Posted on 10/31/2010 2:31:07 PM PDT by JohnRLott
The economic outlook is bleak. Businesses aren't hiring and the economy has lost 400,000 jobs since May. Unemployment has remained at least at 9.5 percent for 14 months, A record length of high unemployment not encountered since the Great Depression. GDP is growing but the growth is slowing. Consumer confidence is falling; the dollar is falling; the real estate market remains in a slump. And the Obama administration has overseen the 2009 and 2010 deficits at unprecedented levels, accumulating over $2.7 trillion during just two years.
Still, investors sense a glimmer of hope, reflected in rising stock prices. Stock prices have much more to do with long-term expectations of profitability than short-run results. This new optimism likely reflects the rapidly changing political outlook. Stockholders have already been anticipating higher taxes and health care regulations under an Obama administration with basically free rein to adopt whatever economic policy that they want. Now, with Republican victories likely on Tuesday, particularly in the House, predictions are for a more favorable business environment and better economy.
While it is all very intuitively plausible, hard numbers also back up this discussion. The probability of a Republican majority in Congress is provided daily by Intrade -- which is basically a betting market that has proven to be remarkably accurate in predicting past election outcomes. . . .
(Excerpt) Read more at foxnews.com ...
Why. Obama will still be President.
Gridlock!
bttt
stocks are racist..
Buy the rumor, sell the fact.
And obama will say, “See, I told you my policies were working!”
But he wont have access to his congressional box of matches to start anymore fires.
Just barely.
...the market will LOVE gridlock!...keeps Washington from more mischef....it’s worth remembering that it was Rick Santelli’s ‘tea party’ rant on the floor of the Commodities Exchange that gave birth to a movement.
Exactly. I think the market could easily go down hard this week. The market has already factored in a House takeover.
I’d personally wager that the market is already up in expectation of Democrat losses. Something unexpected, like a 12 seat (instead of 8 seat) GOP gain in the Senate, might push the markets higher.
I do think this is right because some money will flood the market in the short term. But this will only help to cause inflation in the long run.
Real growth will not happen until the congress takes office next year.
“Buy the rumor, sell the fact.”
Exactly - I wonder how much of the election results are already baked in.
A republican victory has already been considered and discounted into the current price
If Republicans improve their past record of conservatism and fiscal restraint (which is less than moderately better than Democrats), then election of Republicans will repeatably bring stability and growth to the market.
Don’t count on the market surging the day after. That is why the market has been climbing to new highs before the election in anticipation of a Republican win. The market tends to discount events in advance of the actual news.Although if the unforeseen happens and Republicans do not capture the House, the market may just unravel the day after elections.
“The market has already factored in a House takeover. “
Yep. But it might go up a small amount as those naive folks that don’t realize this jump on the bandwagon a day late and a dollar short as usual.
Stocks have already gone up last few months based on polls.
On November 3rd stocks will go down. Old Wall Street strategy
to sell when good news is out, and buy on anticipation of good news.
Buy on the rumor, sell on the news.
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