The economy has lost 400,000 jobs since last May, and unemployment has remained at least at 9.5 percent for over a year, a record length not seen since the Great Depression. The real estate market is still bunk, the dollar is tanking, and in the last two years, the Obama administration has overseen unprecedented deficits, acquiring $2.7 trillion during their last two years. However, rising stock prices reflect optimism in investors. Stock prices are determined by long-term expectations of profitability than short-run results. Experts are guessing that these changes are a reflection of the changing political outlook. Stockholders were reluctant in the atmosphere created by Obama's higher taxes and health care regulations and the ability to adopt basically whatever economic policy they choose. With Republican victories likely, predictions are for a more favorable business environment and a better economy.
Some hard statistics are able to back up these assumptions. The probability of a Republican majority in Congress is provided daily by Intrade, which is basically a market that has proven to be remarkably accurate in predicting past election outcomes. Intrade along with the Rasmussen Daily Tracking Poll, which reports on the approval percentages of Mr. Obama, show that the ups and downs of the stock market coincide well with these measures. For instance, the Dow Jones Industrial Average hit bottom on March 5, 2009, when Obama had been in office for just two months. Conversely, this year the stock market reached a peak of 11,205 when anti-Democratic sentiment was reaching its highest. Could be a good couple of years should the Republicans take over.
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