Hope Evaporates - Stock Market Plummets

President Obama’s election campaign focused on change he would bring that would turnaround the economy. The team of economic advisers he introduced only days after his election testified to the priority he intended to give to the economy. Paul Volcker, the former Federal Reserve Board Chairman, lent great credibility as the head of that advisory group and expectations for an economic recovery began to spread.

The hope for a reversal of economic fortunes began to unravel with Obama’s controversial selection of Timothy Geithner as Secretary of the Treasury. It was eroded further by reports that Larry Summers, the head of the National Economic Council, was giving a cold shoulder to Volcker and assuming dictatorial power over economic matters.

Hope evaporated entirely on February 10, 2009 when the oft-delayed plan to rescue the financial system was revealed in a speech by Secretary Geithner that contained no meaningful solutions. The Obama administration allowed Geithner to be the spokesperson for its much heralded rescue plan, and Geithner demonstrated that neither he nor anyone else on this new economic team has a clue on how to fix the problems.

The financial markets were stunned that President Obama had somehow turned the economic destiny of the nation over to Nancy Pelosi, Barney Frank, Larry Summers, and Tim Geithner. There appears to be a growing realization that President Obama has very little understanding of the financial markets.

Stock market participants were hopeful that the carefully placed leaks in the days preceding Geithner’s speech were designed to whet their appetites for a bigger announcement. At the end of the speech, it was apparent that this administration simply delayed the speech, while fruitlessly hoping that someone would invent a solution.

Anger replaced hope on February 10th and people questioned if the Secretary of the Treasury should resign. The stock market shed more than 382 points amidst growing despair that the nation faces four long years.