Posted: 2006-11-07 23:57 US mid-term elections  Presenter: Lindsay Williams Guest(s): Ed Lynch Ed Lynch from BJM in the USA tells Classic Business Day why the US markets are looking positive as the Republicans look sure to lose ground in the US Congress at the mid-term elections LINDSAY WILLIAMS: Ed, have you voted yet? ED LYNCH: Yes, I voted first thing this morning on the way into the office. LINDSAY WILLIAMS: I wouldn’t be as rude as to ask which particular party you voted for, but can you tell us about the significance of these mid-term elections? ED LYNCH: What we are seeing here right now is a real shift in the political mood in the US right now - we are expecting to see Congress actually switch hands from the Republicans to the Democrats. The Senate is still a coin toss - it could go either way - but the general sense right now is that we are heading for gridlock, which would prevent anyone from really getting anything done without compromises - and the market seems to like that. LINDSAY WILLIAMS: So if there’s any particular issue that needs to be voted upon it’s going to be a split decision that’s going to take longer - why would the market like that I wonder? ED LYNCH: I think the market likes government doing very little - that doesn’t say very much about our view of politicians. The general sense here is that if it keeps the politicians on the sidelines the market can just go about doing what it needs to do, and count on things remaining as per the status quo. LINDSAY WILLIAMS: The argument of George W Bush is that he’s been absolutely right, and that’s been vindicated by the fact that Saddam Hussein has received the death penalty. There have been a few quirky incidents in the last couple of days, notably the far-right evangelist caught allegedly being a little bit injudicious with a young gentleman - has this damaged the Republican cause? ED LYNCH: The Republicans were on the back foot for the past month or so - they actually seem to be making up some ground, and the general sense is that they may hold on to the Senate because of this - but it seems to be a forgone conclusion that the Republicans won’t keep Congress. It’s amazing some of these stories coming across the press lately - one would think they could only come from the fiction section of a library. LINDSAY WILLIAMS: It’s been a particularly dirty campaign. On CNBC earlier today somebody said if politics guides investment decisions investors are going to make a big mistake - they said never mind who is in, that the US economy is doing well and company profits have been doing well, so forget about politics and just keep buying the market. Would you go along with that? ED LYNCH: I would think so. I think the US economy is in better shape than people think - I think we definitely are in line for a soft landing, and companies have done a lot over the past few years to clean up their books so they are going to be able to weather it fairly well. ar/met Comments Related to this transcript: Comment on this transcript... Name : Email : Comments :