It may seem hard to believe, but this is going to be the last full week of Obama’s presidency. After eight years (long, horrible years for the bearish set), Obama’s tenure in the White House is nearing an end. His excellency President Twitter will be sworn in (placing his hand, I suppose, on The Art of the Deal) in just a couple of Fridays. There are very few guarantees in life, but I’m pretty sure of this: this is going to be a very interesting administration.

Anyway, since Trump’s inauguration is coming up, I thought I’d reflect a bit on what happened in the equity markets when Obama came into office. It’s kind of interesting (I’ve also featured two images of Obama, showing how much these two terms have aged the man).

The downward-pointing arrow on the left begins immediately at the election. In other words, it looks like equity markets had an “oh, crap!” reaction to Obama being elected, because they figured he was left wing, would soak the rich, would punish the banks, and would really help to redistribute the wealth of the nation. After falling about 20%, markets stabilized. 

The other arrow, showing the Dow falling again, this time to about 6,500. The arrow begins on Inauguration Day. It’s kind of fascinating to me how the equity markets reacted, because in the interim it’s sort of like they forgot who was going to be President. In other words, he got sworn in, and it’s like the market had the similar “holy cr**!” reaction it did in the first place.

Of course, the 6,500 on the Dow was one of the greatest equity bargains in human history, and you could have bought shares in Industrial Fecal Consolidators, Inc. and still made money.

The possibility I want to offer is that Trump is going to be an upside-down version of all of this. We have, of course, witnessed the orgasm in equities taking place after his election, since the man’s going to slash taxes for everyone, build a wall, raise tariffs, and rebuild the middle class.. So we’re in “pause” mode right now, it seems, but perhaps after his inauguration, there will be a relapse of the Trump “bounce.”

If this happens, though, stay tuned for about, oh, six weeks or so. My opinion – – and I deeply believe this – – is that Trump is going to muck up things beyond all belief (perhaps even to the point of an existential crisis for the U.S.) and equity markets are going to be surprised at what they get.

Hail to the Chief!