re: #1228 WoodstockDave

Obama’s stock market disaster has less to do with his wasteful, earmark-laden waste of $800 billion than with his failed leadership. He and his Treasury secretary haven’t a clue about what to do to get out of this financial and economic mess. Even worse, they do things that anyone familiar with basic economics or market workings would know not do do. At every turn, they create fear, uncertainty, and doubt about what their plans are. They’re creating an environment where businesses have no idea what’s coming next. We don’t even know what income and capital gains tax rates will be in the next year or two. How the f*ck are businesses supposed to plan with these incompetent, opaque idiots pulling the levers of government?

It’s poetic justice that the young, who voted for this goon in droves, will be the ones to pay for this mess. Too bad the rest of us unwilling victims have to go along for the ride.

Exactly. The markets loathe uncertainty. They’ll respond positively even to a stupid - but detailed and forcefully argued - plan. But even a whiff of incompetence at the top sends them into a panic. And we’ve gotten a whole lot more than a whiff.

Rather than running around trying to “stimulate” things, Congress and the Administration ought to be putting in place fixes for some of the things that went wrong. Mandatory, significant down payments for mortgages; mandatory credit and financial background checks for mortgage borrowers; mandatory income to debt ratios; outlawing of interest-only (or even worse) loans. Over on the banking side, an examination of these bizarre credit instruments with a highly leveraged mortgage wrapped in layer upon layer of additional borrowing needs to be done, and these and similar instruments need to be outlawed, much as leveraged stock purchases were severely curtailed following the 1929 crash.

So far, I have seen nothing whatsoever done to fix any of the structural problems that lie at the root of today’s various crises. Just a lot of hand-waving, and a frenzied tossing of wads of increasingly devalued dollars at every problem, real or imagined.

It’s just this sort of ignorance and inaction that has spooked Wall Street.