U.S. Markets in Anticipation of Obama-Administration Economic Team Announcement
At the end of a week of volatility, reflecting the many uncertainties and unanswered questions facing investors, U.S. stock markets rallied during Friday’s trading and while not entirely regaining the losses of the week, at least minimized those losses to some extent. Many believe that the rally in the market can be attributed primarily to the rumors and speculation with regard to who will be making up the Obama administration’s economic team. The President-elect is scheduled to introduce this team to the nation on Monday afternoon, and analysts are hopeful that with the new administration starting to take shape, it will have a confidence boosting effect on investors, and U.S. citizens as whole.
It is expected that 47-year old Timothy Geithner, who is currently president of the New York Federal Reserve, will be named as Treasury Secretary on the economic team. Geithner was born in Brooklyn, New York City, with his early schooling taking place in Thailand and his education being completed at Dartmouth College and John Hopkins University’s School of Advanced International Studies. He has resided for periods of time in India, Thailand, China and Zimbabwe. He started his career at Kissinger and Associates in Washington, D.C., before joining the International Affairs division of the U.S. Treasury Department in 1988. Geithner’s career went from strength to strength and he was appointed as president of the Federal Reserve Bank of New York in October 2003. He is also vice chairman of the Federal Open Market Committee. Geithner coordinated the rescue and sale of Bear Stearns in March 2008 and has been instrumental in managing crises experienced in the 1990s in Mexico, Brazil, Indonesia, Thailand and South Korea. It is reported that Geithner believes that the Treasury Department needs to be given the authority to investigate and implement responses to the unprecedented financial crisis the United States finds itself in, and if Friday’s market rally can be used as a gauge, investors agree.
While investors on Friday appear to have responded positively to Barack Obama’s possible choices for his economic team, uncertainty about the current administration hiatus is fueling concern as American citizens are anxious for reassurance, strong leadership and direction. CNN’s senior political analyst David Gergen echoed the feelings of the vast majority of ordinary citizens when he noted that “the bottom feels like it is falling out for many people” as they discern the lack of leadership in Washington. While the President-elect has made it clear that the Bush administration is still running the country until the 20th of January, concern is mounting with regard to President Bush’s apparent lack of involvement in major decision making.
The transition period from the existing administration to the new one could not have come at a worse time and analysts believe that many investors are going to wait for the new year before actively engaging in the stock market again. With the thanksgiving holiday cutting into the current trading week, the impending announcement of the Obama administration’s economic team, the expectation of numerous economic reports and the retail trade regarding this as the beginning of the holiday shopping season, it is anticipated that the market will continue to be volatile – just how volatile that will be, remains to be seen.