I have to say that it’s nice to have a Democrat in power again. I have some Republican readers out there (just embrace it, Kevin; talk to Taylor — he’ll help you) who I know will find it very annoying for me to be joining in the celebration of Obama’s first couple of days. But, I have to say, that I like what Obama’s done so far: moving to close Guantanamo and the CIA’s secret prisons is simply awesome. The very existence of these programs is not only Un-American, but, I believe, unconstitutional.
Where, in our Constitution, does it say that the United States can take people into custody and detain them for years at a time without bringing them up on charges? I was hoping that the justice system would actually reject Bush’s programs, but the years went on and nothing happened. It seemed that someone in the Bush Administration decided to leave the people detained in Guantanamo for the next President to sort out. (I felt this even before Bush got re-elected in 2004.)
For that matter, Iraq seemed little more than a talking point in the “War on Terror” in Bush’s second term; other than sending some additional troops into Iraq, what really changed there? For that matter, what did the additional troops accomplish other than to give John McCain something to ramble on about during his campaign for President? I love what The Daily Reckoning’s Bill Bonner said about the Iraqi journalist throwing a shoe at Bush: “What’s wrong with our American journalists? Have they no shoes?”
Indeed, I wondered the same thing about a lot of people. How could we allow the Bush administration to rewrite the power of the executive branch before our very eyes and have so little outrage? So, I am pleased to see Obama’s first acts being so definitive to curtail the obvious abuses of the prior administration. Although, Wall Street doesn’t seem quite so happy about it.
As Taylor pointed out in his last comment,
“The percentage decline is the worst ever for the Dow on a president’s first day in office. That would break the old record, 2.9%, set on Nov. 22, 1963, when Lyndon Johnson took over after John F. Kennedy’s assassination.”
Of course, there’s a maxim on Wall Street that the first two years of a new Presidency will be down years and the last two will be good ones.
Still, that was a particularly violent reaction to Obama’s first day.
Although, I made money. As you can see in the chart below, Barrick Gold has been doing just fine over the 3 months since Obama was elected President. On that fateful day of which Taylor spoke, when the Dow was down 4%, Barrick was up some 5.8%. What can I say? Gold’s been treating me well.
That’s not to say that I think this stock isn’t going to see some rocky times ahead. I do think the forces of liquidation are taking a breather — for now. The volatility of this week is more the Wall Street traders showing their displeasure at the forces of Socialism that Obama represents. But I expect it to stabilize over the next few weeks. In fact, I’m expecting a bit of a rally. It’s going to be a sucker’s rally, though; but I still expect it’s going to trap a lot of people who are thinking that the worst is behind us.
Barrick will probably be taken down a peg or two in the upcoming collapse, but it’ll come back. I can’t say the same for the rest of the stock market. We’re making the bitter transition from a consumer-driven economy to a producing one. The first stage is that the businesses that catered to consumer spending need to leave the scene to clear the field for the new companies. That means you can expect a lot of companies going bankrupt this year.
As for me, I’m doing a bit of trading. As you can see from that chart of Barrick, it seems to be hovering between a range of $31 and $36. That’s a pretty healthy trading range to buy in at the bottom and sell at the top, and that’s what I’ve started doing. I’ve turned some extra profit from it so far. I expect that all my profits will be taken out by the upcoming collapse, but those profits should help to cushion the blow. It’s the buying at the bottom where you can expect to make some real money.
I can only hope that these easing up on the powers of the executive branch may indicate that, perhaps, my fears of him being the next FDR and implementing a lot of BS controls — such as gold confiscation — may prove false.