TW: Doug Kass is a notorious stock market bear. His prognostications have unfortunately been spot on this year. He wrote at the beginning of the year in his annual forecast that the election of a Democrat would be bad for the market. He has shifted his position. I will concur with his prediction and state affirmatively that if Obama wins next week the market will be up (barring material exogenous variables) significantly by end of week trading on Nov 7th.
From Kass at the Street.Com:
"The conventional view is that an Obama win next Tuesday will have a negative impact on U.S. equities, as the Democratic party is seen as the party of higher taxes for the wealthy, trade protectionism, etc. It was my view, as well, up until recently; I now disagree, however, as circumstances have changed and so has my investment conclusion...the severity of our financial crisis has been greeted by the Republican campaign with trivia and with a singular lack of understanding of the economy, while the Democratic campaign has responded with gravitas. While I am being overly simplistic, Senator McCain's campaign has been highlighted by continued clumsy and disorganized responses to our financial woes
While Senator McCain focuses on earmarks and pork barrel spending (a relatively trivial factor compared to the scope of the world's financial crisis) and Governor Palin talks hockey moms and pit bulls, the Obama/Biden campaign (which in its infancy was full of vague uplifting rhetoric) has morphed into pragmatic and solution-oriented mode (e.g., the recent caucus with seasoned financial types such as Buffett, Rubin, Buckley, Summers and Volcker) in an attempt to put needed flesh on financial policy and much needed reform...
Most seem to agree that it is now time to approach unconventional problems and risks with unconventional solutions and policy. Based on the polls, to many voters (and investors) today, the Democratic party seems far better suited to tackle the enormity of the risks...
I look toward a different (and more salutary) market outcome than is generally expected following a Democratic win. In essence, there could now be such broad-based dissatisfaction with the current lack of leadership and poor decisions by the Bush Administration that investors could greet a Democratic win as setting a new stage of leadership capable of reversing the current view that U.S. economic and political preeminence is on the decline. Decisive, creative and coherent moves by a newly elected Democratic Administration could further engage investors in 2009"
http://www.thestreet.com/story/10444338/2/kass-obama-the-street-cleaner-we-need.html
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