There is a saying in Spanish: “otro vendra que bueno me hara”, which loosely translates to “another one will come who will make me look good”.
We have all heard, of course, George Bush being called ‘the worst president in US history” by the media, lefties and the so-called ‘international opinion’. This adjective is freely thrown around with complete disregard for any of the clear achievements of the Bush presidency, including keeping the country safe, minimizing the impact of the Internet bubble burst, and producing a record streak of consecutive months of job growth.
But now, without even having served one day as president, Sen. Obama is out to conquer the title of worst president, in economic matters, in the history of the US. For that assessment we look at the veredict from the stock markets well reflected in this WSJ article.
For more on this and the meaning of Tuesday’s big jump on the markets see below.There is no question that stock markets are very good at reflecting a *perception * of what the future will bring. Note that we say perception, not *reality * as we all have seen how markets oversell and overbuy from time to time. But the recent drops in the markets, despite the multiples interventions by governments and central banks, indicate one main thing: the Obama presidency is being priced in and the price is very low. Thus, Sen. Obama can now be tagged as having made us poorer by $2+ trillions without even having had a chance to enact any of his redistributive policies. Clearly, noone in history approaches this kind of collapse. The interesting thing is that if Obama becomes president and the markets goes on a wild climb 80+% in the next 2-3 years, Obama will be able to proudly say that he is “as good as George Bush was”. I believe, however, that the chances of that rise actually taking place lie between the highly unlikely and the utterly impossible.
Which brings us to Tuesday, October 28 and the 900+ point climb in the Dow. Can we say that the prospect of a lowering of the prime rate caused such an unprecedented level of enthusiasm in Wall Street? perhaps, but doubtful. A more interesting explanation for this move actually is that Monday and Tuesday have seen a tightening of the polls towards McCain. Investors have seen this movement and a bit of panic as to being oversold entered their minds, thus they are hedging their bets.
Investors or Oracles? Let’s hope for the latter and for the common sense of the American people.