I think it is safe to write there is a stark difference between the Republican and Democratic candidates for President

I think it is safe to write there is a stark difference between the Republican and Democratic candidates for President. Are the Democrats doubling down on a losing strategy given the massive losses the party has suffered since 2008?
Democrats have lost 900 seats in state legislatures, 70 house seats, 13 senate seats and 12 governor mansions. In many regards this is the greatest transfer of power in at least three generations.
The only office that there has not been a major transition is in the White House.
If the leading democratic or republican candidate enacts the legislation that each are advocating, there can be major change in the financial markets.
Simply speaking, the topic above is centered upon the repeal or the strengthening of Dodd Frank.
In my view Dodd Frank is perhaps one of the most economically restrictive legislation passed. I would like to focus upon one segment of this legislation, a sector that I am involved with on a daily basis.
I think the corporate bond market is extremely illiquid. Bids are virtually nonexistent as most firms do not understand the unwritten or untested rules of Dodd Frank as they relate to capital charges regarding bond trading and inventories. Even with nominal selling, prices are crushed.
Yesterday the Wall Street Journal reported based upon Fed data, large US banks by one measure have negative corporate bond inventories for the first time ever. I believe this is a direct result of Dodd Frank.
There is a strong probability monetary policy will be changed for the first time since 2006, a change coming from levels never yet experienced. How will the bond market respond?
Last week the 2 year treasury—the instrument most sensitive to monetary policy–traded to the highest yield since May 2010. Is this a harbinger of things to come? I can write at length about my experience since the complete implementation of Dodd Frank about 14 months, an experience wrought with a lot of lost sleep and great anxiety.
During 2012 I wrote extensively about the significance of the upcoming election, using words such as tectonic and transformational. And yes I did not think the President was going to be re elected.
In many regards I was correct regarding the potential outcome of 2012. As written above, the President’s party has lost the greatest amount of legislature power in at least three generations. Today’s leading Republican candidates are “outsiders.”
As noted, there is a stark difference between the candidates on the right and left side of the aisle.
Are the Democrats campaigning on a losing platform or vice versa?
I strongly believe in the axiom of “there is no interest like self-interest” thus I hope some of the more draconian tenants of Dodd Frank to be repealed. These tenants are inhibiting the economy given that capital, capital formation, and the trading of this capital is the lifeblood of capitalism and the economy.
Commenting briefly about yesterday’s market action, equities were quietly lower led by energy. Oil fell on inventories and the dollar weakened form near a 10 year high.
Last night the foreign markets were mixed. London was down 0.60%, Paris down 0.93% and Frankfurt down 0.45%. China was down 0.48% Japan up 0.03% and Hang Sang up 2.40%
The Dow should open flat ahead of a busy day of Fed speakers. There was little reaction to the ECB’s statement that it ready to boost stimulus next month as inflation wanes and if economic prospects worsen. The 10-year is flat a 2.32% yield.