Since March, the performance of the S&P has been correlating extremely well (76%) with Obama's reelection chances on InTrade. In fact, the correlation is so good that even a short-term plummet in reelection chances saw the S&P plummet as well. We'll see what Obama's chances are after all the dust is settled from the first debate, but it appears that the market wants Obama to win. And why might it want him to win? Could it be because Obama, unlike Romney, has made of no mention of nominating a new Fed chairman next year? Lest we forget that stocks would likely be 50% lower if it weren't for Bernanke's liquidity pumping.
the big question is what happens with all that liquidity when the corporations decide to spend all that money they have on goods and services instead of sitting on it. They estimate that American corporations are sitting on 2 trillion dollars of cash, when they inject that into the economy prepare for hyperinflation.
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