Monday, September 15, 2008

Dow Falls 504 Points as Obama's Chances Fade

The decline in Senator Obama's fortunes in the 2008 election have been followed closely by a sharp stock market decline today due to the bankruptcy of Lehman Brothers. This bodes ill for my home town, New York City, and for my home state, New York, as both depend heavily on Wall Street and finance for their revenues.

Contrairimairi has forwarded a seemingly unrelated piece of news. Jennifer Rubin of Commentary notes that Mr. Obama is one of the largest recipients of donations from Fannie and Freddie Mac. Back in 2007 the Washington Post noted that Senator Obama was the largest recipient of donations from Wall Street. Thus, 17 months ago, before he overtook Senator Clinton in the primaries:

"The Illinois senator raised $479,209 from employees at the banks in the quarter, according to Federal Election Commission filings. Giuliani collected $473,442, and Clinton got $447,625. The figures are based on employers listed by the donors; in some cases, names are incomplete or missing."

This was back in April 2007 when I and many others had heard little about Senator Obama. Of course, with the backing of George Soros and Warren Buffett, Wall Street has been absolutely thrilled with Senator Obama's candidacy. Obama was talking about change for Americans when he really meant million dollar bonuses for the good folks on Wall and Broad.

In June 2008 I blogged that:

"In contrast to Goldman Sachs, Morgan Stanley has traditionally given to Republicans, according to Open However, in 2008 Morgan Stanley has donated $1.4 million to Democrats and only $824.8 thousand to Republicans. As far as the finance, insurance and real estate industry as a whole, open secrets reports that in 2008, for the first time since 1990 when it begins its report, the industry as a whole is favoring the Democrats over the Republicans."

Wall Street has benefited from decades of Republican financial subsidies in the form of artificially reduced interest rates that have inflated the stock market, enhancing stock valuations and hence the turnover of stocks as investors have speculated to a far greater degree than they would have. Clearly, the Republicans have been running out of steam, as their subsidies have gone into the pockets of Wall Street bounders who lack the competence to manage even a subsidized business. Wall Street probably hoped that Mr. Obama was a plumed knight come to rescue them from their self-created dragons of inflation and American economic decline. Wall Street has been slurping up the resources of hard working Americans via Federal Reserve Bank inflation for decades, and now they are going bankrupt nevertheless. This is not incompetence. It is corruption.

I can't help but wonder if the stock market is declining in part as a reaction to the reality that Mr. Obama won't be around to help them in the coming four years.

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