Morris, Hannity, Limbaugh implicate Obama in stock-market decline -- analysts disagree

On November 6, Fox News contributor and syndicated columnist Dick Morris, Fox News host Sean Hannity, and nationally syndicated radio host Rush Limbaugh asserted that President-elect Barack Obama is to blame for the decline of the stock market following the November 4 presidential election. Several analysts, however, disagree -- including some who appeared on Fox News or Fox Business Network.

On the November 6 edition of Fox News' Hannity & Colmes, Morris said, "Now, the other thing that I predicted in Fleeced is that the stock market would go crazy after he [Obama] was elected. Not just because he's a radical, not just because he's a Democrat, but because he's going to raise the capital gains tax." Hannity replied, "So look what's happening," adding, "If he doesn't come out and say "I'm not going to, you know, raise the capital gains tax, I'm not going to raise taxes," but heading into an economic slowdown, you're predicting the stock market is going to -- it's the Obama tanking?" Morris replied: "It's going to continue to tank. It's lost 12 percent of its value in the last two days."

Similarly, on the November 6 edition of Premiere Radio Networks' The Rush Limbaugh Show, Limbaugh asserted: "OK, so let me start at the top here connecting the dots. On Tuesday we elect a new president. New president promised even before the election, by the way, when we had a 4,000-point drop -- the president promised to increase corporate taxes, capital gains taxes, the top marginal income tax rate, a massive new energy tax that'll bankrupt coal. And his party is talking about a government takeover of 401(k) plans." Limbaugh continued: "So on Wednesday, the Dow drops about 486 points. It's down 346 points today. But of course, according to the drive-bys, these two events have nothing to do with each other. It's just a coincidence. The market's down today because of the jobless numbers. That's how the drive-bys see it. We have the largest market plunge after an election in history. Thank you, man-child Barack Obama."

But even analysts on Fox News and Fox Business Network cited reasons independent of the election to explain the fall of the market in the days following the election.

• On the November 5 edition of Fox News' The Live Desk, Fox Business Network contributor Eric Bolling stated: "Yesterday we were up 305 points, today we're down 315 -- almost the exact same spot we were prior. Look, you know, a lot of people said, 'Hey, is this in response to Barack Obama becoming president?' " Bolling continued: "When Barack Obama was announced at 11:01 last night, the S&P [Standard & Poor's 500 Index] was down 8 points. It stayed there all night until that ADP [National Employment] Report came out, and that's really when the market fell apart. So you can't really blame it on that. It was the ADP report." Host Martha MacCallum responded: "Plus, it was factored into the market yesterday that Barack Obama was gonna win because it was pointing in that direction. And the market was up considerably yesterday."
• On the November 7 edition of Fox Business Network's The Opening Bell, Fox Business Network vice president of business news Alexis Glick asserted: "I so did not believe that the market reaction over the past two days was about Obama. Wednesday morning we walked in, we saw the Challenger and Gray [planned layoff] numbers, we saw the ADP numbers, the weekly jobless claim numbers -- yeah, well, they were basically in line, but we knew two days ago that this was going to be a bloody number. Frankly, we probably knew several months ago that it was going to be a bloody number."
• On the November 6 edition of Fox Business Network's America's Nightly Scorecard, Inc. magazine senior editor Rod Kurtz said to host David Asman: "[Y]ou could say a lot of people are walking around saying they have Obama hangovers because they were out celebrating, but I think what happened in the markets really is more tied to the broader economy and less so with Obama. I think, you know, the fundamentals we've heard so much about the economy during the election. You know, this jobs report could be problematic. I think that unemployment is still an issue. Retail, I've been saying for a while, is a huge issue."

Further, a November 7 Wall Street Journal article pointed to weak corporate reports and analysts' belief that the Bureau of Labor Statistics' October Employment Report -- which was released Friday -- would show job losses as reasons for drops in the stock market. (Indeed, the BLS report showed that nonfarm payrolls fell by 240,000.) From the Journal article (subscription required):

Stocks suffered a second straight round of steep losses amid new signs that bellwether companies and their customers are struggling. Jittery investors also placed early bets that jobs data due out Friday morning will be bleak.

