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• Below-average stock market returns
• Average inflation
• Average interest rates
• Below-average new home sales

Here is how the economy, financial markets and housing have performed under different political alignments since 1958:

We are certain that all of the above can be attributed to conditions that are not solely attributable to politics, but at least now you have the facts.

Based on our analysis of the campaign, we also expect the following:

• Increasing union power
• Increased taxes on the wealthy, which is hopefully somewhat offset by tax credits for employers
• Improved savings programs
• Increasing regulation of all kinds
• A realization that not everyone is responsible enough to be a homeowner

More Stimulus Needed

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As we addressed in our last e-mail, Bad Moon Rising?, it is probable that we will see another stimulus package develop, most likely in a lame duck session of Congress initiating on November 17. Consensus is that there is just too much work to do on the economy to wait until January.

Regardless of whether it's the current administration that sets those stimulus wheels in motion, it's the new one that will ultimately be charged with the follow-through.

Let's take a tour of the landscape facing the new Administration:

• There is unprecedented volatility in the stock market, with many retirement accounts down 25% or more.
• Unemployment is rising.
• Consumer confidence is at an all-time low.
• The U.S. is at war in two countries.
• The current President and Congress have the highest disapproval rating in years.
• New home sales are occurring at the same pace as the early 1960s.

New Home Sales / Household
Here's a look at how new home sales as a percent of households have performed under different political alignments:

Against a historical average since 1965, the new home sales pace has been the most rapid when Republicans were in control of Congress and the Presidency, followed by a Democratic Presidency/Congress