Friday, November 05, 2010

Stocks Rally because of. . . Fed Move? Or GOP Win?

By Douglas V. Gibbs

The Indexes rallied, there were strong retail sales, and the Dow gained. The Media is proclaiming that it was the result of the Federal Reserve buying up more of the government's debt. But could the rally have been because of an injection of confidence as a result of the massive Republican win on Tuesday?

After all, everyone knows it is the GOP the practices fiscal responsibility more often than the liberal Democrats.

The Dow Jones industrial average rose 219.71 points, or 1.96 percent, to close at 11,434.84, a two-year high. Standard & Poor's 500-stock index rose 23.10 points, or 1.93 percent, in preliminary figures, and the Nasdaq composite gained 37.07, or 1.46 percent.

Equity markets have also slowly been rising steadily in the last couple months. Some would say because of the anticipation of stimulative steps by the Federal Reserve. Others would say in anticipation of the Republican landslide that all knew was coming, except for the hardest left Democrats.

Fact is, spending has to come under control. The fed buying our debt only delays the inevitable, and leads us down a road toward inflation.

-- Political Pistachio Conservative News and Commentary

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