since everyone was so orgasmic over the Obama presidency, I just thought there would be some kind of rally after the inaugural. I'm still waiting.

[MannyIsGod]

link?

[MannyIsGod]

Is it fun to rewrite history Darrin?

[DarrinS]

link?

Just a quick-and-dirty search:


http://articles.moneycentral.msn.com...r-a-rally.aspx


By the way, is this how you pronounce "dumbass" if you have a speech impediment? (re: author of the following article)

Editor's note: To view the stock screen mentioned in this column, download the free MSN Money Investment Toolbox.

The world's markets are poised for a broad-based rally with Barack Obama's presidential win.

With U.S. stocks pulling back today after a big Election Day gain, that may seem a bold prediction. But my reasons are simple.

In the short term, at least, stocks respond to sentiment more than fundamentals. For example, even in the face of an oncoming recession, the recent downdraft sank many stocks to prices much lower than justified by their fundamental outlooks.

With Obama's win, the same thing could happen in reverse. Whatever the reality, in many people's minds, the Democrat represents hope for a better future.

That's true globally, not just in the United States. Polls in Russia, Germany, Spain and even China tell the same story. People around the world express optimism that Obama, as president, would change U.S. foreign policy for the better. Further, the win by the Illinois senator proves to many doubters that the American dream is alive and well.

Those positive feelings should be reflected in stock markets, pushing share prices higher in the U.S. and around the world. Eventually, that excitement would diminish, and the market will go back to worrying about how business is going.

Those financial worries are serious, and they could keep the market down. But it's not what I expect. Here's a screen that can help you find stocks likely to participate in an Obama rally.

[coyotes_geek]

My feeling is that the economy has to contract until supply catches up with demand. There's really nothing anyone can do to change that fact. No matter how great the tax break is, people aren't suddenly going to go buying cars right now, or refitting their house with solar panels, or anything along those lines. You might get a small percentage to respond, but not enough to counteract the contraction.

Who stands to lose the most? Investors. They're the one who are going to see their money supply lose the most on paper, so they're flipping out. The average household that loses 10% of their income probably goes from 70K to 63K. The millionaire has suddenly lose 100gr though. Course they're going to be pissy.

Most normal people can recognize this... that's why they're saving instead of spending. Some financial types are too stupid to recognize this, having spent years living the high life... hence all the 'retreats'.

I agree with pretty much all that. No doubt things were going to suck no matter what and obviously the investors are going to be more worried than everyone else. But a lot of that worry comes from Obama spending massive amounts of money and telling everyone that rich people (a.k.a. investors) are going to pay for it all. Investors are also concerned over the government taking ownership stakes in companies. Investors don't want to be business partners with the government, nor do they want to invest in companies who would effectively be business compe ors of the government, so staying out entirely is the safest option they have.