Is the stock market panic in anticipation of an Obama win and the specter of socialism?

No, the panic isn't in anticipation of socialism, because neither candidate will change our country's capitalistic underpinnings. The panic is a reaction to years of deregulation of the financial industry. Both parties are responsible, but to understand which might be held more responsible, just ask which candidate professed support for deregulation until two weeks ago. Specifically, I would point to the loosening of net capital requirements by the SEC in 2004. Large financial institutions (think Lehman Brothers and Bear Stearns) were effectively allowed to more highly leverage their positions (to ratios of up to 30:1). Preceding the 1929 stock market crash, individual investors were allowed to leverage their positions at very high ratios, and margin calls fed into a vicious selling cycle. For this reason, limitations on margin buying by retail investors were put in place. Due to the 2004 rule change, institutions replaced individual investors as the agents whose leveraged positions forced selling, though the ensuing panic has led to selling by both institutions and individuals. Separately, there remains virtually no regulatory oversight of the multi-trillion dollar derivatives market (one example of which, credit default swaps, have significantly exacerbated the financial crisis). The lesson: smart regulatory oversight is a reasonable way to prevent severe market corrections such as we are currently experiencing.

I belive this country is headed for even touhgter times,With theese large stock losses,why hasn't anybody been telling the US people what this is doing to their 401K, Roth accounts, and all kinds of retirement savings. I myself have lost a substantial amount of my retirement funds and have no way to replace them; so I really see these as some dark days.

To Jared: Wanna bet? Great explaination but.....The House is and will be again controlled by more than 50% democrats. The Senate is and will be controlled by more than 50% democrats. Do you know how a bill becomes a law? Congress makes the rules....the president just signs off on them. It only takes 50% vote in each house to pass legislation to the president to be signed into law. With Obama having control of the "pen", there is abosultely nothing to stop Democrats from the ridiculous legislation they have already passed. In fact, they may even pass legislation that is unrepealable in future administrations. You think Obama is gonna veto anything that Pelosi, Reid, Schumer, Dodd, & Frank send him? These characters have been his biggest supporters. This Congressional clan loves socialism and government control. Their main principle is spewing what they think is fair: equal outcome, not equal opportunity. They are already on TV stating the reason for this crisis is "Free Markets". And the president gets to appoint the next Treasury Secretary, SEC chairman, Fed Chairman, Commerce Chairman, ect....With only 26 days left til election, you don't think investors are pulling money out because of this?

-The panic is a reaction to years of REGULATION of the financial industry !. With a un regulated market things like the bailout would never happen. Government should stay out of the markets then prices would always be correct.

TO ALAN S- ARE YOU FORGETTING THAT DURING OUR LAST DEMOCRATE PRESIDENT'S ADMINISTRATION ,CLINTON, WE HAD NO DEFICIT. AND WASN'T IT JUST A COUPLE OF WEEKS BEFORE THE BAILOUT THAT BUSCH SAID OUR ECONOMY WAS DOING   OK AND HAVEN'T FORECLOSURES BEEN  ON THE RISE AND GETTING WORSE AND WORSE FOR A T LEAST 2 YRS NOW? WHY ALL OF A SUDDEN WHEN WALL STREET FAILS DOES THIS MAIN STREET ISSUE GET THE ATTENTION IT WARANTS AND WHY CAN'T I HELP THINKING, THAT IT IS IN PART TO PACIFY THE ORDINARY PEOPLE,LIKE MYSELF,TO ACCEPT  AND SUPPORT THIS HUGE SPENDING OF TAXPAYERS MONEY AS THEY TELL US THAT THIS IS FOR THE BENIFIT OF MAIN ST AS MUCH AS WALL ST AND HURRY UP NO TIME TO THINK    AND OH YEAH, HOW MANY YEARS HAS IT BEEN SINCE WE WERE TOLD THE WAR WOULD END IN A MONTH? AN D WHAT IS THE NAME OF THAT COMPANY DOING THE REBUILDING  IN IRAQ, ASK VP CHENEY. MAYBE  PRES BUSCH  CAN  GIVE McCAIN A FEW POINTERS OVER GOLF. WHAT CANIDATE HAS NOT HAD SUPPORTERS IN THE  HOUSE AND SENATE ?      I'LL TAKE MY CHANCES WITH OBAMA ,THE ALTERNATIVE SCARES ME..    AND IS THIS ALLEGED THREAT ON CAPITALISM MEANT TO SCARE THE PEOPLE? A SMALL SCALE RED SCARE MAYBE?          

To Kalli - Not Red, Socialist.   You appear to forget that during CLinton and his wifes  administration we has a Republican congress.  Indeed during most of our history we have had a close enough balance of power in Congress to limit the extent of extreme laws.  I do fear what an  Obama government with effective same party control of Congress could do to our institutions.  Our trial lawyers, teachers, and unions are salavating at the prospect.  While our medical system needs some changes I do not want to see us going the socialst way and ending up with a system as bad as Canada's or Europe.  There is a reason if your serieously ill, and can afford to, you come to the USA to get treated.  Of course only the socialst leaders and Eliet can afford to do that.  Putting the most leftist leaning  individuals in effective control of our system is NOT a risk I want to take. Especially someone who doesn't have the experience to realize how much harm uninteneded consequences could do to our whole system.          

Frankly, I am totally disappointed with the whole political act that is going on in this country. Each and every time elections come along the blame game goes on & on. In the end it never gets better? These candidates use the economy as a reference, yet they are both senators & are a part of the problem each blaming the other for the nations problems. Neither one of them has even mentioned the IRS as a problem? This entity cost the american tax payers an enormous amount of money each & every year, just think about what the forms that are required cost alone. There are also many other problems in this country that must be addressed. Such as term limits for politicians, that is one of the main problems with our present form of government. Also place them on the same status as the american tax payer with regards to social security & ect. They are in my opinion as bad as the CEO's that has been walking away with big bags of money. I am amazed that the people of this country are not up in arms with what is happening?

At this election would like to see all the current elected officials voted out & bring in new hope with new blood..In closing as a thirty year veteran, having fought in three wars I hate to say that it was all in vain & have lost faith in my own country!!!  

What does any of this political hackery have to do with low P/E stocks?

It is clear that Obama is a Marxist/Black nationalist and, with an enthusiastic Democratic majority in House and Senate,  that he would likely be successful

in redistributing wealth. Should he win, the wisest thing for savers who have built up their

assets over the years, is to move them out of the country. I have more than half of our total assets in cash and don't want that to fall into Obama-Palosi-Reid's hands. I am ready to

move those assets to a safe haven abroad before Obama takes power. You should consider ing so, too.