That the democrats could take not one, but both houses of congress. And im starting to think thats a major reason why stocks arent acting as well as wed expect given that so far earnings season has been pretty darn strong. Even as the dow rallied 41 points today. It is far more muted than one would expect with big rallied intraday usually giving up to selloffs in the late afternoon. Sell, sell, sell. Now, maybe the debate tonight will change things but for the first time in ages, i think its important to frame the stock market in the context of a potential democratic landslide come election day. What would it mean for the democrats to win the house, to win the senate . What would it do to the stock market . White house, senate, house of representatives. Well, first, it would most certainly elevate the more radical wing of the Democratic Party that views big business as the enemy. Think Bernie Sanders. Think elizabeth warren. So where would they do the most damage . The government intervenes in the private sector in many different ways, but the most visible areas are banking, health care, and the environment, where rules are made that can make or break many a companys earnings per share. Lets start with banking. Until the democratic landslide, the rap on Hillary Clinton was shed be more reasonable toward the banks than president obama because shes been a big beneficiary of their giving. Just being willing to talk to the bankers about the issues makes her less hostile to the industry than president obama. But if both houses of congress go democratic, i think that might put the banks right back in washingtons crosshairs. It would mean more regulation, so the banks would have to hire more nonrevenuegenerating employees to make sure those regulations are followed. There will probably be multiple discussions about whether the banks are too big and, yes, too powerful. You might see suggestions that larger returns from banks means theyre taking too much risk, and therefore need to be clamped down once again. Why do i think all of these topics are in the air . Just take a look at how the bank stocks have done after reporting what can only be described as some of the best quarters in years. Quarters where lagging divisions like fixed income turn into roaring Profit Centers and where commercial and Consumer Lending has become unmitigated bright spots, yet the stocks arent reflecting that strength because right now theres a seething debate in the Democratic Party about concentration in banking. We used to separate actual banking from investment banking, meaning we had bnks that did lnding and other banks that were allowed to do corporate finance. Ever since the great depression, the glass steagall act prevented depositors money from being put at risk by those nontraditional portions of the bitz of banking. But 17 years ago that law was repealed and banks could put these two different kinds of businesses under one roof. Now in the aftermath of the financial congress, eliminated risky processes. If glass steagall were to be revised, Companies Like bank of america, jpmorgan, and citigroup would literally be torn asunder. Theyd be dismantled. Youd have to ask yourself is that possibly why these stocks have had such meager increases after, again, reporting what i regard as astounding results and i follow these banks incredibly closely. Beyond that, you got to wonder whether the whole notion of banks being too big to run efficiently or honestly might come back to life in washington. We might think that the wells fargos crossselling scandal is a one off issue. But congress could pass rules that severely limit crossselling or even block it entirely. Thats the price the industry might have to pay for wells fargos misbehavior. Maybe the Clinton Administration goes back to the old 10 rule where no banks were permitted to have more than 10 of the countrys business. Even though many of these deals were done at the governments behest, they could just as easily be undone, something that would crater the group. And in the event of a landslide, a really Aggressive Congress instate fee limits and even Interest Rate caps on a whole host of products. That could impact all financials, including that of american express, which is soaring in after hours after a very good and, yes, surprising quarter. In short, a democratic wave on election day, a head long landslide is going to be a nightmare for the financials. Thats what i think the stocks are saying every time i see one more report from the group. How about the drug stocks . Johnson johnson reported a very good quarter yesterday. But during the q a on the Conference Call, californias proposition 61 i dont know if youre familiar with this thing, but this 61 came up, and really kind of dominated the discussion. Thats a Ballot Initiative that would allow the state, which spends more than 4 billion a year on drugs, to demand Veterans Administration prices for the drugs that california pays. Hmm, what would it mean . The v. A. Pays the lowest prices of any Government Agency in part because it providing health care to veterans. Deservi deserving. But if the initiative passes in california, youre likely go to see a ground swell of support for states, even the feds to implement pharmaceutical price controls. If you own the stocks, youre only thinking