Will Obama II Be Reagan I Or Truman III?

Tyler Durden's picture

There are plenty of analogs for market and economic behavior currently echoing the past - some scary, some terrifying, and some hopeful. Barclays found two interestingly similar election-bound relationships to the current environment but with very different outcomes: Harry Truman's successful 'Fair Deal' 1948 campaign and Jimmy Carter's unsuccessful 1980 re-election effort.


Via Barclays:

In both cases business confidence and capital spending were soft during the election year; however, during the sprint to the November elections the market went in completely different directions.


In 1948, the S&P 500 dropped 11% from June through late September, bounced in October then fell sharply after Truman won in a shocking upset.


In 1980, the S&P 500 rallied 36% from March through late September, had a 5% correction in October followed by a post-election rally to higher levels after Reagan won a decisive victory.




Capital spending fell sharply in late 1948 and 1H49, driving the economy into recession due in part to a monetary policy mistake (raising the reserve requirement), while in 1981 capital spending increased sharply.




This year’s election had similarities with both. Unfortunately the market traded as if this was 1980, but it turns out we could be headed for ‘Truman’s 3rd term’ (See Figures 3 and 4).


Clearly the risk is a policy mistake – this time fiscal – which could drive another capital spending bust and a shallow recession.


So, will Obama's 2nd Term be more like Truman's 3rd or Reagan's 1st for the market and the economy - based on potential for policy mistake... or c) none of the above...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ACP's picture

Judging from the hate spewed by his mindless followers, I'd say Stalin II.

flacon's picture

Ben Bernanke walks into a restaurant and orders a pizza. The waiter asks him if he'd like his pizza sliced into 6 slices or 8. Bernanke replies "8 slices please. I'm really hungry".

DoChenRollingBearing's picture

Ha ha!  + 1

 Obama has his first chance at some new leadership (?).

Review of Barron's -- Dated 12 November 2012:


GetZeeGold's picture



Bringing up Barry in reference to Reagan.


Mark the checkbox....I've seen it all now.

Jay Gould Esq.'s picture

What shall be suffered upon investors ? Quite simply, the market behaving correctly as predictor of the expiring national economy:

Analogue: Herbert Hoover, '29-'32.

LetThemEatRand's picture

Agreed, but likely only after the false "black swan" event upon which it can be blamed.   What Ben really means when he says he is a scholar of the Great Depression I, is that he will not repeat the mistake of allowing the market to tank without some supposed external event on which to blame it.  He has proven himself quite good at making the average person believe that the Fed is on the side of ordinary Americans.

akak's picture

You know, LTER, when away from the subject of Ayn Rand, you can be really quite lucid.


LetThemEatRand's picture

I appreciate the compliment, but I think I'm equally lucid when on the subject of Ayn Rand.  Or I'm a blind squirrel.   Either way, I genuinely believe that Ms. Rand has poisoned this country because she gives cover to sociopaths.   Like all philosophies that attempt to impose simple answers on humanity (Marxism, Keynesianism, and on and on), what works on paper doesn't tend to work in practice.

Spastica Rex's picture

Ayn Rand was a pop-philosopher; the perfect figurhead for self-absorbed and poorly educated Americans.

akak's picture

Funny how the pop philosopher was almost universally derided and hated by her contemporaries.

But ironic how we ostensibly went from ersatz pop-philosophers to actual pop-presidents.

LetThemEatRand's picture

Her contemporary Alan Greenspan thought she was swell.

akak's picture

Well, did you ever actually LOOK at Alan Greenspan?  I think the man was born 80 years old!

I have always wondered if he made Ayn put a bag over her head when they had sex --- and vice versa.  The image of a basilisk mounting Medusa comes to mind.

Spastica Rex's picture

Needlessly graphic, IMO. Think of the children.

Yen Cross's picture

She does look like Medusa,  +1 for akak...

  Debbie Wasserman Schultz, is "Äyn Rand" reincarnate.   Ayn rand has some evil eyes.

vast-dom's picture

Rand = Retard posing as intellectual. 

Spastica Rex's picture

Dr. Phil = Ayn Rand

Maybe in 50 years, he'll have a cult, too. I reckon he'll need to publish a sci-fi paperback or two, first.

L. Ron Hubbard > Ayn Rand

because his cult makes way more money.

LetThemEatRand's picture

Ayn really should have worked aliens and volcanoes into her books.  She would have made a (further) killing, while not in the slightest diminishing the value of her thinking.

