President’s First 50 Days & Market Changes
As discussed previously, I no more think the 2007-09 crash is Obama’s fault than I believe the 2000-03 Tech wreck was W’s fault. The key forces causing a market collapse were already in motion when each President was sworn in. Others do, and I have suggested these pundits were revealing their own partisan biases rather than making informative commentary about markets.
Regardless, this is a fascinating, information filled chart — I am not sure what it means — other than the markets have affected the Obama presidency more than any other presidency:
>
Chart by JP Koning
http://www.financialgraphart.com/
>
Previously:
Was the ‘00-03 Crash Bush’s Fault? ‘09 Obama’s? (March 5, 2009)
http://www.ritholtz.com/blog/2009/03/2000-crash-bush-09-obama/
Markets Are Rorschach Inkbot Tests (March 2, 2009)
http://www.ritholtz.com/blog/2009/03/markets-are-rorschach-inkbot-tests/
Experts, Crashes, Media, Skepticism (February 19th, 2009)
http://www.ritholtz.com/blog/2009/02/experts-crashes/
March 11th, 2009 at 9:05 am
You are getting as chart happy as CR, Barry…by the way, has anyone ever seen you two in the same room at the same time?….hmmm….
I am not sure about the significance of the chart either, but I did see something that looked a little ominous this morning….
http://biz.yahoo.com/ap/090311/eu_britain_toyota.html
AP
Toyota to cut UK production and wages by 10 pct
…some have predicted wage cuts…..
March 11th, 2009 at 9:12 am
Bruce,
Toyota is halting the construction of their Mississippi facility, as well..
BR,
the second link you posted under “Previously”, is most apt.
or, differently, this chart is nothing more than agitprop that perpetuates the fantasy that there are any operative differences between the “Administrations” it enumerates
March 11th, 2009 at 9:18 am
In the interest of determining cause and effect, if any, I’d like to see a similar chart for the 100 days, or a longer period, immediately preceding the inauguration of each President.
March 11th, 2009 at 9:20 am
What it means is –
Go long for the next 50 days.
Absolutely, positively don’t go short the next 50 days.
March 11th, 2009 at 9:22 am
……Amusing parlor game……otherwise totally meaningless……..As far as the present incumbent is concerned I don’t think he’s loosing much shut-eye over what the markets are doing…..They’re going to insulate the banks and boost the real economy……The market will reflect what’s happening in the real world……. If it works he’ll be FDR….If it doesn’t he’ll be Hoover….We’ll have the verdict in about 18 months.
March 11th, 2009 at 9:30 am
I believe Toyota is also offering buyouts here, not that anyone would take them in this environment. No car company can survive multiple months of 30-40% sales declines. Nobody talks about the parts mfrs, but there pain threshold has to be lower than Toyota. How do you vertically integrate when you are losing your ass and the maket is down 30-40%, so that you can maintain the flow of parts? I’m sure Shelby and Corker are all over it.
March 11th, 2009 at 9:39 am
The most I take away is that O has been handed the largest POS economy of the lot and echo what
Marcus Aurelius Says:
In the interest of determining cause and effect, if any, I’d like to see a similar chart for the 100 days, or a longer period, immediately preceding the inauguration of each President.
March 11th, 2009 at 9:40 am
Serves the greedy auto workers right – Mississippi has a long history as a hotbed of unionization.
March 11th, 2009 at 9:42 am
“They’re going to insulate the banks and boost the real economy”-otto
if they continue to ‘insulate’ the ‘banks’, they’ll incinerate, what’s left of, the ‘real Economy’.
March 11th, 2009 at 9:46 am
Whether imposed on Republicans or Democrats, I find the entire practice of associating – much less, attributing – stock market performance to an American President’s term in office ridiculous. If stock markets were efficiently priced, I would have no problem with it, but the reality is that the vast swings in equity valuation indicate huge variances in speculator sentiment. A President’s job is to create real wealth, not promote a more euphoric illusion of it.
Thankfully, I think at least 52% of Americans will be able to see through all this media-created jibber-jabber. Also, such attacks on Obama came too early and largely from CNBC, which is now locked in an ongoing comedic wrestling match with The Daily Show that will only further undermine its credibility.
“Should I throw my feces at him?”
March 11th, 2009 at 9:48 am
I don’t understand the point of this chart. The old canard is that markets anticipate developments 6-8 months in advance, but the entire history of the stock market for the last 2 years has been the utter failure to anticipate events.
