Why does Wall Street want republicans to win presidential elections?

[ringmastery]

The research shows the markets do better under democratic administrations.

http://biz.yahoo.com/ms/040728/113806_1.html

A recent study published in the October 2003 issue of The Journal of Finance looked at how the stock market correlates with presidential-partisan cycles. Here's what it found:

--Equity premiums are higher when the Democrats are in office (9% higher using market-cap-weighted numbers and 16% higher when using equally weighted numbers). That's caused in part by real market rates being higher under the Democrats and real interest rates being lower.
--These risk premiums are higher for smaller-cap stocks than larger-cap stocks.
--The presidential cycle variables are not correlated with the business cycle variables.
--Equity premiums do not peak around election dates.
--Volatility is higher when a Republican president is in office.

[movonne]

1. Because of all the crooked stuff going on in the fianacial area....

This administration is letting them get away with murder(or should I say robbery).

[htuttle]

2. Because individual greed usually trumps the impulse for collective good

Enough people on Wall Street see reasons that THEY will be made rich by the Republicans, no matter what the market as a whole does. It's like taking $5 today in lieu of $15 next week.

[Mr_Spock]

20. I agree - individual greed. They want no supervision so they can screw us

In the end, the more balanced approach of the Dems works out better in the end though. I just made a plot of Clinton vs. Bush using DJIA. Funny really - Clinton had "exponential growth" in the market and Dumbya has had a totally "flat" market for four years. In reality, the exponential growth of the stock market was unsustainable (for obvious reasons), but it's an interesting comparison.

[TaleWgnDg]

22. hey, Mr_Spock, why should I . . .

"boycott . . . Half-Time Pizza in Boston?" Just curious . . . ?????

:dem:

========================================
I suggest to you tonight that if George Bush had
selected the court in 1954, Clarence Thomas would
have never got to law school." -- The Reverend
Al Sharpton, Democratic National Convention, Boston,
Massachusetts, July 29, 2004, on "answer(ing)your
questions, Mr. President."
http://www.cnn.com/2004/ALLPOLITICS/07/28/dems.sharpton.transcript/
=======================================

[Mr_Spock]

25. That storeowner put a giant banner over his store during the convention

in Boston. Here is the sign he put in front of his business:



He tried to frame it as an assault on his business - a real inconvenience, but after further questioning he was simply a partisan hack making an ass of himself.

"Pasquale said he will vote for Bush again and said that if the Texan ever comes to Boston, he hopes the president makes Halftime Pizza, located at the corner of Friend and Causeway streets, one of his stops."

[TaleWgnDg]

26. ah-ha!! and thanks for the input . . .

::scribble:: ::scribble:: "boycott Halftime Pizza, Boston, Massachusetts b/c he's a Bush lackey, and spread the word . . ."

[unblock]

3. wall street doesn't, at least, not this time.

first off, a lot of wall streeters are democrats. remember, this is manhattan. true enough, many of the richer wall streeters and wall street execs are conservative, but they're old fashioned conservatives, not the religiously insane variety.

wall streeters like balanced budgets. wall streeters like a sound infrastructure. wall streeters like a smoothly functioning economy with minimal disruptions. wall streeters HATE risk. wall streeters like corporate reports they can rely on. and of course, they like a rising market.

the current powers that be have been a disaster on pretty much every front. many wall streeters will be voting for the democratic ticket for the first time in their lives.

p.s., i work on wall street (actually midtown, but in the financial securitization business) and i've heard "these guys have GOT to go" from a LOT of wall streeters.

[Nevernose]

6. Yeah, what he said.

[Rebellious Republican]

4. Its not about whats good for the Companies, its about whats good

for the indiviual CEOs and Board Members. They rape the companies for what they can get, then when it colapses they move on to the next victim. Think Ken Lay!

[Nevernose]

5. I don't think they do

That's why the economy always tanks under Reps. Wall Street is smart enough to figure that out.

[Lucky Luciano]

7. Wall St consists of many traders that don't give a shit

about the companies themselves - just their stock movements from day to day. Traders thrive on volatility as they can place bets on stocks to go up as well as down.

I doubt they root for republicans for this reason, but they do love volatility.

However, these traders are not a majority on Wall st!

[The Backlash Cometh]

8. I don't know what it's called, but...

All investment firms have better deals for their rich investors. I bet, if someone actually did the math, you'd find that they do better during Republican administrations, than anybody else.

[mmonk]

9. Many of the new

market people have drunk the Kool Aid concerning supply side economics. But older market investors such as Warren Buffet have not.

[K-W]

10. Greed, propaganda, and tax cuts for the wealthy.

Corporations dont want a good economy, they want one that is profitable for them. Certain types of economies produce great growth, but the benefit goes to the workers/middle class/ or small businesses. That does nothing for giant corporations.

Propaganda of course, and the republican lies and myths.

And Tax Cuts. Corporations are run by the extremely wealthy who like tax cuts for themselves, thier companies and corporate welfare which is promised to them by republicans.

Thats the trick to understanding this, corporations dont do anything, people do, and what people hold the power of corporations and what do they want.

[AndyTiedye]

21. Wall Street Did Fabulously Under Clinton

The tax cuts for the wealthy have not come close to restoring their
losses in the Bush* stock market.

