Stock Markets Exposed

Democratic Stock Market crash coming?

My theory is that the Democrats will purposely stir up problems for business by holding hearings and threatening new costs and liabilities for business. This will cause business to react to the uncertainty by pulling back (less investment hiring fewer employees). This will stall profits, cutting government tax income spurring Dems to call for yet more taxes in the name of balancing the budget. Layoffs will increase. The Stock Market will crash. The voters will blame it all on Bush and elect a Dem in 2008. Money can't rotate out of real estate very well. As more real estate goes on sale the prices drop and real estate items (paint, furiture, repairs) drop which causes stocks to also go down. I agree that a housing decline will increase foreclosures, but the lenders are mostly Fannie Mae and Freddie Mac securities holders. They may see a decline in their income.

Public Comments

1. My thoughts... this is a rotation of money. Money coming out of real estate and going into stocks.
2. Economics is independent of Washington politics. However, I'm not saying that laws can't be passed that affect economics. Laws can effect economic change. The Democrats want the United States to be as strong and vibrant as the country can be, just the same as the Republicans do.
3. There may indeed be a crash coming, but I do not believe the Democrats will have much to do with it. I expect it will be a result of the housing crash and the overextend borrowings of the over bought home owners. If this does happen and foreclosures begin to balloon, many banks and mortgage lenders will find themselves in a world of hurt. In fact the entire financial structure might be threatened. Just a possibility. And the person responable will be Allen Greenspan and no one else.
4. Dems aren't as stupid as they seem. They want to stay in power. There will be gridlock in the Congress. If they win Congress and WHITE House in 08 look out and get out of the market then!
5. Political parties don't ipsofacto damge or enhance the stock markets. Although I've heard that most stock market advances have occured during democartic administrations (haven't really researched this though), and I usually vote republican or independent. That said, it seems to me that money shifts from realestate to stocks, i.e. it's time to buy realestate and rehab and flip versus put money in the market. My sense is that this is the time to put your money in the stock market.