As Per The Script? US Presidential cycle & equities

[slipslidingaway]

July 2007

http://contraryinvestor.com/mo.htm

"As Per The Script?...Boy, it sure looks that way at this point. So maybe we should not be so surprised at all that the markets of the moment appear to be in a one way levitating act, except for a few very short lived speed bumps now and again. If you can believe it, we're referring to the script of the US Presidential cycle for equities. Long time readers know we've referred to this in discussions over the years. It's time once again to have a little check in. We'll get right to it and start with a picture of historical experience. What you see below is the average of 56 years of Dow price performance split into four year blocks coinciding with the four year presidential cycles over this period.

Addressing our near term world, the pattern of the second and third year of the cycle is clear. An equity market rise into the Spring of the second year, a correction into summer, and then a blast off into the best of the four year cycle through the summer of the third year in almost straight up fashion. Does this pattern remind you of anything? It better. Just have a look..."

[slipslidingaway]

1. The Iraq War and the equity markets, October and March lows

After a 2 1/2 year decline in the equity markets the Dow made a low on October 10, 2002, the same day the House of Reps authorizes the use of force against Iraq.

The Dow retests the October low on March 12, 2003, five days later it is announced that the U.N. inspectors are being withdraw from Iraq and the Dow closes up 282 points.

Thanks to DU'er Mugsy for the reminder :yourock:

Who Stood to Benefit from War with Iraq?
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x37296


http://www.armscontrol.org/pdf/iraqchron.pdf

"March 17, 2003: After U.S.-led diplomatic efforts to build support
for the new resolution fail, the United States decides not to seek a
vote on it—a reversal of Bush’s March 6 statement that the United
States would push for a Security Council vote on the resolution,
regardless of whether it was expected to pass.

Annan announces that UN weapons inspectors will be withdrawn
from the country."