So far, the market has responded very well to the Bush presidency, the DJIA was up 100 on Wednesday, 177 on Thursday, and another 70 today. Oil Prices fell slightly yesterday, and will probably fall more in the spring when if Bush (and a rep majority in congress are able to open the ANWAR for drilling, this should have a good effect on the economy. 337,000 new non-ag payroll jobs were created in October, which is another great boost for the economy, and by December, we may finally get to net job gain for the last 4 years.
Good news on the jobs. Things have definitely perked from its recent low points. The US economy needs to produce jobs at twice that rate in order to keep up with the increases in the size of the workforce, but we seem to be past the worse. The market rally is in response to a decisive election outcome. Expect it to last for 2-3 months. DJIA, NASDAQ and SP indices are all essentially flat for the year to date. Our current account deficit is putting pressure on the dollar, and we've seen the dollar drop 2% this week and probably 6% on the quarter. Expect this to continue, as there are three ways to resolve a current account deficit: - devalue the currency of the deficit holder - transfer assets from the deficit holder to the surplus holder - increase production and export capability of the deficit holder The US is not in a good position to quickly increase production. The federal government is not going to do anything to reign in spending, creating more pressure on the debt markets. I expect the dollar to slide another 30% and US interest rates to increase 150-200 bps in the next 12-18 months. A healthy response to this challenge is to invest in production capacity in the US. A cynical response is to invest in off-shore securities.
I hate to be the bearer of non-partisan tidings, but this more to do with the stability that comes from the end of a presidential election, than Bush being the one who was elected. Howard Stern could be president, and the market would still react the same way.
I guess if you're looking to leave the country you should do so quickly. I've been doing the cynical thing.
This not true. What is your source for this? The US needs to produce 700,000 jobs just to keep up with increases in the size of the workforce? That is silly.
My bad. I should've used info for the year, not the month, to make that statement. The Bureau of Labor Statistics is my source, as I like to roll my oiwn data. The US economy needs to create 2,600,000 full time jobs every year to keep up with population growth. We've created 1,300,000 in the past twelve months.