Many reasons have been thrown around to the continued rout in global stocks. After all with 24/7 media, they need to have something to talk about. Bank failures, plugged up credit markets, as well as a general panic among investors are just some of the reasons given for the market slide. But what about the fact that Wall-Street may be on edge regarding a potential Obama presidency. Could it be that investors are worried that a Democratic president and Democratic controlled congress is a recipe for disaster?

Much has been made over the years about gridlock in Washington. Many of us believe that gridlock is good because nothing ends up getting done in Washington, which means that nothing can get screwed up. With a potential Democratic sweep, investors may be fretting about increased spending, increased taxes and increased intrusion into the lives of each and every one of us. After all the Obama policy of hope and change is innocent enough, but if it’s backed up by Nancy Pelosi et al. running with a majority in both houses, things could interesting.

Here is a chicken/egg one for you. Common wisdom has Obama surging ( I guess this is one surge he supports!) due to the current economic crisis. But could the market crash be a result of Obama’s poll surge, and the fact that investors are scared of a Democratic sweep?

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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