Remember when the yield curve inverted and the market went up, because it was “different this time?”
Remember that just 1 year ago, the all-knowing market valued Bear Stearns at $130 a share? Goldman at $200? Citi at $22?
This market reflects developments from 6 months ago, not 6 months in advance. It has become a trailing indicator.
March 11th, 2009 at 9:56 am
RE CNBC Sucks
“CNBC, which is now locked in an ongoing comedic wrestling match with The Daily Show that will only further undermine its credibility.”
Monday night’s show, the moment of Zen, was a direct in-your-face to Cramer’s dismissive comment on Stewart to the effect “What? a comedian is attacking me?”
It was a series of Cramer clips in his clown role, at his most idiotic, followed by his very sober statement in a Maria interview in which he said “I’m telling the viewers of this video to buy Bear Sterns”
FOTFLMAO
March 11th, 2009 at 9:57 am
>>This market reflects developments from 6 months ago, not 6 months in advance. It has become a trailing indicator.<<
I agree. This is not an “investor’s” market; it is a trader’s market. Mr. Market has gotten many, many things wrong over the past year. Why should we expect different now?
March 11th, 2009 at 9:57 am
By the way, the reference to the feces came from Boots the monkey on last night’s Daily Show. We are entering an entirely new level of pop-culture ridicule of CNBC.
http://www.thedailyshow.com/video/index.jhtml?videoId=220510&title=basic-cable-personality-clash
March 11th, 2009 at 10:01 am
“We are entering an entirely new level of pop-culture ridicule of CNBC.”
Contrarian indicator flashing. MSM revulsion with the market – counter-trend rally.
The bear market will not end until nobody even wants to think about the market, let alone discuss CNBC.
March 11th, 2009 at 10:04 am
I do not think the presidents job is to create wealth or jobs. Mostly it should be to stay out of the way (which seems never to be done) and guide the country thru the international scene and perhaps other issues related to all Americans.
Insofar as the 2009 decline, the Obama adm does have a hand in this latest decline–the tax proposals were unsettling. Budget cuts in defense and health care took down those sectors. elimination of the step up basis at death changes thinking.
But I am in the smaller government camp if for no other reason than the federal government, when it centralizes a task is not effective (poor execution) nor efficient (it always costs far more than it has to) consequently the taxpayers can spend much more wisely than the fed government.
The analogy is what Obama wants to do–eliminate outsourcing of tasks and bring them in house–so to speak–it will end up costing more for things that probably should be decentralized or not done.
Fifedoms we know are created in big business and also in government. Which is why small private businesses are usually so much more profitable. The owners think hard before spending money and think real return on investment. Not many fancy aircraft or offices. And the reward for watching money spent will be higher taxes.
Watch how many California businesses leave CA with the higher income tax situation. Lose businesses, lose jobs.
Think about why Tiger Woods and his income left California.
March 11th, 2009 at 10:06 am
Chart it back to election day and it will paint a different picture. Not sure how much more that picture says, but several of the presidents would see a much different number.
March 11th, 2009 at 10:06 am
CNBC sucks:
I think a good feces fight would be a step up from the average TV program…
March 11th, 2009 at 10:13 am
I don’t think the drop is in any way Obama’s fault, either. However, I do think he has an ambivalent economic team who present poorly and seem to have no particular direction. He has not stepped to the fore to appear to be directing that team or, indeed, to have any plan other than to talk positively but allow them free rein.
This is not confidence-inspiring.
March 11th, 2009 at 10:42 am
I never expected to pass the CNBC fighting baton to Boots the feces-throwing monkey, but being a Republican, I am willing to declare “Mission Accomplished”.
March 11th, 2009 at 10:50 am
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9Ih4pDxaIK4&refer=home
China Trade Surplus Plunges as Exports Fall by Record
…it is time, Barry, for you to buy a new pair of penny loafers…..otherwise, how are they going to be able to afford our questionable treasuries….?
March 11th, 2009 at 10:51 am
Very impressive. It must not be an easy task to underperform every single one of those guys. There are some real losers in that list.
Fairly or not, Obama will get the credit or the blame. Part of the job. Why he gets paid the big bucks. Insert your favorite cliche here.
March 11th, 2009 at 10:51 am
Hmmmmm. Guess it means he ain’t no Roosevelt………….
March 11th, 2009 at 10:54 am
Everybody seems to be not so sure of yesterday’s rally. Not that it won’t resume, but so far, I see no gusto, no commitment, no follow-through. Didn’t we have a 250+ up day last week that also supposedly indicated a sea change? Is this becoming a pattern?
