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Pragmatic Capitalism – SO GOES THE STOCK MARKET, SO GOES OBAMA?

Anyone who remembers the 2008 election remembers how important the economy and the stock market were in deciding the outcome. It looks like a similar trend is developing in the 2012 election. Personally, I am shocked that Obama even has a prayer in this election given the unemployment rate. I said back in 2009 that the unemployment rate was likely to be over 8% when he was running for re-election and that that would bury his chances. But boy was I wrong about that. According to Intrade the President is still the odds on favorite to win the upcoming election at 58%. But the stock market could change all of that in a heart beat. I was struck by the chart below showing the Intrade odds of an Obama win versus the S&P 500. In this “what have you done for me lately world” it seems that the latest stock quote is one of the primary drivers of the well-being of the country and a real-time reflection of the President’s efficacy. Obviously, this isn’t an entirely rational view of the world and stock prices don’t always reflect our reality, but the data doesn’t lie….

Source: Bianco Research

Category: Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

36 Responses to “Open Thread: US Stocks & Politics”

  1. MidlifeNocrisis says:

    I am continually amazed at the difference in results over a relatively short period of time. I would think that people would have a “set” opinion on these matters that would not change over the period of just a few weeks. That said……….. I am still looking for the “anti-corporatist” candidates and have not found any yet. Too much status-quo for my taste.

  2. Rich in NJ says:

    Many voters don’t have the time nor the inclination to digest the nuances of policy differences. So they base their preferences on their sense of the direction the country is going in and how it affects their lives. That perception is often skewed by the latest MSM meme, which has been pretty variable in recent months.

  3. albnyc says:

    Differences without distinctions. Epic fail either way.

  4. carleric says:

    As the number of pigs at the trough continues to increase why would anyone think the pigs wpould vote for anything different.

  5. Jojo says:

    Wouldn’t it be grand if the majority of voters said no to the establishment candidates and we all agreed to write-in a candidate? Maybe Ritholtz?

    Would that even be possible? Could a write-in candidate steal the election if they got enough votes? What a dream!

  6. marianlibrarian says:

    Ever had a boss give you an annual performance review that basically focused on the last few weeks? Voters do that too.

  7. deanscamaro says:

    On this Memorial Day weekend, with the number of sacrifices made by those from the non-1% contributors to the political ambitions of the brainless dead Congress, I for one would like to recognize your giving. You have been the sacrificed cannon fodder.

  8. James Cameron says:

    I never cease to be amazed how stupid people who should know better can be. The person in question, Terence Flynn, may also not be aware that he has certainly violated Rules of Professional Conduct, in case someone wants to file a complaint with the DC Bar.

    Labor Board Member Resigns Over Leak to G.O.P. Allies

    http://goo.gl/V4KY4

  9. James Cameron says:

    Wrong link on the Flynn piece right above (that’s for the RPCs!). Here:

    http://goo.gl/f43Vg

  10. realgm says:

    Ben got his printing press ready. He would do something to make things prettier for his master’s re-election. The stock market would rally and things would seem better but still horrible for main street.

    Romney is no match against Obama. Obama should worry about Ron Paul and maybe Gary Johnson (if Johnson managed to get Ron Paul’s supporters)…

  11. markssoapbox says:

    I wish that we could see a comparison between Carter and Obama. Carter was ahead for much of the race. When the voters pulled the levers, they didn’t choose him.

    As with polls, Intrade is driven by the media. The news coverage of Obama is beyond favorable. It’s borderline campaigning. Carter, while not getting the level of positive press of Obama, was given favorable coverage.

    People don’t want to feel stupid in front of other people. So when ask about Obama, many times they lie and say they are for him.

    These people are not like most here. They don’t spend much time divining the future, parsing the words of “world leaders,” reading the technical tea leaves, or researching beyond the basic news they hear in 30 minutes. Their worries are more immediate; putting food on the table, paying the rent, and making the utilities payment. What they know of the economy they hear from a slavish media. it’s no wonder the numbers are skewed. When ask, they don’t want to appear stupid, and regurgitate what they heard in the media. It’s not they want to lie, they just don’t want to appear stupid or out of touch.

    When they get into the voting booth, where no one is watching, they say what they really feel. Obama is in for some bitter medicine come November.

    Obama strikes me (in the polls and Intrade) as being “over bet.” I saw this repeatedly in Vegas. No matter how bad Notre Dame was, there would be people backing the team because of the myth. Some people, based on faulty info, just can not fathom that “The One” could lose. Home filed advantage was another cause of over-betting. The assumption was that the home team had an advantage due to geography. Again, bad info parroted by their group, bad choices. When these bettors were NOT with their friends, they made much different choices, almost always.

