Open Thread: US Stocks & Politics

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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

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