There are significant and troubling issues in the European economy that are freaking out investors and causing negative volatility on Wall Street. Everyone is worried that Greece will default on its debt and cause a banking crisis reminiscent of 2008. Today, a top official at the European Central Bank resigned and people got even more nervous. But it’s also true that the mere existence of Republicans is hurting investor confidence.
“Even yesterday’s speech raises questions of whether there will be support for fiscal policy,” [former Federal Reserve economist Paul Ballew] said about the president’s jobs address.
Mr. Obama’s plan focused on generating jobs and included a number of tax cuts and spending proposals, like an extension and expansion of the cut in payroll taxes and a tax holiday for small businesses for hiring new employees.
Mr. Ballew said that questions persisted about how much of the proposal would pass…
…Clark Yingst, the chief market analyst at Joseph Gunnar, said that the fall of the euro against the dollar on Friday, resulting in a six-month low, suggested that the S.& P. 500 had not yet completed its recent correction.
“The market just doesn’t believe that it is going to be passed by that Republican house,” Mr. Yingst said of Mr. Obama’s speech.
In other words, we’re all losing money in our retirement portfolios because the big investors think the GOP will block the president’s jobs plan.