A Very Bad Quarter

The Dow Jones Industrial average was down 12 percent in the third quarter – the worst quarter since President Obama was sworn in.

The economic confidence of America has declined and it is taking Obama’s support down with it.

·       52% of Americans believe it is very or fairly likely there will be a new financial crisis (Washington Post/Bloomberg News poll, October 2011).

·       Only 42% of Democrats believe it would make much difference to their financial positions if Obama wins.  Only 48% believe their personal finances would improve (64% of Republicans believe their finances will improve if Republican wins).  (Washington Post/Bloomberg News poll, October 2011)

·       Investing confidence is at -45, down from +42 in February, back to late 2008/early 2009 levels.  65% feel little or no control over their ability to build retirement savings (Gallup/Wells Fargo poll, October 2011).

The market volatility reflects a contest between some good business news, such as earnings and low valuations, versus concern with the European sovereign debt crisis, slowdown in the world economy, and continued political instability and gridlock in Washington.

Yet, in spite of all the bad national news, the Denver area retail economy continues to improve.  The sales and use tax collection in metro Denver is up 5.75 percent this year over 2010 and up 7.1 percent in August over August a year ago.

If Main Street dominates Wall Street, there may not be double-dip recession, but continued slow growth.