It’s tempting to wonder if today’s selloff on Wall Street is because the boyz are taking profits before our Socialist Kenyan Suzerain (under whom the market has gone up more than 60 percent) raises taxes on the rich, regulates and prosecutes the banksters, inaugurates a carbon tax, etc. etc. This is kind of where Tim Fernholz in the Atlantic is heading. If only.
Better Markets’ Dennis Kelleher has an interesting take:
For Jamie Dimon and all of Wall Street, it’s time to wake up and step up or, finally, shut up.
They lost on their biggest bets in a long time: defeating President Obama, defeating Elizabeth Warren in Massachusetts and, more important to them, defeating financial reform. They went all in. Spent hundreds of millions of dollars directly and indirectly. They had a presidential candidate expressly vowing to repeal the Dodd Frank financial reform and Wall Street re-regulation law. All their efforts were for naught. The loss was total.
The question now is whether or not they will learn anything. If past is prologue, they won’t, but they have a moment to seize an opportunity, rehabilitate themselves, and do what’s right for the country, which will also turn out to be what’s right for Wall Street.
I’m not holding my breath.
I suspect the reasons are more prosaic. We’re back to reality, where an intransigent Republican House of Representatives will refuse to raise the debt ceiling, even though this was done routinely in the past. And Mr. Obama will either fight or cave. The gun at their heads is the so-called fiscal cliff, automatic spending cuts that include the holy of holies, defense. For some reason, we can’t make the transition after war to a peacetime economy with less defense spending for the first time in American history.
Less noticed but as profound are new reports out of the European Union on dismal growth prospects. Of particular concern is news Wednesday that Germany, the one strong spot in the eurozone, posted a 1.8 percent decline in industrial production from August to September.
Whatever the cause, this is an overvalued market that has been waiting for a correction.
And Don’t Miss: Facing protests, China’s business investments may be cooling || NY Times
Today’s Econ Haiku:
Trump, Rove, Peggy and Rupert
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