The big day is here. Americans will go to the polls today and decide who will lead the country messed up in financial and economic turmoil. As of Monday, the final “USA Today”/Gallup pre-election poll clearly pointed to a win by the Obama-Biden camp, with a 55% rating, compared to 44% for McCain-Palin. Based on the standard three percent error allowed, Barack Obama will become the 44th President of the United States.
Trading was up last week, which is generally not the case with a Democrat administration, but clearly part of the reason for the buying was an extremely oversold market. According to pundits, a win by Obama is already priced into stocks, while a win by McCain could drive up stocks, as Wall Street tends to favor a Republican government.
If Obama does win as expected, it will not be an easy road for the former community worker from Chicago. He will inherit a country that is in the midst of an economic slowdown and upcoming recession, along with a fragile credit market and a housing market that has collapsed. Jobs are also being cut everywhere and consumer confidence is at a low. The next President will need to ride out some real rough quarters and pray that the world economies do not falter; otherwise, it will be ugly.
While the newly minted President will not take office until January 20, 2009, the first thing he will face is the fourth-quarter retail and earnings results, which are expected to be downright nasty. There may be pressure on the Federal Reserve to eventually cut the Fed Funds rate to zero percent if the economy does not respond. Japan did just that, but it still took the country years to pull out of its recession before pulling back into the trough. Clearly, the next President-elect will have his hands full. Let’s just hope he will have the fortitude and will to rectify the current mess we are in. Let’s have a say in the direction of the country by going out and voting.