Friday, September 03, 2010

Prayers for me, but not for thee

Today 200,000 Muslims held prayers in a Jerusalem mosque.

In a related story, zero Jews held prayers in Mecca.


Keith Wilson said...

Stuart Varney (Fox financial) says that if the Republicans take back the house, the market will explode because of all the cash on the sideline and new confidence.

However, if the Republicans manage to lose, the market will absolutely collapse.

I believe that in the long run, its all downhill. However, for the short run, do you agree with Stuart?

Jody Wilson said...

Historically, several major bear markets have ended in October of a mid-term election year - around the time when pre-election polls have more or less predicted the results of the Congressional elections. That's why the years following midterm elections are on average better than the other three years of the Presidential election cycle. I would expect any short-term election-related rally to occur when polls start showing that Republicans are taking control of either the House or Senate.

Right now Rasmussen has the Republicans ahead in the House 207 seats to 193, with 35 tossups. They need 218 to be the majority, so it's not yet a lock. The Senate race is even tighter, with the Dems ahead 48 to 46 and 6 tossups.

I could be wrong, but I doubt that the market is priced for a Republican victory at this time. If the Dems win, then there will simply be more of the same when it comes to public policy, so I doubt there would be a crash. I think the market would just continue doing whatever it's been doing.