Monday, February 06, 2012

"One-Term Rally" Now the CW?

The folks at IBD want you to contemplate the idea that the stock market is rising on the very real prospect of a defeat of President Obama. Welcome to the party IBD, I've been inching out on that limb for some time now:
I think this is good for the stock market. The economy will muddle through for the remainder of this year and into next, but the further Obama slides and the lower his chances at reelection get, I think we will see an inversely proportional growth in economic optimism. The more it looks like Obama is a goner, the more American business leaders will feel like a giant weight is being lifted, the more entrepreneurs will feel like the sky is clearing. I predict a rough inverse correlation from here on in between Obama's poll numbers and the stock market - call it the "one term rally."
As a matter of fact, I think I called a long-term, secular bull market a couple days into Obama's presidency on theory that it would be so bad that the market predicted an utter decimation of the progressive wing of the Democratic party.


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