I wonder what the effect of the failure of Lehman, and sale of Merrill Lynch will have tomorrow on the stock market, and on the election. I asked my sister, who has a bird's eye view from a major post on Wall St (but so major, I shouldn't say where) for her opinion...
She said "We saw it coming, tragic for the employees, though. These firms took too much mortgage risk." Since it was anticipated, she felt there won't be too much damage on Wall Street.
That was uplifting, but unlike Sis, my MBA is in marketing not finance. So what I see is that, as already being debated in the headline of a recommended Diary tonight, it will be reported/interpreted by many as "Merrill Lynch failed". But Merrill Lynch is a very strong retail financial brand name. Most Americans don't know an IndyMac Bank from a Bear Stearns, and really don't understand the role of Fannie or Freddie. But Merrill Lynch? Many voters and their friends may have retail accounts there. And if the crisis expands to either Washington Mutual or AIG insurance, also retail names, Main Street fears will only grow.
So my question is what Main Street will take away from this?
If the markets take a dive tomorrow, or there is a big uptick in fear of the economic sitation, will that kill off the media's zeal to promote the next "lipstick" controversy? Could it blow away those insipid subjects? And if so, would that help Barack? As far as I can see, it would.
I wrote in an earlier diary, that in just the way that Republicans have used fear of whatever (terrorists, Mexicans, gay marriage, etc) to win elections, that the Dems have to take advantage of this REAL fear, and play off of it to win this election. Maybe this is an October surprise in September, which works the same since so many states have early voting this time around. How Obama and his team handle it can make or break such a close election. He has to take advantage of the fear and state clearly how Republican lack of regulation, cronyism, and greed let this all happen.