Stock Market Loses $3 Trillion in 3 Days

Continuing with the pattern set the day after the election of Barack Obama, the stock market has lost a staggering 3 trillion dollars in just 3 days.

The market is already in the worst post-election plunge in U.S. history, but the losses over the past 3 days make other post-election losses pale in comparison.

True, other forces are at work in bringing about the market's woes.

But the election of a new President is also a leading indicator of whether or not Wall Street views the policy proposals of that new President to be financially sound for the economy.

The American people protested loudly and clearly concerning the bailout passed by Congress. And now we have an incoming President who not only embraced that bailout but is proposing even more.

And, as reported today by Forbes, the current price-tag of the bailout, all at taxpayer expense, stands at $5 trillion dollars and counting.

As reported earlier, most of the leading economists in the U.S. believe that the bailout of Wall Street and other large corporations is a terrible idea. Perhaps most investors deep in their heart of hearts believe the same thing.

Stocks Lose 7% of Value Since Election Day

In the largest election week decline in U.S. history, the stock market lost 7% of its value in the first 3 days after the vote.

Even the election of Herbert Hoover in 1929, Franklin Roosevelt in 1932 at the beginning of the Great Depression, and Jimmy Carter in 1976 did not match the decline following Barack Obama's election.

Reuters News Service provides a table of market activity showing the gains and losses in the stock market in the week following every election since William McKinley in 1896.

The only other Presidential election in history that came close to matching the losses in the market following the election of Obama was that of Harry Truman in 1948.

That week in 1948 following Truman's victory, the market lost 6% of its value.

STOCK MARKET: WORST 2-DAY LOSS IN HISTORY

Perhaps the past 2 days, not just the day after the election, will help convince some skeptics that the election of Barack Obama is the single biggest factor in the stock market's history-making 2-day decline.

In the 2 days since the election, the market has experienced its worst 2-day decline in U.S. history.

Prior to the election, the market was making a decent recovery. In fact, it was inching upward toward the 10,000 mark once again.

But as I predicted (along with several others), electing Barack Obama to the White House would send the market into an immediate tailspin due to his investor-hostile policy positions.

It is the height of naivete to think that the election of someone who will slap investors with heavy taxes would not negatively impact the market in a major way.

Investors are not imbeciles. They watch tax policy very closely. And they correctly determined that in order to avoid losses in 2009 resulting from the hefty tax increases of the Democrats and Obama, they need to sell now.

Thus, the stunning 2-day plunge.

And unless the Democrats and Barack Obama signal that they will NOT implement the promised tax policies that will penalize those who create wealth and invest in our markets, we can expect more dramatic and painful losses.

We are headed for another Great Depression unless the new 'chosen leaders' back off from their ill-conceived intention to increase taxes on the very ones who can pull us out of the current economic downturn.

Stocks Plummet in Reaction to Obama Win

As predicted here, the stock market plummeted on Wednesday in reaction to the Barack Obama win.

In fact, the drop of nearly 500 points is the largest post-election loss in U.S. history.

And thus, my point is confirmed. Barack Obama's tax proposals are not only bad for the markets, but they may well be enough to push the economy over the edge into either a severe recession or an outright depression.

When investors know that after the shift in power in January their taxes will be raised, particularly capital gains taxes as Obama has promised, we can rest assured that those investors will sell NOW rather than wait for the tax increases to take effect.

In fact, I will make a further prediction. The losses on Wall Street will continue unless Obama and the Democrats eliminate capital gains taxes altogether and immediately promise there will be no tax increases, period--not even allowing the Bush tax cuts to expire.

This will give confidence to those who invest in the markets and create the wealth and the jobs in America.

But if Obama and the Dems are intent on doing what they promised with regard to taxes, look for a deepening economic decline resulting in even greater pain and suffering for the average citizens.