Market calm as uncertainty ends


The Conservatives won the election, right? With a majority? So what the fuck is happening to the market? I thought all of the business papers said that such an outcome would calm the markets down, provide stability, etc., etc. I didn’t want to jump to any conclusions about a trend on Tuesday, when the markets dropped by about 1.5%. I thought that one day does not a trend make. So here we are, five days later. What’s happened? This:

TSX composite 5 day trend

That’s a 4.5% drop in the TSX index in one week. The commodities bubble is bursting, and once again none of the geniuses who report on the market called it. They claimed stability would be the result of this election, if we elected a Conservative majority, not an immediate devaluing of Canadian wealth. Investors were supposed to be calmed by the steady hand of Stephen Harper and Jim Flaherty.

Lest anyone accuse me of wishing for this to happen because of my political bent (NDP), you can fuck off. I have painstakingly saved into mutual fund RRSPs for the past ten years, and I also have a small non-RRSP investment portfolio. I’d like to see reasonable growth on both of these, because I know that the underfunded CPP is not going to take care of me in the future, given who we (and by we I mean the 24% of eligible voters who actually voted for these idiots) elect.


4 thoughts on “Market calm as uncertainty ends

  1. well this reminds me what happen before/during the 2008 election when the HarperCons didn’t see the economy tanking (or they knew and did the pretendy thing). Of course, we now have the steady hand on the economy tiller!

    good post!


  2. I’m not sure how much of a cause-effect here is due to the Conservative majority. The US markets/policies/Bin Laden are probably having a much greater effect. For example, Ben Bernanke recently announced that the US Fed won’t continue with a third round of money printing (QE3), so the supply of cheap money available to invest in the markets could be drying up.

    Of course business news might not just be innocently wrong either. I watched a CTV News channel business reporter talking about the markets soon after the election. In the same breath it was claimed that the equity markets going down wasn’t Harper’s fault, but that it was thanks to Harper that the dollar was performing strongly. Tails – I win, Heads – you lose?


  3. Of course there is no relationship between Harper’s reelection and the stock news, but can you imagine what the headlines would be if a minority government was elected and these market results appeared afterward?

    I say that there is no relationship between the election results and the market, but only no *direct* relationship – the long-term relationship is clear; if the Conservatives or the Liberals before them had done anything to foster Canadian manufacturing rather than simply allowing our economy to float on the basis of raw material extraction and export, we’d not have a TSX and dollar in complete lockstep with the price of oil and gold.


  4. Kevvy nailed it. I don’t think the Contempt Party majority really caused this. But imagine the headlines if the election result were different, and the market dropped 4.5% in a week.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s