  12. ConscienceofaConservative says:

    Personally, I’ve called an Obama 2nd term since it became apparent Romney would be the Republican contender for two reasons. First Romney’s claim that his experience in private equity helps him understand how to create jobs doesn’t hold water, and second he he effectively challenge Obama on health care.

  13. MidlifeNocrisis says:

    Yep. Obama is going to win again and 49% of the voting public is not going to like it one bit!

  14. Lord says:

    I struck that with the candidates tied, they think Obama will win, this despite needing several points in the popular vote just to tie in the electoral. What would be interesting is if it is thrown to the House since they would probably support the electoral over popular candidate.

  15. S Brennan says:

    Who cares who wins? Both of these frauds represent the highest bidder and will whore themselves according. Anybody who thinks we are having an election is kidding themselves… Yes, there is a rhetorical difference between parties, but as Candidate Obama whipping for Bush’s TARP* showed…it’s a charade.

    As to the tired old “lessor of two evils” crap, the guy who says the “nicer things” is more effective at implementing evil…so on that count, I’ll give the nod to Obama…by a nose.

    * Let’s not forget Obama supporting.

    1] Bush’s timetable and tactics in Iraq.

    2] Expanding Bush’s war in Afghanistan to a pathetic end.

    3] Bush’s FISA.

    4] Legalizing Bush’s policy of infinite detention without trial.

    5] Going beyond Bush and legalizing execution without trial of American citizens on US soil.

    6] Legalizing Bush’s…of why bother…Bush/Obama fans couldn’t give a crap about the US Constitution which our soldiers swear fealty to upon their enlistment.

  16. Jojo says:

    Ha! This is great. More communities should refuse to pay the real costs involved in providing crowd control and protection during all political campaign visits.
    ————–
    Newport Beach wants $35,000 from Obama campaign after fundraiser
    May 26, 2012

    The city of Newport Beach spent $35,043.04 on police officers when President Obama stopped in Corona del Mar in February for a campaign breakfast, and revenue officials have sent his campaign an invoice to recoup the costs.

    City Manager Dave Kiff said the invoice was his idea.

    “I think it is appropriate to treat it like a private event — if another private event that large and which required that much police presence occurred, we would bill the event sponsor,” he said in an email. “If the president was here on presidential business, we likely would not have billed for that.”

    http://latimesblogs.latimes.com/lanow/2012/05/newport-beach-wants-35000-from-obama-campaign-after-events.html

  17. ZedLoch says:

    @marksoapbox “The news coverage of Obama is beyond favorable.”

    Stare at this chart, and then repeat that statement:

    http://www.journalism.org/sites/journalism.org/files/u47/Obama_s_Tone_Over_Time.png

    And in case you have some extra time, here’s the article:

    http://www.journalism.org/analysis_report/barack_obama_0

    And the real money shot:

    “In January, the differential between the president’s positive and negative coverage was dramatic. In the four weeks, the percentage of negative assertions outnumbered positive ones by between 28 and 37 points.

    That tone, however, began to moderate in the first three weeks of February, when negative coverage exceeded positive by between 11 and 15 points.”

    If the evil, liberally biased Mainstream Media had voted in April, Romney won a plurality of 35% to Obama’s 21%.

    I mean, sh*t c’mon!

    Why is it that right wing talking points these days are so easily disproved with a 5 second Google search?

  18. cognos says:

    Yeah… pretty obvious Obama wins. Still 60/40 bets are never great… much better stock market bets (hard to lose 100%… not that hard to make 20, 50, even 100).

    Romney is not that competitive. Private Equity 1% guy? Paid 13% taxes on 10s of millions in income? Same Bush policies which caused $2-4T in debt from moronic moves. He is not likable, on basic points… “corporations are people”. While UnEmp is still high… its down 2-3% from peak… looks like more by fall. Obama has shown himself to be a great campaigner, funder raiser, and debater. Best of the era. Killed OBL. Finally, demographics in the swing states are big support.

    Realclearpolitics.com does a good “poll of polls”… while the margin in small at +1.8% to Obama… 5 of last 6 major polls show Obama ahead. As people come to know the Romney campaign better… his support is likely to wane.

  19. cognos says:

    I actually think both are pretty decent candidates, and guys. We’re lucky. They are both high functioning, quite smart, good managers and MODERATE.

    Everyone doesn’t like them for it… on both sides… but the US is strong in the center and weak at the extremes.

  20. Jojo says:

    May 26, 2012
    Obama Should Seize the High Ground
    By THOMAS L. FRIEDMAN

    DURING a recent discussion in Seattle with a group of educators, one of them surprised me when she pointed out that even though their state did not win President Obama’s education “Race to the Top,” that program was critical in spurring education reform in Washington State. As I listened to her analysis, the thought occurred to me: I wonder how Barack Obama would do if he ran for president as himself. … How he would do if he ran for re-election on all the things he’s accomplished but rarely speaks about.