boo. Needless to say, this could crush the profitability of these companies. Plus we know that pharma is public enemy number one, whether it be the outrageous price increases some miscreate ants have put through. Could just annihilate this group. I think thats also why the biotechs act so badly. This group, which is so sensitive to random tweets by Hillary Clinton or even nonkaed Bernie Sanders has become persona non grata ahead the election. Then there are the rules for the environment. Weve had a bit of a coal come back of late, but you can forget that if we get a democratic sweep. You might even need to begin the countdown to the end of fossil fuels in this country or at least investing in them for any success. The oil stocks indeed have been rallying when crude passed 50. But this is a group that investors will most certainly pay less for if Congress Changes hands. If the democrats sweep, i can tell you that getting permitting for new natural gas or oil pipeline might become just too prohibitive to justify. Oh, and forget about mergers. Id expect the Justice Departments Antitrust Division to block anything that would create excessive concentration whether it be the monsanto deal or even walgreens and rite aid. That one seems to not be working the aall. But none of these deals would happen. I dont even think the lawyers would check off on the companies doing them in the first place. I do hear there could be some positives, for example, i keep hearing that government will finally start spending more on infrastructure, which will be a boone to caterpillar. We like Martin Marietta materials and also vulcan. Really . You think that can make up for all the things i just talked about, especially when ive only scratched the surface of what could go wrong. I havent even touched on a possibility of a huge increase in the minimum wage. The fact is that would be a gigantic negative for the earnings of restaurants and retailers. The tepid action so far this earning season does not indicate the results are sub par. Its a reflection of the fact that Money Managers are worried about a democratic landslide come election day. So theyre selling anything the government could potentially squelch. If thats the case, then this market will have a bias down despite these excellent numbers because government interference can be a real earnings killer. And in the end, thats what the stock markets all about. Lets go to tom in connecticut. Tom. Caller hey, jim. Tom here in the great taxation state of connecticut. Regarding fitbit, hey, last november you spoke very highly of fitbit. In fact, you kind of touted it as a potential buy. I bought in at 28. 72, and now, as you can see, it hasnt performed quite to our expectations. So should i sell for a Capital Gains offset or hold and hold on . This is a great question. First time, as you know, we have total accountability on this show. I have said that i got fitbit wrong. I actually did a whole piece about why i got it wrong. We had james park on recently. Hes the ceo, and i still believe in the company. I do not think you should sell it down here at 14. I think it could have a good holiday season. But as i said in that piece and subsequent times, including when we just interviewed james, i had too much faith in the stock, and i was wrong. Richard in arizona. Richard. Caller hello, jim. About 18 months ago, you said that hpq was the play for 3d printers and then about six months, you said that alcoa was the play. So is there still a future in 3d printers . Yes. I think you have to separate the two. Hpq, which is the hp ink does have a really interesting Service Model for 3d printing. Alcoa has a special technology. My Charitable Trust owns it in part because they have a very special technology that allows 3d printing to be done in industrial instances. Both of these are more promising than any of the consumer 3d printing stocks that are currently out there. Can i go to erica in california, please. Erica. Caller hi, jim. The oracle of cnbc. I love you coining new phrases like people are cooky. Got one of your books for my son james. Thank you. Caller i missed the run up on expedia. For five days now, it almost went up 8 from below 117 to 125 today. Is this due to the october 27th earning date, or did i miss important notes like increase in travel or other miracles . Trading wisdom tells us not to chase a stock, especially after being up 8 . Should i enter with a small position . You know, this is a very tough one because, erica, first of all thank you for the kind words. We have pushing this expedia nonstop thats because integral to owning inns in this country and hotels and all sorts of travel. The stock just had to move. I think now you got to wait for it to pull back. I see sus kwa hahn na pushed it again tonight. It is a stock we think is inherently undervalued. Maybe you have to own some, but then let it come down. Because in mad money parlance, we do not chase stocks. And if you were to buy expedia tomorrow, you indeed would be chasing. This markets getting nervous about the idea of a democratic landslide, and right now the stock of any company that could be affected by new regulations is feeling the pain. The house of pain. On mad tonight, there were three with the long awaited separation of rr donnelley, then there were three. Ill tell you something, it aint working out right now. I know . Of you are upset about it. Ill tell whau to make of the trio of companies. Then the sales force secret is out. Plus is the Airline Sector finish the its descent, which has gone on forever . After united arlz earnings yesterday, ill tell you if the rest of the group is finally ready to fly. So stick with cramer. Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that nses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. On a perfect car, then smash it into a tree. Your Insurance Company raises your rates. Maybe you shouldve done more research on them. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Over a year ago we learned that rr donnelley, the Worlds Largest commercial printing company, with a host of other Communications Related businesses, was planning to break itself up. I thought it was a brilliant idea. That breakup finally arrived earlier this month, splitting into three new companies, Lsc Communications, Donnelly Financial solutions, and the rump, rr donnelley. Its time to address each piece. Regular viewers know im a big fan of these corporate divorces. I also like the old rr donnelley as a turnaround play with a juicy dividend. But not all breakups are executed equally. And so far this one has been a real dud. If you own the old rr donnelley at the beginning of august 2015 when the ceo announced the split, and if you held on to all three stocks since the plit, youre now down 28 with a huge chunk of that loss coming in the last two weeks, since the breakup. So now that the company has split itself into three different businesses and the stocks have really been hammered, we got to ask ourselves which ones are actually worth owning if anything . I always used to argue that rr donnelley was worth less than the sum of its parts but now the parts are acting like theyre worse less than the whole. How should we fweel now that theyve been separated . Lets go through each part unemotionally. Lsc communications, trading under lksd, got the printing business. Theyre a Global Leader in Cost Effective print related Services IncludingDigital Print as well as office products. Lscs clients include publishers of all stripes from magazines to catalogs this. Is a pretty slow Growth Business but it has tremendous scale and the Printing Industry has been consolidating for years. Then we had donnelly solutions. The old rr donnelley was the most trusted name in preparing Financial Statements for publicly traded companies, and km is the business that Donnelly Financial got. They primariily serve Capital Markets and help deliver accurate Financial Communications to investors and regulators. Think ipo documents, shareholder reports, regulatory filings. In recent years, theyve been providing Data Analytic Services to these same clients. Thats more of a Growth Business. Finally the remainder. The new rr donnelley is a Communications Management company focused on helping clients create, manage strategies via digital and print media. They do everything from product promotion to logistics. Now, before i got into the specific pros and cons of each business, okay, let me just say let me explain some of the rationale behind the breakup. In the old days, rr donnelley was mainly a big printing company. Given that print seems to be going the way of the do do, the company spent the last decade making a series of acquisitions to diversify itself into a number of different areas related to communications. Ultimately it got to the point where the printing business was holding the rest of the organization back. In the end, printing, Financial Solutions and Communications Management, well, just didnt seem like they belong under the same roof. So a little more than two weeks ago, rr donnelley officially split itself, spinning offer llc communications and Donnelly Financial solutions to its existing shareholders. I think is a very smart move. From a financial standpoint, each of these Smaller Companies will have a well tailored structure that fits with its growth profile. Like most breakups, each company will be able to focused on what it does best rather than being lost within a larger enterprise. While i was a fan of the backup, i dont think all three stocks are necessarily worth owning. Take Lsc Communications, the print business. We know that print media is dying as more and more people get their news online or straight from the smartphone. Its not just newspapers. Who uses a printed phone book these days . Who peruses a printed catalog when you can go to the companys website. The part of rr donnelley that became Lsc Communications has managed to hang in surprisingly well. Last year their variable print sales were flat. Their book and magazine printing division, that saw sales decline by 4 . Part of me wants to say that Lsc Communications is the part of rr donnelley that rr donnelley didnt want because it is in secular decline. But the ceo decided to stick with this part of the business, so obviously he thinks its got potential, no doubt because it wants to make some takeovers and lsc does have some things going for it, like tremendous scale that allows them to operate more efficiently to offer their clients the lower cost. As a matter of fact, theyre the low cost producer. But ultimately Lsc Communications is fo