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Obama's Huge Economic Challenges
November 05, 2008 5:45 PM
ABC News' Betsy Stark reports: Today's 486-point drop in the Dow -- more than erasing a euphoric Election Day rally -- was a pointed reminder of the huge economic challenges faced by the President-elect Barack Obama.
Yesterday Wall Street joined the country in celebrating the end of an endless campaign and the "amorphous optimism," as one analyst described it, that comes with the change of leadership from a sitting president of historic unpopularity to a new one who rides into office on a hopeful wave of popular support.
But today it was back to reality -- and as we all know reality isn't pretty. Today's selling was ignited by a report showing a precipitous drop in activity in the nation's service industries, which represent roughly 90 percent of the U.S. economy. It was fueled by earnings report showing how hard the financial crisis has hit corporate profits: GMAC, the finance company partly owned by GM, said it lost $2.5 billion in the third quarter and that its mortgage lending unit is struggling to survive. A widely watched employment index showed the biggest job cuts in six years, a poor omen for the government's monthly jobs report due out Friday.
President Obama may be able to lift Americans' hopes for the future but he's likely to face a steady stream of negative news day-to-day. "We are now deep in the belly of the recession beast," said economist Bernard Baumohl of the Economic Outlook Group.
One other note for market trivia buffs: History shows that the stock market tends to rally the day after a Republican presidential election victory and it tends to sell off the day after a Democrat wins the White House. So this election has stayed true to trend. But take heart: history also shows that year in and year out, the stock market performs better with a Democrat in the White House than a Republican -- more than a little ironic considering how reflexively Republican Wall Street itself is.
November 5, 2008 | Permalink | User Comments (26)
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It will be interesting to watch the faces of those who elected Barack Obama - they will rapidly change from their wide-eyed wonder - to confusion, then to apprehension, then to disbelief, and finally to horror as they discover their new leader is as hollow as the promises he has made.
Joe Biden is right - Barack Obama will be tested, and the entire Democrat-controlled Congress will be tested - and they will not have the luxury of blaming anyone else for their own failures.
And fail, the Democrats will.
And fail, Barack Obama will.
And then comes the judgement of the American people.
And it will be severe.
No more whining, Democrats - now you get to be the punching bag - and deservedly so.
And this includes YOU, Liberal Media.
YOU are the ones that have betrayed America with this Trojan Horse Socialist imposter, Obama.
Posted by: One_American | Nov 5, 2008 6:45:38 PM
One_American, that post is not very American of you.
Posted by: Andy | Nov 5, 2008 6:54:37 PM
Americans, be optimistic!Why are you judging the new president elect Barack Obama this early? Who knows, Barack Obama might be the best president ever in the history of America.Just shut up and instead help pray that America will be back as what it is before.Is crab mentality here in United States?
Posted by: michael | Nov 5, 2008 8:03:55 PM
One_American.....gloom and doom just like your pitiful Republican party. Ever thought maybe that's why you'll lost. People are tired of your "scare" tactics. Definitely a SORE LOOSER!!!!!!
Posted by: realist | Nov 5, 2008 8:07:04 PM
I took down my American Flag down for the first time in 10 years. I am no longer proud to be an American. We are so screwed.
Posted by: frankly my dear | Nov 5, 2008 8:29:07 PM
One_america and frankly my dear, I will pray for both of you that God remove your filthy racist views and clean you so you can think clearly and wish this nation well under President Barack Obama
Posted by: Stanley | Nov 5, 2008 8:37:47 PM
I am no longer proud to be an American.
==================
Then leave. No one is making you stay.
Posted by: Stupid Comments from the Right | Nov 5, 2008 8:39:54 PM
What does racism have to do with it?Typical....
Posted by: frankly my dear | Nov 5, 2008 8:40:55 PM
I want to thank the 61% of the voters for Obama who happened to be white. You have demonstrated that one's character and not the color of one's skin was the most important factor in your decision..God bless you and I know that President will do his endeavor best to Represent this country and make us proud. Let us pray for the Racist Americans(black and White) that God would clean them of their filthy views. We have to work together to make this nation great again.
Posted by: Stanley | Nov 5, 2008 8:41:50 PM
One_American, you're right. Obama and the Democrats will be tested. They know this. They said as much themselves last night. If they do fall -- and you, of all people, better pray they don't -- it had better not be because your party treated them with the same kind of sore loser tactics with which you greeted Bill Clinton 16 years ago.
Realist is right as well. America is scared of the GOP scare tactics. You tried to scare us by branding those who disagreed with you as not patriotic. That didn't work. Now, you're trying to brand those who disagree with you as socialists. Notice that didn't work on Tuesday, either. Maybe, you'll take the hint, this time: We're not scared, and you're not going to make us scared.
OK, we're all in this mess together. Blaming whoever started it is not nearly as important as us all finding a solution for getting ourselves out of it. It's time for us to all work together as Americans. As one great American -- and a Republican (looking right at you, One_American,), President Lincoln put it: "United we stand, divided, we fall."
