There Is That Silly Meme Again...
CNBC continues with the "stock market is rooting for Obama" ninkompoopery, this time trotting out Swiss talking head Marc "Dr. Doom" Faber. To be fair, Faber doesn't say the market is rooting for Obama's policies, just for the continuity of regime. I still think this is wrong and I have told you what I think the market is doing here and here. To recap, I think the stock market is betting that it'll get either 1) Obama with a Republican House and further Republican gains in the Senate - basically a mostly powerless Obama, or 2) Romney. For the stock market that equals "Heads I Win, Tails I Tie." Thus the rally.
But I think that Faber's reasoning is flawed and his ability to prognosticate this election is limited. First, he reasons that the market wants Bernanke and with Obama, Bernanke stays. First, Bernanke is around through 2014 no matter who wins, and it is no guarantee that he would accept a reappointment by Obama in 2014. It is been a long arduous road for the Bernank, he might want to get back to cushy life in Princeton. Second, and finally, this is an election were you can't have much insight sitting off in Europe and reading the conventional wisdom. This is not a conventional election, there is so much pent up feeling in the hearts and minds of Americans, so much is in flux, and so much in happening under the radar that is opaque if observed through conventional lenses. I don't think Faber is in a position to see or know what is going on.
As for me, well, you know, dear reader, that DB has his finger on the pulse. This is what is happening in our election right now...it could all change but this is what is happening today:
1) Obama's 2008 coalition is broken, his campaign is under-performing in reconstituting it
2) Obama is being actively undermined by the Clinton machine
3) Romney is inching forward in workmanlike, incrementalist fashion
Furthermore, the economy will be of no help to Obama, nothing is going to happen that will be perceptibly positive. Lastly, as I have stated before, Obama has terrible instincts and is prone to making catastrophic errors. There is a reasonable chance (20%?) that his campaign will melt down in shocking fashion.
But I think that Faber's reasoning is flawed and his ability to prognosticate this election is limited. First, he reasons that the market wants Bernanke and with Obama, Bernanke stays. First, Bernanke is around through 2014 no matter who wins, and it is no guarantee that he would accept a reappointment by Obama in 2014. It is been a long arduous road for the Bernank, he might want to get back to cushy life in Princeton. Second, and finally, this is an election were you can't have much insight sitting off in Europe and reading the conventional wisdom. This is not a conventional election, there is so much pent up feeling in the hearts and minds of Americans, so much is in flux, and so much in happening under the radar that is opaque if observed through conventional lenses. I don't think Faber is in a position to see or know what is going on.
As for me, well, you know, dear reader, that DB has his finger on the pulse. This is what is happening in our election right now...it could all change but this is what is happening today:
1) Obama's 2008 coalition is broken, his campaign is under-performing in reconstituting it
2) Obama is being actively undermined by the Clinton machine
3) Romney is inching forward in workmanlike, incrementalist fashion
Furthermore, the economy will be of no help to Obama, nothing is going to happen that will be perceptibly positive. Lastly, as I have stated before, Obama has terrible instincts and is prone to making catastrophic errors. There is a reasonable chance (20%?) that his campaign will melt down in shocking fashion.
posted by Donny Baseball at 2:56 PM
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