Everyone was somewhat on hold when it came to stock trading the week before the Presidential Election in 2012. Then everyone also speculated what might happen if Governor Mitt Romney's campaign was able to unseat President Barack Obama. Some thought as I did, that if that happened we'd see a 1000 point rally on the DOW. Still, most expected Obama to win, and even Jim Cramer said he expected Obama to win, but also that it didn't really matter because the 2013 financial cliff and day of reckoning was coming either way - regardless of who was elected. Okay so, let's talk.
In hindsight, which of course is always 20/20, President Barack Obama did win his reelection, of course, getting reelected is always the easy part going into a lame-duck term. Most stock traders figured that there might be a little pull-back if Obama was reelected, not much and they expected if it did, it would recover quickly, as most of that was already priced in as he was again; expected to win. Well, what happened shocked a few, but not me.
The day after the election on November 7, 2012 the stock market had a huge sell off, 314 points on the DOW. Basically some of the health care stocks took a beating due to the take-over of the health care industry through the Affordable Health Care Act (Obama Care), but that wasn't all, nearly all the major stocks were down by 1 to 2% straight across the board in all sectors.
This to me shows a no-confidence vote by investors of the concept of another four years of what our economy had just gone through. As resilient the US economy is, if we get a repeat of four more years of this, things won't be looking too good once we emerge on the other side of that long dark tunnel, and who knows there may be a cliff on the end of that track?
As an economic analyst for a think tank, which happens to operate online, I've been quite concerned with the Obama Administrations sometimes cryptic "class warfare" political rhetoric and attack on the job creators. Why? Well, because I've always been one of them, and completely understand how free-markets work, why they work, and when they work best. So, of course, I wasn't the least bit surprised at Wall Street's response to this election. And, I am very worried about the drastic cuts needed now after the Obama Administration has added another $5 Trillion to the US debt. Please consider all this and think on it.
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