The Dow Jones Industrial Average finished down 443.48 points on Thursday, off 4.9%, at 8695.79, hurt by declines in all 30 of its components. The Dow has fallen 929.49 points, or 9.66%, over the past two days, the biggest percentage drop since the crash of October 1987.

[...]

The generally downbeat trend in the retail industry was worrisome, as was the possibility that strength at discounters like Wal-Mart may signal that consumers are continuing to tighten their belts, hunting for bargains and spending less at chains with higher prices.

Considering that consumer activity constitutes more than two-thirds of the overall U.S. economy, continued weakness in purchases of everything from televisions to t-shirts could deepen the recession that most economists believe is already underway. Many stock investors have lingered on the sidelines lately, waiting for more clarity about whether things will get much worse.

"There's just not a lot of buying power out there right now, so any bad news we get is going to tend to get the market moving lower," said Daniel Genter, president and chief investment officer of RNC Genter, a Los Angeles money-management firm.

Volume at the New York Stock Exchange was slightly below the year-to-date average. Decliners outnumbered advancers nearly five to one.

Traders said it appeared some participants were placing early bets to brace for a worse-than-expected jobs report when the government issues its monthly assessment prior to Friday's opening bell. According to Dow Jones Newswires, the consensus estimate on Wall Street is that the report will show that nonfarm payrolls shed 200,000 jobs in October, marking the 10th straight month of declines.

"It really looks like people are worried," said Randy Frederick, director of derivatives trading at Charles Scwhab [sic: Schwab]. "I can't see a lot of other reasons for the losses over the last few days to be so deep."

A November 7 New York Times article also reported that analysts attributed the market downturn to the expectation that the BLS report would show a decrease in jobs:

Analysts said that the markets had skidded Wednesday and Thursday as investors hunkered down for the release of the jobs report. They attributed Friday's rebound to unemployment numbers that, while grim, were not cataclysmic, and said buyers were creeping back into the markets.

From the November 5 edition of Fox News' The Live Desk:

MacCALLUM: The Dow is down today about 312 points. And Fox News business expert Eric Bolling is here -- entrée --

BOLLING: Thank you.

MacCALLUM: -- to explain what's going on. What's the reaction?

BOLLING: You know, it's strange. Yesterday we were up 305 points, today we're down 315 -- almost the exact same spot we were prior. Look, you know, a lot of people said, "Hey, is this in response to Barack Obama becoming president?" I'm going to throw this up here -- these guys don't know what I'm doing. I'm sorry, guys. Take a look at this, though: When Barack Obama was announced at 11:01 last night, the S&P was down 8 points. It stayed there all night until that ADP Report came out, and that's really when the market fell apart. So you can't really blame it on that. It was the ADP report.

MacCALLUM: Plus, it was factored into the market yesterday that Barack Obama was gonna win because it was pointing in that direction. And the market was up considerably yesterday.

From the November 7 edition of The Opening Bell on Fox Business:

GLICK (anchor): All right, Jenna, what do you make of the numbers?

JENNA LEE (anchor): Well, I mean, it's interesting to watch the reaction over here, Alexis, because again, when the numbers hit, it wasn't really much of a reaction, and now we're seeing again the kind of selling picking up. The big question is, we talk about auto loans, we talk about mortgage rates, we're talking right now over here about banks actually dropping those rates to the consumers -- it doesn't matter if you don't have a job. I mean, it really all comes back to that. No matter how much you drop those rates, if you don't have employment, you're not going to ask for a mortgage, you're not looking for a new credit card -- or maybe you are. But again, it's those rates. It really all comes back to jobs, so again, you know, not necessarily way bigger than expected, but not good news.

GLICK: Yeah. Connell?

CONNELL McSHANE (FBN correspondent): Jenna's right. This is the story for next year, how high the unemployment rate goes, and how many jobs we shed. I mean, this is a terrible report. I mean, it's getting lost a little bit in the -- we're going to get caught up in the market reaction. The market reacted before the report. We're down 1,000 in two days heading into this because people expect a bad report and we got it this morning, so I don't know what's next.

