Power And Dollar

Obama Administration Begins! (Or ?)

Obama settled on his economic team late Friday afternoon, sending Dow 400 points higher, just above 8,000 points.  Then, news about Citi’s (NYSE:C) bailout came about.  This news probably marks the beginning of Obama administration.  Here is also why this signal is important.  

 

A plan like Citi is facing must have been laid in advance.  What has been in the dark is if the plan gets proper continuity through its execution.  Therefore, the first priority is people.  The people had to be properly identified.  The team had to understand what is involved.  Geithner’s appointment had a lot to do with his familiarity in the financial crisis as well as the solution already in place.  He probably had a hand in the solution as well.  For an announcement that spans through two administrations, Obama had to approve.  Bush had to approve this plan as well since Obama is doing to take the credit for its success but Bush will take the blames if it fails.  Geithner’s appointment is an additional (in addition to James Jones’ appointment) indication of the desire for smooth transition. 

 

Of course such a “smooth” transition means a blend of old and new, ie some more of Bush people, and some of Bush ideology gets carried over.  However, media is very willing to forget about these things, when it is done by Obama.  

 

The importance of the news, in addition to sending DJ and S&P up another 3% in the first 2 or 3 hours of a Monday morning, is this: Obama already replaced Bush; expect more consequential news from now on.  Obama’s administration is not going to begin on 2009.01.20.  His administration starts now.  Therefore, if you thought your decisions could wait until 2009.02, then you may want to re-juggle your vacation schedule.  Your Q4 board probably is going to get busier than usual, not only the economic news and your company financials matter, but also Obama will deliver statements earlier than previous presidents.  Decisions about your public relations firm, lobbyists, policy research contracts will have to be revisited now rather wait after Christmas.  

Fund managers have to get busy too.  Just look at Citi’s stock this morning: 2 hours and 66% increase.  Obama’s statements will make big swings.  So, don’t slack. 

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November 24, 2008 - Posted by | banking, Barack Obama, business, Current Events, 美國, Democrats, economics, obama, politics, Republican, wordpress-political-blogs

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