Investors are understandably concerned about the implications of the outcome of the November 6 election.  Suffice it to say, the stock market rendered its own judgment on Tuesday, with a decline of 313 points.  Today, we are seeing more follow through on the negative sentiment.  Interestingly, US Treasury bonds rallied, with the 30 year bond up almost $2!  The decline was broad based, with hardly any stocks up on my main quote screen.  Predictably, Energy and Finance, some of the most regulated (and demonized) industries, got hurt the worst.  I read a story in the Wall Street Journal today that said that Exxon Mobil and Johnson & Johnson now pay a lower interest rate on their bonds than the US Government!  This is unprecedented, at least in modern times.  Considering the fact that the US Government normally (and historically  always) has paid a lower interest rate than any other domestic bond (and most foreign bonds), this should be a warning sign and a wake up call to those in power who have an effect on the perceived quality of the US Government and its ability to repay debt obligations.

Harry Reid, the Democratic leader in the Senate, has already said that he is willing to negotiate if the Republicans in the House are willing to raise taxes.  But he says that he refuses to touch or reform Social Security and other such government entitlement programs.  John Boehner, the Speaker of the House, has said that he is willing to raise taxes if the Senate is willing to tackle entitlement programs!   There does not seem to be any common ground here, at least today.

Hang onto your wallets, we are about to be in for a bumpy ride!