They Don't Fear Elections

Markets, no matter what you think of them, are a sounding pole (or line) that measures future economic activity. The markets in and of themselves are not the problem. The problem is political volatility. Traders make money whether the markets go up or down. It is the movement of markets that generates money. Iraq's market reached its highest point just before America invaded. This was not a sign of confidence. It was a market in its death throes.

We all assume that the next election will solve everything for us. We eagerly await November. It is possible that the markets will rally in anticipation of a Republican sweep. This rally has the potential of being like a prisoner, having just been released after a long confinement, now standing in front of his house. He rushes across the lawn, his heart overflowing, eager to see his wife and kids. As he opens the door, he trips the wire that sets off the explosion that levels the house.

Inflation could be the charge, or social unrest, or a war. Too many fuses have already been lit; too many surprises converging dead ahead. I believe the only thing that's keeping us afloat today is our sluggish economy. There's not enough punch currently for the fireworks to proceed. Once it takes off, God help us!

These people will not give up. They’ve come too far. Isn’t it strange how they don’t seem to fear elections?