While a lot of people are scratching their heads about what went on today with Wall Street’s plunge, it’s easy to map out. It’s the beancounters at it again. Beancounters are an odd branch species of homo sapiens, they are paid to be conservative and think in worst case scenarios, they are paid to think 18-36 months out, and keep the company on course financially in a journey that’s chunked up in three month segments called quarters.
So what is that strange species up too? This is the first working week of the fourth quarter, and most large corporations across America have their beancounters diligently at work putting the final tweaks to the companie’s 2009 budgets. The credit crunch? Most companies have already prepped and planned for that, and that was the discussion two quarters ago to present. If that’s the case, what could cause such a jagged off-the-cliff stutter in the market like we saw today?
Short selling opening up is definitely part of it, but that’s not all of it.
With Obama leading in the polls, every company in the US now has to factor in the effects of the Obama tax increase into their budgets for the next two years, and the beancounters have to do it because they plan for the worst. The Tax increase won’t happen in first quarter, but by third quarter if he’s elected the tax increase will be there.