Was the ‘00-03 Crash Bush’s Fault? ‘09 Obama’s?

The incessant parade of bad advice, partisan quackery and general ignorance about the way markets work is fascinating to watch. I used to find it annoying, but now I simply use it as a way to make money. Just find the dumbest of the group, and take the other side of their trades.The latest idiocy coming out of the usual collection of misfits, dolts and cheerleaders is that the last 20% leg down in the market is pretty much all President Obama’s fault. Now before I explain — yet again — why this is so foolish, I have to point out that just about everyone who is saying this has been pretty much wrong about, well, pretty much everything.

This collection of seers, pundits and talking heads have a track record that would make the 1927-1933 group of Pompous Prognosticators blush with pride. Their sterling track record includes:

• Failing to recognize the importance of the Housing Boom;

• Not understanding the impact of ultra cheap credit;

• Failing to notice the economy weakening appreciably in 2008;

• Missing all of the warning signs of distress in firms as varied as Bear Stearns, AIG, Lehman, Citigroup, Freddie Mac, Wachovia, Countrywide and WAMU;

• Utterly missing the most telegraphed recession in history;

• Believing the sub-prime problems would be contained;

• Expecting the rest of the globe would decouple form the US economy;

• Believing that deregulation was the path to prosperity;

And many more.

That this pool of idiots missed all of the above merely suggests that are grossly incompetent as market and/or economic observers. That they now want to blame Obama for what happened only compounds their awful track record, and reveals them as nothing more than shameless partisans.

Using their own logic, let’s have a look at what occurred at this point in history — March 5, 2001 –  during George W. Bush’s first term in office: From election day in 2000 to today, March 5th, here’s how the market behaved:

Nasdaq November 4, 2000 – March 5, 2001 nasdaq-2000.gif

That’s off about 33%.

To really prove the point, let’s see the same chart from when George Bush started leading in the polls in early September: Nasdaq September 1, 2000 – March 5, 2001 nasdaq-9-2000.gif

Down about 50%.

By the idiot squad’s reasoning, the 2000 tech wreck was all George Bush’s fault. Funny, I don’t recall hearing any of that from them in 2000-01.

I am not an Obama cheerleader. For the record, I found his selection of Larry Summers to be awful, and his choice of Tim Geithner as Treasury Secretary ill-advised. But to hold him responsible for a market collapse on day 41 of his Presidency — following 8 years of gross negligence and ruinous incompetency under the Bush regime — is simply too much stupidity for any damaged nation to bear.

Previously: Markets Are Rorschach Inkbot Tests (March 2, 2009) http://www.ritholtz.com/blog/2009/03/markets-are-rorschach-inkbot-tests/

Experts, Crashes, Media, Skepticism (February 19th, 2009) http://www.ritholtz.com/blog/2009/02/experts-crashes/

1927-1933 Chart of Pompous Prognosticators (November 2006) http://www.ritholtz.com/blog/2006/11/1927-1933-chart-of-pompous-prognosticators/


Originally published at The Big Picture blog and reproduced here with the author’s permission.

8 Responses to "Was the ‘00-03 Crash Bush’s Fault? ‘09 Obama’s?"

  1. WVpessimist   March 5, 2009 at 11:38 am

    Thank you! The oversimplification going on is rather insulting.btw… first

    • Anonymous   March 5, 2009 at 7:02 pm

      Meet Rush

  2. Guest   March 5, 2009 at 6:29 pm

    “Meet John Doe” A Frank Capra movie.See it. Rent it. There will be no other explanation needed. Your Wall Street blues are being coordinated by the people who are making major money off of you.See also “On the Waterfront”. Brando personifies our pain and conflict of interest.Well, while you are at it… Oliver Stone had a good Wall Street movie too.Hmm. “Network”. Now that explains everything. “I’m mad as hell.”Are you Right, Left, or correct. About 8 hours of your time in front of the boob tube. But you do that anyway… checking… checking… (I won’t give you the next… checking). Bloomberg’s monitors are enticing, second by second.Do your own research.“I am not gonna take it anymore”Robert Gerard

  3. Anonymous   March 5, 2009 at 7:01 pm

    Rush Limbaugh. He wants to bring down the U.S. by himself? He should rot in where ever he wants, not in my backyard. Enough said.John Doe

  4. Guest   March 6, 2009 at 5:38 am

    I have a theory: the people who don’t blame Bush are the same ones who blame Obama, never mind those eight prior years. These are the same people who blame Clinton for Bush.

  5. Guest   March 6, 2009 at 3:46 pm

    What you are missing is that the market is a leading indicator, a discounting mechanism. Do you think the market is going to pay the same multiple on earnings in the past and not only because of this crisis, but that a President with a SOCIALIST AGENDA is threatening the earnings power of many different industries. That means that in many of those industries (pick any besides basically Retail/Tech) the profitability is likely to be lower in the future. Plus given government involvement, the risk is greater, hence you would pay less of a multiple for those earnings. My conclusion Obama certainly IS TO BLAME!!!!!!!!

  6. Guest   March 6, 2009 at 3:47 pm

    I’d much rather live under a Rush Limbaugh regime any day.

  7. Erlon Faria Rachi   March 8, 2009 at 2:42 pm

    Dear Mr. RitholtzI am Brazilian and like you I do have no contempt for idiocy.It’s amazing to follow how polarized the American society is right now. Either Obama is the ‘Great Fixer’ or he is ‘The Antichrist’ or ‘The New Stalin’.By not being an American citizen, I really do not care weather Rush Limbaugh or Nancy Pelosi pulls the strings in Washington. But I do care when people start judging things based on ideology and/or religious beliefs.Stock prices reflect only how much people are willing to pay to own a piece of some enterprise. The better the outcome of such enterprise, the higher it’s stock price. Shareholders should oversee management and guarantee enterprises’ success.This jus was not done in the last few years. Companies held assets nobody understood (nor care to understand). Profits were announced and dividends paid even when money was not made from the enterprise’s core business, but from it treasuries.Shareholders had forfeited their overseeing rights to risk evaluation companies (Fish, Morgan Stanley, and Moody’s) but they were in bed with the ones they were supposed to evaluate.Those are the ones to blame for this mess. For example: Mr. Wagoner led GM through its current bankrupt status, and the guy still holds his job…This disgrace was not built in a couple of weeks since the US election. Unfortunately it will not vanish away shortly as well.Regards