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   Cramer - Why Obama Is Bad for Stocks   
      
   ByJim Cramer, RealMoney Columnist , On Thursday June 24, 2010, 11:15 am    
   EDT    
      
   I heard it five times this week, twice Tuesday in a Wall Street bar, two    
   times during the day chatting with investors and then last night at    
   dinner with a pal, an old pro trader from down the block. All said the    
   same word, as if programmed, like pod people in Invasion of the Body    
   Snatchers. The word?    
      
   Malaise.    
      
   All of the people who used this term were older, friends from the days    
   of trading, wizened veterans of other terrible markets and of course,    
   people who came of age during the Jimmy Carter years, where the    
   unlamented president talked about the malaise in America and how the    
   country was going in the wrong direction, coincidentally in large part    
   because of failed energy policies that produced gas lines and a lack of    
   energy independence. He talked about a dispirited America where people    
   for the first time thought that the next five years would be worse than    
   the last five years. When you read the speech -- it can be Googled    
   simply by typing in "Carter" and "malaise," the speech was that well-   
   known, and, yes, well-scorned -- it resonates today as if it were given    
   by the man in the White House. I am surprised he's not giving it, but he    
   knows better: Carter never recovered from it.    
      
   Malaise. The recognition that things are out of control and there is no    
   getting better. The recognition that the president and Congress can't    
   create jobs and that we can't stop the spill. The recognition that    
   things are out of our hands. One true presidential historian/arbitrageur    
   invoked the "pitiful helpless giant" speech, a true throwback, a    
   miserable speech by Richard Nixon green-lighting the disastrous    
   Cambodian incursion in order to defeat the indefatigable and ultimately    
   undefeated North Vietnamese. Given our inability to subdue the Taliban,    
   though, maybe the analogy's not that off-base.    
      
   It sure feels like we are stuck in a malaise and have been reduced to a    
   pitiful helpless giant, hobbled this time by high debt, huge taxes, an    
   anti-business agenda that is freezing job growth and an intractable    
   economy.    
      
   To me, the coincidences are leading to what you see on your screen -- a    
   collective sense of ennui and "it isn't worth it" because things aren't    
   getting better, they are getting worse. That's how you get a market that    
   interprets everything negatively and people who are fleeing, not going    
   toward, even the best of values.    
      
   I do not mean to be political. It's not like the Republicans are    
   proposing breakthrough strategies to get things done and break the    
   malaise. But I do hear it, especially from people who have come back    
   from Asia, where the can-do attitude of the '80s and '90s or even the    
   '40s and '50s reigns.    
      
   Malaise.    
      
   Yesterday's rank insubordination by a key general in, of all places, a    
   Rolling Stone interview -- ???!!! -- crystallized the moment, didn't it    
   (no pun intended). I only heard two things: one that it was right for    
   Gen. McChrystal to be fired and two that McChrystal was right for what    
   he said. Given that a plurality of my colleagues voted for President    
   Obama, the conclusions were pretty grim for what one soul called a    
   "failed presidency."    
      
   Look, in this country it is never too late for Obama to reinvent, broom    
   the people who have been setting his agenda, tack toward pro-growth,    
   although his one attempt to break with the orthodoxy came when he    
   embraced offshore drilling -- a luckless failed presidency?    
   And I am confident that the spill, if contained, would provide a lift    
   and a revaluation of the malaise. However, I am NOT confident that BP    
   will be able to contain the spill. So many maddening things being done    
   wrong by one company that I think will have to file for bankruptcy    
   because of its gross negligence and the sheer size of the claims. I have    
   to marvel that the BP public-relations team struck back today with an    
   obvious riposte, as I have begun to read stories about how a bankruptcy    
   from BP would be a true blow to the U.S. economy because of the role it    
   plays in drilling and finding oil.    
      
   Claptrap. A bankruptcy filing is to eliminate the possibility that BP    
   would have to be liquidated. It is a peaceful and orderly way to    
   transfer the equity to the claimants while the bonds have a chance of    
   paying off.    
      
   This isn't short-term. I am not looking at red futures or weak European    
   quotes, despite the fact that the situation there no longer seems to    
   have systemic risk and by this time I would have thought Greece would    
   have been booted from the EU. Seems pretty strong over there, even    
   though I think that a slowly weakening euro may be in the cards because    
   the leaders over there want to boost exports.    
      
   Nevertheless, I keep coming back to the malaise, where even good news is    
   filtered badly: a rising home price obscured by weak sales that should    
   be extremely weak because of an expiration of a credit that paid for a    
   year's worth of interest or maintenance charges, or whatever it was    
   applied to.    
      
   This malaise, like the Carter malaise, starts from the top, although    
   Carter's speech was a thinly disguised attempt to blame the American    
   people for the malaise and their unwillingness to sacrifice.    
      
   I think it has to end at the top with a recognition from the president    
   that jobs have to be created, uncertainty removed, the agenda shelved.    
   He obviously has no intention WHATSOEVER of doing that. And I am not    
   saying this as someone who favors or is opposed to Obama, I am saying it    
   from the litmus I always use: Is something or someone good for stocks or    
   bad?    
      
   Obama's bad.    
      
   His administration is proving to be the champion for those who don't own    
   stocks and perhaps never will. Or, worse, he thinks that the average    
   working person saves in CDs -- is he unaware of the 25-year campaign by    
   all to have retirement savings and college tuitions paid for by now-   
   tattered stock portfolios?    
      
   I point all of this out because when I say this market is going nowhere,    
   I think it is going nowhere because of Washington, not corporate    
   America, not the public sector, not the private sector. The companies we    
   have heard from this week are brimming with cash, with the Jabils    
   setting the tone of terrific earnings and the Apples setting the tone of    
   worldwide dominance.    
      
   But it hasn't mattered.    
      
   Malaise.    
   That's what we are dealing with. You want to put the conversation in    
   stark footing? Corporate earnings aren't mattering because P/E's are    
   shrinking from the malaise.    
      
   My most Republican of friends didn't stop with Carter and pegged the era    
   as most similar to the 1930s, where deflation, not inflation, was the    
   problem. I think that's too extreme, but empirically not easily    
   dismissed. I just think that no one reading this thinks the next five    
   years are going to be better than the last, even though we just    
   experienced a hideous stock market decline.    
      
   There's just no sense of any control.    
      
   To dig in your bearish heels, though, is to see the market fall to 9700    
   on the Dow and we get some wakeup calls: BP containment, presidential    
   recognition that job creation and not cap-and-trade or financial reg or    
   amnesty or Card Check -- all part of his pro-union agenda -- can help    
   break the malaise and put us back on the right course.    
      
   As my old friend Steve Galbraith, a great stock thinker, wrote in a    
   remarkable piece of research for Morgan Stanley, "Look for the union    
   label and sell," a commentary on how companies that were union-dominated    
   were good sales. GM anyone?    
      
   Well, what happens if the president wants to put the union label on more    
   businesses? What happens if he thinks it's right?    
      
   Guess what. He does.    
      
   Which perhaps is ultimately what this market is saying -- look for the    
   union label and sell -- because the president's wearing such a label, so    
   bizarre given what we know about unions and profits and lack of success    
   of the enterprises dominated by them.    
      
   Forget my politics. Forget anyone's politics. The malaise is here.    
      
   And the stock market knows it more than anyone.    
      
   CMPQwk 1.42-21 9999    
   Stop the Democrat party oil embargo ....   
      
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