Political Perceptions : Obama Knows How to Move to the Market
You need look no further than the Wall Street Journal for confirmation of what I've been saying: Obama and Wall Street... like a hand and a glove.
Oh, that joker! People thought he was going to raise taxes on the rich and cause problems for the biggest of the big capitalists. Boy, he sure showed them... he's one of them after all!
For a liberal Democrat who made no secret of his Robin Hood economic instincts, President-elect Barack Obama has been showing a savvy understanding of how to get the hard-core capitalists on Wall Street to do his bidding.
The way that Mr. Obama has handled his ambiguous role in the last week — before he actually has any real power, but is viewed by the nation as the economic savior — has been telling.
Most notable is the way he gave investors a shove toward the buy side with a press leak that may have prevented another scary stock market sell-off. Instead, his deft maneuvering was followed by a substantial rally that avoided even more financial angst around holiday dinner tables.
The way he teased the markets and the media about what he will do about taxes and spending also showed an aptitude for operating in the Wall Street-Washington arena.
It was then that the Obama folks leaked word that New York Federal Reserve Bank President Tim Geithner would be the new secretary of the Treasury – the post most important to the folks who make a living trading stocks and bonds. The Obama team was confident that Mr. Geithner would be viewed favorably by the market because he was a known and approved commodity among the Wall Street crowd.
They were right.
The leak was meant to buttress the market; normally announcements that seem likely to move stock prices one way or another are made before or after trading hours, from 9:30 a.m. to 4 p.m. Before the leak, investors had feared the Dow would test the 7,000 range. As the news spread, the market rallied and the Dow finished the day up almost 500 points, above 8000.
That was the point. The Obama folks wanted to move the markets, but they weren’t ready to officially announce Mr. Geithner’s selection, which they did the following Monday along with the rest of his top economic team.
*Phew*... I can sure rest easy, knowing that Obama's watching over the markets, making sure that they don't go down too much!