Stocks and Politics: The Obama Stock Market

Obamanites will no doubt point out that on Obama's watch the Dow went from about 6,500 in March 2009 to 11,000 in October 2010. But a more granular look reveals a different picture.

All hell broke loose in September 2008 - the height of the mortgage crisis, with the Dow plunging from 11,000 to 8,000 in one month. But it hit a low of 7,500 after Obama was elected. Following the election, the market staged a feeble rally attempt that fizzled. Obama wasn't inaugurated until January 2009 but after the inauguration the market plunge continued, with the Dow losing another 1,500 points by March 2009. Sure the Obamanites blamed the continuing malaise on the previous administration, and there was little Obama could have done to stem the decline in such a short time but the stock market anticipates, or discounts, events months in advance. Shouldn't the market have been rallying in anticipation of the promised hope and change?

After hitting the low of 6,500 in March 2009, the Dow took off, climbing to 11,000 by April 2010. A remarkable recovery, given the prevailing doom and gloom, expectations of a greater than the Great Depression and predictions of the end of capitalism as we know it. But did the market recover because of or despite Obama? What exactly did he do to turn things around?

Remember those Obama stock lists back in early 2009? Renewable energy, stem cell research, new green technologies, infrastructure spending? None of those stocks went up. None of those hopes panned out.

When Hillary set out to reform healthcare in 1993 under Bill, healthcare stocks plunged. Not so with ObamaCare. Why? Was ObamaCare so good for the market and the economy? Obama signed the healthcare reform bill into law in late March 2010, and the stock market plunged into a nasty correction shortly after that. Shouldn't the market have rallied instead to celebrate the big victory for the American people?

The stock market correction that started in April 2010 fanned the fears of a double-dip recession amidst out of control congressional deficit spending, 10% unemployment and the White House's relentless anti-business rhetoric. But the correction ended in September 2010 and the market took off once again. Markets often rally before midterm elections. Since the country expects a huge Republican victory, is the market rallying in anticipation of the Republican majority neutralizing or even rolling back Obama's disastrous socialist policies and arrogant Democratic Congress?

The stock market is a strange animal, hard to explain at times. But when a clear repetitive pattern emerges, it is hard to ignore. The market advanced each time it felt that Obama was impotent and declined when it feared that Obama was going to do something, or when he actually did - like pushing through the dreaded healthcare reform.