Tuesday the country elected a new president who promises to increase corporate taxes, increase capital gains taxes by a third, increase the top marginal income tax rate, impose a massive new energy tax, and whose party is talking about a government takeover of 401K plans. On Wednesday the Dow drops over 500 points and at mid-day on Thursday it is down another 200 points. But of course, these two events have nothing to do with each other. It’s just a coincidence.
Here’s how the Raleigh News and Observer is presenting the news:
Wall Street recoiled again Thursday, sending stocks lower for a second
straight day as new readings on retail sales and jobless claims fanned
investors’ worries that the economy is in recession.
New claims for
unemployment benefits did dip by 4,000 to a seasonally adjusted level
of 481,000, according to the Labor Department. But jobless claims above
400,000 are considered recessionary levels, and have run above that
figure for 16 weeks. Also, long-term claims jumped to 3.84 million, the
highest level in 25 years. The numbers arrive a day ahead of the key
October jobs report, a widely watched barometer of the economy’s health.
The only mention of the President elect comes in passing.
On Wednesday, Wall Street plunged as investors considered once again
how deep and protracted a U.S. recession President-elect Barack Obama
will face in January when he is sworn in.
No one on Wall Street is woried about what his policies will be or how those poicies might actually make the recession worse. Now I wonder what the story would be if the market shot up 500 points on Wednesday.
