Policies Matter

Here is some excellent reporting from the Associated Press on the effects of the Obama administration's fiscal policies on the stock market...

Market analysts usually play down the influence of presidents on the market but say this time could be different as taxpayer dollars prop up private companies and Obama's first proposed budget stands at $3.6 trillion, with a gaping deficit.

In this case, said Wachovia Securities chief market analyst Alfred E. Goldman, investors are saying "they have no confidence in the stimulus package doing much stimulation anytime soon. And they're greatly concerned about the size of the budget."

On some of the most wrenching recent days in the market, it's been easier to connect cause and effect.

The Dow sank 4 percent on Feb. 10 as Treasury Secretary Timothy Geithner unveiled a new bank-bailout plan that Wall Street immediately criticized as laughably light on details.

Several weeks later, investors shaved an additional 4 percent off the Dow after the government agreed to give insurer American International Group an extra $30 billion, bringing its loan total to $180 billion.

Now the Dow seems to drift lower day after day, with Wall Street waiting for clarity and selling in the meantime.