“Economic terrorism”: Huckabee wonders if someone’s trying to drive the market down

posted at 1:49 pm on October 11, 2008 by Allahpundit

I’m … highly skeptical, but lack the economic chops to debunk this myself. Any financial wizards want to weigh in? He’s right that the market’s been diving late in the day (except yesterday), but I assumed that was due to small investors whose mutual funds are valued as of the day’s closing price trying to unload their shares before the final bell. That’s how it works at my fund. If you don’t get out before the market closes that day, you’re forced to ride it all the way to the closing bell the next day. Normally that’s no big deal, but when the Dow’s dropping 7% every 24 hours and people are desperate for liquidity, every day you wait is potentially thousands of dollars lost. So they’re hanging on until 2 or 3 p.m. or so to give it a chance to recover, and when they see that it hasn’t, they all dump. Or so I thought. Huck thinks differently. Exit question one for people who know what they’re talking about: Is he right or is this just another case of Huckabean economic populism leading him to blame shadowy, nefarious fat cats for a systemic problem? And exit question two: Who, exactly, does he suspect is behind this “economic terrorism”?


Related Posts:

Breaking on Hot Air

Blowback

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2 3

Disclaimer: you expect this joint to have people who know what they’re talking about?

I like to think I know a little bit. I knew who Palin was before McCain tapped her, and I knew that Keynesian economics, like socialism, was unsustainable.

I did not think that our government would ever so brazenly hand our money directly over to Wall Street, though.

angelat0763 on October 11, 2008 at 9:34 PM

apacalyps:

I had the same thoughts about oil prices, but whenever anyone would bring it up free marketers would say it was just increased demand and geopolitical tensions that were driving prices.

Terrye on October 11, 2008 at 5:11 PM

Right, Terrye. That is what they always say. Prices have gone up due to increased demand, or the free market… blah, blah, blah… I don’t believe a word of it! Didn’t oil prices skyrocket down just before the Bush/Kerry election in 2004? People were asking the same thing. Why have the prices fallen so fast. What did it? It’s pure manipulation of oil prices as far as I’m concerned. It’s used to either help or hurt something. There is so much the general public does not know. The few people pulling the strings treat them like cattle.

Now I am a supporter of the free market, but I have to say I watched those prices and thought this can not be just the market. But …, I don’t know.

It cannot just be the market. I agree.

apacalyps on October 11, 2008 at 9:53 PM

apacalyps:

I had the same thoughts about oil prices, but whenever anyone would bring it up free marketers would say it was just increased demand and geopolitical tensions that were driving prices.

Terrye on October 11, 2008 at 5:11 PM

Right, Terrye. That is what they always say. Prices have gone up due to increased demand, or the free market… blah, blah, blah… I don’t believe a word of it. Didn’t those oil prices skyrocket down just before the Bush/Kerry election in 2004? People were asking the same thing. Why did the prices fall so fast? What did it? It’s pure manipulation as far as I’m concerned. It’s used to either help or hurt something. There is so much the general public does not know or see. They are treated like cattle.

Now I am a supporter of the free market, but I have to say I watched those prices and thought this can not be just the market. But …, I don’t know.

It cannot just be the market. I agree.

apacalyps on October 11, 2008 at 9:55 PM

Sorry for the accidental double post.

apacalyps on October 11, 2008 at 10:11 PM

Reagardless of what is driving the prices and the fall in the market, you don’t go onto a national news source and report on some mysterious “bad agents” as Huckabee called them. It is not responsible as a leader.

The first thing that you need to understand about a capitalist economy is that it is entirely based on trust and confidence. If people start tightening up the money supply you are guaranteed of big problems.

Our financial institutions have already taken a big hit in terms of public confidence. The last thing we need is people in positions of leadership talking things down even more with wild speculation. If you are going to talk that stuff, then go on the record with all of your sources and name some names. Otherwise all you do is make people more worried and create more problems.

In other words, if Huckabee can’t bring proof of this he needs to shut the hell up until he can. We have enough problems already without imagining new ones.

