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Preview of Nov Elections ?

GOP candidate Mr. Brown won Mass senate seat which was held by one of the most liberal democrat Ted Kennedy for last 50 years.

What a difference one year makes - last year this time Obama was on top with oath celebration of first black president. One year later, he is about to see his most important domestic policy issue - health care bill derail after so much efforts or after coming so near.

It's sad that due to this one election, health care bill and some other key policy initiatives may be dead. Is this preview of Nov elections ? This win would definitely get GOP rank and file motivated to get few more senate seats in Nov elections. So this seems to be repeat of 1994 when democrats lost elections and both houses.

Only silver lining about this is:

Stock market would love this (in fact it already predicted this with markets going up today by 116 points). It would go up even more tomorrow.

If we look back, it may be good thing for economy and stock markets. Here are two examples:

- Reagan/Republicans lost seats in 1982 election. Economy and markets went up for next few years till 1991
- Clinton/democrats lost seats in 1994 election. Economy and markets went up till 2000

So if you are investor, celebrate ! Personally I would be dis-appointed to see health care bill gets derailed. After all it took 15-16 years to come to this stage of almost getting it passed.

Mr Obama and democrats still has 10 months to work out plans to get unemployment below 8% - then they have chance in Nov elections.

/Shyam

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