His speech may have inspired the nation, but President Obama's economic cheerleading failed to make a believer out of Wall Street. Despite today's bleak news on the trading floor, the comforter-in-chief seemed to accomplish what he set out to do on Tuesday night--raise the spirits of grassroots Americans. Before last night's speech, confidence in the country had tumbled. While an overwhelming majority approved of President Obama (62%), nearly 80% agreed that "things are going badly in the United States." By a noticeable margin, the President has become more popular than his policies.
While people respond to his rhetoric, the market responds to reality--which is why investors have seen an interesting trend each time the President's outlines his agenda for the economy in a major speech. Obama's stock goes up, and the Dow goes down. Like a truth indicator to the President's plans, Wall Street tells us what Obama will not: financial experts have serious misgivings about the administration's approach to the crisis. The correlation below is really quite striking. When the President speaks, the market listens... and crumbles.
- November 5, 2008 (Wednesday after Election Day): -486 (5.0%)
- January 9, 2009 (one day after Obama speaks at George Mason University on "need" for $800 billion stimulus package): -143 (1.6%)
- January 20, 2009 (Inauguration Day): -332 (4.0%)
- February 10, 2009 (one day after Obama declares that without a stimulus, "an economy that is already in crisis will be faced with a catastrophe"): -382 (4.6%)
- February 17, 2009 (market opens for the first time after Congress passes $787 billion stimulus on February 13; Obama signs bill into law, declaring, "The stimulus lets Americans claim destiny."): -298 (3.8%)
- February 19, 2009 (one day after Obama announces potential mortgage relief plan): -90 (1.2%)
- February 25, 2009 (one day after Obama's first speech to the full Congress): -80 (1.1%)
