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The big story in politics for the moment is the Missouri Senate race, which had been seen as an easy win for Republicans until nominee Todd Akin made a comment about how “legitimate rape” was unlikely to cause a pregnancy in victims.That comment has breathed new life into the campaign of incumbent Democrat Claire McCaskill, and the Republican party is flipping out, hoping to push Akin out of the race so that someone else can take his place.
In his nightly Bedtime with BTIG note last night, strategist Dan Greenhaus urged investors to pay attention to this pointing out that arguably the Senate was more important than the Presidency.
We asked him to follow up on why he thinks that.
The focus on the Presidency and its occupant often imbues a sense of ability upon the office that really isn’t accurate. This is true in the realm of foreign affairs but with regard to domestic policy, where attention currently lays, the President is handcuffed to a larger degree. That is where the Senate comes in. Investors are fond of believing “divided government is good” because a divided government, as we’ve seen these last few years, gets little done. While less government action in good times is welcome, government inaction this time around is proving problematic.
So from an investor standpoint, while the President is enormously important in the current election given the disparity between the two visions, the implementation of that vision relies on the House and the Senate. In that regard, investors more inclined to a Romney Presidency than the alternative should be rooting every bit, if not more so, for Senate Majority Leader McConnell rather than Reid.
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