Hawthorne on October 11, 2008 at 10:15 PM

awfully convient timing for the fincial crisis to hit though, some people knew what these CDS’ contracts were capable of doing

jp on October 11, 2008 at 10:19 PM

In other words, if Huckabee can’t bring proof of this he needs to shut the hell up until he can. We have enough problems already without imagining new ones.

Hawthorne on October 11, 2008 at 10:15 PM

What? If Huckabee can’t bring proof he needs to shut up until he can?? That is so stupid. That’s like saying when somebody sees something suspicious that could be terrorism they shouldn’t say anything because they don’t have proof yet. They need to just shut up. That’s ludicrous. What if he’s right? Ever think about that. What if this financial collapse is economic terrorism? You’re advice is dangerous especially when America is so hated the world. I mean, REally hated! Like, they want America destroyed. All options for this financial free fall should be looked at and considered.

apacalyps on October 11, 2008 at 10:46 PM

Here’s the answer:

Mutual Funds enter or exit the market most every day at about 3:30 pm ET to balance their portfolios. If they are getting hit with redemptions, then they will have automated sell orders of entire portfolios to come up with cash to remit to clients. The opposite when mutual funds are flush with cash and need to spend it.

I technically trade the market and the reversals occurring the past 12 days are technically perfect in the futures and dow cash markets…people are bailing because they expect “The One” to win…He will confiscate the little people’s wealth in short order, is the assumption.

Dow Daytrader

daytrader on October 11, 2008 at 11:13 PM

A note on the gas price drop – according to the Instapundit in a roundup of links earlier this week, public transportation use has jumped about 10% this year, and miles-driven in the US has dropped by a similar amount. No mystery involved, aside from the Invisible Hand.

Separately, regarding the “deliberate act” hypothesis. Regrettably, this is anecdotal – I’ve lost the links, but maybe some enterprising digger out there might want to look into this. About 18-24 months ago, a number of articles were written about the steepness of the drop for the dollar against the Euro. That the Euro would be valued higher was no surprise to the various writers; the “bad-debt” problem was of course obvious. However, the productive capacity of American and American-owned businesses made the sharp disparity look interesting. There was evidence at the time that the dollar was in fact being sold short. I’m not going to get into who might’ve been shorting; I want to prove it first, and then one can go on to who might’ve been doing it. This low value for the dollar compared to many other widely-used foreign currencies (Taiwanese and Aussie dollars, Euros, Rubles, etc) was why we noticed the jump in oil prices more than those other nations (our rise was increased by the drop in value of our currency).

Blacksmith on October 11, 2008 at 11:22 PM

(and one fine day I will figure out how to separate paragraphs without posting on a regular basis)

The interesting part of the oil price/short-sale speculation from a year or two ago, was that right after the Russian-Georgian conflict, the dollar started rising again. And shortly after that, the Russian military stalled outside Tblisi. At the time I had thought that we’d found our short-dollar culprit (Russia, using the shorted dollar and their own petrorubles to fund their military adventures, and getting caught in the timing by a margin-call type of event; this was “supported” by the number and sizes of the units involved in the invasion – an exercise that would require – and was – months in the planning and prepositioning). However, shortly after the end of major operations in Georgia, the Panic of 2008 started in earnest.

During the Panic (thus far at least) the US Dollar has kept rising, particularly against the Euro (aside from a slight dip – order of pennies/Euro – on Friday). The dollar is now roughly where the pundits thought it should’ve been about 1-2 years ago – while the US crisis is raging. Now pretend you’re an international investor. If the Americans can’t pay their debts (which evidence was sorely lacking until this week – default rates that were mentioned in public were on the order of 5-10%, not the higher numbers of this past week thanks to the mark-to-zero and puree-blended bad-with-good that’s inherent to an MBS), why on Earth would you put your money into dollars? And yet the exchange rate keeps increasing in our favor – so someone – or a lot of someones – still have confidence in the US economy.

