There's always a euphoria (at least for most of the country) after an election. This is not like 2008 glee today, but there's a feeling of hope and optimism from most.
However, if you thought we just got through four years of gridlock in Washington, I've got some news for you: They will look like nothing compared with what's coming in the next four years.
Forget about reaching across the aisle, compromise, and bipartisanship. After last night, the Republicans hate Obama even more than they did before. They believe half the country is on their side. They will believe that it's time to double down on intransigence.
So, "fiscal cliff" talks? Forget about it. Raising taxes? Spending cuts? Investments in the future (whatever they may be from the president)? I fully expect Republicans to kick and scream at every possible moment.
Is it dispiriting for most voters? Sure. Congress will probably continue to have a terrible opinion rating.
However, is it bad for stocks? No way.
Gridlock can be quite good for stocks over the next four years.
We can kick the can on entitlements and defense. The Fed's Ben Bernanke can keep the money flowing. The economy will continue to heal itself. The housing market will stabilize and come back. People will still have maxed-out credit cards, keeping retail sales buoyant.
It's not good in the long run, but when was the last time politicians did anything that was good for us in the long-run?
In the short run, the market will like another four years of Bernanke and some Geithner-lite Treasury secretary that Obama will put in place. Even though Wall Street will grumble, it will continue to be pleasantly surprised by the hands-off nature of this administration.
With all that said, we could have a few speed bumps in the next three months. Those bumps could come out of Europe, as we have seen this morning. Or there could be bad days of rhetoric between Democrats and Republicans on the road to a compromise on the fiscal cliff issue.
There are no big fixes that Obama can offer to jump-start the economy. It would have been the same had Romney won. You can expect him to try and show like he's doing more about housing in his second term, but that market will just have to take care of itself.
The rhetoric about China being a currency manipulator is going to disappear now.
Obama will try to do a little here and there about energy, education and climate change, but it's hard to imagine he'll be able to show any results by the time he leaves office.
Yet, day after day, the economy will continue to steady itself. By the time 2016 comes around, we may finally be able to say we've climbed out from the shadows of the 2008 financial crisis.