Comments on: Pricing in a Bush Presidency

By: Myke's Weblog

Myke's Weblog — Wed, 09 Jul 2008 09:51:33 +0000

Flashback to July 9, 2000: What if Bush gets elected?

Who sees the future? Link: The Big Picture | Pricing in a Bush Presidency. Pricing in a Bush Presidency? Wall Street Journal, July 9th 2000 Various Wall Street strategists have expressed concern regarding how a new set of Bush monetary

By: wunsacon

wunsacon — Wed, 09 Jul 2008 07:14:08 +0000

>> Oh my word…the number of people taking this article seriously is ridiculous…
>> Posted by: Jay | Jul 8, 2008 4:06:08 PM

Someone even cited it as “support” in a later thread!

But, hey, we’re a crowd. We should expect some “noise”.

By: Robert

Robert — Wed, 09 Jul 2008 01:04:29 +0000

Good points, Toni – Thanks for the insight.

By: Toni Crescenzi

Toni Crescenzi — Wed, 09 Jul 2008 00:23:56 +0000

If Barrack Obama wins the presidency, the price of oil could fall by $40 per barrel. The financial markets will discount the possibility before hand, at least partially. There are three ways in which this could happen:

1) As was the case during the Clinton administration, Obama might be more inclined to intervene in the foreign exchange market to support the value of the dollar. The U.S. has not intervened in the FX market since Treasury Secretary Robert Rubin did so in September 2000 when the Treasury sought to support the Euro, then costing about 80 cents per dollar (yes, the cost has almost doubled since then). Intervention or the threat of intervention could shave $20 off the price, based on the divergence in price between oil quoted in dollars versus that of other currencies.

2) Obama will speak in a more concilatory tone toward nations in the Middle East. If he does, some of the risk premium would likely be extracted from the oil price.

3) Energy conservation and investment in energy infrastructure are likely to increase if Obama wins, as it will be part of his mandate. Announcements of a nationwide effort to both decrease consumption and increase the supply of energy would have an announcement effect on the energy markets, lowering energy prices and burning speculators.

Points 2 and 3 are probably the most bankable ideas, but the mere threat of point 1 is still enough to impact the markets.

By: Jay

Jay — Tue, 08 Jul 2008 20:06:08 +0000

Oh my word…the number of people taking this article seriously is ridiculous…not to mention frightening, as I’ve been operating under the assumption that there’s a fairly astute bunch of readers over here at Big Picture.

By: jen

jen — Tue, 08 Jul 2008 18:31:03 +0000

It’s not a satirical reason you can’t find the link, it’s the memory hole. Some things have a way of disappearing.

By: liam

liam — Tue, 08 Jul 2008 18:23:00 +0000

Well, the markets might have missed the CDO and credit crunch debacle, but the guys quoted in the article were prescient about the bush presidency. Not being jingoistic at all, but…
the 1st guy feared deficits from tax cuts,(check)
the 2nd big spending, (check)
the 3rd fallout from deregulation, (check)
the 4th housing, (check)
the 5th a market crash (check)
the 6th glowed about the likelyhood of war in the middle east. (check)(check)
From now on I’m getting my political advice from wall street guys.

By: ScottB

ScottB — Tue, 08 Jul 2008 18:13:31 +0000

Loved it, especially the Rubin quote.

By: Daniel K

Daniel K — Tue, 08 Jul 2008 18:04:02 +0000

Sad…sad sad sad. Reading this with the Citigroup story above this one re finding loopholes around Glass Stengal–just sad.

What’s happened to this country?

By: Lord

Lord — Tue, 08 Jul 2008 16:57:02 +0000

We may well see a election time relief rally when Obama looks like winning or wins though on the hope our current national nightmare is over.