Tuesday, November 4, 2008

Political Tuesday

Several articles on politics and the markets. All kinds of debate on who is better for the markets, Democrats or Republicans. Historically it is thought Republicans but that really isn't true. According to the articles below the markets doesn't really care about the President, it is Congress that matters. What appears to be even more important is having a divided government. That is what I always say. If the government can't accomplish anything we are much better off. If Congress gets a filibuster proof Congress today the market will most likely sell off tomorrow. Thanks goes to Cason for emailing these articles to me.


"When the Republicans controlled Congress, the market's annual appreciation was 14.41 percent irrespective of the party of the president. In the opposite case, the annual appreciation was 6.79 percent."


"Maybe we should lag the results by a couple years. That is, we'll assume that the growth in a given year was the result of the president's policies from two years ago. When we do that, we find that the economy performed pretty much exactly the same regardless of the president's party...But then who ever said that the president alone determines the economy or the stock market? It's Congress that makes the laws. The president just signs them. Based on congressional control, the study results look very different. Under Republican Congresses, stocks have averaged a 19% return, while under Democratic Congresses only 11.9%."


a Democratic president and a Republican Congress. Under that deal, stocks have averaged a 20.2% total return, and real GDP averaged 4%

No comments: