Decision Time: Some questions to answer

Posted April 3, 2008

“Wall Street has a lot in front of it. Not only does it have to figure out who the winners and losers are of this credit crunch. It also has to figure out what a major shift in national leadership would mean. ” - Andrew Snyder

By Andrew Snyder

Baltimore (TFN)– This whole credit industry mess may be a blessing in disguise. It is keeping Wall Street on its toes and out of the political arena. Normally on such a big election year, the polls would be playing a large roll in the ups and downs of the market. Not this time. The Street is merely trying to stay alive.

But there are some hints that the nation’s corporate world is about to enter the political arena. Wal-Mart is a prime example. Long known for its not-so-liberal stance on employee healthcare, the company has a large stake in who becomes the nation’s next leader.

If the democrats win, Wal-Mart could be forced to shell out huge amounts of money to upgrade its employee health coverage. Even worse, as the nation heads to a socialists insurance system, the company’s increased tax outlay will force it to help pay for the nation’s other 299 million citizens not on its payroll.

But if McCain and the Republicans win, Wal-Mart can continue with its every-man-for-himself policy. After all, that is one of the key reasons those bouncing smiley faces can offer us everyday low prices. By not offering what is typically considered a full benefits package, Wal-Mart saves hundreds of millions of dollars each year.

A lot on the line

With so much on the line, the company’s CEO, Lee Scott, is wondering why the nation’s other large companies are not entering the political arena and endorsing a candidate. Like I said, it is because they are too worried about staying in business and keeping their own jobs.

As this election period unfolds, big business will not be able to stay away. Eventually, companies from across the nation will be chiming in, letting us know their opinion. You can bet many of them are going to be focused on this forced healthcare issue. A lot of CEOs will work hard to keep healthcare a “benefit” of a job and not a constitutionally mandated right.

Frankly, I am surprised Wal-Mart has remained behind the curtains during the Democratic debates. We cannot forget Hillary Clinton served on the mega-companies board from 1986-1992, during some of Wal-Mart’s fastest growing years. She is likely to keep that off her campaign ads, but you can bet Obama won’t.

Vote with your money

Wall Street has a lot in front of it. Not only does it have to figure out who the winners and losers are of this credit crunch. It also has to figure out what a major shift in national leadership would mean.

What happens if Barrack or Hillary makes it to Pennsylvania Avenue? What will happen to corporate earnings as taxes soar and regulations increase? Investors need to realize, the markets could be in for a major correction come November.

And what if McCain (or Bush the third, according to pundits) makes it to the White House? Will the conservatives on Wall Street jump for joy and send the Dow soaring? Or will it be more of the same?

These are the questions investors need to be pondering right now. The credit crunch is shaking itself out. The next time we hear any real news will be when Q2 earnings reports begin to trickle in. By then we will already know all we need to know.

Keep an eye on the polls. If all three candidates keep true to their promises (okay, at least some of their promises), we are in for some big changes. Invest accordingly.