I received a question that really addresses the current situation, and deserves an answer . An answer that is loaded with opinion, but the opinion is mine and not media driven.
The question: “the elected administration spends it's way to be re-elected and the economy and stock market have gone up with this excessive spending.”
A would say it is a good strategy to give voters a feeling that the economy is in great shape. Here is the exception, and it depends on the “approach” of the current Administration and the strategy that put them into office. So by taking a look at the last election we can see starting in July 2008, the Stock Market took a sharp down turn. That lasted into march of 2009. So consider, as part of my answer, this move was to accomplish two things. One to create fear of the damage done by the previous Administration. Two is to show a Market recovery starting in 2009, based on the “new” Administration, and new policies.
So here is what I feel will be what happens going forward up to the next election:
The Stock Market will “fall” based on decisions made by the Republicans and supported by the Tea Party. The point is, and will be used as a Champaign is that the Market was on the road to recovery based on the policies of the “current” Administration. Then the Republican House, with help of the Tea Party caused the Administration just to compromise in order to “prevent” default for the first time in this Countries history. A “weak” market will give the current Administration a platform to point the fickle finger of blame at the Republicans and Tea Party,. Far from true, but the majority of voters follow the Media, mostly owned by people such as George Soros, and the media will do as they are told by their boss.
This is the foundation of my thinking that supports my opinion that the current Administration will do all that is possible to create FEAR in the hearts of the voters, and with media support blame the Republicans/ Tea Party. This approach will give them votes.
So rather than supporting the market, which may give thought that credits the Republican policies for strengthening the economy and putting people back to work. Bad for the current Administration.. voters will want more of the same, a stronger economy and people back to work. So I believe the current Administration will take the FEAR tactic pushing the market into weakness, and say if it wasn’t for the interference of the Republicans the Country would be in much better shape. Obama did the best he could with what he had to work with… not his fault.
Sure there is enough people on entitlements, and don’t have a clue about what is taking place to sell the story. Giving the current Administration enough votes.
The Stock Market is very Vulnerable to media created perceptions, and the current supply of Stocks in inventory (held by investors) is HUGE, and there is not enough buying in the World to support the market if fear ever steps in, and the investors want to liquidate,,, currently most trading is done by the Fund Managers, and Money Markets so for awhile they will be able to clam the investors (who’s money is at risk) that set backs are normal market action and “they” should not be concerned.
Sad, but I have sit in those meeting, and watched everyone stand up relieved that they are in good hands.. LOL and me shaking my head like a billy-goat coming in out of the rain.
I am head of the class hoping I am wrong, but as for Stocks I will not be a buyer. Yes, I was March 2009, but that was because the break was fast and new enough that it could recover.. This one looks much more serious, to me.
“Trades” I hope my logic makes some sense. I wish you all the best, and I hold no fear you will be ahead of the game.. It is the majority that concerns me.