Getting Used To The Pain
link Markets Start to Anticipate Obama Victory in November – Fast Money – CNBC – CNBC.
This is a classic “as if” scenario. Despite demonstrable incompetence and ill founded principles offered during the incumbent’s stay in the White House, the narrative is being pushed that the ‘stability’ offered by the Obama reign is somehow benign for the financial markets. Only those who are still subscribing to the tooth fairy fantasy; those that are on their 3rd hit of the bong or those from California could possibly subscribe to this delusion.
The fact is, markets are anticipators of events, usually 6 to 8 months into the future. For example, when the stock market suffered the massive swoon in early 2008, it was partly in anticipation of the Democratic victory in the fall of that year. While the write downs in bank and mortgage valuations did substantiate the big selloff, it was the anticipation of a incoming regime that was expected to be unfriendly to markets that started the cascade.
At the moment, the Republicans are almost finished with their circular firing squad process of vetting their candidate to oppose Obama during this year’s November elections. It appears that the presumptive victor, Mitt Romney will prevail and consequently, an experienced and capable economic individual will resume control of the Presidency. It is more likely that this assumption is the scenario causing the markets to advance. To subscribe to CNBC’s version of reality is to assume that people have come to accept and embrace out of control spending, skyrocketing deficits and a sure but steady neutering of America’s economic and social system. In other words, they assume that people have thrown up their hands and accepted that the U.S. will become Greece, Portugal or even worse, California.
While of course people will always adjust to whatever reality is thrust upon them, it’s a stretch for anyone to claim that the financial markets are stabilizing ahead of an Obama victory. It’s as if someone chose to go back to eat at a particular restaurant after becoming violently ill when they last ate there. It’s the logic of ‘the devil you know’. Sounds like spousal abuse to me.