GOP Obstruction Would Be Disaster for Stock Market If Congress Goes Republican

The GOP has made clear its intention to block, obstruct and destroy any and all efforts to boost the economy.

If the GOP takes over one house of Congress, the stock market will plunge, says analyst Henry Blodget.

From Tech Ticker:

As the November mid-term elections come ever closer, more pundits are predicting that the Democrats will get clobbered. The consensus is that they’ll lose control of the House of Representatives. Some folks think they’ll even lose the Senate.

And what will that do to our political system, the country, and the stock market?

The fear (or hope, depending on your perspective) is that a Republican landslide in November will create “gridlock” in Washington. With the presidency and Congress split between the parties, passing legislation that the other party opposes will become even more difficult.  And that situation, says our guest Vinny Catalano, president of Blue Marble Research, will hamper the government’s ability to get the economy moving again.  It will also, in Catalano’s opinion, be a “disaster” for the stock market.

Catalano believes that the government needs to act boldly to address the country’s sky-high unemployment and debt problems. And being “bold” in the face of gridlock, Catalano believes, will be impossible.

In the past, “gridlock” has actually been good for the stock market–or, at least, hasn’t stopped it from rising rapidly (see the end of the Clinton years).  But Catalano doesn’t believe that will be the case this time.  He believes the market will be in a trading trading through the elections, and then resume its decline.  His target is 950 on the S&P 500 by the end of this year and a startling 750 by the end of next year.