The article provided below shows how bankers and those
working for big financial institutions see Obama. The answer might surprise you put an end to
the perception that rich business people are in favor of Romney whereas the
working class would favor Obama. According to the article, after surveying
hundreds of institutional investors at Royal Bank of Scotland, 83% favored
Obama. The article provides an explanation
on why this is. Since most of the people
in this class are business/ economics majors, what do you think about Obama
from a purely economic standpoint?
When I read this article I interpreted it as saying that 83% believed that Obama would be re-elected and not necessarily that the same high percentage of institutional investors are actually in favor of him. That being said, I don't really like the idea of relying to heavily on the day to day activity of the S&P 500 because if can often fluctuate to a high degree often based solely on speculation.
ReplyDeleteI do agree with Obama's ideas about giving tax breaks to the middle class, however the level of national debt is scary to me and seems to be getting even more and more out of control. Therefore I'm not sure if these tax breaks would necessarily be the best idea but seeing as tax breaks for the wealthy have not been working so far it may be worth while to give this idea a chance.
Also, on statistician Nate Silvers blog he currently rates Obama as having a 75.2% chance of winning the election. So its looking like we will get a chance to see more of the Obama policies play out since Silver has a history of crazy good accuracy. http://fivethirtyeight.blogs.nytimes.com/author/nate-silver/
When considering the profits of the current stock market over the past year, I am not all that convinced that it is solely caused by futuristic consideration of a reelection of Obama. Although some of Obama's economic plans seem to have some solid framework and justifications such as his middle class tax breaks, I don't believe this high fluctuation in the market is a result of his progress. Instead I tend to look at the explanation in the article of the federal reserve and their tendency to put more money in circulation. This seems to turn people away from the bond market and push them into stocks.
ReplyDeleteWhat is interesting to me is the use of the term "expect" instead of "want" when referring to that 83%. It gives the impression that these investors are simply saying that given the current economic climate, they would not be surprised to see Obama get elected again. I agree with Brandon in the fact that the gains we have seen in the stock market are not a direct result of Obama-hype.
ReplyDeleteFirst, I want to point out the WSJ's particular use of language in the first sentence, describing the richest of Americans as "the investor class," rather than "the ultra-rich." This word choice shows who the Journal panders to, because by describing them as investors rather than rich, it makes the income disparities seem natural, and it makes the investors seem like they are doing the rest of the economy a favor by investing in it.
ReplyDeleteAs for the rest of the article, it seems to me like the current trend is short term, probably a combination of all of the factors mentioned in the article. These gains show progress, but it remains to be seen whether they will hold, and I would not be at all surprised to see some serious financial turmoil within the next three months, between the election and the restructuring that the US government will have to undertake soon. Practically anything they do at this point will hurt the markets some. If they continue to raise the debt ceiling, I imagine Standard and Poors will be much less hesitant to downgrade our credit rating again,seriously hurting us in the long term. On the other hand, if they do start to pay it back, it will hurt businesses and consumers in the short therm. Either way, the near future is going to be very uncertain for financial markets especially in America.