I have a theory. I remember wrestling with the idea in the 2000 election that maybe it IS actually better for a Republican to be in office for the stock market. Since I was daytrading, I was partially interested in tax cuts on capital gains, a rising tide for all boats, and any sort of way to make more money. People say Republicans are good for that.
But here we are with $126 oil, a struggling dollar, and a massive budget deficit with two wars. Government spending is at its highest levels, housing prices are dropping, people are defaulting. Remember when the US was booming with optimism during the Clinton era, fit with a big surplus?
I’m not going to say that the Democrats are good for the economy, because they have fucked up policies towards food subsidies and protecting American labor, but I think that the Republicans right now are just so destructive economically that they are dragging the stock market down.
Is it possible that the market’s recent rallying (which is allowing it to challenge its 200-day averages) is because the macro financial instability is over and now the market sees itself as undervalued?
Is it possible that once Bush is trounced from office, that the market will explode upwards? Bush has made the US’s balance sheet fiscally unsound and he has strangled investment, not encouraged it. He has reduced international desire to invest in America. He has stopped government institutions from working properly. His tax ideology is ridiculous.
I think that the market looks so resilient now because it should have been growing a lot faster than it has been. I think it might be undervalued. The market already knows about high oil prices and has priced that in. Businesses are doing okay, despite all of this. Tech stocks have rallied hard because the Fed has cut rates so much — despite larger macro concerns, low rates benefit tech companies ultimately.
That’s how the market feels to me right now. It feels like it’s being pulled up. That’s just my intuition. This fits my long-term view that a more globalized world will benefit from increased efficiency and productivity, ensuring long-term growth and massive growth for medium-developed nations. A week and a half ago, I went 50% into international funds in my govt. retirement fund. I’m not ballsy enough to commit 100% right now but I trust my gut more these days.