This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Politicians Are Staying Out of Investors' Way

NEW YORK ( TheStreet) -- The midterm elections of 2014 are 20 months away -- an eternity in politics. But for capital markets, the midterms already matter now.

Democrats seeking to keep their Senate majority will only mostly moderate from here -- creating gridlock on major new legislation -- an additional positive factor for stocks as the risk of extreme legislation dissipates still more.

Some investors fear gridlock means nothing can happen, but that's not so. It means less extreme things can happen. Look at major legislation so far in 2013. It's been mostly as-expected continuing resolutions and extensions of the status quo. The fiscal cliff deal mostly made existing tax brackets permanent. The sequestration wasn't new; it was over a year in the making. (And, in fact, total government spending will rise in 2013). Sweeping legislation is the stuff of a single party wielding either outsized power or tremendous powers of persuasion. We left that world back in 2010.

And Democrats in the Senate know, if they want to keep not just their majority but their jobs, more moderation must be the name of the game. There are signs of it already. Democrats haven't been the most uniformly enthusiastic supporters of the Keystone XL pipeline (which would carry oil from Canadian oil sands and North Dakota's Bakken Shale to Gulf Coast refineries). On paper, the pipeline seems like a bipartisan win-win-win. It's popular (according to some polls, 70% of registered voters support it). It creates jobs. It should alleviate some energy production costs. And politicians on both sides enthusiastically support reducing American reliance on oil from despotic regimes.

But since, as of yet, cars can't run on happy thoughts, there's always the NIMBY issue which tends to affect both sides equally. And the environmental lobby is small, but powerful, and leans heavily Democrat. Hence, in past votes, the pipeline has fallen well short of a filibuster-proof 60 "yeas."

But in an amendment to the Senate budget last week, 17 Democrats joined every Republican in giving the full pipeline a green light, with many of those 17 either up for election in 2014, from traditionally red states or both.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs