By 2016, Mitt Romney may be sighing in relief that he lost Tuesday. The economic landscape for the next four years is likely to be filled with crises, and the president in office will be blamed for most of them, whatever his policies.
Romney's destiny of quiet retirement with his automobile elevator and his Cayman Islands investments will seem greatly preferable to the struggle that awaits the re-elected President Barack Obama.
Internationally, four more years leaves plenty of time for things to go wrong.
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How an Obama Win Affects Investments
Now that U.S. President Barack Obama has secured a second term, how will his win affect your investments?
In terms of monetary policy, U.S. Federal Reserve Chairman Ben Bernanke's "grand experiment" with quantitative easing will continue at least until Bernanke's second term expires in 2014. We can expect the Fed to continue to expand its balance sheet through asset purchases-primarily mortgage backed bonds- and to keep overnight interest rates near zero.
The Fed currently expects GDP growth of 3% in 2013. Unemployment is expected to continue to decline through 2013 but the unemployment rate may move in fits and starts as more discouraged workers move back into the labor force as conditions improve.
Unless there is an unexpected improvement in the employment situation and housing prices, investors can expect quantitative easing and zero interest rates to remain in place through 2013.
Here are the other ways a President Obama win will affect your investments.
If There's No Winner of Election 2012 Tomorrow, the Market Loses
There's More than Election 2012 Moving the Stock Market Today
The stock market today is trading higher as investors await the results of Election 2012. By the end of tonight, barring legal battles that could delay a winner, the uncertainty surrounding the election will be over.
But there's more than the election that's affecting markets today.
As voters head to the polls, it's only fitting that the one economic report released today is on jobs.
- Job openings continue sluggish trend- How Americans view the job market and what they expect it to be like under each candidate will be one of the deciding factors in this election. The Labor Department reported on Tuesday that job openings in the U.S. hit a five-month low in September, indicating that the recent drop in unemployment is not an accurate portrayal of the labor market. The number of available jobs fell by 100,000 to 3.56 million and it wasn't because more positions were filled - during September fewer people were hired, as well as fired. If you go back to December 2007, the start of the recession, there were about 1.8 people vying for each position and now that number has almost doubled to 3.4 people. "Hiring is the most costly expense for a business," Kurt Rankin, an economist at PNC Financial Services Group Inc. in Pittsburgh, told Bloomberg News. "Until a framework for policy can be determined, which will come with the election and the resolution of the fiscal cliff, businesses are not likely to ramp up hiring."
Who Will Win Election 2012 and Lead America Over the Next Four Years?
Election 2012: Is Today's Presidential Election More About Lost Dreams Or a New Promise?
In what can only be described as a madcap dash for votes in key battleground states, President Barack Obama and Candidate Mitt Romney worked the crowds late into the night.
As well they should. Almost every Election 2012 poll I've seen has the candidates in a neck-and-neck race headed into today's finish line.
As of press time:
- CNN's survey has them in a dead heat at 49% to 49%.
- Pew Research shows Candidate Romney behind President Obama by a 50% to 47% margin.
- The Politico/George Washington University survey reflects a tie at 48%.
- And the latest NBC/Wall Street Journal numbers show President Obama pulling ahead with 48% compared to Candidate Romney at 47%.
Given these mismatches, I can only hope we're not left counting chads or something equally ridiculous tonight when the polls finally close. The markets really wouldn't like that.
As it is, all the major averages are on hold. Not literally mind you, but figuratively. Nearly every trader and institutional manager I know is treading lightly at the moment.
Because they know that by Wednesday morning half of them will be wrong. That means they'll have to adjust both their outlooks and their portfolios.
In the financial scheme of things, though, the election is a sideshow. The far bigger issue when it comes to your money is the fiscal cliff. And I am not alone in my thinking, either.
A recent CNN poll suggests that 60% of market professionals are far more concerned about what's going to happen when spending cuts and tax increases hit January 1 than they are about who's in the White House.
I don't think they're wrong to be worried, either...
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Hurtling Over Fiscal Cliff Likely Regardless of Election Outcome
Representatives of the Group of 20 (G20) industrialized countries meeting in Mexico City over the weekend begged U.S. officials attending the meeting to avoid the impending fiscal cliff in 2013.
Chile's finance minister, Felipe Larrain told Reuters, "If we're not able to resolve the cliff, that could be the tipping point for a much more complicated scenario in the world economy."
The G20 clearly recognizes the risk of the U.S. falling off of the fiscal cliff.
