The stock market dropped by almost 300 points Wednesday in the largest
post-election decline in history. There was a rush of cash into U.S.
government bonds as well, because those investments are considered a
These odd messages from Wall Street must add up to something. What is it that investors are afraid of, and what frantic messages are they conveying? Because Wall Street is usually insightful in predicting election outcomes, why was Wall Street stunned by Obama's reelection?
The reality is that the fiscal cliff looms ever closer as the possibility that President Obama and Congress can reach an agreement to avoid tax hikes and spending cuts by Jan. 1 of next year seems uncertain at best.
Every major market indicator signals that global investors are more worried than optimistic about what will happen to the U.S. economic policy before President Obama officially starts his second term.
If President Obama and Congress do not reach a deal by Jan. 1, the nation could go off the fiscal cliff despite the risk of a recession. The election overall confirmed the status quo, which means it is very unlikely that things will change unless Obama and Congress make a bipartisan agreement to reduce the national debt.
Let us sincerely hope that the CEOs of Main Street won’t engage in massive layoffs of workers because of that same fear that worried Wall Street immediately following the election outcome.