Like I said above, I’m not looking for “whom” until I can prove “what.” But the “economic attack” angle isn’t as tinfoil-brigade as it would seem at first glance. “It just don’t add up!”

Blacksmith on October 11, 2008 at 11:39 PM

Allahpundit notices that there is not enough dissention between the ranks of conservatives to keep him happy.

So – what does he do?

He regurgitates a shined-up turd screaming “HUCKABEE”.

Yup – that’ll help us. Allahpundit: he’s as helpful as leprosy.

grtflmark on October 11, 2008 at 9:15 PM

AP has blog traffic as a first priority. Controversey creates traffic and discussion. Much like talk radio that accepts advertisement from people who talk the economy down so they can sell their financial products. Worse, would be the ads they buy to sell multi-level marketing scams. Yeah, good job, put that ad on during a conservative program, works real good at undermining credibility, but hey the station owner is making money!

aikidoka on October 12, 2008 at 12:03 AM

Here’s the answer:

Mutual Funds enter or exit the market most every day at about 3:30 pm ET to balance their portfolios. If they are getting hit with redemptions, then they will have automated sell orders of entire portfolios to come up with cash to remit to clients. The opposite when mutual funds are flush with cash and need to spend it.

I technically trade the market and the reversals occurring the past 12 days are technically perfect in the futures and dow cash markets…people are bailing because they expect “The One” to win…He will confiscate the little people’s wealth in short order, is the assumption.

I am not “well heeled” but a have a few close semi-retired friends who are. They have been slowly pulling money out of the U.S. since the first of the year in anticipation of a Hillary or Obama win. After the Palin selection they both halted their transfer. Both have business interests in several countries. These are not just business guys, but also community leaders and heavily donate and are involved in local community education and non-profit groups.

If similar persons with a net worth of say $50 million uupwards have been doing this, then the market has been nibbled at for some months now.

Kermit on October 12, 2008 at 12:11 AM

Anybody know anything about automated buy/sell orders possibly driving market volatility?

Speakup on October 12, 2008 at 12:33 AM

What Huckabee stated is not far fetched. And proof? I have a good friend that told me about Wachovia and Washington Mutual three months before they went down. I can’t say who he is. He is famous and very well known. I asked him the same thing a few days ago. He told me that was a great question. And yes that could be what is going on now. The statement that we have enough things to worry about was stupid! One should always think ahead. If Obama wins we are so screwed. Seems interesting that Obama has been getting by with so many things. He hasn’t produced no documents proving he went to Harvard or other schools. And he won’t produce his birth certificate. Last year they were interviewing his Aunt in Kenya. I heard her say that she was in the room when Obama was born in Kenya. I am blond but I have excellent ears. Thought you had to be a US citizen? 35 years old. That man shouldn’t even get a Security Clearance.

sheebe on October 12, 2008 at 12:39 AM

I probably should not comment on anything that Huckabee says. I view this man as one step from pond slime. He has not been ethical or accurate in much that he has said to this point, so I see no reason at all to give him credence over the mysterious evil guys that are crashing the market on purpose.

Frankly, the faster and farther away this guy goes from our politics the better off we will all be. He is just fishing for air time so he stays in people’s minds. The problem is that he is creating more fear by saying things like this. That is not helpful.

The very idea that Huckabee will publicize something as unsubstantiated as this to the American people, and further erode trust in our financial institutions (especially at this delicate time) shows that he will stop at nothing to be self-serving. Even helping to make the economy even worse by rumor mongering is not out of his range of depravities. This guy is a clown and he just cannot stand to see his circus close.

Hawthorne on October 11, 2008 at 9:14 PM

Spot on and excellent post! It needs to be bumped to the current default page.

Shelby on October 12, 2008 at 1:07 AM

He regurgitates a shined-up turd screaming “HUCKABEE”.

grtflmark on October 11, 2008 at 9:15 PM

Ewww, but best description of Huckabee ever!

Shelby on October 12, 2008 at 1:12 AM

Blacksmith on October 11, 2008 at 11:39 PM

USD started gaining against every other major currency (except yen, and there’s a reason for that) around July 15 – the same time oil peaked (gold made a second peak as well, and iirc this is also when other commodities started to slide). Russia invaded Georgia on August 8.

