On the surface, the U.S.'s failure to win the 2016 Olympic games is no big deal. So it went to Rio De Janeiro instead of Chicago. Too bad, but life goes on. And as far as the stock market goes, judging from its ongoing strength, the loss is pretty much a non-event.
That's not the way it's seen by Selwyn Ortz, a principal of Hong Kong-based global money manager HK Investments, Ltd. He believes the market could eventually face a meaningful setback at some point because of the implications of President Obama's failure -- despite a full-court press -- to induce the International Olympic Committee to choose Chicago as the host city for the 2016 Olympic games.
The Olympics loss, as Ortz sees it, is one of eight red flags the market should be wary of. "The market's adverse reaction to this episode is not something that will happen tomorrow night, but it's on the way," he says.
"Not getting Chicago the Olympics was a significant loss for Obama," says Ortz. One ramification, as he sees it, will be to fire up the Administration's political enemies and make it much tougher for the President to achieve anything of a concrete legislative nature in Washington. Eventually, he feels, the market, confronted by legislative stalemates and much greater political bickering, including within the Democratic ranks, will get the message that Obama's honeymoon is over, and stock prices will be punished.
The Olympics loss, he also thinks, will cause the President to lose some of his international luster and support, which could embolden the U.S.'s enemies.
There's an old saying you can worry yourself sick over nothing. One of academia's leading political minds, Larry Sabato, professor of politics at the University of Virgina, reckons Ortz's concern may be a case in point. Why so? Because while he views the Olympics loss as domestic and international humiliation for the President, he doubts it will have any drastic effects on his ability to get legislation through a heavily Democratic Congress. It was a "memorable embarrassment," for sure, but memories should fade quickly as we move on to other topics, Sabato says.
Speaking of risk factors for the market, Ortz argues that Wall Street is presently blind sided by the widespread and swelling view that stock prices -- despite a more than 50% run from their March lows -- still have nowhere to go but up. Ortz, who believes stock prices, generally, are overvalued based on fundamentals, doesn't buy such optimism, contending the market has enough concerns on its plate to be wary of such exuberance.
In fact, he sees a slew of additional risks, any of which he thinks could precipitate a sharp market decline -- anywhere from 10% to 20%, he believes -- if they become a reality. Noteworthy among them:
So there you have it: Eight waving red flags. It all reminds me of a warning Julius Caesar received about the Ides of March. He ignored the warning and, as we all know, it cost him his life. Ortz's admonition: Don't be another Caesar!
Write to Dan Dorfman at Dandordan@aol.com
Wall Street's recent display of incompetence, larceny, and corruption is an epic fail that dwarfs Chicago's inability to win its Olympic bid. The market has FAR more important things to think about - it's behaviour, for instance - than the Olympics.
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What expertise does Mr. Ortz have with American politics. Is Mr. Ortz an American?
I don't think the IOC decision affects Obama's standing one bit.
The Asian nations all voted for Toyko in the first round, but there weren't enough of them to put it on top in the second.
As I said, I only heard it once, but I strongly suspect it to be true.
My theory is that if there had only been one round with everybody voting either "yes" or "no" on all of the candidates, and the winner being the one with the greatest number of "yes" votes left after subtracting the "no" votes, the outcome, or at least the order of who came in second, third and fourth, might have been different.
Wish we conducted political elections that way. Then you could vote for your real choice *and* the candidate you'd otherwise wind up voting for in order to defeat the one you fear. This would have kept Perot from taking votes away from G.H.W. Bush and Nader from taking away votes from Gore, and would also have given a truer indicator of how people felt about 3rd party candidates.
Rio was considered the favorite and Chicago the second choice. That most likely never changed.
Only a true conservative would blame Obama for the dirt left over by their hero George Bush and try to show how this might affect the market. Give me a break.
Obama should be happy the right can't play him as the darling of foreign cheese eating wimps. Hard to crown him the head of the global order if he can't get the olympics.
China's market decline isn't surprising. Having the unfettered ability to put their stimulus in play building they will of course burn through it more quickly than we do ours. As long term growth for them remains dependent on foreign consumers getting positive and spending (Neither of which will happen this X-Mas) much to a chinese market analysts chagrin also ensured it.
The Job market will worsten.
Banks will again use the last quarter to write of bad debt running a 3 quarters of positive news 1 quarter of bad news stock value market strategy.