THEME: MORE THOUGHTS ON BUSH RALLY

The market rallied sharply after George W. Bush was re-elected partly because on the flip side of the coin, a Kerry victory would've meant a much darker picture for business in America.

Consider this lead for an article in the National Post, a Canadian newspaper:

New York Attorney General Eliot Spitzer has taken on Wall Street and vowed to clean up business methods but his enemies have accused him of resorting to 'Wyatt Earp legal vigilantism'

In a Kerry world, Eliot Spitzer would no longer have to split his time between attacking corporate America and helping 100 "Central Park pretzel vendors outside his 5th Avenue apartment" get backpay. No, he would be Wyatt Earp as US marshall not local town sheriff. He would be the Attorney General and threaten the Fortune 500 richest people with Federal supoenas.

In an Eliot Spitzer world no CEO of any major corporation would be safe. His corporate fraud hotline would be ringing non-stop, and he would bring us back to an era of Teddy Roosevelt trust busting or Bobby Kennedy taking down US Steel.

Instead, we are left in a world where GOP disses SEC Chairman William Donaldson for adopting too many Democratic sponsored reforms. Hmmmm...let me get this straight, wasn't he brought in to, unlike his predecessor Harvey Pitt, actually reform the SEC so that it would go after business fraud with some teeth?

So, we are not in that era. What does that mean? It means that the public is still not angry enough. It means that barring a general crash in all assets (stocks & real estate), the public will not be angry enough to demand real reform.

So, in the short-run, all of the corporate shenanigans can continue with the occasional perp walk thrown to the press. In the long run, the dollar will continue to sink until the rot is exposed.

Is a crash inevitable? At some point it will be.

I think Eliot Spitzer's career will be a key one to watch in the next 10 years as it will be shaped around such events.