ellens wrote:...... Both parties are responsible for the financial mess we are today, although I would tend to blame the Republicans more because their obsession with deregulation helped to gut out the mechanisms that could have prevented some of the banking calamity. Everybody should see the movie, "Inside Job" to get an idea how little oversight there was over what the major investment banks were doing during the last 20 years. The people employed to provide oversight and regulation, including the credit rating agencies, were all bought off by the major banks, as were the economic advisors to all the presidents, including Obama.
Excellent points ellens. In Elliott Wave terms, periods of optimism give rise to risk taking and deregulation, while periods of pessimism give rise to caution and increased regulation. While I wold love to believe one party is morally or intellectually superior to the other, (it would make voting easier), I see precious little difference between the two. Both parties are comprised of humans, both face the same (often perverse) incentives, both are subject to influence by zeitgeist, and elected officals that do not run with the herd are soon displaced.
IMO, the party in power at the time of the dominant social mood, will behave in accordance with that mood.
It is interesting to watch for changes that reverse previous actions, and how the changes may(?) identify the magnitude of the trend. During the bull market of the 1980-1990's, and even the bounce in the early 2000's you could see decisions, legislation, social norms, and human behavior being reversed that had been the established norm for years and even decades.
Buying a house with no money down for example. Can you imagine borrowers or lenders being so reckless 20 or 30 years ago?
Glass-Steagall was passed in 1933, and reversed on 11/12/1999. At that time, the Elliott Wavers pointed out that the reversal of legislation that is 66 years old, and designed to minimize economic risk is a mark of extreme optimism, perhaps even the ringing of the bell that signals the top of the market. Shortly after, the DJIA/gold cost ratio peaked. In other words, the DJIA peaked in terms of real money.
In the last few years there have been many very small indicators, that decades of social norms are reversing. Most of them escape me at the moment. Two that come to mind are Sears was recently open on Thanksgiving for the first time in their 120+ year history. Recently, the interest rate charged by the Bank of England was the lowest in it's 350+(?) year history (I think).
In the last election, several congressional seats changed parties for the first time in decades. When is that last time a member of the Royal Family of England was attacked by a crowd?
As the Elliott Wavers note, it is not a hard science, but an attempt to identify probable behavior. I think if nothing else, it indicates that current times may be more volatile than in the past.