Monday, November 17, 2008

What a legacy

Here comes the Obama Recession.

That's right, we're in the beginning of a recession caused solely by Obama's threat to tax capitalism.

In just the two weeks since Obama became President-Elect, the Dow has fallen from 9,625 to 8,273. That's 1,352 points, or 14% of the total value. Compare that to the two-month period after each new President's election in the past 30 years:

President-Elect Bush 43, late 2000: Down 100 from 10,900; -0.9%.
President-Elect Clinton, late 1992: Even at 3,300.
President-Elect Bush 41, late 1988: Up 150 from 2,050; +7.3%
President-Elect Reagan, late 1980: Even at 900.
President-Elect Carter, late 1976: Up 70 from 930; +7.5%.

(Each of these is approximate, as I had to read them from graphs on http://www.djindexes.com/mdsidx/index.cfm?event=showAverages.)

The point is that the economy's reaction to Obama's election is tremendously more severe than to any other presidential election within my lifetime, and with no surprise; he has promised to disproportionately punish those who succeed, and the obvious reaction is to pull money out of the economy before he has a chance to tax it.

So how long will it last? My theory is that even assuming that Obama realizes fairly soon how destructive his ideas are, capital will not reenter the market en masse until tax year 2009 is complete, so look for things to get better in February 2010.

One big exception: It appears that firearm dealers are doing extremely well, and will probably continue to do so until Obama makes them illegal.

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