Oh my God! That was the most ridiculous thing I've ever read. You are attributing the stock market action in November the year before presidential elections entirely to those elections? Or even substantially? What a joke!
Trust me: This month's market action has nothing (NOTHING!!!!) to do with the presidential election in 2008 and everything to do with concerns about the credit markets and the economy.
Consider that this is the first thing I've read connecting the 2008 election to the markets. So unless people are making buy/sell decisons on this basis and just not say anything, this is WAY OUT OF LEFT FIELD.
Actually, this isn't as far-fetched as you might think. Newspapers regularly runs articles of this type prior to presidential elections which claim that the stock market does a not-bad job of predicting the party of the presidential election, and those stories often run fairly far out in time. Conventional wisdom is that markets predict the economy six to twelve months in the future -- why should they ignore politics?
Here's an example of such an article from the Washington Post:
http://www.washingtonpost.com/wp...-
2004Jul25.html
If anyone wants to participate in the use of markets to predict political events directly (rather than the indirect phenomenon I noted in this article), check out the work being done at the Iowa Electronic Markets of the University of Iowa. They do remarkably well.
Sorry you didn't like the article; I thought it was at least more interesting that noting that the 10% decline in the market from its high merited the term "correction."
Carl
Come on. That article you linked to was written in late July 2004, less than 4 months from the election.
Of course, the stock market cares about who wins elections and that sort of thing.
The day after the Democrats took a lot of seats back in November '06, health care and drug stocks got hit, for example, thinking the Dems would go after them and hurt their business.
And Wall Street will be interested in next year's election.
But the argument that the selloff this November is a prediction that the Dems will win next year is a joke.
I haven't heard a single mention of that on CNBC, in The Wall Street Journal, Barron's or any of the other media that I read on a daily basis.
Usually, the players involved, the people actually moving the money which determines the way stocks trade, get quoted in market stories.
So, this analysis is off the mark.
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