Barack Obama Sends Powerful and Well Planned Message to Uncertain Markets Validating Concerns
By Mike Madigan
On Monday Barack Obama sent a clear, powerful and well planned message to the markets that appeared to be targeted at validating many people’s concerns.
In an already jittery market that was looking for reassurance following an over 250 point drop in the market Barack Obama started his speech by showing up over 50 minutes late with no explanation as to what caused the delay.
Obama started his speech with the following quote related to the S&P credit rating downgrade: “The markets, on the other hand, continue to believe our credit status is AAA. In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.” Obama made this statement in the midst of a market correction fueled by the market’s loss of confidence in the United States credit and following a major trading scandal at Buffets Berkshire Hathaway and an S&P Downgrade of Warren Buffet’s Berkshire’s outlook down to “negative” from “stable”.
Obama next ridiculed the S&P and discounted it for what he believed was a questionable rating downgrade and tried to suggest that he was not to blame for the current situation. Obama stated: “That doesn’t mean we don’t have a problem. The fact is we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction. That was true last week. That was true last year. That was true the day I took office.”
Obama, similar to an alcoholic denying his problems with alcohol, next suggested that if the people in the leadership positions had just stayed quiet and kept Obama’s secret that we had a massive debt problem we would not be dealing with this debt downgrade today. Obama stated “we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least. We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.
Obama laid out his plan on how to proceed immediately by dramatically increasing spending through a stimulus plan focused on extending unemployment and rebuilding infrastructure apparently modeled after his failed stimulus package. Obama’s stimulus package compounded the current debt crises by adding nearly a trillion dollars of debt to it and many say it resulted in the sustained unemployment rate of around 9%.
Obama’s speech sent a powerful message to the market that this Administration is either in denial or it is intentionally creating a crises in the market. Obama appeared late without explanation, he discounted and ridiculed the S&P rating as irrelevant and he launched into plans to introduce massive new stimulus spending. Following this speech the market responded to Obama’s message by going from down 2.5% to down well over 6%.
In a related story the UK’s Daily Mail reported mounting rumors that investor George Soros, 80, has made almost $1 billion in the market investing on insider information that the U.S. would lose its AAA credit rating.