As for the yen, on the foreign exchange market that’s the carry trade currency – borrow at a low interest rate (sell yen), invest in a high interest rate (buy euro, pound, etc.), take the difference. If you look at the yen pairs (USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY, etc.) you’ll notice they’ve all, more or less, fallen off a cliff – people are buying yen and selling everything else (“unwinding” their carry trades). It’s risk aversion. There’s no reason, at least regarding fundamentals, that one would buy yen (Japan having almost no raw materials of its own, an increasingly sluggish economy everywhere it exports to, its deteriorating demographics, etc.).

So, we have obvious risk aversion going on. It isn’t that investors have confidence in the U.S. economy necessarily, it’s more likely they have less confidence in other economies.

jrl on October 12, 2008 at 1:40 AM

I called the market top around August 1st last year when the Dow was near 13,700; clients simply liquidated some positions in equities, took the cash and started shorting the mini-indexes, Russell, Dow, S&P….

People that have large portfolios of stocks are similar to Pearl Harbor’s ‘Battleship Row’, sitting ducks for
(1)shortsellers,
(2)deriviative collapses
(3)the normal ebb & flow of global market forces
(4)USA sliding into 2nd tier status via socialist entitlement programs & high corporate taxes, high property taxes and high regulation

Chickens are coming home to roost; in a few years the USD will be 2nd tier status- commodities and currency plays are all that is left unless McPalin gets in and cuts corporate taxes/reforms entitlements/pulls back regulation/cuts spending. Unless ALL FOUR occur, USA is headed for socialism/2nd tier status.

Smart money has seen this coming since when social security reform failed & Bush 43 passed the new drug entitlement. The 6th republic of France is on the way…

DowDayTrader

daytrader on October 12, 2008 at 9:00 AM

Economic terrorism;

Kaddafi torpedoes EU economy

Libya will take $7bn of assets out of Swiss banks and stop supplying oil to the country, as an acrimonious dispute that started with the arrest of Colonel Gaddafi’s son escalated.

The north African country said the moves were a protest against the “poor treatement of Libyan diplomats and businessmen by the canton of Geneva”, according to state news agency Jana.

Libya first threatened to stop oil deliveries after Mr Gaddafi’s son Hannibal was arrested in Switzerland in July. Two servants claimed they had been assaulted by Hannibal and his wife Aline. Libya didn’t go through with the threat and Swiss prosecutors closed the case last month, after the servants received compensation from the couple and dropped the charges.

Libya said it would revoke the latest decision to stop oil deliveries once it had an explanation about the way its diplomats and businessmen had been treated, and sought a formal apology from the Swiss government.

The country supplies about 20pc of Switzerland’s oil, but Swiss oil officials said the cut-off would not hurt availability or push up prices because the country would have time to find an alternative supplier.

Libya’s national oil company, Tamoil, said the decision to stop supplies had been taken by the government and did not know how long the suspension would last.

The Swiss stock market opened sharply lower, falling 6pc to 5461 points. Insurance shares were hard hit with Swiss Life falling 12pc , Zurich Financial and Swiss Reinsurance falling 8pc, 8pc and 12pc respectively. Credit Suisse fell 10pc.

/mercurial.. yet “rehabilitated

Terp Mole on October 12, 2008 at 9:17 AM

OBAMA = Financial RUIN
*
That’s their plan, folks. We’d each better drag three people to vote.

marklmail on October 12, 2008 at 9:39 AM

Two names come to mind…….Warren Buffet and George Soros. But hey, what do I know? I’m only a Construction Worker and an ARMY dad. Don’t these 2 have a history of bringing down markets? Hmmmmmm…… time for a little research??

Rick554 on October 12, 2008 at 9:39 AM

George Soros.

