The financial markets weren't pleased that President Bush, the House and Senate behaved like the Three Stooges in cutting the federal budget deficit.

But with that slapstick routine now out of the way, the stock and bond markets are hoping that the American people won't punish incumbent elected officials too much in this Tuesday's election.

"Real political upheaval is not what the financial markets are looking for," said Francis Schott, chief economist of Equitable Life Assurance. "The financial markets are looking for evidence of stability."

With the American electorate in a rebellious mood (at least according to media reports), the financial markets will be paying more attention than usual to the midterm congressional elections.

Experts say the success of Democratic challengers could hold the key to how the stock and bonds markets do in the weeks ahead.

"A big Democratic victory could easily lead to a big sell-off for the dollar because of fears of lower interest rates," said Schott. And a weakening of the dollar could, in turn, hurt stocks and bonds.

Stocks and bonds, of course, are down sharply over the past several months. But those declines can be blamed only partially on the chaotic budget reduction process.

The weakening economy (despite the bizarre 1.8 percent rise in the third-quarter gross national product announced last week), rising interest rates, tensions in the Middle East and panic over the general state of America's financial system have all contributed to nervousness in the financial markets.

If Tuesday's election results rile Wall Street enough, it will mean that the budget reduction process took a heavier toll on the financial markets than at first believed.

"It's always a safe bet that investors would rather see Republicans win than Democrats," said Thomas D. Gallagher, a political economist for Shearson Lehman Brothers Inc. in Washington.

But a bad showing by Republicans this time around would be particularly bothersome for Wall Street because it would call into question how much control Bush will have over the stumbling economy during the next two years of his term.

"Greater-than-expected Republican losses in the House could be a minor negative for financial markets," said Gallagher. "That would be a signal that the Democrats will be on the offensive next year."

But he added that the financial markets normally ignore midterm elections and probably won't get too disturbed this year either.

Jumping ahead, the financial markets would also be interested in the aftereffects of a Republican slaughter in the election.

"I think {Federal Reserve Board Chairman Alan} Greenspan will be the scapegoat for Republican losses," said H. Erich Heinemann, chief economist at Ladenburg, Thalmann & Co., the investment firm. And Heinemann said he expects "very significant Democratic gains" on Tuesday.

If Bush is angry enough at Greenspan for not lowering interest rates, Heinemann believes the president could retaliate by filling the currently vacant post of Fed vice chairman with Greenspan's heir apparent.

"This could have very wide-ranging repercussions," said Heinemann, adding that the reaction by the financial markets to such a move could be "very nasty."

International Business Machines Corp.'s stock rose nicely months ago after the company reported attractive second quarter profits.

Then the shares weakened when people realized that the profit improvement was caused mainly by the weaker dollar.

Well, it's happened again. IBM's shares perked up after the company reported a 31.5 percent increase in income per share from continuing operations in the third quarter. But once again the strength might be an illusion.

Rick Martin of Prudential-Bache Securities Inc. recently told clients that IBM's revenue growth of 6.8 percent in the third quarter was probably due entirely to currency translations into the weaker dollar.

He estimates that IBM's international revenues were down between 2 percent and 3 percent. And its U.S. revenues grew only 1 percent to 3 percent.

Will IBM's shares, as they did last quarter, sink slowly toward the $100 level? If the dollar continues to decline and the economies of foreign countries remain strong, IBM could continue to show decent numbers.

But there is no telling whether Wall Street will continue to reward IBM's stock for this quirk in foreign currency translation.

When you're hungry, go to Hungary.

That seems to be the motto of Wall Street's investment banking industry in these lean times. The sharp decline in merger and acquisition activity in the United States has left many investment banking firms looking for new fields to till.

And Hungary, right now, is inviting investment bankers to pick up their hoes and pay it a call.

A few months ago, the Hungarian government requested that investment bankers put in bids to "privatize" 20 companies in that country. That means the 20 companies -- everything from hotel chains to trucking concerns -- would be taken out of government hands and either sold to other companies or their stock sold to the public.

Experts say the amount of interest received by the government has been staggering.

Arthur H. Rosenbloom, chairman of MMG Patricof & Co., a New York-based investment banking firm, is part of a group that put in a bid to privatize Danubius, a leading hotel chain in Hungary. Rosenbloom says his group is just one of 40 that requested an information brochure on Danubius, and presumably all the groups have an idea of what should be done with the company.

"This is really, really, really hot stuff," said Rosenbloom. "The world is changing before our eyes."

Yeah, yeah. But what's really important to the Wall Street community is that someone is putting deals together, picking up the slack that was left when the Asher Edelmans and Irwin Jacobs of the world were pulled kicking and screaming out of the deal business.

The bidding process was set up by the Hungarian State Property Agency after the government was accused of selling off some companies -- including a light bulb manufacturer to General Electric Co. -- too cheaply. The process began about a month ago and will drag out for another couple months.

Sources says Bear Stearns & Co., Goldman Sachs & Co., Morgan Stanley & Co., Citicorp and other major U.S. financial institutions are among the international army of investment bankers and commercial bankers that have expressed interest in helping the Hungarian government.

"It's a wonderful time to do business over there," said Larry Rosenshein, managing director of the Hungarian Finance and Trade Corp., another investment firm that is looking to give the Hungarians a helping hand.

John Crudele is a columnist for the New York Post.