President Barack Obama wants you to know that the Greek financial crisis isn’t about to evolve into a major global financial crisis.
During a White House news conference on Tuesday, Obama said “markets have properly factored in” the risks associated with the ongoing turmoil that’s been rocking Europe in recent days.
“This is not something we believe will have a major shock to the system,” he said. “But obviously it’s very painful for the Greek people and it can have a significant effect on growth rates in Europe.”
Over the weekend, it became increasingly clear that Greece was unlikely to make a debt payment due to the IMF on Tuesday. This would legally put Greece in default. Global markets sold off, with the Dow Jones Industrial Average falling 350 points in a day.
US presidents don’t don’t spend a whole lot of time talking about the financial markets. But when they do, everyone listens. Because, who wouldn’t love to remind everyone that the President of the United States, like us, is terrible at making stock market calls.
Back on March 3, 2009 (via Goldman Sachs), Obama made one of the most perfectly timed market calls in the history of market calls. He said, “[W]hat you’re now seeing is profit and earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.”
The S&P 500 more than doubled since Obama made that 2009 call.
Hopefully, he’s right about the whole Greek thing too.