Most people who deal in finance for a living—as opposed to politics—attribute the recent rise to the anticipated QE2. It’s basically fed-induced asset inflation. If such is the case, it means the markets believe that the fed will continue its policies regardless of who wins the midterms.
The market is banking on hope and change, and if the Republicans do not take the House, it will crash.
This is where the pessimist in me comes out. The American people want to vote "Stop!" in theory but as soon as the GOP is in charge and starts cutting spending to a sane level, the MSM will start running the "Republicans are killing children and the elderly" stories and the public may swing against the GOP. The GOP will then retreat and turn back into the GOP of the early 2000s and the country will sink further into Socialism.
My small business has confidence things will change for the better next month. We made the purchase of new wheels that we needed, but sat on for a year. A Ford for the first time in my life. Love it and it felt good.
No, it’s rising in reciprocal lock-step with a weakening dollar, alluded to in the last chart.
The market is moving sideways or is really flat. There is no volitility or volume in the market. When you read that Soros has pulled 40% of his portfolio out of the market you have to wonder why? Yes, there have been some up days and some down days but nothing really but a propped up market hoping to bring in the odd lot buyers because there seems to be confidence that the market is going to continue to go up.
I agree with some of you that what the market sees is the Republican takeover of the house, which should result in resolution of the tax issue, and the associated fiscal uncertainty. Eradication of this uncertain climate can unleash a medium-sized up-tick-because:
Banks and corporations are flush with cash, and lean. In order to ditch employees, many organizations have done so by embracing technology-thus productivity is accelerating. We now have four years of cumulative pent-up demand in the auto sector. I admit housing is still a huge drag, but damage should be mitigated somewhat by all of the above.
If the Republicans can succeed in privatizing Fannie and Freddie.....there’s a great deal of public support for this.....then we’ll then have a HUGE uptick, IMHO.