March 11th, 2009 at 11:01 am
you may as well have gone out and whacked a hornet’s nest with a stick Barry
The responses were pretty predictable.
If you’re looking for fun why not drop an evolution or global warming post into the blog. Those are usually good for a few hundred to and fro’s. Everybody is a little cranky around here these days. Maybe they need a brawl to reduce some stress
March 11th, 2009 at 12:15 pm
I’m not that happy with Obama, but his “mid term report card” isn’t due for 20 months; and his final for another 3 & 3/4 years.
Blaming him for what is happening in the economy says little about him, and a lot about his detractors.
If people are focusing on their own economic lives, then the economy will take care of itself. Self-reliance, not rent-seeking, is what made America great.
March 11th, 2009 at 12:15 pm
You need to think about the Obama administration as “turn around specialists” .
They have been handed a job and regardless of how bad it was when they took over, it is theirs to fix.
Now–if your company was in trouble and seeking outside help–a new management team. Would you hire this team?
Kind of like putting Immelt and Nardelli in charge of things ((oops-one is a member of the turn around team and the other not turning around Chrysler)
March 11th, 2009 at 12:18 pm
The actual effects of the new presidents policies, takes at least a year to even begin to come into play. The effects of brain-dead idiots reacting to the rumors of what horror or bliss the newly elected president and his (rumored or stated) policies may do to the country, is almost instantaneous. But the stock market is not just reacting to the president (and his policies), it is reacting to many other factors that are completely outside of his influence. To measure the actual effect of a president you would have to define and “neutralize” all of those other effects in a multivariate model of the stock market – good luck with that. Now that is not going to prevent some monkey from screeming that he know the cause / effects relations of market gyrations. If he actually puts his money where his mouth is, I will say good luck and thank you.
March 11th, 2009 at 12:28 pm
The economy is much bigger than any one man–that much we can agree on. The feedback loop generated by the fiscal policy of the Obama administration is long and it will be months or years before anybody can make an educated deduction regarding its effectiveness. However, the stock market is another story altogether. The stock market is forward looking. As such, each President absolutely owns the stock market performance from the day he is elected.
March 11th, 2009 at 12:32 pm
This chart assumes that it is the President’s job to make the Dow go up. Not the economy in general, but the stock market. Not the stock market in general, but the itty-bitty Dow. 30 stocks.
I’ve often said that the fundamental problem with our economy is that we manage for just two numbers: GDP and the Dow. Neither are good measures of economic health.
Barry, this doesn’t seem in keeping with your usual intelligent analysis. What’s up?
March 11th, 2009 at 12:32 pm
“If people are focusing on their own economic lives, then the economy will take care of itself. Self-reliance, not rent-seeking, is what made America great.”
Which is why the government should pay my mortgage and Citi, AIG, et.al, creditors w/ your taxes. Focusing on my own economic life is so banal, when the government is ever willing to encourage me to direct my focus elsewhere.
What’s in it for me? Will it cost less to take someone else’s wealth than to create my own? These are the abiding principles of America’s “greatness”. That and having more nukes than anyone else.
March 11th, 2009 at 12:36 pm
All this chart shows is that Obama is the first president to take office in the middle of a historic economic meltdown….the political cartoon that described it best came out a couple of months ago in which a smiling Bush is at the wheel of the “Thelma and Louise ” convertable plunging straight down after having been driven off the cliff saying to a terrified Obama riding shotgun, “I bet you can’t wait to take the wheel”!
March 11th, 2009 at 8:31 pm
How charts and graphs do we need to link Obama and the current economic mess? Perhaps if someone take the time comparing stock market and moon phases? or wall street performances in leap years? So many countless other possibilities…of them all, it has to be wall street and U.S Presidents.
Sorry, but this is just another meaningless chart.
March 12th, 2009 at 3:45 am
A fan of the Efficient Markets Hypothesis would have to conclude tht the graph is complete jibberish: as Samuelson famously stated, “properly anticipated events fluctuate randomly.”
Blaming/crediting Obama or any other president for a post-inauguration DOW fall/rise or for a pre-inaugural, post-election rise/fall is to assume that stock market participants do not read the newspapers in the midst of an election. If one desires to blame/credit Obama for DOW performance, that should be measured by DOW performance in the run-up to the election, when it was becoming clear that he would win. DOW performance vs. Intrade odds for his winning in that time period might be interesting. Certainly his policies in office are no surprise to anyone.