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Friday, November 2, 2012

Investors Want Romney

Posted by on Fri, Nov 2, 2012 at 6:32 AM

Why? Because if Romney were president, they would feel comfortable enough to take the kinds of risks that crashed the market in 2008. This is not a joke...

25% of respondents said they would take on more risk in their portfolios if Romney were elected, as opposed to only 12% who would do the same if an Obama re-election were to take place.

But here is the thing: Investors have done very well under Obama. Not only was there no depression, but the stock market rose 50% during his term...

The results have the tint of conventional wisdom to them, the wisdom that says Republicans are more business-friendly than Democrats and thus better for the stock market. However, only four presidents elected since 1900 have seen the Dow rise 50% or more during their first three years in office, according to Bespoke Investment Group.

One is President Obama, a Democrat. The other three were Franklin Roosevelt, Dwight Eisenhower and Bill Clinton. All three were re-elected to second terms.

If Romney is elected, we can expect a repeat of 2008—meaning, we can expect another spectacular transference of wealth to that tiny (if not tinier) segment of our society. A market crash does not burn money like a fire in a forest. A crash moves money like a heist.


Comments (16) RSS

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Supreme Ruler Of The Universe 1

The DOW is a measure of insecurity.

It is people using stocks as bank accounts. No growth.

Not to fret. We are soon joining...the Romnian Empire.…
Posted by Supreme Ruler Of The Universe on November 2, 2012 at 7:16 AM · Report this
"A market crash does not burn money like a fire in a forest. A crash moves money like a heist."

Exactly right. Remember the late 90s when all the "experts" were telling the middle class "Put all your money in the stock market! You're a fool not to!"? Then the bubble burst and everyone's 401k was worth a fraction of what it used to be? Guess whose pockets were lined with your retirement money?

Of course, the bigger picture is that privatization of Social Security is nothing but an attempt at the biggest ripoff in modern history. Luckily the public has so far seen through that sham.
Posted by MRM on November 2, 2012 at 7:16 AM · Report this
Theodore Gorath 3
The biggest problem for the democrats is the meme that republicans/conservatives are better for business and the economy than democrats. Nothing could be farther from the truth, as history shows quite deftly. This is very obviously in Obama's term with the stock market, manufacturing, housing, and unemployment numbers, and where they were when Dubya left.

Perhaps the biggest obstacle for Obama in this election (besides his skin tone), are those voters who say: "I just feel that Romney would be better for the economy."

They are completely wrong to feel this way, but it is a lot harder to get to the brain than the heart. Conservatives got to the heart first, it has been carrying them for some time now.
Posted by Theodore Gorath on November 2, 2012 at 7:21 AM · Report this
Pope Peabrain 4
But Republicans excel at promoting greed and selfishness. And despite being called "investors" they are little more than thieves.
Posted by Pope Peabrain on November 2, 2012 at 7:34 AM · Report this
@3 Absolutely correct. History has shown that the economy does better when a Democrat is President or Democrats control congress. This is true for just about every measure of the economy, including the stock market. These big investors may simply be hoping for lower tax rates.

It is reminiscent of big CEO attitudes towards health care. The best thing to happen to big companies (GM, Boeing, etc.) would be if we had a single payer system. These companies could rework their union contracts, giving their employees a little extra cash, but removing their ever increasing health care insurance costs and thus taking a bit for themselves. The only drawback is that taxes would go up. Not necessarily on the company, but on the individual. In other words, these CEOs are acting on their self interest, rather than the interest of the shareholders. The same can be said for the investors.
Posted by Ross on November 2, 2012 at 7:58 AM · Report this
I wish I could find the link, but I remember reading that the stock market has historically done the best when there's divided government. The theory is that in those circumstances it's very hard to change anything and businesses prefer stability/predictability.
Posted by decidedlyodd on November 2, 2012 at 8:17 AM · Report this
seandr 7
@2: Catchy quote, but completely false.

With any crash, the only people that profit were those holding short positions, which is a very small fraction of investors. The retirement assets of the middle class are sitting in the same securities as the assets of the super wealthy, and they all get spanked when the market crashes. Wealth does indeed vanish across the board - the only difference between the rich and middle class is that the former typically have a buffer. But not always - google "Mastro" for one example.

