-- Posted Thursday, 6 November 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Thursday, November 6, 2008
“Phenomenally accurate forecasts”
Investors greeted Obama’s victory with a thunderous Bronx cheer yesterday, sending the Dow Industrials plummeting nearly 500 points in heavy trading. In ordinary times, we might have inferred that Wall Street denizens were registering their fear of what the most politically liberal President in U.S. history might attempt over the next four years. (Note to GOPers: Try stopping him with this line: “Obama! Klaatu barada nikto.”) But these are not ordinary times, and so perhaps there is another reason why shares plunged on a day when a majority of voters in this country were literally dancing in the streets over the prospect of “Change.” Our guess is that, with the campaign-from-hell finally over, it has suddenly dawned on investors, not only that are our dire economic problems still very much with us, they are about to re-emerge with a vengeance as front-page news.
It will of course console no one that whatever occurs between now and Inauguration Day will be dealt with in some fashion by the Bush administration For all intents and purposes, Paulson, Bernanke et al. are Obama’s team as well, and if another big bank or two goes down between now and January, it will have made no difference who was President at the time. Again, in ordinary times, Obama and his economic advisors might want to have the worst of it over with before he takes office. But to the extent this could imply the demise of, say, Citicorp, so powerful an emetic in Q4 could just as easily kill the patient as purge him of sickness.
Berkeley’s Best & Brightest
Still, we are heartened to note that not all of Obama’s economic policy advisors are the Keynesian madmen we might have expected. Paul Volcker, for one, is on the list, and so are Robert Rubin and Larry Summers. But it must be assumed that there are a few closet Trotskyites as well, since some of those on Obama’s short list have Berkeley addresses. We’d trust them, however, before we’d trust Paul Krugman, an ardent “unofficial” Obama supporter whose regular column in the New York Times fairly describes what U.S. economic policy might look like if university professors were completely in charge of it. We’d throw the bunch of them out and sign up Ron Paul and Nouriel Roubini, but don’t expect to hear much from either – other than on the Web -- over the next four years.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 6 November 2008 | Digg This Article | Source: GoldSeek.com
