Submitted by Ron T, Sep 29, 2007 01:47

I was a stockbroker in November of '94. The day the Republicans won the House, the 30 year Treasury was trading around 8.75%. My firm's Chief Investment Strategist strongly (to put it mildly) urged us to invest our clients in bonds.

What advice! The market, betting that the new House would follow through on its Contract With America, rallied the day after the election and within two years, the Long Bond was under 6%. These lower yields drove money into the stock market resulting in the largest stock boom in history. Check the historical charts to verify this observation. By the way, the DJIA had risen from 3200 to 3600 from Clinton's Inauguration in 1992 through Election Day of 1994. It would peak above 11,000 in January, 2000.

The markets bet on the Republican's resolve to lower taxes and shrink government and they were well rewarded.

Ron T

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