by Lee Adler
It may not be democracy, but at least it’s not one party rule any more. The power of the klepto- corporatocracy/ religious wacko axis has finally been reduced. Stirred by the loss of its precious sons and daughters in a war that benefits only Halliburton, and worried about their inability to afford the most basic of life’s necessities, like a 3 car garage filled with SUVs, and a perpetually appreciating home ATM, the American people have finally begun to stir from their long slumber. Change is coming.
As far as what it means to the general market– nada. Rest assured if the market rolls over here it’s because it was ready and the liquidity just isn’t there to support it. And if it doesn’t roll over, it’s not a celebration of a Democratic victory either.
Of course there will be individual stocks and sectors that will be affected. I think first of the outrageous prescription drug legislation that forbade the government from negotiating prices with the drug companies, allowing those companies to continue their rapacious campaign of extortion and thuggery against the sick in our society. Let’s see if something doesn’t happen to quickly cut them down to size. At least the thought of that happening is likely to have some impact on their stock prices.
Keep an eye on the price of oil too. They are going to have to start replenishing the strategic petroleum reserve. They’ve been pumping it out since Katrina, and if you don’t think that’s helped to put downward pressure on prices, think again. Likewise, the oil companies no longer have any reason to suppress the price of oil by manipulating the futures markets. Goldman’s reducing the share of unleaded gas in its benchmark energy index was a one shot deal that instigated forced selling in the futures pits by indexers and arbs. That’s not going to happen again. On the other hand, now that the oil company executives will be facing a hostile Congress, certain to exercise subpoena power, they may opt to be more cooperative. As for a windfall profits tax… unlikely to pass Bush’s pen.
The instability and uncertainty in the Energy arena may be pulling in two directions. As the price of the underlying commodity begins rising again, will the energy companies themselves benefit? As usual, we’ll let the charts be our guide.
In the end, it’s still about liquidity and cycles. The political change is a manifestation of that. Now that the Administration and the Fed no longer have any reason to prop the market, it’s going to be ver-rr-r-r-y in-ter-est-ing.
So, with our analytical and tools charts at the ready, let the games begin.
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