President Obama and his team have been warning all over since they took over the office. The message I am getting, we are doing something but don't hope for a quick turnaround - the worst is yet to come. He may be honest with his assessment but is it necessary to keep reminding us? Or can he says the fear is fear itself? Perhaps he is afraid to look silly to call for a market bottom.
Going back to history book. During the Great Depression, DJIA bottomed out on the week of Jun 27, 1932[DJIA closed at 48]. FDR made his famous speech Fear Itself on March 4, 1933 on the day he was sworn in as the President of the USA, nine months after stock market lost almost 85%. DJIA was around 60 on that day and 25% higher than the Jun 27 low. The point of maximum pessimism already behind him by the time he made that speech. Here is the speech.
I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.
In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.
(Click here to read the whole speech)
Putting Obama and FDR inauguration speech side by side. Obama speech looks far less desperate.
Homes have been lost, jobs shed, businesses shuttered. Our health care is too costly, our schools fail too many, and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
These are the indicators of crisis, subject to data and statistics. Less measurable, but no less profound, is a sapping of confidence across our land; a nagging fear that America's decline is inevitable, that the next generation must lower its sights.
Today I say to you that the challenges we face are real, they are serious and they are many. They will not be met easily or in a short span of time. But know this America: They will be met.
(APPLAUSE)
On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.
(read the whole speech here)
Two days ago, he came out to address the nation fearing the market continue to fall after DOW broke below 7,000. Our usual cool guy got even cooler, he is expounding Benjamin Graham philosophy - in the short run the market is a voting machine but in the long run it is a weighing machine.
Obama compared the daily market fluctuations to a tracking poll in politics and said he wouldn’t be adjusting his policies just to meet daily market expectations.
“If you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong,” he said.
The president also said that consumer confidence is “taking root” with enactment of the $787 billion package of spending and tax cuts he won from Congress last month.
“There are a lot of losses that are working their way through the system,” Obama said. “And it’s not surprising that the market is hurting as a consequence.”
I believe Obama is realizing that he needs to shore up confidence.
March 3 (Bloomberg) -- President Barack Obama said falling share prices may mean bargains for investors with a “long-term perspective.”
Obama, who is seeking to boost public confidence in his strategy to pull the U.S. out of recession, spoke a day after stock markets tumbled. The Dow Jones Industrial Average yesterday dropped below 7,000 for the first time since 1997. The Standard & Poor’s 500 Index closed at the lowest level since October 1996.
“What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it,” Obama said at the White House today while meeting with British Prime Minister Gordon Brown on battling the global recession.
(click here to read the source)
Right after FDR made his famous fear itself speech, he launched The New Deal programs with full of Alphabet soup agencies[NRA, SEC, PWA, NYA, etc] to get things done. I am seeing Obama administration is lack of boldness or ability to get things done. It's very unAmerican too me. I am very weary that his dream team will spend more time talking rather than doing, despite of Obama relentlessly demanding time for action is now. Will he end up being a leader with no followers? Will Obama's vision of hope and change turn into no hope and no change? This is what the market is telling him. I like Obama's ideals but he must show the world he can get things done.
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