The WSJ Editorial Page Talks, the Market Listens

Thursday morning editorial:

The voters may be full of hope about the looming Obama Presidency, but so far investors aren’t. No President-elect in the postwar era has been greeted with a more audible hiss from Wall Street. The Dow has lost 1,342 points, or about 14%, since the election, with the S&P 500 and Nasdaq hitting similar skids. The Dow fell another 4.7% yesterday.

Much of this is due to hedge fund deleveraging,* as well as dreadful corporate earnings reports and pessimism that the recession will be deeper than many had hoped.** We also don’t want to read too much into short-term market moves.*** But there’s little doubt that uncertainty, and some fear, over Barack Obama’s economic agenda is also contributing to the downdraft.****

What WSJ readers did on seeing that (via Google Finance):

And, lest you think I’m cherry-picking to avoid the broader markets, from the same source:

*This is from the paper that argued continually until October that the hedge funds were running perfectly.

**There might be a link there.

***Really?? So how do they explain the next sentence?

****This is on a par with deleveraging, lack of investment, lack of profits, lack of markets that clear, fading real estate values for the mall-stores, and the multiple recent retail bankruptcies (Circuit City, Ponderosa, Applebee’s, etc.)? Looking at the six-month graphic, it appears that the market hit a bottom on October 27th [Oct27 close: 8,175.77, more than 100 points below the level when the editorial was written], bought into the Obama rumor, and has been selling some gains on the Obama fact and the Fed easing and Hank Paulson’s admitting he has never known what he was doing.