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Busch: Obama Making More Market Friendly Moves

Today, President Obama returns to Washington, D.C. from Hawaii and a well earned rest after a flurry of legislation was passed in the last two months of the year.

His approval ratingshave increased to 50% as the Bush tax cuts were extended, a new 1 year tax cut was passed, DADT was repealed, START nuclear arms treaty was ratified and a health care bill for 9/11 responders was funded. If the mid-term elections sent a strong message of disapproval, then President Obama has clearly understood what the voters want.

For those keeping score, this shift to the center by President Obama was one of my key factorsfor stronger equity markets and Risk-On trading. While Republicans had been skeptical of getting the Bush tax cuts (along with dividend and cap gains) extended, Obama read the Tea Party leaves of the mid-term elections and decided the middle is where he needed to go with policy. My theory that all politicians are at their core self-preservationists holds true.

Washington D.C.
Washington D.C.

Another point I was looking for to confirm this shift was a change in the cabinet and specifically a change of Obama’s chief of staff (COS).

To refresh, the previous COS decided to leave to run for mayor of Chicago.

In his place, Peter Rouse was placed in a care-taker role until a more suitable replacement could be found.

The COS is critical as it is the main gate keeper to for access to the President and for formulating policy.

Today, we are getting reports that former Clinton Commerce Secretary William Daleyis among the candidates to be named COS according to multiple sources. Currently, Daley is an executive with JPMorgan Chase in Chicago and is the brother of current outgoing Chicago Mayor Richard M. Daley. Unlike most of Obama’s cabinet, Daley’s private sector experience is extensive from working as a partner at Mayer Brown to President of SBC Communications.

For the markets, this would be a solid choice as it would cement the move to the center by Obama and reinforce the policy focus on the economy. He would be seen as not only business friendly, but financial market friendly.


Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a frequent CNBC contributor. You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch.