Obama is not responsible for the stock market’s daily ups and downs. Before this week, the pundits were blaming Obama for the stock market going down. This week they should be praising him because it went up, but the financial community is responsible for its own fate. Obama inherited a huge mess. He’s working to get out of it, but it’s going to take a while to dig out of the hole that the Republicans left for him. The financial executives just don’t want to take responsibility for their own failures.
Who knows why the market goes up or down. They claim it went up this week because big banks, starting with Citi, announced that they were making a profit so far this year. But what about all those toxic assets? They are still out there. Plus, as Jay Leno or somebody said, “Wow, we gave CitiBank $40 billion, and they made $8 billion profit.”
Plus, what’s going on in the rest of the world? If something goes wrong in some unexpected place, it may well affect the US market. On Fareed Zakaria, Niall Ferguson warned that the next problem might be the disintegration of Ukraine and some other eastern European countries that will allow Russia to reclaim some of its “near abroad.” Meanwhile, today China expressed concern about its investment in the US. To some extent we and China are tied together in a form of Mutually Assured Destruction because of the enormous amount we owe China. China can’t sell off its holdings without driving down prices and hurting itself, but it is certainly in a position to wreak havoc if it wants to.