A familiar refrain from the wingnuts over the last month was that the stock market was tanking because it was not liking what it was hearing from President Obama. So if we go by that logic, I now expect them to immediately and without qualification praise President Obama for encouraging today’s nearly 400 point gain in the DOW. If conservatives are consistent, of course they will do that.
But I won’t hold my breath. Because they won’t. Nor should they, because their original premise is wrong to begin with, so if they praise President Obama now, they would be wrong yet again. But then again, they being wrong would be consistent. But I digress.
Today’s surge in the market was credited to Citibank showing a profit, which reveals the real reason for the market tanking: concern over stability of banks. Indeed, as the market dropped over the last weeks, shares of bank stocks reached $1 a share levels, and some became penny stocks.
Now you could say investors were leaving the market in droves prior to today because they did not like President Obama’s plans for stabilizing banks. But if they are showing confidence today because Citibank, over a third of which is now controlled by the federal government, is showing a profit, then that implies approval of the Administration’s actions in stabilizing Citibank to the point where it can show a profit.
It is a messy game when you try to pin credit or blame on a President based on the rise and fall of the stock market. In the end, the market is a confidence game, pure and simple. And against the Chinese water torture of bad news day after day concerning banks and unemployment figures, it was only natural for confidence to be shaken and for the market to fall. And the market is still mercurial, since today’s gains can be lost tomorrow if Bank of America posts losses tomorrow. President Obama and his team have the right idea: to not concentrate on the day to day short term of market gains and losses, and to focus on long term plans to stimulate and save the economy.