What Did We Learn Last Night in NY, NJ, and VA?

Off year elections are always interesting in terms of getting a pulse on the American public. Yesterday’s elections, with the primary focus on the gubernatorial elections in VA and NJ, the mayoral race in NYC, and the Congressional race in upstate NY, strike me as having some similar themes. What were they?

1. A rising tide of discontent with incumbents.

I sense that not only in the NJ gubernatorial election but primarily in the mayoral race in NYC. Michael Bloomberg spent over $100 million, was estimated to hold close to a 20 point lead, and won by only 5 points.

I definitely sense this anti-incumbent discontent in Connecticut, as well. Both Senators Dodd and Lieberman are under real pressure.

2. An inability of the Obama administration to turn out the vote that brought him to Washington.

Which segment of the electorate is that? Younger voters and minorities. Their numbers were down considerably, especially in VA, and it showed in the results as the Republican candidate McDonnell routed the Democrat, Creigh Deeds.

The White House would spin yesterday’s results, and especially the VA race, as not being a referendum on Obama. That said, if the Dems can’t turn out a major part of their base, the shift in sentiment by the moderates and Independent voters could spell doomsday for blue-dog Democrats (Democrats elected from typically Republican states) a year from now.

3. Americans are tired of the business as usual politics.

This theme is a twist on point 1 above about a growing tide of anti-incumbent sentiment. I sense this dynamic from the results of the Congressional race in upstate New York. In this race, the Republican party railroaded their candidate Dede Scozzafava out of the race and replaced her with a strong conservative Doug Hoffman. The Republicans had held this Congressional seat for decades. The fact that Scozzafava crossed party lines and supported the Democratic candidate did not help, but I view these results as a repudiation of the ‘business as usual’ politics that has polluted our country.

Add it all up and what does it mean?

America wants to be governed from the center. If politics in Washington and in the state capitols did not get that message last evening, then they were not listening.

What does this mean for the markets? Well, typically markets prefer fiscal discipline. That said, the markets – primarily equities and commodities – are “bubblicious” right now given all of the liquidity provided by Uncle Sam. On the margin, though, I think the markets will receive last night’s news in a generally positive light. Why? Our federal government is currently dominated by the liberal agenda of the Obama administration and supported by House Speaker Pelosi and Senate leader Reid. America is telling them to lean more toward the center.

Clinton heard this same message in 1994 when the off year elections went strongly Republican. Will the Democrats hear this message? Will they act on it? I doubt it.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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