As investors grapple with the worst market since 1996, the President says stocks are a good deal.
Speaking at a press conference on Tuesday, President Barack Obama said “buying stocks is a potentially good deal if you’ve got a long-term perspective on it…”
He also said if lawmakers pay too close attention to Wall Street's "fits and starts" it could lead to bad long-term policy.
Since Obama released his budget last Thursday the S&P 500 has fallen 8.4%.
Is Obama To Blame For Market Turmoil?
Over the past few days there’s been a growing outcry that the budget is the reason for the recent stock market plunge. That it was the budget which sent stocks to a level far below the critical technical level of 740 on the S&P 500 , which many investors including FM trader Jeff Macke really thought would hold.
In his blog, Fast Money producer John Melloy wrote about this phenomenon. He said, in speaking with big investors Dylan Ratigan has learned that the Street is worried about this massive budget for one of two reasons: 1) because of higher taxes and/or 2) because the potentially tremendous increase in the deficit -- will have the effect of lowering the rate of return for investors over the long-term.
Therefore, they are applying an even lower P/E multiple to stocks.
Daniel Clifton, Strategas Research head of policy research, is among the growing number of Obama critics. He tells Fast Money the new spending is inefficient per dollar of debt issued. And we can’t pay for it.