I did not post any economic notes
in order to avoid sounding political right before the elections, so not that
they are over, we can get back to explaining what's going on in the economy.
Tuesday night, the nation elected a new President.
Wednesday, the stock market responded with a major drop. Some analysts have
already said it was a sell-off to avoid any Obama taxes on capital gains.
That's not correct. The sell-off happened a few weeks back, and right now the
economy is poised to move up, and it has been. The fact is the economy will
move ahead, as previously stated, and it will do so regardless of who the
President is. So, he question remains, why the sell-off?
These notes are intended to take complex economic
issues and bring them down to earth in plain English. So, what happened? Wall
Street, meaning every investor, which includes the middle-class and up, are
worried about the future with Obama as President. No, this is not a political
statement. Happy people buy and move the economy forward, and people who are
worried sell, which drives prices down.
The fact is
that groups like Acorn worked hard to register new voters, mainly students and
poor people who are demographically most likely to vote for Obama. The result,
everyone else, which includes the vast majority of Democrats and the hedge fund
managers who are in charge of their 401 K plans, are not happy.
Hence forth, a sell-off on Wall Street. |
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