You're pretty close. Wall Street generally cheers when the executive is held by one party, and the legislative is held by another. The correlation ends up being significantly higher in that case.. An argument as to why would be that neither party can pass significant legislation in that case, so the street can come up with new financial instruments with little fear of regulation or major rule changes.
Quote: (03-01-2012 11:08 AM)ElJefe Wrote:
What about this:
Some of the difference may stem from the fact that every Republican president since at least the end of World War II has faced a recession during his first term in office, Stovall said. Nine of 11 recessions that began since 1945 -- and seven of eight since Kennedy ran for president in 1960 --started with Republicans in the Oval Office.
Buddy, if it was as straightforward as this, every motherf***er on Wall St could pack his bags and go straight home because we'd all know we just needed to sit tight while waiting for the next Democractic President.
Not only this, but how much economic policy can a President enact anyways? If congress is against him? Clinton did well with a Republican congress. The economy in the US seems like it might be making a turn-around. With a Republican congress AGAIN.
Reagan had to contend with a Democrat congress, and things went pretty well under him for a while there, too. Is this making sense?
Are you factoring in US monetary policy as well? What about Greenspan, Volker and Bernanke? Does your dependent variable (stock market performance) not depend on that either?
Your night-club analogy is oversimplified and useless. The economy is a complex system politicians love to tinker with, and very few people have any idea of the parameters involved, transposed by matrices of untold numbers of vectors. It's a complicated reality that is so hard to model we educate and train thousands of professionals to do nothing but mess around with data and develop regressions just to get an inkling of how to go about compressing all those factors into a useful model.
If the economy was like a nightclub we could all go home right now... but it's not.
If ANYTHING the best situation is a President of one party working with a Congress of the other party, but even this is hard to justify.