Dow Jones Plummets After Re-Election Of President Obama

Following a jubilant night and early morning celebration by President Obama and his supporters, the markets reacted much the same way they did when he won in 2008.  The Dow Jones Industrial Average dove 313 points, its largest one day loss since November 9, 2011.  The Dow is now at its lowest level since July 26.  The business community is not a great supporter of this President as he creates too much uncertainty.  For one, the banking sector was reacting to the likelihood Dodd/Frank will remain unchanged.  Banks obviously hate strict regulation.  Then there is the Affordable Care Act.  With his re-election, there is little chance of change as the next two years will see the full impact of Obama Care.  Despite what the President has told us, this program will be prohibitively expensive and will not pay for itself.  Then there is the President’s pledge to help the poor and middle class but without big business, there is no middle class.  From where does this President think jobs are created?  He spoke of a recovery from the bottom up, exactly how does that happen?  One of the arguments against the re-reelection of President Obama is he’s not a job creator despite the 171, 000 job created in October.  The fact remains, the unemployment rate is 7.9% and if he doesn’t reach out to the business community, these next four years are going to be ugly.  On a positive note, due to the economic uncertainty, and fear of an economic downturn, crude oil prices dropped $4.27 a barrel to $84.44.  That of course is no comfort to those living in parts of the northeast who are unable to find gas as a continuing result of Hurricane Sandy.  If 2008 is any indication, the markets may be in for another day of large losses.  The President and Congress are now stuck with each other for another four years, so they better figure out how to make friends and work together, or we will all suffer the consequences.  It will play out in a much better fashion if there can be a consensus and action on how to lower the deficit as opposed to waiting for Dodd/Frank and the Bush tax cuts to expire.  This country is in a precarious financial position and we can ill afford to lose our AAA rating as Fitch Investors suggested will happen, without an agreement.  If that is allowed to occur, expect the country to fall back in to a recession by Q2 of 2013.

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