Tuesday, January 20, 2009
Hey, neat coincidence
Some of you may have noticed that the market fell over 5% today, the day Obama was inaugurated. This caught someone's attention and Bloomberg reported that from Election Day to Inauguration Day, the market fell 14% waiting for Obama. This was the worst performance for the Election-Inauguration day stretch on record. The second worst, at -13%, was waiting for Roosevelt in 1933. The almost identical loss is coincidental and not based on any fundamental math or econometric reason. FDR experienced such a drop due to the horrible, deteriorating economic conditions at the time (during the Depression). Today, conditions are rapidly deteriorating as well and we fear a depression. Just a coincidental sign of the times, I guess.
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I noticed. A bartender at one of my local hang-outs asked me about it. I told her it was a gift to Obama from Wall Street lowering expectations so that when he leaves office his numbers relative to the market will look better. Of course I was being facetious. When Bush took office the Dow was at 10,588, on Obama's inauguration day it was 7,949. He has nowhere to go but up (let's hope)!
ReplyDeleteInterestingly, the Dow was around 50 when FDR entered office in 1933 and the same when he left in 1945. When Clinton entered office in 1993 the Dow was at 3,242. It more than tripled while he was in office ending at 10,588.
Timing is everything!