Americans spoke out with conviction a month ago as the House of Representatives witnessed an historic land slide, the state governorships were also a landslide, the Republicans and businesses got what they wanted and they almost got the Senate too. Obama seemingly has struck a deal with the GOP on extending the Bush tax cuts for all Americans, this is all great news for businesses, the job market and expansion, right? Absolutely! Congratulations to Washington and America for taking a huge step in the right direction, but where is the huge market rally you may ask? Why aren’t we making new multi-year highs in equities and the like? Let’s put this into perspective. So far this year the markets have already notched double digits gains with incredible volatility and most likely if none of the above occurred, we could be talking about a very different market environment, as in Dow, S&P and Nasdaq possibly down 20% or more?

My takeaway is the changes that have indeed taken place from a policy standpoint and of course politically, could be the one-two knockout punch to unemployment and the fuel for corporate confidence and subsequent expansion. So I am not worried about the market churning right now and I think that patience is the name of the game.

All the best.

~George