A huge realignment in the House, and a possibly stunning victory in the Senate will be driving trading today, and most likely, the economic and political agenda for the next 2 years. The surprises were everywhere.
CNBC is claiming the election turned on Scandals and Iraq. Media coverage on the Middle Class has been spotty; they are still missing the big picture as to what has been happening economically. As we noted on Monday, Its Still the Economy, Stupid. And with all due to respect to my pal Larry -- THAT'S the greatest story never told.
While the Political futures got the House right, it appears they were wildly wrong about the Senate. That would be quite a blow to these thinly traded, tiny markets. And of all the things they tend to get right, elections are their forte. If it turns out they blew this, I would venture to say it would lower their profile dramatically. This is not a "told-you-so" -- but one will be forthcoming if GOP control of the Senate falls.
For those who believe markets are perfect prognosticators of the future, you are strongly advised to reread The kinda-eventually-sorta-mostly-almost Efficient Market Theory.
Also worth noting: Now we'll find out if some of the more experienced than I market watchers (Jeff Saut, Bill King, John Succo, J) have been right about who/what's been driving the stock market futures for political purposes. Indeed, its now in their interest to let markets slide as a rebuke to the Dems. Negative futures and market dips have been bought in the past; I suspect that pattern may not continue.