Bove compare Obama's policies with Chavez's

Obama's "Venezuelan-style" Policies Will Cause Stock Market Crash, Dick Bove Says


Posted Jan 28, 2010 07:30am EST by Peter Gorenstein in Investing, Banking, Election, Politics

Related: spy, ^DJI, ^GSPC, dia, XLF, ^IXIC, ^RUT

To paraphrase Miller Tabak equity strategist Peter Boockvar, a political science degree on Wall Street may be more important than a finance degree these days. Since the crisis created the need for unprecedented government intervention, stocks are influenced just as much by policy decisions as they are by fundamentals and valuations.



Last week's announcement of the "Volcker Rule" and President Obama's digs at the "banker [who] puts the rest of us at risk for his own selfish gain" in the State of the Union address are just the latest examples.



Be afraid, Be very afraid.



Dick Bove, bank analyst at Rochdale Securities, believes the growing acrimony between Washington and Wall Street could have devastating consequences. "If the President and Congress continue down the path that each has indicated...the equity markets

will crash," he warns. "Moreover, the financial system will have to be rebuilt on a new base."



President's Obama's latest proposal to limit the size and trading activity at banks will cut off money supply, Bove frets, driving "the United States back into recession and...crash the market."



That's not all…



Obama is crafting an attitude towards banks and the rich that Venezuela President Hugo Chavez would recognize as his own, Bove tells Aaron in the accompanying clip,.



How is Obama creating a "Venezuelan-style" democracy?



-- 1. Like Chavez, Bove argues Obama is “blaming the money class of Wall Street” for the crisis. Bove admits greed and fraud were plentiful on Wall Street before the crisis but believes these actions came as a result of failed policy and regulation.

-- 2. “The Volcker Rule” is targeting the rich and is meant to limit the size and activity of banks.

-- 3. Bove believes Obama is trying to attack Wall Street's right to dissent by attempting to limit lobbying and influence in the halls of Congress.

Bove’s message isn't necessarily partisan. He believes Republicans aren't better serving Americans. He knocks the GOP hard for "thinking party first" and says "they're almost hoping or betting the economy fails so they can get back in power."