The problem with putting social security and retirement funds in securities is that you are betting money you simply can not afford to lose. You are effectively saying "fuck it, I don't need a safety net", which proves to be a stupid decision when you fall off your tightrope.
Posted by seandr on November 2, 2012 at 8:52 AM · Report this
Urgutha Forka 8
Investors would take less risk with Obama in the WH?

That doesn't even make any sense.

With a democrat chief exec., certain stocks will go up and certain ones will go down.

With a republican chief exec., OTHER certain stocks will go up and others will go down.

Are you sure they polled investors? I know of no investors who think ALL investments would decrease with Obama.
Posted by Urgutha Forka on November 2, 2012 at 9:51 AM · Report this
Gay Dude for Romney 9
A repeat of 2008? So just how will Romney manufacture another housing bubble burst? Hmmmmmm?
Posted by Gay Dude for Romney on November 2, 2012 at 10:02 AM · Report this
Max Solomon 10
@9: the European bond market is held together with bailing wire and duct tape. it could easily drag the planet back into recession/depression, no matter what Obama, Treasury, or the Federal Reserve want. in fact, i'm amazed they've held it together through this election.

i don't know that it will concentrate wealth more, if that's even possible at this point - but it will destroy wealth.
Posted by Max Solomon on November 2, 2012 at 10:11 AM · Report this
Pope Peabrain 11
@9 The same thing that caused the first crash and something you never hear the Republicans say anymore: Deregulation.
Posted by Pope Peabrain on November 2, 2012 at 10:11 AM · Report this
treacle 12
@9, well, first he'll attempt to start another war -- really just either escalate the conflict with Iran, or get overtly involved in Syria, or perhaps step things up in Africa.. many options here. Then when that has the media cycle in it's grip, quietly loosen investment rules again, which will simply allow another bubble to inflate on its own. He's certainly not smart enough to "manufacture" a bubble by himself, but his putative administration could quite easily facilitate the conditions to let the market bubble on it's own -- because that's what stock markets do and have done ever since the 1600s when the first 'joint-stock' companies were first created, and shortly thereafter proceeded to create the famous "South Seas Bubble" and the "Tulip Mania", and on and on.

Are you not very bright? Or are you just not paying attention?
Posted by treacle on November 2, 2012 at 10:23 AM · Report this
Will in Seattle 13
Gold is down. Because Fear is over.

Better measure is S&P 500. About 80 percent of my holdings are now in an S&P 500 index fund with an expense ratio of 0.03 percent (0.0003 fees).

That measure is up.
Posted by Will in Seattle on November 2, 2012 at 11:34 AM · Report this
Some Old Nobodaddy Logged In 14
@7 You're talking about the short-term. Recessions are great for the super-wealthy. Does no one remember this wonderful video?…
(And no, it's not a hoax, no matter how many right wing nutjobs stamp their little feet.)

The Republicans represent the super-wealthy, and so they like to set up recessions to help their buddies.
Posted by Some Old Nobodaddy Logged In on November 2, 2012 at 12:08 PM · Report this
keshmeshi 15
Honest question: If Romney cuts capital gains taxes to zero, does that mean that investors can still write off capital losses from their income tax?

If yes, that pretty well explains why investors would take on more risk. It's the standard socialism for the rich, capitalism for everyone else. They reap all the rewards of investing (since they're paying no taxes on their gains) while taking on very little risk to themselves (since they can write off the risk from their regular, working income).

It also portends an even greater boom/bust economic cycle which will undoubtedly leave us in a Great Depression in seven years or so, just in time for another Democratic president to clean up the mess.
Posted by keshmeshi on November 2, 2012 at 12:37 PM · Report this
keshmeshi 16
The retirement assets of the middle class are sitting in the same securities as the assets of the super wealthy, and they all get spanked when the market crashes.

No, they're not. Wealthy people have much more access to top-notch investment services, not to mention insider trading. Yes, there is the occasional dipshit who loses all his money by over investing in the real estate market at the top of a bubble or by handing all of his money over to Bernie Madoff, but the overwhelming majority of rich people know how to manage their wealth effectively.
Posted by keshmeshi on November 2, 2012 at 12:43 PM · Report this

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