Isn't the stock mkt drop a reflection of lack of confidence in corporate leadership?

[mod mom]

The right keeps pushing the mantra that the market is reacting to Obama policies but as an investor myself-I don't trust the greedy bastards running major corporations. It doesn't help when you have banking CEOs continuing their huge pay/bonus programs despite their companies major downturns. I had my own business for 17 years, part of which I had a major road project in front of my store which really hampered traffic. As sales dropped, so did my income. I don't understand this sense of entitlement of huge salaries that these guys are showing other than they don't care about the business, rather they are out for themselves. How can I trust their actions to place my money under their trust?

Again, I don't believe it's not Obama's policies, but corporate leaders who are losing the trust of investors.

What do others think?

[stray cat]

1. It strikes me as simply common sense when looking at the economy

why would anyone trust the stock market and who has money to put in it?

[ThomWV]

2. That's certainly part of it - that an anticipated sales

Realistically not many public companies are looking at a strong future. Small paving companies maybe.

[Subdivisions]

3. I heard somebody on CNBC yesterday say that it's a vote of

no confindence in the Obama Administration.

[rfranklin]

7. That is a Republican talking point....

Yep, millions of people are joining together and ruining their chances of retiring by selling off their stocks at the lowest possible price to show their displeasure with Obama. Makes sense to me.

[burythehatchet]

9. "I heard somebody on CNBC...." No more need be said.

[HughBeaumont]

16. CNBC is the flat-taxer corporate fluffer channel.

Republican congressmen, Bewsh-leftover Senaturds and various other free trader scumbags have a personal forum for their views in CNBC.

[MercutioATC]

4. The stock market is reacting to the economy.

Yes, there might be a small rally if they felt the stimulus and/or bailout plans were particularly good, but the fundamentals of the economy are horrible and getting worse...hence, a market dropping like a rock.

[JHB]

5. Loss of trust in executives and the market in general

It's the bad eggs hatching from 30 years of deregulatory chickens coming home to roost.

When you can no longer tell what's an investment and what's a swindle, people don't buy stock.

[sandnsea]

8. an investment vs a swindle

precisely. well put.

[mod mom]

10. They need to make severe examples of swindlers to prevent others from trying

this form of enrichment-imho. They need very strict oversight agencies. I just heard someone comment on NPR how the person picked to head the SEC is another insider. That doesn't give reassurance.

[burythehatchet]

6. A stock price is the preset value of all expected future cash flows. Your point

is is quite valid, but I have a slightly different take: A recession is a lack of confidence, what we have a now is a lack of trust. In my mind, a huge difference because you can get confidence back but it nearly impossible to regain trust without a major restructuring of the underlying framework

[B Calm]

11. Losing 40% of my nest egg to Wall Street crooks has nothing

to do with Obama!

[Joanne98]

12. It reflects a lack of trust in our markets. Especially the S&P

Which is driving everything else down. It would stop if we would start arresting the criminals. But so-far nobody feels like doing that. Look at Madoff.

[mod mom]

14. We'll see w Madoff today if he gets to keep his penthouse + $60+ million he is asking

to keep. Perhaps they should allow those swindled to decide this point.

but Madoff is not running corporate America, and those faces of banking CEOs that have been visible have shown blatant arrogance and total disregard for their companies. It's all about them and their personal finances. :mad:

[Thrill]

13. No. Haven't you heard? Its all Obama's fault

[endarkenment]

15. No it is a forecast that the economy is going to suck for at least the next 6 months.

The market isn't voting about leadership it is voting about the prospect for profitable operations over the short term future. The short term future looks like shit and the market reflects that.

[OffWithTheirHeads]

17. K&R for telling the truth!

[notesdev]

18. It's corporate and government combined

Nobody tells the truth. You can't believe a balance sheet or financial statement from these companies, and you can't believe any of the economic figures that come out of DC. All are manipulated to serve what the people providing the numbers want you to believe.

For example, how anyone gives credit to the official unemployment or CPI numbers is beyond me, when they have been so obviously manipulated (three times in the case of the CPI). How anyone could believe a balance sheet statement when companies are allowed to mark their assets to bubble fantasy prices and put things 'off-balance sheet' and so on, I cannot even begin to understand.