Wednesday, January 21, 2009

U.S. Stocks Slide In Dow Average’s
Worst Inauguration Day Drop

by Elizabeth Stanton - January 20th, 2009 - Bloomberg News

Barack Obama became the 44th U.S. president today, inheriting the most severe economic crisis since Franklin D. Roosevelt was sworn in 76 years ago. The turmoil has dragged the world’s largest economies into recession, caused more than $1 trillion of losses at financial institutions and prompted a sell-off in global stock markets.

Treasuries fell for a second day on speculation Obama will sell record amounts of debt to battle the recession.

This is not happening because George W. Bush is President. This is happening because Barack H. Obama is President. Our youth, our radicals and our socialists may be impressed with Barack H. Obama. Investor's are not.

It is true that Bush responded with a very weak plan last year when the banking crisis started showing. It is even true that Bush helped to create the crisis with his profligate spending and his nearly doubling of the national debt during his eight years. On the other hand he did try and stop the housing bubble by opposing a continuation of the Fannie Mae and Freddy Mac idiocy. However Bush failed to end the CRA rules that force banks to make bad loans, failed to end Sarbanes Oxley's "mark to market" write downs and failed to address the insider trading "derivatives" insanity with its related "securitized mortgage bundling". None of these causes were created by Bush. He can only be blamed for trying to patch the consequences rather than fix the causes. That has proven inadequate to stop the bleeding.

The reality is that Bush also cannot be blamed for the world banking crisis that contributed to the problem here in America. Other nations have mismanaged this WORLD crisis as well, and the global contributions to this crisis have been ignored by Obama and his minions, just as they ignore Clinton's grand experiment to end the rules separating banking, insurance and securities (that were passed during the great depression when it became clear that rampant speculation helped to bring down our economy - then as now). This too is a major contributor to the crisis that no Democrat will accept accountability for because it happened on Clinton's watch. Without that misguided change the derivatives insanity would not have gained so much traction.

The answer is to fix the problems, not blithely continue borrowing money and spending money as if our children will not have to pay the price. Investor's know that. The huge drop in the market is a reaction to Obama's insane plans. It is obvious nothing will get his attention because he is ignorant of what makes our free market economy work. It is also obvious that like Hoover, Bush will be the pinata for the press for years to come. Bush will be blamed, not for what he did, but for everything that happens. The MSM will never blame Obama.

In a related frustration, Republicans who opposed Bush on many of these same issues will be blamed by the press as well. Bush, just by being Republican and letting these things fester on his watch, has destroyed the Republican brand.


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