    Barack Obama is a great orator, but he is the worst president I’ve ever seen when it comes to explaining his achievements, putting them in context, connecting with people on a gut level through repetition and thereby defining how the public views an issue.

    Think about this: Is there anyone in America today who doesn’t either have a pre-existing medical condition or know someone who does and can’t get health insurance as a result? Yet two years after Obama’s health care bill became law, how many Americans understand that once it is fully implemented no American with a pre-existing condition will ever again be denied coverage?

    “Obamacare is socialized medicine,” says the Republican Party. No, no — excuse me — socialized medicine is what we have now! People without insurance can go to an emergency ward or throw themselves on the mercy of a doctor, and the cost of all this uncompensated care is shared by all those who have insurance, raising your rates and mine. That is socialized medicine and that is what Obamacare ends. Yet Obama — the champion of private insurance for all — has allowed himself to be painted as a health care socialist.

    In sum, Obama’s campaign right now feels as though it were made in a test tube by political consultants. It’s not the Obama we admire. Rather than pounding the country with “I have a plan” — a rebuilding stimulus plus Simpson-Bowles — which would be an Obama-like message of hope, leadership and unity that would put him on higher ground that Romney can’t reach because of the radical G.O.P. base, Obama is selling poll-tested wedge issues. I don’t think it’s a winner for him or America.

    http://www.nytimes.com/2012/05/27/opinion/sunday/friedman-president-obama-should-seize-the-high-ground.html

  21. bonzo says:

    Very hard to call. Obama’s campaign strategists are top-notch, his war-chest is full and Romney is vulnerable to negative campaign ads. A lot depends on what happens in Europe and China. If all austerity cans are kicked down the road past November, Obama is looking solid, provided he is ruthless in attacking Romney’s vulnerabilities. Otherwise, the economic mood could sour and voters will opt for change.

  22. [...] Baseball. Big Picture: “It seems that the latest stock quote is one of the primary drivers of the well-being of the country and a real-time reflection of the President’s efficacy.” “There are lots more rich [...]

  23. AtlasRocked says:

    Why don’t the people start talking about policies that are working this election instead of politics? Why are we still looking to politicians for answers? They follow, they do no lead.

    Why don’t we all start talking about the stuff that is failing 100% of the time, and just stop doing the 100% failing ideas. Start with Keynesian stimulus – it has never paid back the debt created, whether done by Reagan, Bush, Clinton, W, or Obama. The debt just keeps going up.

    When we stop borrowing, then we’ll start adopting the best **economic** policies instead of eating cotton candy.

    If Obama, Krugman, Friedman, etc., were a nutritionists, they’d be telling everyone cotton candy is what we should be eating 24 hours a day because it tastes good. These policies taste good, but have no nutrition. The underlying fundamentals are the worst possible thing we can do for the economy. Combining socialism’s desire to eliminate failure with capitalism’s constant small failures creates a reward system for failure. Now we’re up to over a trillion dollars of debt being added a year to prop up the failing ideas, $2.9 trillion of money printing, and Obama-Friedman-Krugman says let’s eat some more cotton candy using future taxpayer’s dollars. The Republican’s tax cuts w/o spending cuts are just as stupid.

  24. MidlifeNocrisis says:

    “Start with Keynesian stimulus – it has never paid back the debt created, whether done by Reagan, Bush, Clinton, W, or Obama. ”

    There is a reason for this. The “debt” you speak of isn’t really debt as you and I know it. It does not need to be paid back. It is a tally. A tally of dollars created and placed in the system. Once you learn that the earth is not flat it changes your whole perspective.

  25. Joe Friday says:

    cognos,

    I actually think both are pretty decent candidates, and guys. We’re lucky. They are both high functioning, quite smart, good managers and MODERATE.

    Romney is already on the record stating he would enact the Ryan budget, which would be a return to the failed Chimpy Bush policies, AND include even more additional massive tax cuts for the Rich & Corporate, AND eliminate Medicare to be replaced with vouchers that would cost seniors $6,700 out-of-pocket annually while rising every subsequent year, AND additional massive cuts to discretionary spending.

    Just the opposite of “moderate”.

  26. Joe Friday says:

    AtlasRocked,

    Why don’t the people start talking about policies that are working this election instead of politics?

    You should heed your own advice.

    The policies you advocate were enacted in Britain. They’ve already reentered recession and their budget deficits are climbing.

  27. Jojo says:

    Economix – Explaining the Science of Everyday Life
    May 29, 2012
    Republican Keynesians
    By BRUCE BARTLETT

    Most Republicans and conservatives despise the British economist John Maynard Keynes and believe his theories are the root of all evil in economic policy. Yet when push comes to shove, Republicans are happy to fall back on Keynesian theories when it suits them.

