Larry Kudlow’s NRO analysis of last week’s surge in the American stock market averages suggests that the likelihood of President Obama’s policies failing is providing fuel for the rallies:
“Hate to say it but Obama’s disastrous press conference last night (7/23) is a big contributor to (Fri)day’s roaring stock market….Politics is not everything, but I believe that the shrinking probability of a new government insurance plan that would lead to nationalized health care — along with the demise of cap-and-trade that would nationalize energy — is very bullish for stocks….(Obama’s) whole garbled, inconsistent, and baffling defense of health care looked real bad. The president’s polls have been falling, especially on his policies. And markets see the possibility that free-market capitalism will live to see another day. http://kudlow.nationalreview.com/
Kudlow goes on to review the mixed signals in our volatile markets but concludes with guardedly bullish optimism:
“I’m not predicting a return to the all-time S&P high, which was over 1,500. There are still too many government threats to free-market capitalism emanating from Democratic Washington. But the political tide is clearly turning for the better. And so are the economic stats. If the July employment report wipes out some of the negatives of the June report, this market could really roar.” (ibid)
Moderates and Blue-dogs please take note of this interesting recipe for the return of American prosperity:
Obama failure equals American success.