"Or extreme legislation reflecting the dangerously growing clout of socialism within the Democratic Party. Gridlock makes all of those things less of a threat, not more of one."
"Democrats have been giddy following the strong rise in the major U.S. stock market indexes the day after their blue wave crashed over Congress, giving them back control of both houses and leaving badly defeated Republicans as a demoralized minority. So do stock market investors like socialism? Hardly.
One thing is clear from this election: the Democratic Party mainly flies these days on its left wing. There are very few Democratic moderates and even fewer conservatives (if any) among Democrats. With its open embrace of the Democratic Socialists of America and its alliance with politically radical Islam, it is now all but in name a socialist party.
"But that isn’t what the stock market was applauding on Wednesday.
"OK, so why did the S&P500 Index gain 1.6%, the Dow 30 a whopping 3%, and the Nasdaq 1.4% the day after the Democrats shellacked the Republicans?
"Relax. The markets haven’t gone socialist. They are, as always, highly pragmatic.
"As we wrote just yesterday, “the only thing we know for sure is that for the next two years, Washington, D.C., will be in a state of gridlock while Democrats unleash a torrent of investigations, impeachments, and endless claims of corruption and wrongdoing.”
"Yes, “gridlock,” which is just another word for restoring lost political equilibrium through the ballot box.
"That’s why the market often does well after midterm elections. Midterm elections are usually a course correction for voters who feel angry or betrayed by a political party or a charismatic leader. And that can create a deeply divided government. Also known as gridlock.
"The truth is, markets like midterm elections because of this process, not despite it.
"President Donald Trump, after congratulating Democrats on their big victory, noted almost casually that he intends to veto Democratic bills he doesn’t like. No surprise there. A veto is a powerful thing: It takes two-thirds of both chambers of Congress to override one. That’s real gridlock.
"So regardless of what Democrats might want, unless they play ball with the now-minority Republicans in the House and Senate and with Trump, they’re unlikely to get it." . . . More.
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