The 'Communications Impact' charted

A modest "Obama bounce" was seen in the Dow during the days immediately after the President's inauguration. However, once in place, the President's plans and non-plans began to emerge, and the notably unsentimental and apolitical Wall Street communicated clear dissatisfaction. Pundits and pols alike expressed their belief that Treasury Secretary Tim Geithner's non-plan recovery presentation was precisely the wrong communications package; it was a plan to have a plan to be announced later, but not a plan as expected. 

To see graphic representation of Obama's dramatic impact on the stock market, click the chart below and get a larger image.

Then, to add to the confusion, Sen. Dodd said live on Bloomberg TV: “I don’t welcome that (bank nationalization) at all, but I could see how it’s possible it may happen…. I’m concerned that we may end up having to do that, at least for a short time.” 

Almost immediately after Dodd's comments, Bank of America and Citigroup shares tumbled, and Treasury felt compelled to issue a brief statement saying the President’s plans did not include bank nationalization. That statement, however, was not all-inclusive or definitive. Confusion prevailed and stocks fell further. 

The White House attempted to counter the impact as Obama spokesman Robert Gibb told the media, "Let me reassure as best I can on banks. This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring they are regulated sufficiently by this government. That's been our belief for quite some time and we continue to have that." Stocks came off of their lows following these comments.

Unfortunately for American individual and institutional investors, the business of communications and effective performance of the communications function both were failures.