Last I checked, the futures markets were giving OBAMA! a 59% chance to winning the election – lower than I would guess, so I suppose you could say I would go “long Obama” if I had to make a trade.
Thus I have internally accepted the fact that we must prepare to deal with the future economic policies of OBAMA!
This usually means a brace for the negative. However, a very interesting point posed by Martin Hutchinson over with Money Morning:
On monetary policy, Obama is advised by former U.S. Federal Reserve Chairman Paul Volcker, a believer in fighting inflation through high interest rates – a strategy he successfully employed in the early 1980s. Further, current Fed Chairman Ben S. Bernanke is a Republican appointee whose term expires in January 2010. And since former Fed chief Alan Greenspan served throughout the Clinton years, there has not been a Democrat-appointed Fed chairman since Volcker himself in 1979. It is thus very probable that Obama will replace Bernanke, and quite possible that he will replace him with a monetary “hawk” who will push interest rates higher. This will make Wall Street squawk, and will likely cause a temporary crash in stock prices, but will end up being very much to the long-term benefit of the U.S. economy. Enough with the financial bubbles that we’ve seen!
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