Can't Markets See Obama's Confident He'll Get His Way?
NEW YORK ( TheStreet) -- Though Barack Obama's press conference on Wednesday failed to deliver any direction to markets, the president evoked pure confidence on his position in the "fiscal cliff" negotiations.
The Dow Jones Industrial Average dipped below the flat-line during Obama's address, but ticked slightly higher by the conclusion of his appearance. The S&P 500 and Nasdaq also dipped during the speech, only to eliminate those losses by the end.
"It is there for all to see. It is a deal that can get done. It cannot be done if every side wants 100%. And part of what voters were looking for is some compromise up here," Obama said.
The president led off his press conference with a statement about the Sandy Hook Elementary school shooting, and said he would set a January deadline for new gun control proposals. But reporters, who have noted the lack of access to the president, quickly pivoted to the looming so-called fiscal cliff -- when the combination of expiring tax relief measures and deep spending cuts will automatically go into effect.
While the markets fluctuated, Obama reiterated his optimism and pointed to the fact that House Speaker John Boehner (R., Ohio) had already conceded that marginal tax rates should go up. Raising income rates had been one of Republicans' principal disagreements with the president.
To put the onus even further on Boehner, the president said he recognized that it may be the House speaker's conflicts within his caucus that have prevented a deal getting done by now.
In the summer of 2011, Boehner had difficulties rallying the so-called tea party representatives to agree to raising the debt ceiling. The small group of legislators on multiple occasions held out, thrusting markets into turmoil. Politicians reached a deal in the proverbial final hour, but the damage had already been done as Standard & Poor's downgraded the United States credit rating. The ratings agency partly attributed the downgrade to instability in policy-making.
This year, however, the president is riding a sizeable electoral and popular vote victory and Democratic pickups in the House and Senate as a referendum to get a sweeter part of the deal on the budget.
So while reporters barraged the president with skepticism about fiscal cliff talks, and questioned how he would respond to a Boehner spokesman's latest statement that the White House's "opposition to a back-up plan to ensure taxes don't rise on American families is growing more bizarre and irrational by the day," Obama simply repeated his belief that there's no reason America should go over the fiscal cliff.
Markets fluctuated -- possibly searching for firm direction from Obama's comments -- but the president seemed to telegraph something else: He'll reach a fiscal cliff deal and he'll get mostly what he wants.