"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Thursday, November 4, 2010

Does the Market Love the Republican Victory? It Depends...

Well, it looks like it, if you look at today's 2% rise in the Dow:



And, the market being forward-looking, it would appear that a Republican victory started getting priced in around Labor Day:



On the other hand, in the long-term the market can only reflect the real strength of the economy.  Which makes me worried that we haven't found the bottom of the bubble quite yet:



Yikes!  We are either living in a historic time of remarkable growth and exploding affluence, or else we are living through a Grand Illusion.  

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