“Well, we hope you are happy with yourself, America: You reelected President Obama and destroyed the stock market.
That’s what a bunch of angry Wall Streeters, who unsuccessfully sunk millions into defeating Obama, would like you to believe, anyway. The truth is a bit more complicated.
The Dow Jones Industrial Average closed Wednesday down 312.95 points, or nearly 2.4 percent, its worst selloff of the year. It closed below 13,000 for the first time in three months. The Standard & Poor’s 500-stock index also tumbled 2.4 percent, and the tech-heavy Nasdaq composite index fell nearly 2.5 percent.
Throughout the election, Wall Street types took to CNBC to sound the dour warningsthat a second Obama term would immediately cause all of your money to catch on fire, because of how much Obama hates business or something. Wednesday’s bloodbath would seem to be their most apocalyptic warnings come to life.
There are just a few problems with their theory.
For one thing, Obama was the perpetual favorite throughout the election, with hisodds on the prediction market Intrade never dropping below 50 percent all year. He consistently led in the polls of key swing states like Ohio and was very seldom behind in measures of the national popular vote. Meanwhile, his challenger, Mitt Romney, spent much of the election shooting himself in the foot. Despite all of these signs of Obama’s impending re-election, stocks managed to rally throughout the year, with the Dow up 6 percent since the end of 2012, even with Wednesday’s loss.
What’s more, the Dow posted a huge, 1 percent gain, on election day, when Obama’s Intrade odds were at 70 percent or better and number-crunchers such as Nate Silver and Mark Blumenthal were calling Obama a 90-percent lock for re-election.”
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