[Feanorcurufinwe]

11. Wall St sees financial benefits in a Democrat win

It might be too early to say that Wall St's money managers are warming to the idea of John Kerry as president, but an increasing number are taking the idea seriously. In early June, all 37 hedge fund managers surveyed by International Strategy and Investment thought George W. Bush would win a second term. But by last week, 53 per cent were expecting a Kerry victory.

<snip>

Although many believe Kerry's environmental and health-care policies could hurt profits of energy and pharmaceutical companies, some think the Democratic candidate can guide the economy and improve foreign relations. His emphasis on fiscal discipiline, in particular, scores votes and even money from wealthy Wall St backers. "There are a lot of people here who have second thoughts about the war in Iraq," said Robert Hormats, vice-chairman of Goldman Sachs International. "And there are far more than that who are concerned about fiscal responsibility in Washington."

<snip>

"Once you get the Budget under control, a lot of good things happen," Hormats said. "Kerry will be good for the economy and, therefore, good for the markets." Some industries may benefit from a Kerry presidency. Smith Barney analyst David Smith said alternative energy stocks could get a boost from the candidate's support for increased use of renewable energy.
http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3582023&thesection=business&thesubsection=world&thesecondsubsection=usa&thetickercode=

[West Coast Democrat]

12. You tell me...

[Solomon]

13. I'm surprised that nobody got it yet. The reason Wall Street wants

republicans to win is that under republican administrations, regulations are rescinded. No audits of business. What rules they leave in, they enforce very laxly. When democrats are in power, the regulations are enforced, the market as a whole prospers because the system works more like it's supposed to work. More "people" benefit.

The same with respect to all corporations. Regulations are rescinded when republicans are in power. This is what they did under Reagan and the slogan "big government". Getting the government out of "our" lives meant rescinding all those "do-gooder" regulations that the managing class has to put up with.

[leesa]

18. Exactly. Good summary.

[NeoConsSuck]

14. They might want Repukes..

But I am beginning to doubt that they want NeoCons like Bush. I thought the heavyweights would be pushing the market up by now.

I was wrong. I think they're disgusted with the economy and the looming budget defecit. Bush is expendable.

[AirAmFan]

15. Under Republicans, greedy Wall Streeters gain MUCH more in "tax cuts"

than they lose in lower stock investment returns.

For example, Dubya's 2001 cut in maximum income tax rates from 39.6 percent to 33 percent is a 20 percent gain, compared to a 9 to 16 percent gross loss in equity returns.

And the reason for all the hoopla about Reagan is very clear wheh you look at the table of historic top brackets at http://www.irs.gov/pub/irs-soi/02inpetr.pdf For most of the years from WWII until the 1960s, the top marginal INCOME tax rate was 91 percent or more. Then Democrats cut it, first to 77 percent and then to 70 percent. Reagan funded the conspicuous consumption of the 1980s by slashing it to 50 percent, then to 38.5, and finally to 28 percent for earned income, (33 for unearned). Bush evened out the top bracket to 31 percent, and Clinton raised it to 39.6.

[AndyTiedye]

23. Please Bring Back the Clinton Stock Market Valuations!

The tax cuts aren't nearly as lucrative. The no-bid contracts
are only lucrative to Bush* and Cheney's cheneying friends.

> Under Republicans, greedy Wall Streeters gain MUCH more in "tax cuts"
> than they lose in lower stock investment returns.

If they were moderately greedy and not completely inept, they
would have done MUCH better in the Clinton stock market.
Even conservative investors who buy only bonds were getting much
higher yields because interest rates were higher, and nearly all
of that yield was real. The Federal budget was running a surplus and there was little inflation except for the cost of housing in certain
areas. Now bond yields are effectively negative when inflation
is taken into account.

> For example, Dubya's 2001 cut in maximum income tax rates from 39.6 > percent to 33 percent is a 20 percent gain, compared to a 9 to 16
> percent gross loss in equity returns.

Most lost a lot more than that. The NASDAQ is a bit over 1/3 of what
it was before the economy hit the bushes.

[camero]

16. Because most stockholders are in the top 1%

They always vote for business-friendly administrations. Greed rules on Wall Street. The wealthy own most of the stock in a corporation so they get most of the wealth from the corporation. Like a monarchy.

[TheWebHead]

17. actually they prefer a split government

So I'm guessing most would prefer Kerry, since it's unlikely the House will tip back to Dems, and neither side has a filibuster proof Senate, which also more likely than not will stay with Republicans. Gridlock is good with Wall St., less spending, more internal oversight. Both sides spend like Paris Hilton on Melrose if they control all three branches.

[napi21]

19. You're right. I prefer a split too!

I think most Americans prefer a split government too. I know, it's very frustrating when nothing seems to get done, but it really does put very necessary controls on both sides.

I am a very strong Democrat, but I don't want them to have free reighn either.

[AndyTiedye]

24. Split Between the Democrats and the Greens

after they work together to run Republicans out of power.

[TaleWgnDg]

27. hey, my take on all of this is . . .

By its very definition, Wall Street is money. Folks are in the business of making money from money, period.

Now. If that's true, then wouldn't you expect Wall Street to go w/ the flow to procure money? Republican? or Democrat? No diff as long as it produces money. Did Clinton produce money? How about GWBush? Will Wall Street be better off 4 years from now w/ GWBush's tax cuts? Or will Wall Street be better off w/ Kerry's proposals?

Oh, and what's Greenspan's take on this?

Or to put it another way, who's donkey will they ride (excuse me, Rev. Sharpton) to get there?

:kick: :kick: :kick: