Bloomberg implicitly asks the obvious question: Investors say that president Obama is bad for the bottom line; if so, then why are US corporations on track for the biggest earnings growth in 22 years, and the stock market is going like gangbusters again?
68% of US investors say that Obama’s policies are detrimental to the US investment climate, and they aren’t even willing to give Obama credit to turning around the economic collapse. And 67% of them want to see a Republican win the 2012 presidential election.
As Bill Maher put it, are they upset “because President Chocolate Jesus did not make it rain twenties in two years”?
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Did the investor community support Obama in 2008? My understanding of Maher’s comment was that it was targeted at those voters whose expectations of what Obama would/could do were wildly out of proportion from reality.
The reason that investors think that Obama is bad for the bottom line is because he wants to reform wall street and the banking industry to put in place regulations to prevent another meltdown. But those regulations prevent the financial industry from creative financing such as derivatives and credit default swaps. Therefore they will not be getting those huge bonuses.
I still maintain that thinking that companies make decisions is false. It is the people on the board that make decisions, and those decisions are often selfish. These individuals are not doing as well under Obama as they would under a Republican government.
Starluna, I believe you are correct on Maher’s comment, it was targeted at Obama’s 2008 voters who are now not supporting him.
The article was interesting in that it is from a global response and not just US investors. The only difference between Us and non-US investors seemed to be Non-US still felt positively about the President while US investors did not.
Earnings are up because companies(atleast retail) raised prices higher than the down economy justified and I dont think the stock market is correct either. We are still on the edge of more collaspes.
Also when I think about comments relating Obama to bottom lines I think deficit…probably not the case though
If one can believe the Consumer Price Index (and I do with a fair dose of salt thrown in), prices have only increased marginally and many things have come down in price, large appliances and furniture for example.
A large number of companies are making more money than they did 2 years ago – just read the financial section of many newspapers and one can find reports of improved earnings every day and fewer reports of decreased earnings. Many companies are sitting on more cash than they have in years and I’m not just talking about the financial sector.
How have they achieved these recoveries? Way too many corporations laid off way too many workers. Then they piled additional work on those still working, thereby boosting productivity (up to a point, it’s less expensive to work folks on overtime than hire additional workers). Many moved even more of their production and services out of the country. Are their bottom lines fake? Most aren’t.
Is the stock market wrong? About the increased profitability of one company after another? No, I think they’re getting it right. P/E ratios are dropping, mergers and corporate purchases are increasing again. Is the market over-reacting to this news? Yep, I think it is, but I don’t see it leading to a dangerous stock run-up with all the investment money currently sitting in bonds.
Next big “bubble” to burst? Why, the bond markets, perhaps? Pretty seriously oversold to folks escaping the stock market two years ago and, due to suppressed interest rates, not really a value for the money. When enough folks really start to believe that the market is a moderately sound investment again, money will start to leave the bond market and it could leave fairly fast as more folks try and recoup losses from 08 and 09. Value of existing bonds will also drop once interest rates are allowed to rise. May be a double whammy.
I’ve put my retirement nest egg in a hole in the back yard. Sad thing is, I can’t remember where.
Investors prefer republicans for a simple reason. They only care about money they earn and they can earn money by investing in the US or abroad. Wherever they make money they pay taxes to uncle sam so obviously they prefer the candidate or party that reduces taxes. If the US goes down the drain they invest overseas. Bush and then obama saved a lot of investors by bailing out the banks and its a case of what have you done for me lately.
Warren Buffett is decidedly a Democrat. While he rubs elbows with the Republicans, his bent is on the Democrats. He has no interest in spending money, just making it. As far as bailing out banks, he gives the reasons for bailing out banks so we don’t go under completely. Let’s not forget that we as the Government are making close to 8% on the bailout investments. Only other way to make that is with preferred stocks which also make a very nice capital gain for you.
I don’t know if Warren Buffet, or any very famous Republican investor, is really a fair sample of the mindset of a typical rich person/investor.
The super-rich have already made it, and can worry about being generous etc.
The not-quite-super-rich are still trying to make out like a bandit. Perhaps these individuals are more likely to have a predictable selfish attitude? Just a thought.