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Congressional Effect Management Founder Eric Singer discusses whether the markets are better off when lawmakers are on recess.
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It's used well congress is out in stocks while the -- Lawmakers starting August recess today in a stock market came love -- pretty good -- -- Monday.
Congressional affect management founder Eric singer says that's the no coincidence and he joins us now.
You know Eric we always talk about how it seem coincidental.
That often when the outcome lawmakers are way the stock market has a pretty good session but this the first Monday in about two months that the market with the.
Well into you know there's a lot of data support that the market does better when congress is on vacation gone back to 1965.
Day by day that's almost 121000 trading days.
On -- 7900 days that they were in session the market went up less than 1% annually.
And on the 4100 days that they were on vacation -- went up 16% annually 16%.
And who the F and that's 121000 trading observations and and to date is consistent going all the way back to 1897.
So what do you what why movie and I mean -- -- people wanna know why welded to thing is we have to think of congress has stood for 535.
Men and women competing for glory and for attention on the microphone and for.
And campaign donations and every day they wake up saying.
What to new thing can -- propose for legislation today and when they propose legislation.
They create uncertainty and that uncertainty impacts the market what about the notion that some of -- legislation may actually remove uncertainty in other words we do send lawmakers a Washington.
To resolve problems.
I think that the problem is that the lawmakers really are they tend to be very short term -- their thinking a lot of -- -- focus on what we need to do to get reelected.
And the more they focus on what they need to do to get reelected.
The short of their horizon it's it's their correlation between just how -- congress and is to how well the market reacts from their way.
Did there and there is a little correlation that if if you have a if you have a very popular congress.
Is that oxymoron by the way the well that's right so long I don't remember -- very as a relative term that there was the president is always much more popular -- he gets a lot more attention but the birth and congress hasn't been mired in the low teens on their on their approval rating for a long time.
It you know -- is historically there have been popular congresses and you know I I I have great hair and I can remember the days when we used to earn interest on our money you know it's there it's those things have happened in the past but they're not happening right now.
So when they come back.
Is there sort of like -- these guys are back with sell everything you know they'll sell in May go away how about you know this.
Via congress is back so you know -- I but I -- I I I think you know congress' has adopted some very short term measures and there.
And there's always a fear that even their short term measures won't hold up they adopted a continuing -- you know they've we've been told that there is an agreement to agree.
On the budget.
To -- that down the road by six months.
We'll see it wouldn't be unprecedented for that for that to come apart -- if they get back together and for some reason they don't.
Finish their agreement to agree.
That'll be bad for the -- but I who who who thinks -- gonna do anything that at the election is so close I don't think they're gonna do very much with the election coming up I think that they all would like to just -- and see how the election turns out but.
You know events sometimes have a way of catching up with the -- And there may be.
Things that force them to.
Legislate when they.
We're hoping not to everything different that we -- look report now that that this is an election year you know with respect to some of the work that you've done.
Plus this is the surprises -- mean people look back on 2008 and they sale was an election year and more it was heading straight down but the fact is that in August the market was open in 2008 people a little bit surprised -- -- remember that.
It was a year when when.
We got a bonus which was they decided to go on on vacation one week early.
And that was the margin of difference for for the month of August you know Mark Twain said that no man's property.
It's a -- legislatures and session.
-- -- true then it's true now I get -- today you know for all the ribbing that we give them for being away so long I bet there's a lot of people watching this show now that was they would go way at least for the rest of the year.
By the I'm one of them I think that that's alright.
-- singer -- -- appreciated Greg were very much rewarded.