Rick554 on October 12, 2008 at 9:39 AM

I think you are totally right. Soros is bad news, has a record of corruption and would love to mess up our markets. Plus, if you are trying to drive people away from Capitalism and the Free Market, you wouldn’t think anything of doing what you could to destroy the market. You would think you have absolute moral authority.

foxforce91 on October 12, 2008 at 11:42 AM

Huck is right.

Mike Huckabee is a true American hero.

It’s a travesty that they fixed the election in several states and waged a propoganda campaign in order to keep him off the republican ticket.

He would have won the general election in a landslide!

SaintOlaf on October 12, 2008 at 12:42 PM

Osama bin Laden (and Al Oueda’s)main objective in the 9/11 attacks was to bring down the US economy. The economic problems we are having are evidence that he is achieving his goal. We are not winning the war on terror, and that is helping Obama, as are the economic troubles. But none of this really matters, it’s all Bushs fault.

harpman on October 12, 2008 at 1:21 PM

Mike Huckabee is a true American hero.

It’s a travesty that they fixed the election in several states and waged a propoganda campaign in order to keep him off the republican ticket.

He would have won the general election in a landslide!

SaintOlaf on October 12, 2008 at 12:42 PM

SaintNutty – I’m thinking you are either senile or a liberal due to your delusion and hokey conspiracy theories.

Shelby on October 12, 2008 at 2:28 PM

Huckabee’s an idiot. The money hasn’t been spent yet.

blink on October 12, 2008 at 3:39 PM

Huckabee’s an idiot. Nobody is big enough to manipulate this large of a sell-off.

blink on October 12, 2008 at 3:40 PM

Huckabee’s an idiot. Is he going to become a truther next?

blink on October 12, 2008 at 3:40 PM

BTW, did I mention….Huckabee’s an idiot.

blink on October 12, 2008 at 3:41 PM

“blink,”

You are entitled to your opinion, including your opinion that Huckabee is an idiot. You’ve already repeated it in four consecutive posts. I think we get it.

Nevertheless, you have given no supportive information to justify your ad hominem attack against Huckabee, nor have you defined your use of the word “idiot” and how Huckabee fits that definition.

Frankly, Huckabee appears to be an exceptionally intelligent individual. He is eloquent in his communication skills, has excellent public speaking abilities, recalls information from memory quite well, understands various topics rather well, is civil and respectful in most of the activities and communications I have observed him in, and, quite frankly, he appears to be rather intelligent, perhaps quite a bit above average.

In other words, you might not like Huckabee, and you might disagree with him, but I fail to see how Huckabee is an idiot in any stretch of the imagination.

William2006 on October 12, 2008 at 4:46 PM

..our politicians have sold us down the river..

I agree, what can we do about it?

tgillian on October 12, 2008 at 5:35 PM

Wait, Huckabee said this??? Figures, he’s great guy but I don’t think he’s qualified to make such claims.

Cr4sh Dummy on October 13, 2008 at 1:50 AM

Gee I never would have expected it to be Huckabee to speak this truth. One, I would have never expected him wo be able to figure it out and two, never would have expected him to buck the libs and come out and say it. I have an MBA from Carnegie Mellon and have lots of friends in the financial sector and they believe the same thing based upon the orders coming from overseas which is what is driving the dollar up – all the foreign money being converted to dollars so they can used them to manipulate the market. Watch and see if after Obama wins the markets don’t recover – at least until the suckers realize Obam’s plans will destroy the economy. They see the Dow dropping to around 5000, recovering to back over 10 so they can make back the money they lost and the next year down to 3-4000

bill30097 on October 13, 2008 at 10:23 AM

Soros was apparently behind the Asia economic crisis in 1998 when he was playing with Asian currencies. He made a lot of money and crushed the Asian Tiger economies, with China filling the void over the past 10 years. Soros also said, early on in this election cycle, that he would spend whatever it took to secure a Democrat in the house. Soros has the money, knowledge, desire, and willingnes to LOSE significant amounts of money, to make this happen (at this time) when it affects the election the most.

jerseyman on October 13, 2008 at 12:46 PM

Comment pages: 1 2 3