Obama has been in decline for months.

Then Unemployment hit double digits.
Then NJ elected a Republican to replace Corzine.
Then MA elected a Republican to replace Ted Kennedy.
Then Health care imploded.
Then the Supreme Court struck down McCain-Feingold.
Then the stock market started tanking after Obama declared war on banks.

The commercial real estate crash is just around the corner.

The slide began a long time ago, and it will continue for about another 3 years.







Revenge Isn’t An Economic Policy
By Ed Carson

After spending his capital on health care and climate change as unemployment soared, President Obama sees political gold in bashing Wall Street to satisfy (often understandable) public anger.

The policy merits of Obama's proposals — a “TARP tax,” restricting the size of activities of big financials — are debatable. Experts a lot smarter than this writer support and oppose them.

But the starkly political motivation, fueled by and fueling populist rage, has unnerved Wall Street. It’s creating a hostile and uncertain climate for investors and lenders. Reports that the Senate may not have the votes to confirm Ben Bernanke to a second term before his current term expires Jan. 31 don’t help.

The S&P 500 sold off 2.2% on Friday — 5.1% over the last three days.

This bank-bashing strategy may ultimately backfire. The major averages now are all down for the year and appear to be in a correction. That could hurt consumer spending, and hinder a still-fragile economic recovery. If unemployment remains high, voters likely will still punish the party in power.

As Jason Trennert of Strategas wrote in his daily note this morning: “(T)here is the potential for the nation’s economic policy to focus on finding scapegoats rather than on finding long-term solutions to its problems.”

You think?

Update: Tony Crescenzi, strategist and portfolio manager at Pimco, said in a note regarding Bernanke's confirmation: “It would not be wise for Congress to politicize the institution vital to maintaining the purchasing power of the U.S. dollar. If it does, and if fiscal profligacy continues, U.S. financial assets in general could be put under downward pressure.”