More "wisdom" from the people paid to tell us what is going on with the markets. Let's remember that all of these people failed to predict the current meltdown.
An article today at CNBC contained a bunch of claims about how the market would react to an Obama or McCain victory on Tuesday.
Among the "kernels" of wisdom:
Some traders think there is a connection between the recent drop in stocks and Obama's rise in the polls. The last time McCain had a consensus lead in polling was Sept. 11, which was the market's most recent high. Since then the Dow industrials have fallen about 20 percent.
"A lot of times the way the market works is fear-driven, and the worst-case scenario is already factored in there," says Jordan Kimmel, a fund manager at Magnet Investment Group in Randolph, N.J.
Ok, so the first conclusion is that some people (which means I want to say this but I really don't have a lot of firm examples) think the market is falling because Obama will be our next President. This is like a bad McCain add: "Obama is to blame for market crash"
On the other hand:
But the market's huge selloff is mostly the result of an unprecedented financial crisis, which is pushing the economy toward what many expect to be a long and painful recession. That has also been the main factor behind Obama's rise in the polls
OK, so now it might be that Obama is doing well because the market is doing poorly. This is starting to sound like a chicken and egg problem. Which is it? The market is falling because Obama is doing well or Obama is doing well because the market is falling.
More from Mr. Kimmell:
"My best guess is we see a rally in November regardless of the outcome of the election," Kimmel says. "Should McCain actually win I think you see a gigantic rally, but I'm not expecting that at this stage."
Wow, another McCain campaign ad: Vote for McCain if you want your portfolio to really take off.
On the other hand (From Bruce Fenton of Atlantic Financial:
we have lost a tremendous amount of foreign investment—over a trillion dollars. The perception of global investors, the foreign policy and just the diplomacy of Barack Obama would be seen as a big positive outside the US."
So maybe an Obama victory is a good thing for the market. Bring those foreign dollars back. Yayyyyy!!!!
Yet some market watchers believe the election is not at the top of the priorities list on the trading floor. With stocks hampered by so many other factors, such as credit tightening, consumer weakness and the specter of a recessionary economy, politics is only one of many factors.
Oh, never mind. Maybe the whole election thing isn't driving the market. The market is responding to real world economic problems and Obama's pending election isn't really part of the problem.
So basically it's a whole article of mindless speculation that concludes with "the election is not the top priority" to the markets. But hey, we get to say a bunch of things that make it sound like a vote for McCain is a vote for your 401K.
What do you think?
I do want to note that I don't think the author of this article was biased in any way.