Investors Show Obama No Respect in Poll as Profits Surge with U.S. Stocks

  Fifty-Two Percent of Investors Worldwide Believe Obama Is Destined to Be a
                              One-Term President

Business Wire

NEW YORK -- November 11, 2010

Investors around the world believe President Barack Obama is bad for the
bottom line, even though U.S. corporations are on track for the biggest
earnings growth in 22 years and the stock market is headed for its best
back-to-back annual gains since 2004.

Pessimism about the impact of Obama’s policies on the investment climate is
common to respondents everywhere, the latest Bloomberg Global Poll shows. At
the same time, those outside the U.S. have favorable views of the president
himself, while U.S. investors overwhelmingly have an unfavorable view,
according to the quarterly poll of Bloomberg subscribers who are investors,
analysts or traders conducted Nov. 8.

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The respondents also say the Republican victories in midterm congressional
elections, which gave the party control of the U.S. House of Representatives,
will be good for business. Pluralities anticipate lower taxes, an improved
investment climate and better stock market returns.

Investors are evenly split on their impression of the president, though 62
percent of those in the U.S. view him negatively. Worldwide, 63 percent of all
respondents say his policies are detrimental to the U.S. investment climate.
That number increases to 68 percent among U.S. investors, even though the
Standard & Poor’s 500 Index has risen more than 50 percent since Obama was
inaugurated in January 2009 and corporate profits have rebounded almost to the
pre-recession peak reached in 2006.

The president gets little credit from investors for measures he oversaw to
rescue the economy, including the continuation of a bailout of the financial
industry begun under President George W. Bush, an expansion of the help for
U.S. auto companies and the enactment of an $814 billion stimulus package.

Only 1 of 6 investors says the Obama administration’s policies have been
primarily responsible for the performance of the stock market or economy.

While respondents are bullish about some aspects of the Republicans gains in
the elections, they don’t expect the political shift to have a broader
economic impact. More than half of all respondents say they believe Republican
control will have little or no effect on job growth or the availability of
credit. A 41 percent plurality say the change in party control won’t have much
impact on the overall economy.

Investors are split on the consequences of the Republican House majority for
the budget deficit, which was $1.29 trillion in the 2010 fiscal year that
ended Sept. 30. Thirty-six percent see a positive effect, 24 percent a
negative effect and 31 percent little or no effect.

When Americans next elect a president in 2012, a 2-to-1 majority of U.S.
investors say a Republican in the White House would be the better outcome for
the economy. A plurality of investors in Europe and Asia believe an Obama
re-election would be best for their regions’ economies. Yet more than half of
investors worldwide (52%) say they believe Obama is destined to be a one-term
president.

The poll was conducted less than a week after the Nov. 2 midterm elections,
which gave Republicans at least 60 seats in the House and six seats in the
Senate, the biggest swing in the party’s favor since 1938.

With the White House and Senate still under Democratic control, three-quarters
of investors would like to see the two political parties working together,
even if it means compromising their principles.

They also aren’t giving congressional Republicans an unequivocal mandate:
Investors are split evenly on their appraisal of that party, with 44 percent
holding a favorable view and 44 percent unfavorable. Congressional Democrats
come out worse: 57 percent negative, compared with 31 percent positive.

This ambivalence applies also to the presumptive new speaker of the House,
Republican Representative John Boehner of Ohio. About one-third have a
favorable view of him, a little more than one-quarter have a negative view and
more than 4 of 10 investors have no opinion. He does better among U.S.
respondents, with a plurality of 47 percent holding a favorable view.

Regarding one of the most immediate questions facing Congress, almost
two-thirds of investors believe a failure by lawmakers to extend the Bush-era
income-tax cuts before they expire Dec. 31 would damage the U.S. economy and
stock markets. The view is shared across all regions, though it is strongest
in the U.S.

U.S. investors and their counterparts in other regions diverge on how Congress
should handle the specific elements of the tax cuts and other financial
issues.

More than 6 of 10 U.S. investors believe it would be best if Congress adopted
the Republican proposal to extend the tax cuts for all income levels,
including wealthy families. Only 3 of 10 investors outside the U.S. believe
the cuts should be continued for all taxpayers.

Pluralities of investors based in Europe and Asia believe it would be best to
extend the tax cuts only for families making less than $250,000 per year, as
Obama and most congressional Democrats advocate. Almost a quarter of investors
outside the U.S. believe all the Bush tax cuts should expire -- a solution
espoused by former Federal Reserve Chairman Alan Greenspan as a way to curb
the deficit -- while only 10 percent of U.S. investors say so.

Among U.S. investors, more than half may sell assets to lock in the current 15
percent capital gains tax rate. If Congress fails to act, that rate would rise
to 20 percent.

Already, 7 percent of respondents say they have sold assets to avoid an
increase in the capital-gains tax. Another 21 percent say they plan to do so
before the end of the year while 28 percent are waiting to see how the tax
debate unfolds in Congress. Investors in the U.S. and elsewhere also are split
on whether Congress should follow Republican leaders’ call to roll back the
Obama-supported financial regulatory overhaul enacted this year.

Majorities of investors in Europe and Asia said a rollback is a bad idea while
a 47 percent plurality of U.S. investors said it is a good idea.

The poll of 1,030 Bloomberg subscribers was conducted by Selzer & Co., a Des
Moines, Iowa-based firm, and has a margin of error of plus or minus 3.1
percentage points.

Contact:

Bloomberg
Meghan Womack, +1 212-617-8514
mwomack4@bloomberg.net