Comparing the relative risks of the U.S. and Europe, Canadian finance minister Jim Flaherty told Bloomberg Businessweek, "In the near-term, clearly the U.S. situation is the higher risk."
Tomorrow's presidential election may complicate the situation regardless of if U.S. President Barack Obama wins a second term or if Mitt Romney is our next president.
Washington insiders have suggested that, unless there is a wider than expected margin of victory for either candidate, legal challenges are likely, which could put the result of the election in doubt.
In fact, each side has hefty legal teams waiting to jump to action if the election is close.
What to Expect from Gold Prices If Romney Wins Election 2012
With the presidential election less than one week away, market watchers are estimating what kind of impact a Mitt Romney win would have on the markets, including gold prices.
Gold is expected to continue its rise in 2013, reaching up to the $2,000 mark - or higher.
On Oct. 23, Deutsche Bank analysts called for gold to exceed $2,200 an ounce next year. This came in light of the stimulus measures by central banks.
They wrote in a research note via Commodity Online, "While we have targeted gold prices moving above $2,000/oz. since the beginning of 2011, we believe the Fed's open-ended program of QE announced last month increases our confidence that a surge in the gold price above this level is only a matter of time."
Yesterday (Wednesday), December gold futures closed at $1,719.10.
But if we fast-forward to January, even March 2013, if Romney wins Election 2012, would gold prices be able to continue their upward run?
Here's what a Romney win would do for the yellow metal.
Election 2012 Means the Real Bernanke Bombshells Won't Fall Until December
If you were expecting big news from this week's Fed meeting it looks like you are going to be in for a long wait. This week's FOMC meeting was business as usual.
There was no change in interest rates, no change in the determination to keep rates low into 2015 and no change in the Fed's latest solution, otherwise known as QE infinity.
The truth is the real bombshells won't likely start until the Fed's next meeting in December. By then, the landscape could be completely changed.
With Election 2012 still at stake, it's who controls the Oval Office that matters most when it comes to Fed policy.
You'd never know that if all you did was watch the debates.
Ben Bernanke may well be the second most powerful person in the country, yet his name was never mentioned-not even once. Remarkably, monetary policy was completely absent from the debates.
Election 2012 and the FedThat's true even though the two candidates differ substantially when it comes to the Federal Reserve.
For instance, Mitt Romney has repeatedly said he would not reappoint Ben Bernanke when the Fed chairman's current term ends in January 2014. Conversely, President Barack Obama has indicated his support for Bernanke and his easy money policies.
For that matter, Bernanke himself is in an open question. He may retire in January 2014 no matter who wins Election 2012.
However, at the December meeting one major thing will have changed: the time horizons of both investors and policymakers.
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Tonight's Presidential Debate: Who Will Clinch the Final Face Off?
For the third and final time, U.S. President Barack Obama and GOP presidential hopeful Mitt Romney will take center stage and face off tonight, with the showdown set for Lynn University in Boca Raton, Florida.
With the two candidates running neck-and-neck - a fresh NBC News/Wall Street Journal poll shows President Obama and Romney tied at 47% -- and just 15 days until Americans cast their ballots for our 45th U.S. president, a stellar showing is imperative. Whoever wins Monday's debate will have the upper hand heading into Election Day.
More than 60 million viewers tuned in to the first two debates which dealt with jobs, healthcare, the economy, and taxes. Romney handily won the first debate in Denver on Oct. 3 and charmed hordes of undecided voters. Then the president, who appeared glum and uninterested the first time around, came on strong in the second debate Oct. 16.
Monday's debate will be focused on foreign policy and national security. Divided into six segments, President Obama and Romney will discuss America's position as a global leader, the Afghanistan war, the Middle East, Israel and Iran, and China's explosive rise.
President Obama, as head of U.S. national security for the last four years, has experience Romney can't rival. The president will underscore how under his term he was instrumental in the mission that led to the capture and killing of Osama bin Laden. He will also note that he pulled troops from Iraq.
Romney has his work cut out for him.
His summer trips to London, Jerusalem and Poland were highlighted by several gaffes. The former Massachusetts governor needs to assure voters that he is a capable leader in the global arena by highlighting his leadership abilities.
"Many voters are ready to fire President Obama if they see Romney as an acceptable alternative. Foreign policy has not been a big driver of this campaign but I think Romney could add some icing to his cake if people say, "Hey, this guy is on top of world affairs,'" David Yepsen, director of the Paul Simon Public Policy Center at Southern Illinois University told Reuters.