History shows Democratic sweep would be better for stocks

[cal04]

http://www.reuters.com/article/marketsNews/idUSN3028276120081030

U.S. investors are worried about a combination of a Barack Obama administration and a Democrat-controlled Congress, but history shows that of the two likely election outcomes, that scenario is better for stocks.

Their tax rates may go up after a Democratic sweep, but experience shows their stock portfolios could give them more of a cushion than under the alternative: Republican John McCain in the White House with Democrats running Capitol Hill.

The Democrats look set to maintain control of Congress in the Nov. 4 election and may well expand their grip on the legislative branch. Meanwhile, the latest Reuters/C-Span/Zogby poll shows Obama with a 7-point lead over Republican McCain.

"From what I've heard, people on the Street are pretty concerned about an Obama victory because of their own taxes as well as the broader market," said Johnny Madrid, a trader at a major New York firm, who spoke on condition that his company not be named.

In the seven periods when Democrats had complete control of U.S. political power, the S&P 500 .SPX rose 14.7 percent on average while in the eight times a Republican was president and Democrats controlled Congress, the benchmark index rose 7.4 percent, according to data compiled by research firm Bespoke Investment Group, in Harrison, N.Y.

[aquart]

1. Yes, we should be putting those CEOs in the stocks.

By selling garbage, rotten eggs, fruit, and cat litterbox contents for people to throw at them, we could well defray many of the costs of their profligacy.