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« Preview of the Employment Report for October | Main | Blog Spotlight: Abnormal Returns »

November 02, 2006


J Martini

Interesting insight.

I comment on the pharmaceutical industry and believe that a greater focus on drug pricing will begin with this Congress. Eventually some form of defacto price controls could be adopted should a Democrat win the White House and the Democrats hold the House in 2008. further explains one scenario.

john delaney

Just to say thanks for talking about our markets. We appreciate it!


Hi Barry-
Thanks for your comment. As usual, you have the key point in mind.

My point is that the Dems cannot change these policies before 2010 without Presidential support, ergo, gridlock.

They know this, and they are looking forward to the 2008 elections. Rangel and others have made clear that "everything is on the table." They cannot change things unilaterially, so any moves must be bi-partisan. This is good for those believing in fair treatment of dividends and capital gains, but not well understood a the moment.

As to the market reaction, if many people do not understand how legislation works, it will be a negative. Perhaps negative even if some hedge fund manangers see it that way...

Barry Ritholtz

Many of the recent gains have a basis in the shift in tax policy -- dividends and cap gains in particular.

If the Dems win, that could be a short term negative for markets if the market based tax stimuli is removed -- just see Canada's recent Stock Trust situation.

Longer term, its a much more complex analysis . . .

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