The New York Times asks the question this afternoon–“why did the stock market crash today?”
Speculation focused on fears about the direction of the economy, though it remained unclear why anxieties that have been around for months would suddenly take hold.
I have another theory–Wall Street doesn’t like war, and last night as the chants of “USA, USA” rumbled through the RNC convention hall, while Sarah Palin assured the crowd that John McCain was willing to “fight for you” against all enemies, I think it occurred to the big investors that these martial warriors might actually capture the White House. For two days Lieberman, Thompson, Guiliani and Palin have made it clear that the Republican Party is the War Party. As any investor can tell you, eight years of war have helped few firms except Halliburton and Exxon. If you put all of your money in an S & P 500 index Fund on the day of George Bush’s Inauguration, you would be down about 12% after almost 8 years. This is why Obama and the Democrats have actually raised more money from the financial industry than the Republicans.
The market doesn’t like the War Party any more and they were scared silly by the pit bull with lipstick.