James, I couldn't agree with you more re: "the markets are selling off because the Starr report was delivered to Congress." What a crock. In all fairness to Sue, though, everyone was saying it, even the guys on CNNfn.
See, this is what I don't understand. First of all, the market sells off another 50 points in the last ~45 minutes today. Okay, when you consider all of the volatility we've seen in the market lately, is a 50 point swing one way or the other really a big deal? I think not. But of course, the journalists and "market pundits" feel a need to attribute the 50 point swoon to something. Please do not tell me that traders, upon hearing that Ken Starr delivered his report to Congress--something he's been working on for the past 4 years that we all knew about--immediately started blowing out their positions. I mean, you don't have to be Ken Starr to know what is in the reports. Does anyone, in their heart of hearts, really believe that Clinton is just going to throw in the towel and resign? Does anyone NOT believe that he will spin-doctor his way out of this just like he has with everything else? And furthermore, regardless of what's in Starr's report and regardless of all of the hype coming out of Capitol Hill, does anyone REALLY believe that there are enough Congressmen with the balls to actually go after this guy with an impeachment hearing?
Let's cut through the hype and look at the facts: worst-case scenario, all this does is weaken Clinton's stroke to get his agendas through Congress. Is that such a bad deal for Wall Street? Probably not. Think about it, if he has no stroke, the balance of power swings back to the Republican Congress, and so instead of Clinton pushing through entitlement programs and paying for them through increased taxes, the Republicans now have a good opportunity to get tax cuts and capital gains reforms finally pushed through. How is this a bad thing for Wall Street? Are people really that naive to believe that Clinton is solely responsible for the well-being of the economy and if he was forced to resign that the economy would suddenly go to hell? Of course not. Let's face it, the economy is controlled by a lot of factors, the very least of which is Bill Clinton himself. Now, if they were talking about impeaching Greenspan or Rubin, that might give Wall Street something to worry about. Or if it looked as though the Democrats were poised to re-take the House and Senate, then yes, I could see people on Wall Street getting nervous. Name one thing that Clinton is responsible for that has actually benefitted Wall Street. I don't think you can. Now I do know that his wife single-handedly knocked the crap out of the health care stocks a few years ago when she tried and failed (thank God) to reform health care. But can anyone really make a legitimate case for how a weakened Bill Clinton is bad for Wall Street or the economy?
Of course, on the flipside, this could be a self-fulfilling prophecy. Envision this scenario: the news media gets everyone up in a frenzy, convincing them that Clinton's lack of job security is detrimental to the market. The Joe Sixpacks hear this and take the bait, hook-line-and-sinker, and sell their mutual funds and convert their 401k funds into money markets. Faced with mounting redemptions, the equity mutual funds are forced to start dumping stocks. Six months later, when the Dow is off another 2000 points, the liberal media-types then go "See, we told ya! Your 401k's and retirement savings are in the doghouse and now you won't be able to retire--all because those mean nasty Republicans went after President Bill. If they would've just left him alone, you'd be comfortably retired by now, but since the mean, nasty Republicans went after poor little Bill, you will be forced to work until you're 80 years old." Also, with the stock market in the toilet, the economy naturally swoons (another self-fulfilling prophecy) because people are worried because their "equity savings accounts" have been cut in half, and hence they aren't buying new cars or Intel's new 10,000 mHz PCs. By then, the year 2000 elections will be upon us and the Demos can run their spin campaigns, telling Joe Sixpack that the reason he got laid off is because Newt, Henry Hyde and the rest of the Republican Anti-Christs destroyed the economy by going after poor ol' Bill. And then, true-to-form, Al Gore gets elected and the Demos sweep the Congressional races in 2000.
On that note, I would like to see a responsible journalist actually do a piece outlining how Clinton's status really doesn't affect the everyday doings of Wall Street or the economy. You know, educate people to the fact that, if Alan Greenspan gets caught with a 22-year old Federal Reserve intern or if Robert Rubin is found to have invested in some Arkansas land deal that defrauded an S&L, that Joe Sixpack should be concerned about his investments, but Bill's status is really unrelated to the future performance of his investments or the economy.
Gary |
