I like JR's commentary as it pretty well mirrors my own thoughts, but there is one other observation I've made over the years.
Peoples wallets react to economic trends politically as much as they do based on the realities of the marketplace.
When Republicans are seemingly in charge, consumers on the more politically conservative end of the spectrum spend and invest with confidence while more liberal types do not.
When Democrats are in the D.C. drivers seat the trend reverses and politically liberal types are more confident while conservatives pull back.
Case in point.
During the 90's the biggest players in the NASDAQ boom/bust were more politically aligned with Clinton than Reagan, while those who have been more active during the current administration are more conservatively aligned. With it appearing likely that there will be a continuation of the 2006 political swing to the left in the upcoming election cycle some of the conservative money is beginning to re-align itself while the liberal money remains on the sidelines. That may accelerate the downward correction and slow down the rebound as the market shuffles in a sideways swing pattern.
People give D.C. WAY too much credit for economic cycles, good or bad