GLICK: I couldn't agree more -- I couldn't agree more. I so did not believe that the market reaction over the past two days was about Obama. Wednesday morning we walked in, we saw the Challenger and Gray [planned layoff] numbers, we saw the ADP numbers, the weekly jobless claim numbers -- yeah, well, they were basically in line, but we knew two days ago that this was going to be a bloody number. Frankly, we probably knew several months ago that it was going to be a bloody number.

McSHANE: Yeah. It was.

GLICK: All right, guys, we're going to continue talking about it throughout the hour. The opening bell is going to ring in 16 and a half minutes. We're going to go straight to the trading floor, we'll get their reaction to this morning's numbers.

From the November 6 edition of Fox Business Network's America's Nightly Scorecard:

ASMAN: Rod, what do you think the entrepreneurs of this country would like Obama to say, to reassure them they're going to have a business environment they can work in and profit in?

KURTZ: Well, there's no doubt the tax issue remains front and center for a lot of business owners, even if it doesn't necessarily affect their business. That's been the fascinating thing; I think the McCain campaign -- it was brilliant politics -- the "Joe the plumber," the "spread the wealth." There are a lot of businesses out there concerned about Obama's tax plan that aren't gonna be affected by what he's proposing. But, you know, one of the interesting things -- we sort of did a news analysis the day after the election, and a lot of entrepreneurs out there were saying, "Look, we're still sort of mixed on this, but we're glad we finally have a result. We're glad we know it's him." It gets that uncertainty out, because you at least you know where he stands --

ASMAN: Well, there were two bits of uncertainty. First, the uncertainty as to whether he would be president, and the market went down with that uncertainty. Then the markets sort of factored that in and said, "OK, he is going to be president, we can live with him." But now it's the uncertainty of what he's going to do.

KURTZ: Well, I think, you know, you could say a lot of people are walking around saying they have Obama hangovers because they were out celebrating, but I think what happened in the markets really is more tied to the broader economy and less so with Obama. I think, you know, the fundamentals we've heard so much about the economy during the election. You know, this jobs report could be problematic. I think that unemployment is still an issue. Retail, I've been saying for a while, is a huge issue.

ASMAN: All right.

From the November 6 edition of Fox News' Hannity & Colmes:

MORRIS: Now, the other thing that I predicted in Fleeced is that the stock market would go crazy after he was elected. Not just because he's a radical, not just because he's a Democrat, but because he's going to raise the capital gains tax.

HANNITY: So look what's happening.

MORRIS: And every moron knows that if I sell my stock now I pay 15 percent. If I sell my stock later, I pay at least 20, and perhaps 30.

HANNITY: So if he doesn't come out -- let me follow up. If he doesn't come out and say "I'm not going to, you know, raise the capital gains tax, I'm not going to raise taxes," but heading into an economic slowdown, you're predicting the stock market is going to -- it's the Obama tanking?

MORRIS: It's going to continue to tank. It's lost 12 percent of its value in the last two days. When it thought McCain was going to win because he was surging, it rose all the week before. And I think pressure will build on Obama to announce no increase in capital gains tax. We cannot go to the investor and say, "Please put your money in the stock market, please take that risk. And if you gain the money, I'll tax twice as much."

ALAN COLMES (co-host): Hey, Dick, it rose Election Day in the anticipation of an Obama victory. Nobody thought McCain was going to win then. So you're going to come back here, and will you say the next time the market has a great day and goes up a few hundred points, we should thank Obama for that? If you're going to blame him every day -- you know the market doesn't work like that.

MORRIS: I think that there may be some profit-taking and some recuperation, but I think that Obama's tax increases will have the same effect as Herbert Hoover's.

From the November 6 edition of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: OK, so let me start at the top here connecting the dots. On Tuesday we elect a new president. New president promised even before the election, by the way, when we had a 4,000-point drop -- the president promised to increase corporate taxes, capital gains taxes, the top marginal income tax rate, a massive new energy tax that'll bankrupt coal. And his party is talking about a government takeover of 401(k) plans.

So on Wednesday, the Dow drops about 486 points. It's down 346 points today. But of course, according to the drive-bys, these two events have nothing to do with each other. It's just a coincidence. The market's down today because of the jobless numbers. That's how the drive-bys see it. We have the largest market plunge after an election in history. Thank you, man-child Barack Obama.