Stocks tumbled on Wall Street yesterday, despite falling oil prices, because of the uncertainty that’s hanging over the world like a wet woolen blanket. Unrest at home and abroad is rattling markets despite enough liquidity to keep the economy moving.
Much of that liquidity is sitting on the sidelines waiting for some certainty to come back to the world.
The market hates uncertainty. They, instead, embrace the predictable. The predictable has become almost impossible with the current administration.
In the Middle East, the Obama Administration put its chips in the center of the table in Libya by backing the rebels and talking about establishing a “no-fly” zone. Early on the consensus was that the ouster of Mommar Gadhafi was an accomplished fact.
But the administration has backed the rebels with talk only so far. Now it appears that without substantial outside help, Gadhafi could crush the insurrection. And Obama could be remembered not just as the guy who lost Egypt, but, rather, the guy who lost the Middle East.
Obama’s director of national intelligence, James Clapper, told Congress yesterday that it appears likely that Gadhafi will beat the rebels, contradicting the administration’s party line and outraging a few defense-hawks from the GOP, who realize what’s at stake when a country makes promises they don’t keep.
But that’s what happens when your rhetoric gets in the way of your reality.