Administering a Hand

"They want what every first-term administration wants: a second term."
--Robert Ritter (Clear and Present Danger)

Some believe that stock markets are betting on a Romney victory and that an Obama victory would spell trouble for the markets. This seems unlikely.

During its first four years, the Obama administration has been busy pumping cheap credit, bailing out poor economic decisions, and raising entry barriers to new competitiors--all things favorable for encumbent profits. Whenever it appears that the nascent recovery (now four years 'nascent') and markets are rolling over, policymakers add even more stimulus.

The above picture shows that markets understand a Helping Hand when they see one.

Moreover, there is little evidence to suggest that the Romney/Ryan ticket is more credible/motivated than the current administration in reversing economic deline and fiscal collapse.

As we have noted before, this administration knows that it needs markets higher. And markets know that the administration knows it.

position in SPX