For the past 3 or 4 months I have been telling anyone that asked, what my biggest fear about this election cycle is. Inevitably, I have gone on a long winded answer that involved a discussion of the basic checks and balances that our founding fathers built into the constitution. Legislative, Judicial, and Executive branches are distince and separate for a reason. Balancing the branches is a fundamental key that allows us to have a limited government and economy that is the envy of the world.
It seems that some others are seeing the same thing and are bringing that message to the public in an eleqouent and much broader audience.
First in US News here:
Are investor concerns about an Obama presidency influencing the stock market? And by “concerns” I mean “existential panic.” And by “Obama presidency” I mean “a tax-hiking and regulatory reign of terror.” And by “influencing” I mean “eviscerating.” At least that’s the overwrought take I get from a few of my more skittish E-mailers. Chillax, y’all!
Now a few of my own (more tranquil) observations about a possible jittery Investor Class, the plunging market, and the now famous Obama Discount Theory:
1) I find it hard to believe that fears about a deep recession are suddenly dawning upon investors and thus are solely responsible for kneecapping the market. I’ve been hearing such dire forecasts for weeks from top Wall Street economists, and I really think they’re already baked into the cake. (And credit markets actually look like they are finally picking up a bit—a plus for stocks.) So with that perception locked in, maybe the future political landscape is finally playing a greater role in the minds of investors, especially with polls showing a possible landslide Obama win and big Democratic congressional majorities. Is it really more plausible to suggest no effect whatsoever from a possible once-a-generation, political sea change, especially one that moves away from the winning economic formula of the past 25 years ? Not even a smidgen of worry? C’mon, now.
Then we see this from ABC news:
Watch for Republicans to raise the specter of a Obama-Pelosi-Reid administration that is not going to be checked by a Republican Congress.
And finally Fred is back, and spells it all out in detail. It’s long but it’s important:
