Wall Street Financial Markets Topple on Scott Brown Victory

It was interesting to see how Rick Santelli of CNBC's "Squawk on the Street" extrapolated the signals of Scott Brown's decisive victory in Massachusetts onto the financial markets. The Dow opened and dropped more than 150 points in the first minutes of trading. The dollar gained strength, as Margaret Coakley's loss seemed to be sending the message that the wild spending characterizing Obama's first year, if not halted, at least had brakes.

Stronger fiscal policies will take some of the balloon effect out of the massive stimulus the administration has provided to banks, insurance companies, health care corporations, and giant unions. Stock traders were making tons of money by watching the directions in which the government was pouring money, and getting to it first. It's not illegal insider trading, however, as anyone is welcome to play.

It's just that Wall Street financial moguls are always ahead of government, sometimes leading government in directions advantageous to themselves, as we saw with the AIG payoffs at a 100 percent rate to creditors like Goldman Sachs.

Dylan Ratigan, formerly a CNBC commentator, wondered aloud at his new slot on MSNBC yesterday how Treasury Secretary Timothy Geithner agreed to keep secret for ten years the provisions of the AIG payouts to creditors. There's nothing to be scratching your head about as you read this-the secret payouts were done with your money. Does it need to be made clearer? It's okay for "we the people" to have taken a bath in the economic crisis, and to be truly hurting, but we must "make whole" the big financial corporations like Goldman Sachs, where a lot of President Obama' s support came from, most conspicuously from former Goldman Sachs CEO, John Corzine, who left Goldman Sachs to become governor.

If Corzine's loss to Chris Christie was not enough to clue the Obama administration that people are not nearly dumb enough for them to get away with this financial malpractice forever, Margaret Coakley's loss to Scott Brown undoubtedly will. The people of Massachusetts voted yesterday, and Wall Street is voting today. Until the financial wizards "re-position" in light of this new Massachusetts intelligence, there will be no joy in Wall Street's version of Mudville.

I've singled out Goldman Sachs because it is one of the most visible firms advantaged by the Obama administration, but there are plenty of other profiteers of the Obama largesse. There was early on a decision made to replenish the coffers even of foreign banks who had financial affiliation with America's largest financial institutions. At the risk of being redundant (it can't be said often enough), conclude that it's okay for you to be taking a hit but not those giant corporations which President Obama seems to be so ambivalent about.

Truth to tell, the stock markets today also reacted to negative earnings reports from firms such as computer giant IBM, but that's not good news either. Health care stocks are the only "sector" which have not been reflected in today's dive. Giant corporations and "sectors" with huge lobbying efforts can afford to "hedge" against the directional pitfalls of a retrenching economy. The health care establishment hasn't just arbitrarily "switched sides"; it has the government surrounded on all sides. For the majority of working people, however, the only thing which can be said about hedges is that theirs got a good trimming.