Spastica Rex's picture

She could have written "Battlefield Earth," a story where fat, slovenly, homosexual aliens descend on Earth, take up residence in the penthouses of NYC, and arbitrarily force Earthmen to farm two-row barley using only simple agrarian hand tools.

Of course L. Ron would have to pick a different title for his sci-fi magnum opus a little later on.

akak's picture

Your premise is flawed, however --- everyone knows that homosexuals are prissy and slim neat-freaks.

Besides, homosexuals are inveterate advocates for six-row barley (if it was good enough for the ancient Greeks, then it is good enough for them!).

A Lunatic's picture

Brokeback Barley........

GetZeeGold's picture



Tom Cruise gets divorced........AGAIN!

nodhannum's picture

Can't hold a candle to the Obama cult. They spend way more money.

StychoKiller's picture

Sorry, said "sociopaths" existed BEFORE Ayn Rand; therefore, they already had all the cover they needed.

bigmikeO's picture

We'll be lucky if it's not FDR II or FDR III (WWW III)

dolph9's picture

Obama is not going to be anybody but Obama...an affirmative action buffoon whose only role is to warm the chair in the oval office while the country disintegrates.

Bangin7GramRocks's picture

Couldn't be any worse than dubya 1st and 2nd! That "c" student cocksucker nearly doomed us all and sent thousands of good young men to slaughter. I don't believe Obama is any savior but Bush, Cheney and Rumsfeld should be in prison for war crimes.

pursueliberty's picture

i'M not positive here, but you might want to put the rock down and go find me O's report cards.


It looks to me like we got a lot of bush in obama, and I'm not talking bout michelle

Bangin7GramRocks's picture

Yeah, nice try. Obama was the president of the Harvard Law Review and dubya was a legacy, frat boy who partied his way through his charmed college years.

Remington IV's picture

Harvard Law Review , while never writing any papers for Law Review


Transfer student from Occidental College , who goes to Columbia then Harvard = Affirmative Action

xtop23's picture

You might want to reread the comment you're responding to again.

Pursueliberty's post is spot fucking on.

The report card he's referring to isn't the one they put on a college transcript, sonny.

Urban Redneck's picture

Obama scored both quota monkey and legacy points for his Harvard application.  Furthermore, he hasn't provided a single shred of evidence that he didn't party his way through his charmed college years just as much as the language mangler, or that without being the half black son a Harvard graduate that he even had the intellectual prowess or academic credentials to merit admission in the first place.

BobPaulson's picture

So Obama being an idiot means Bush is not an idiot?

We really all have to break out of the mind control two party kindergarten sandbox trap. It is a treadmill. Any discussion about which party is "better" is a complete diversion. Resist it and see that like the military industrial complex warning of Ike and the convert society warning of JFK are two versions of the same message: it's an insiders game unless we stop playing by their rules.

Remington IV's picture

Three Stooges look smarter than these buffoons


Organ grinder followed by his Chimp

Remington IV's picture

Three Stooges look smarter than these buffoons


Organ grinder followed by his Chimp

jcaz's picture

Dude- still trying to blame Bush?   That's so pathetic at this point...

But hey- good luck peddling your solar panels.....

Oldwood's picture

Just keep telling yourself that. I couldn't be worse, it couldn't be worse, it couldn't be worse. Ha,Ha,Ha!

Dr. Engali's picture

Okay Obama boy...tell me why there are still thousands of good men and women still dying. And please tell me why it is that your savior should not be prosecuted for bombing the shit out civilians throughout the world with his drones. I'm just curious,because if I didn't know any better I would swear we had Bush in the office along with a teleprompter.

Bangin7GramRocks's picture

You have a very good point. I am an independent who doesn't just root for blue or red. I'm extremely disappointed in Obama's war policies. And our secret, vicious drone program is both chicken shit and amoral. But hey, if there is one thing that our youth has proper skill and training for, it's working a joystick. Team America, Fuck Yeah!

A Lunatic's picture

I think you mean immoral.........Hopefully.

Bangin7GramRocks's picture

When it comes to bombing brown people, the United States lacks any morals at all. Therefore, the actions could be perceived as amoral. I personally believe it is immoral to indiscriminately bomb brown people. But we are talking about semantics here.

A Lunatic's picture

But if it is only brown people being bombed it really isn't indiscriminate at all is it? Which in a grammatically bizarre sort of way makes it all perfectly acceptable.........

knukles's picture

Holy shit...


Urban Redneck's picture

a brown person indiscriminately killing large numbers of other brown people, that is some serious self loathing or insanity coming from a narcissist...