Nobody Messes with The Dow
Last night a charismatic President Obama delivered a forceful speech to a joint session of Congress, promising that his plan “will rebuild, will recover, and make the United States stronger than before.” However, there was little buy-in from investors, who remain skeptical about his plan’s effectiveness in stimulating the economy. The Dow Jones Industrial average fell 80.05, or 1.9 percent, the Standard & Poor’s 500 index lost 8.05 point, or 1.07 percent, and the Nasdaq Composite Index also declined, 16.40 points or 1.14 percent according to a Reuters report.
Investors, it seems, are voting with their feet and disapprove of the manner in which the economy is being handled. Concerned investors are also seeking safe haven assets including precious metals like gold. Not only do they want to pour their money into gold futures on the commodity exchanges, but some are willing to incur the expenses and trouble of physically taking the precious metal into their possession, reveals the WSJ article Worried Investors Want Gold on Hand
Tony Klancic, an account executive at Lind-Waldock, a Chicago commodities brokerage, says he has been taking calls since September from individual investors wanting to buy physical gold. These are real people in rural America with money under the mattress, and wealthy individuals coming to the futures market strictly intending to take delivery, Mr. Klancic said.
This brings to mind President Obama’s sound bite “Nobody messes with Joe,” uttered last night when describing Vice President Joe Biden’s forthcoming oversight of stimulus package spending. However, it might have been more apropos to say “Nobody messes with the Dow,” since the spiraling index is a direct reflection of investors’ trust – or distrust – of the whole stimulus scheme.