To those Market-savvy DUers --

[gateley]

Why did the Dow go down today? I would have thought it would have gone up with the news of Obama's election. I know I'm looking at it simplistically, which is why I'm coming to you for clarification. Thanks!!

[AnneD]

1. There could be many reasons.......

1) the party's over. Barack and DEM's will call for and get transparent regulation.
2) no more kicking out families from homes-redo the loans maybe at a loss.
3) they will be fairly taxed, for the first time in 8 years.
4) the GOP can't cook the books anymore-no telling how bad it really is.
5) anymore bailout money will require they actually do something.
6) no more siphoning money from the Iraq cash cow.

There are many more.

The cock roaches always scatter when the kitchen light gets turned on.

[gateley]

2. Thanks! Your possibilities make a LOT of sense! nt

[Roland99]

3. Election euphoria wearing off and a realization that economic indicators this week were CRAP

[BelgianMadCow]

11. Must go read SMW now. Thanks for your posts over there!

:hi:

[Roland99]

13. my pleasure!

Haven't been in there much the last couple of days...I need to poke back in there!

[AnneD]

14. We miss you....

But understand you have more attractive fish to fry;)

[Roland99]

18. HA! Well, that and work has been slam-bang busy this week

I'm missing someone on my team so it's all on my shoulders and some automated stuff has gone haywire adding to the heap. :)

Today should be a breather....should be!

[AnneD]

21. Bet you root for your baseball team......

hope springs eternal.

[crazylikafox]

4. There was a very bad jobs report this AM.

And given that the market had a big runup in the last week or so, I think the big boys just decided to book their profits. It's also going into tax selling season. (meaning they have to sell some of their losing stocks so they can take the tax write-offs)

[Realityhack]

20. Most helpful post so far.

According to the Sandard & Poors rep on the radio last night there were actually at least 3 indicators that where not only bad but worse than analysts projected and that was the main cause.
The professional bet makers on wallstreet are not going to react to someone winning whom they have known was going to win for a week or two minimum with a massive swing. IMO what we saw was business as usual in response to worse than expected reports.

[JNelson6563]

5. Wall St. doesn't like change

Especially the kind of change that's coming. Think of one of those Mucinex commercials, how the party's over when the medicine shows up.....kinda like that.

Take heart though, as things get stabilized and it becomes clear this is the case many will be willing/able to invest again and will do so. This downward thing that happened today was just the greedy big players and they are always short term thinkers (like many opportunists). They are hardly the entire cast of characters. Honest, more long term investors will change the direction of the markets.

Cheers,
Julie

[AnneD]

15. They hate uncertainty even more....

now they know who will be getting the WH mail-they will spend the rest of the year second guessing and Bush will fade into ignominy. Look for fun in next year's first quarter.

[JNelson6563]

23. Yep, interesting days to come for sure!

Good to see you AnneD, as always. :hi:

Julie

[Realityhack]

19. not the reason.

they got several very bad indicators in the AM that caused the crash. These are professional bet makers. They have known for at least two weeks who would win. The market was fine until the much worse than expected numbers came out. The pros also know the markets have historically run better under Dem administrations, and they know the handover of power hasn't come yet.

Reading this as a response to the election is incorrect.

[JNelson6563]

22. Perhaps

I've seen plenty of days where horrible numbers came out and the markets did very well. Posters in DU's Stock Market thread have often commented on this sort of craziness. With that said I don't doubt there was actual lucid thought reacting to the bad numbers and that it played into the day's drop.

Regardless of yesterday's action one simple fact remains, Wall St. much prefers gridlock to change. They are the ultimate subscribers to the notion of "the devil we know is preferable to the devil we don't". I wouldn't at all rule out that the coming big changes also played into the drop.

Julie

[Realityhack]

25. True but...

I think everyone on wallstreet pretty much knew Obama was going to win. And as there is no immediate turnover of power so there would be no policy changes.
The international markets were up. Potentially on less uncertainty. The big investors know that markets have historically done better under democrats and IIRC the guy from S&P said they opened up until the numbers broke mid morning.

[Zynx]

6. First, it rallied for nearly a week prior to this on anticipation of an Obama win.

Now before you say "Isn't the market Republican leaning?", it rallied because the uncertainty was over and done with and they got a good sense of what the election would turn out. Now it is a "sell the news" sort of deal.

[Mike 03]

7. There's a saying on Wall Street: "Buy on the rumor, sell on the reality."

The market has all ready factored in an Obama victory, which may be why we saw less volatility last week and a small rally yesterday.

I could be wrong, but I honestly don't think the election has much impact on market behavior right now. The market is always thinking six months ahead: There are other exigencies that I believe are in play:

1. Force-selling by hedge funds with redemption requirements
2. Commercial Real Estate collapse
3. Credit card collapse
4. Trillions of dollars in derivatives held domestically and overseas; these instruments are poorly understood, may be worth pennies on the dollar, and have not been de-leveraged
5. Fear of more bank failures
6. Admission by GE and Citi that they are not as healthy as many people believed

In the unlikely event that what happened today has something to do with the election, it might be a hangover effect as people begin to realize what a difficult job President Obama will have on his hands.

Mike

[gravity]

8. The economy still sucks

The news the Obama was going to be elected was already priced in the market anyways, so his win met the expectations

[CK_John]

9. Bush pulled the PPT and the election is over, look for 7700 bottom. n/t

[paparush]

10. A big uncertainty was answered last night. Now the markets can settle and respond to the gloomy

economic news.

[maseman]

12. Earnings are awful, the recession has set in, the market was up 300 yesterday

people were taking profits today.

Just because Obama was elected doesn't mean we are out of the worst financial crisis since the great depression.

[Awsi Dooger]

16. Market down, gas prices way down

So much for the cynics who asserted that gas prices would soar on the day after the election. As I posted many times in response, they were not paying attention.

The gas futures price per gallon jumped on Tuesday but plummeted today. The pump price will continue to drop.

[Political Heretic]

17. It goes up prior to election to help GOP, goes down afterward as it gets back to reality

or "fears" Democrats with all our "taxes" and "regulation" and stuff.

[bemildred]

24. The market is not a rational process.

It is more like a herd that gets spooked this way and then that, with a healthy dose of manipulation, and another healthy dose of random dumb-fuckery.

[iamthebandfanman]

26. FREEPER ALERT!

j/k

i just got accused of it for asking a question ,decided id be equally outrageous to make myself feel better.
hehe ;)