    As David Frum, a speechwriter for George W. Bush, recently put it, “We’re all Keynesians during Republican administrations.”

    The latest evidence comes from Mitt Romney, in an interview with Time magazine, during which he expressed concern about the impending fiscal contraction on Jan. 1, 2013, when the Bush-era tax cuts expire and various large cuts in spending are scheduled to take place – a result of last summer’s budget deal. A May 22 report from the Congressional Budget Office estimated that these actions would reduce the federal budget deficit by about 4 percent of gross domestic product next year.

    One would think that Mr. Romney would embrace this huge deficit reduction and say, “Bring it on!” After all, his party has long asserted that deficits drain capital from the economy that would better be put to use by the private sector.

    Indeed, many conservatives claim that deficits are destabilizing and the principal impediment to economic growth. In Europe, conservatives have been successful in making fiscal consolidation the principal means of stimulating growth.

    http://economix.blogs.nytimes.com/2012/05/29/republican-keynesians/

  28. VennData says:

    Marksoapbox,

    You claim, ” People don’t want to feel stupid in front of other people. So when ask about Obama, many times they lie and say they are for him.”

    How do you know this? You’re connected to the minds of millions and millions of American voters?

  29. AtlasRocked says:

    Joe, you have created two arguments forcing us to into unsustainable spending forever: You falsely argue stimulus was a success (then why is it still needed?), and you truly argue cutting stimulus will slow the economey, that is a certainty since the debt is still 9.4% of the GDP.

    You have no plan to pay back the debt. Nobody does.

  30. Joe Friday says:

    AtlasRocked,

    Joe, you have created two arguments forcing us to into unsustainable spending forever:

    False.

    You falsely argue stimulus was a success

    It’s not an argument, it’s a fact. Once again, the independent non-partisan Congressional Budget Office DISAGREES with you.

    (then why is it still needed?)

    For the Umpteenth time, it was too small and ended too soon. However, given those shortcomings, it nevertheless worked spectacularly.

    and you truly argue cutting stimulus will slow the economey

    No, cutting SPENDING will slow the economy (and already has), as there is no “stimulus” to cut.

    You have no plan to pay back the debt.

    False.

    We already know what works. After 12 years of Reagan/Poppy Bush running unsustainable federal deficits, with the debt growing faster than the overall economy, as a result of massive tax cuts that overwhelmingly benefited the Rich & Corporate, in the course of just six short years we had federal budget surpluses and the paying down of some of that Reagan/Poppy Bush federal debt, culminating with the Chairman of the Federal Reserve testifying to Congress that if policies remained unchanged, our ENTIRE FEDERAL DEBT WOULD BE PAID OFF, which Greenie labeled as “dangerous” (to whom ?).

    Conversely, YOUR advocated policies are crashing & burning right in front of our eyes in Britain, as they’ve already reentered recession and their budget deficits are rising.

    YOU have no plan to pay back the debt.

  31. AtlasRocked says:

    Keynesian Beauty Contest

    $50 gift certificate for the winning example:

    Keynesian stimulus was used in the
    country _____ in the years ______,
    during a __ recession/__ depression,
    then the economy turned around within 2
    years and then produced ___ years
    of lasting growth after this. The
    increased tax revenue was enough to
    pay off all the deficit the stimulus
    had created within ______ years.

  32. Liquidity Trader says:

    Keynesian stimulus was used in the
    USA in the years 1982-2000,
    during several recessions,
    then the economy turned around within 2
    years and then produced 20 years
    of lasting growth after this. The
    increased tax revenue was enough to
    pay off all the deficit the stimulus
    had created within that period.

    The Bush pissed it all away

  33. AtlasRocked says:

    Show us the graph of the national debt for that time period, LT.

    Use treasury data, they are the nation’s bank.

  34. [...] Inside Baseball. “The argument of free-market economists that productivity determines wages and profits is mistaken. Productivity determines the over-all size of the pie. How it is distributed depends on a variety of factors, including relative bargaining strength, international competition, labor laws, and the results of elections. Economics and politics aren’t separate spheres.” Americans Select: “Just for the sake of the historical record, the eleven candidates who received the most clicks are: Buddy Roemer 6,293; *Rocky Anderson 3,390; Michealene Risley 2,351; Lawrence Kotlikoff 2,027; T. J. O’Hara 584; Mike Ballantine 425; Blake Ashby 269; Dwight Smith 229; Stuart Hillman 180; Beck Sanderson 170; *Merlin Miller 148; Michael Levinson 136. [* = still running] Predicting the future: Emory study: “Only the stock market really matters. … Cause and effect are tricky here. According to the Emory team, it’s not actually the stock market that causes voters to vote for or against the incumbent. Instead the researchers believe stock market up or down trends simply reflect the national mood” (compare). [...]