THE BLOG
10/12/2012 08:43 am ET | Updated Dec 12, 2012

What's Really Going on: Obama, Welch and Stocks

1. Why did Obama pull his punches on Romney at their first debate?

The night before the debate, Fox News ran a tape of an Obama speech from 2007 about the federal response to Hurricane Katrina that purported to show his "true colors" as a prototypical angry black man. This was a "purpose pitch" as they say in baseball -- but not to "brush back" the president into a passive and defensive crouch (although it did), but rather to set the thread for the narrative they planned for the morning after what they expected to happen at the debate -- a full-throated attack by Obama on Romney's "47 percent" remark and his other conservative campaign commitments. At the last minute, Obama and his advisers decided to back off any "attack mode" perceptions so as not to feed that "Jeremiah Wright" narrative -- which is what the same team had feared most in 2008 and which John McCain had eschewed to his credit. They sensed that if Romney was battered around at the first debate, a desperate GOP would quickly revert to this discarded 2008 playbook, and they thought it was more dangerous for Obama than not scoring debating points. Unfortunately for Team Obama, Romney sized up the situation very quickly -- he is an astute businessman and can read a room and an opponent well enough -- he realized that he could basically say anything he wanted to and get away with it, and so he did. End of story. Obama did accomplish one thing -- the tape has disappeared from the airwaves -- even Fox News, because they now don't think they need it to win!

2. Why did Jack Welch make the preposterous claim that Obama's Chicago team has rigged the unemployment report?

Essentially, because he could! He knew that his tweet would be network news, just because it was his tweet, and that the financial media would give him airtime, without demanding to hear his evidence. He even got a free op-ed in The Wall Street Journal, plus an audience with Fox and CNBC (both in the tank for Romney). No such luck for Harry Reid, who had asserted, without any real evidence, that Romney had for some years not paid income tax. "Where's your evidence?" -- they rightly asked Harry, and hearing none, and cutting him off. But for Jack, it was, like, "Have a chair Jack, let's let everyone hear your story!"

It's hardball time in the campaign, and this is how the big boys play. Larry Kudlow of CNBC, to his credit, stood against his own crowd a bit on this one, and deserves respect. But his fellows sought to counteract him the next morning by wheeling out Donald Trump as a supporting witness for Welch. Trump, of course, is well-practiced in the art of making allegations without any evidence.

"The Donald" was followed immediately by CNBC's own Rick Santelli, who had a moment apparently to take off his campaign button before "reporting" on the alleged conspiracy to fabricate the jobs data. CNBC is now indistinguishable from Fox News in terms of political bias. This is too bad for two reasons: Firstly, Romney is a good candidate who looks like he could win a fair fight on his own; and secondly, the financial markets could use a dose of fair and balanced reporting. It's tough out there for the average investor, and they could use some help to sort through the weeds, but all CNBC wants to do is talk down the market until Nov. 6 to try to prevent Obama from having any advantage from the fact that the market has actually more than doubled during his tenure.

3. Why is the market down in recent days?

Because the short sellers want it down, and they are using the same old scare tactics that didn't work in the past two quarters to spook ordinary investors to sell their holdings cheap because S&P earnings are now forecasted to be down for the quarter that just ended. Just look at the profit warnings from the likes of FedEx and Chevron! But wait -- earnings were actually up in each of the past two quarters in aggregate, not down as predicted by the TV shills for the shorts. And the only actual earnings that have been reported for the quarter are better than forecasted. And aren't there profit warnings every quarter? Indeed, 91 of the S&P 500 have reportedly warned on earnings, but that's hardly a majority. Let's wait and see how the banks, which have been hurting all year, report in the coming days.