Yeah, I said it. This current downturn since November (even earlier) is now on Obama. As the economy rolled quickly down the hill, Obama had the option in each debate, his stump speeches, his acceptance speech and to any microphone since to stop the bleeding. He has not. All he would need state is that any economy in turmoil cannot afford higher taxes. Especially on capital gains. What is ironic is that raising the capital gains rate will have little impact by the time it is passed anyway. Anyone with gains to take is getting out of the market and no one is getting back in. The economy is shrinking, companies are fighting to stay above water and they are laying people off.
Obama threatened to raise taxes, threatened investors with a near doubling of the capital gains rate, threatened companies with more oversight, more taxes and more unions. He backed down on none of it and now he is elected.
Many thought the market had already taken its lumps, found a new low and prepared for this before November 4th. I thought it had to and I put some back in. What many missed, including me was the senate fight for 60. Some were talking about it but it did not seem likely. But as the election approached it became possible. Then on November 5th three elections were undecided and three seats was all that was needed…and down the market went.
Since that time those elections sat undecided. One concluded this week and the Democrats are now two away. One is so close and in a Democrat controlled state, so that is likely to change hands… leaving us with one…Georgia… and down goes the market.
The fears Obama put in every business owner, every investor, and any tax payer that was really listening look even clearer now then they did before the election. The ability to implement each and every program [deficit be damned], raise taxes, limit corporations, empower unions…kill growth, drive up unemployment, capital the US economy for years to come… these are now all possible… and the markets sink.
I believe in irony and I believe if the Dems hit 60 the Dow hits 6000 (a < 50% decline from its highs).