Markets slide because of….you know reality.

My man Jarvis found a quote from a stock broker worried that and Obama election will bring economic Armageddon. Jarvis extrapolates from this quote that the markets are scared of an Obama win, hence their drop. I would like to offer an opposing theory: reality. Let’s take a look at some possible factors in the US stock slide:

1. Major financial institutions investing trillions of dollars in assets that were massively over valued.

2. Banks, fearful of misvalued assets, have stopped lending to each other commonly known as the “credit crunch.”

3. Treasury and Fed actions to correct the situation have been historic, but have failed thus far to thaw the markets-

  • The Fed Finances JP Morgan Purchase of Bear Stearns
  • Fed and Treasury team up to finance the nationalization of Fannie Mae and Freddie Mac
  • Treasury bails out AIG
  • Treasury lobbies for and recieves from Congress a $700 billion bailout package. 

All of these not mentioning the numerous interest rate cuts and an economic stimulus package, have failed to reverse the negative trends in the US economy. So go ahead and try to deflect blame to the man that hasn’t been elected yet. But the facts on the ground are why the market is falling apart. Find another straw man.

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