Posted by: Obama_supporter_in_KY | Nov 5, 2008 8:43:07 PM
Stupid Comments from the Right ....No I plan on staying here and giving all of you libs hell every day possible in here. Getting to say I told you so will be one of my greatest joys.
Posted by: frankly my dear | Nov 5, 2008 8:43:09 PM
One American, as expected, has no idea what it means to be an American.
If you hadn't noticed. Our country is already screwed. There's not a single economic metric that is positive after 8 years of Republican "leadership". And it will get worse before it gets better. It's not Obama's administration that caused it. It's already started.
Of course, people like you and Limpbaugh will blame Obama when things aren't better in a month.
Hate to inform you, it's going to take years to undo the mess that took years to create.
Some of us are ready to try and turn things around. We will make sacrifices so that our nation can move forward.
Apparently others are ready to sit on their ass and do nothing but pray for failure. How very "American" of you.
Posted by: Bitter Loser | Nov 5, 2008 8:48:59 PM
Correction: that should have read "America is tired of the GOP scare tactics..." My mistake for not catching that earlier.
Posted by: Obama_supporter_in_KY | Nov 5, 2008 8:49:43 PM
Getting to say I told you so will be one of my greatest joys.
====================
Man, you lead a sad and pathetic life.
Posted by: Stuppid Comments from the Right | Nov 5, 2008 8:52:48 PM
When you look at Obama's supporters you see blacks, whites, asians, hispanics, native americans etc..his crowd looks like America..when you look at the McCain/Palin crowd you see exclusively white people all looking sad and shouting out hateful words..(skinheads/kkk in formal dress)At their so called convention they made fun of all community organizers, they booed when McCain mentioned Obama's name at his concession speech..The Obama crowd applauded when Obama mention McCain's name at his acceptance speech..can you see a difference here..some of these people are here on this blog..we need to pray for these people..they need some serious help. God bless president elect Barack Obama and God bless America!
Posted by: Stanley | Nov 5, 2008 8:54:01 PM
Bitter Loser after listening to you guys rant and rave for a couple of years you might as well get ready to get some back in the next couple years. By the way for the past two years Pelosi ,Franks and Dodd have been in charge of Congress, the banking and finanical situation and never once chirped up to say that anything was wrong. The demo congress has a lower approval rating than GW.
Posted by: frankly my dear | Nov 5, 2008 8:55:50 PM
Getting to say I told you so will be one of my greatest joys.
====================
Man, you lead a sad and pathetic life.....But here you sit reading this....so how pathetic are you?
Posted by: frankly my dear | Nov 5, 2008 8:59:34 PM
I plan on supporting Obama the same way democrats supported Bush the last 8 years.
Posted by: midwest voter | Nov 5, 2008 9:06:54 PM
Just under half the voting public did not vote for Obama. If you think that the rest of the public is just going to turn into an Obamabot and sing his praises for the next four years you are delusional.
Posted by: frankly my dear | Nov 5, 2008 9:13:31 PM
God Bless the USA!
Posted by: Marius Purcaru | Nov 5, 2008 10:23:53 PM
If I were Obama, I would listen to the likes of Roubini, Ron Paul, Peter Schiff, and Jim Rogers. They predicted the collapse. Some people that didn't include Buffet, Paulson, Greenspan and Bernanke.
Posted by: Ben Straub | Nov 6, 2008 2:20:08 PM
Markets respond to election results for the second day in a row. The response is a sharp drop, nearly ten percent in two days.
Posted by: Tank | Nov 6, 2008 6:26:50 PM
Economic Challenges:
He will have choices to make, if he thinks the US Treasury will be able to help, he will fall short. If he looks in to using capitalist initiatives then we have a shot.
First: he has to recapitalized the middle class: how? The automobile industry is the crown jewel of our durable goods industry. If he requires them to give the consumer a car that gets 250 miles to a gallon with a 20 gallon tank. Than consumers will buy cars and people will be put back to work. This paradigm will make the unit cost of gas at the pump irrelevant.
Second: Fuel -- If he looks into retrofitting our coal power plants with a bio-reactor, that uses blue/green algae for CO2 mitigation. He will get a triple threat; 1) a domestic supply of alternative fuel; 2)have an answer to global warming; 3) the most important peaceful foreign initiative since sliced bread.
How will this be funded: Its time for big business to sacrifice just like we are. The oil companies are setting on 600 billion dollars, they say they want to be energy companies - not just oil companies and with silicon valley (Google’s greener grid initiatives). Have the oil companies invest or put a wind fall profits tax.
Thanks
Rick
Posted by: Rick Shipley | Nov 6, 2008 6:40:13 PM
lets see who supports him in 6 months, all the libs wll run for cover and deny they had anything to do with electing this empty suit
Posted by: obamablows | Nov 7, 2008 1:38:20 PM
God please send Ronald Reagan back to us, and tell the devil to come pick up his boy barrack
Posted by: Reaganplease | Nov 7, 2008 1:41:04 PM
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