It is happening, all the stars are aligning and even the technical analysis is starting to point positively.

Interest in mergers is increasing.

Interest in acquisitions is accelerating.

Markets are stabilizing and pointing to a rebound of sorts.

The second half of 2008 is going to be better than we have seen since mid 2007.

But, it is not driven by anything that will sustain the recovery.

The memory of Clinton’s capital gains rate increase is still fresh in the collective memory. Even though it was enacted mid-year, it was made retro-active to the first of the year. There was no opportunity to adjust. Investors, and lots of them, were just screwed.

Why does this matter?

Because all three Presidential candidates have said capital gains rate increases are okay with them.

So, in 2009, we are very likely to see the capital gains rate increase. And you can bet it will be retro-active to January 1, 2009.

Therefore, anyone who is even considering any kind of deal in 2009 involving cap gains treatment is looking at accelerating that into this year. That means we will see a “rebound” this year and a drop-off next year.

Just think, if we had the Fair Tax financial decisions could be made without having to worry about political pandering, class warfare and vote buying schemes.