Bamonomics exposed! No one in their right mind is buying into it after fiasco
By CHARLES GASPARINOLast Updated: 6:53 AM, August 5, 2011
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Of course, there are lots of reasons why the stock market fell more than 500 points yesterday -- the largest one-day rout since the dark days of the 2008 financial crisis -- global economic unrest being chief among them.
But in the past, when European markets swooned, the US stock market wasn't a bad place to put some money. No longer.
OK, a stronger-than-expected jobs report could send the Dow flying in the other direction today. But talk to investors and you come away with the distinct impression that they've figured out the truth about President Obama's economic policy -- there's no there there.
Yes, they brushed off talk about a US default, and rushed so hard into bonds that the return on Treasury bills maturing in less than a year fell into negative territory. But bond prices mainly reflect things like inflation (which is low because of the lackluster economy), and the United States is the world's lone safe haven. (Even if our bonds are downgraded, they're a safer bet than anywhere else.)
Stocks, on the other hand, reflect investor sentiment about the broader US economy -- and how it'll fare in the future. It looks like last week's rotten GDP-growth numbers, plus dismal manufacturing-growth news, has investors betting that the future doesn't look bright.
"I wouldn't rush to go out and buy stocks, even cheap ones with the market down 500 points, because with the job market and economy where it is, I see significant problems," trader Doreen Mogavero told me yesterday on the floor of the New York Stock Exchange.
The markets reached their financial-crisis low in March 2009, when the Dow fell to 6,600, then recovered over the next two years on a bet by investors that Obamanomics might actually work.
But now they've decided it isn't working -- that's how they read these numbers. And the Fed's not going to help, either -- printing money hasn't worked so far, nor have zero interest rates. And it doesn't have any other tools left.
Republicans, meanwhile, can't push through their own pro-growth agenda, because the president still has the power to stop what he sees as providing aid and comfort to the enemy -- namely "millionaires and billionaires."
House Majority Leader Eric Cantor recently told me there's not much he and his colleagues can do other than make the case for a business-friendly environment, and push to limit the Obama regulations that are forcing firms to hire overseas instead of here at home.
But it seems next to impossible to reverse the debilitating effects of the granddaddy of regulation, the Dodd-Frank financial-reform law, which makes it more difficult for banks to lend to small businesses and forces Wall Street firms to get out of businesses that had little to do with the housing sins that led to the 2008 financial collapse.
In other words, our economy can be summed up in two words: A Mess -- and, in my experience, investors generally hate buying into a mess.
Charles Gasparino is a Fox Business Network senior corre spondent
Read more:
http://www.nypost.com/p/news/national/bamonomics_exposed_into_one_after_DGN6XFBwCKMfiSquznqj9O#ixzz1UB7dja5d
