"The wobbles we’re feeling now are there because the whole world is interconnected and money flows like water. The president can't change that." (In spite of the Republicans' snarkiness.)

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COMMENTS:
*  The real problem with the stock market is that so many speculators are afflicted with "monkey see monkey do" herd mentality.Everything would be fine if the prices were set by rational thinkers.
*  Hey folks, this is not a Crash yet. Right now it is just a correction. It may or may not become a Crash.
*  Repubs cannot have it both ways. They say Obama is responsible for the August dip then he also must be responsible for the rise in the Market (which was awesome) after W destroyed it.
*  On an average, we have one correction of 10% every year. We didn't have one for more than 3 years because of the fed. We are just returning to the statistical norm. Big deal..
*  Darn it, I cut my finger. It's your fault Obama!
*  A correction isn't the end of the world. Why must anyone be blamed for something normal happening? Today my portfolio is up 4.5%. I guess I'll blame the president...
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It’s foolish to blame Obama for stock-market woes
By Rick Newman, August 25, 2015

It’s Obama’s fault.

Expect to hear that a lot during the next 15 months as Republican presidential hopefuls blame everything imaginable on the president whose party they want to bounce from the White House.

Recent turmoil in the stock market, for instance, is Obama’s fault, according to Republicans Donald Trump, Scott Walker, Chris Christie and others. Trump, for instance, said of China, “they’ll bring us down. We have nobody that has a clue.” Then he said President Obama should cancel the upcoming state dinner with Chinese president Xi Jinping and give him a double Big Mac instead. Walker argued that “We need to see some backbone from President Obama on U.S.-China relations." And Christie said the stock-market sell-off resulted from “a history of failed policies by this president.”

Obama certainly has some policy liabilities (exhibit A might be his vow to take decisive action in Syria, which never happened), but if you blame Obama for the 9% drop in stocks during the last week, then you’re basically saying Obama is responsible for what happens in the stock market. And if you’re saying that, then you have to give him credit for the huge gains in stock values that have occurred during his presidency.

By that standard, Obama has been a genius and his China policy has worked wonders. Since the day Obama took office, for instance, the S&P 500 stock index has risen by about 125%, or roughly 20% per year. The smartest hedge fund managers don’t get returns that high. The only thing Obama didn’t do is open a trading account for every American and give them a complimentary $10,000 starter fund.

Better to acknowledge that the president—any president, of any party—has little influence over the stock market, or even over the broad direction of the economy. Sure, presidents can talk up the economy and try to convince consumers and investors everything is great. They can also enact laws and policies that trigger growth, if they can get Congress to go along (which Obama pretty much can’t). But the Federal Reserve has much more influence over the direction of markets than the president does, and even the Fed can short-circuit reality only so long. Sooner or later, financial markets always reach equilibrium levels that will be as satisfying or ugly as underlying fundamentals, regardless of presidential policies.

This is a lesson China seems to be learning as government efforts to prop up the rigged stock markets of Shanghai and Shenzen fail repeatedly. China's communist government created incentives for Chinese investors to buy stocks, which now looks a bit like a Ponzi scheme as buyers bail and the government tries to keep them from selling. This isn’t U.S. policy, it’s Chinese policy, and one America probably couldn’t talk them out of under any circumstances. China is prideful and stubborn, and it can behave in ways that make no sense to free marketers longer than anybody would like.

China is the current catalyst for the turmoil in financial markets, but this may only be because markets were fragile—and U.S. stocks possibly overbought—with something likely to crack the eggshell. It just turned out to be China. Investors are now resetting their expectations and factoring in slower growth in China than assumed until recently: 4% or 5% annually, say, down from 7% or so. How could Obama have let this happen?

When the manic behavior ends, investors will realize that China’s economy is much more dependent on the United States than the other way around. We’re their biggest customer, buying much of what they make. China is a big global consumer of raw materials, but they don’t buy much of what we make here in the U.S. (And yes, we still do make some stuff here.) The health of the Chinese economy matters here, and everywhere, but it would take a real rout in Asia to cause lasting harm here. The wobbles we’re feeling now are there because the whole world is interconnected and money flows like water. The president can't change that.

Republican candidates may not care about the details because they’re trying to get the attention of base voters who don’t like Obama anyway. Luckily for them, there’s more than one villain to pin the blame on when markets stumble. The Federal Reserve is about to raise interest rates, and that, too, is beginning to unnerve investors, even though the Fed has done more to stimulate the recovery we're in than any other body. Obama and the Fed: They caused this problem together. You heard it here first.
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