Romney is going to win I can’t handle another 4 years of Obama
My take is that Obama will win, though there may well be some haggling and court challenges in swing states and New Jersey. However, New Jersey is a solid Obama state anyway, so it may not make that much of a difference there. Governor Christie could be a strong primary contender in 2016, and he may be effusing about Obama in part to build bipartisan cred, but if Romney does win, he’s likely to find himself in a sticky spot. Still not sure if the country will want someone as non-telegenic as Christie, but he’s doing well right now.
The market is likely to drop a bit after an Obama win simply because some of Romney’s deregulation and tax policies will be off the table and so those who were hoping for that will readjust their portfolios, and most likely that will mean shrinking position sizes a bit. However, I don’t think it will drop very much, maybe 50 bps.
Remember that all the uncertainty about who will will the election will also be off the table. That decrease in uncertainty should push indexes up. The final uncertainty will be less if Obama wins, because we have experience in how he operates and should expect things along this line. If Romney wins, we will no longer have uncertainty about the elections, but we don’t know how successful he will be at implementing his policies and how they will change as he responds to any pushback from Congress so the residual uncertainty will be higher.
Just out of curiostity, I did some research on the effects of election years on overall returns between Nov and Dec, comparing returns in non-election years, incumbent-party-win years, and challenger-party-win years. The main conclusion is that there’s very little difference. Presidential election years have slightly lower returns in the last two months than non-election years no matter who wins. If the incumbent party wins, the standard deviation of returns is about 40% tighter than normal. If the challenger wins, the standard deviation is the same as non-election years, but the average is lower.
What results out of this is that the sharpe ratio when incumbents win is the same as in non-election years (at least for Nov and Dec), this is because both returns and volatility decline in proportion to each other. When challenger parties win, the volatility stays the same, but the average return declines, so the sharpe ratio is lower.
Now, none of these differences are statistically significant, and the N is fairly small, so the safest conclusion to take is that the election makes no difference to expected returns. If you want to make some other conclusion, then the next most defensible is that the expected volatility of returns is sligthly narrower if the incumbent party wins.
I just threw up in my mouth at this thread.
in soviet russia, mouth throws up in you
I’m going with Gary Johnson and markets don’t open on Wednesday due to the shock
I’ve been saying it for years…Obama will be reelected handily.
Prediction: Romney finds out on Tuesday what a “legitimate rape” is.
Markets cheer with a 2% rally followed by a 1% decline.
This!
Mccain never had a Denver debate turnaround. Instead, he had Lehmans.
Romney declared that he would dump Big Ben. he is too much of a dove for the Republicans. I started a thread a while ago asking what would you do if you were Ben? Vote for your party (red) or vote for your job (blue)?
I predict an Obama win (although he may lose the popular vote). Markets up strong early (1.75%), before retreating to a 1% gain for the day.
I can’t wait for people to stop talking about this irrelevant topic. Happens every four years, nothing ever comes of it but more of the same…cmon.
Bernanke can’t be dumped, the Fed is independant and his mandate ends in 2014. He has already indicated that he wasn’t returning for another mandate (through a leak).
I hope I’m wrong, but I think Obama is going to win. Market move .5-1.5%
Hard to see how Mitt, if elected, is going to be excited about creating a more hawkish Fed. He’s already claiming the deficit is terrible and the military is way underfunded and the wealthy are in dire need for a tax cut for their very survival: how is jacking up interest rates supposed to make his economic policy work, again?
This week’s Economist in which they just barely endorse Obama, they mention (like you did) how Mitt has so many conflicting goals that they can’t all happen at the same time.
A hawkish fed means higher taxes sooner or later. Politicians always want to spend more money to please their constituencies, and debts incurred by the government are either paid off by raising taxes and cutting spending—a totally unrealistic scenario given what we know of politicians—or the fed simply prints the money to pay it off, which is what’s been happening with the Twist and QE. An accomodating fed has been the darling of both political parties ever since the Boskin Commission.
Boskin was my professor for introductory economics (true story). One of the theories he proposed was that since future generations will have higher standards of living than us through technology and growth, maybe it is fair to give them more debt to balance our utility with theirs. It took me a while to truly reflect on the implications of this statement…
He was also really enthused about (and took credit for) carbon credits.
Come to think of it, I wonder why someone like him chose to teach introductory economics, out of all the classes he could have taught. Maybe it’s because he realized that this would be the first exposure to academics economics for many of the people in the class. So, this would be his chance to influence the impressionable minds of the next generation… I am fairly certain that some of the people in those classes will become pretty important one day…
I call a Romney win, S&P reacts +2% favorably at prospect of reduced corporate tax rates which will immediately boost earnings, then proceed to climb
Nate Silver is predicting Obama as having a 91.6% chance to win.
Silver got every state but Indiana correct in 2008 and he’s all about the stats. (I understand he used to do a lot of stats work related to baseball.)
Meanwhile, Intrade has Obama at a 67.8% chance to win (at time of posting).
http://www.intrade.com/v4/markets/contract/?contractId=743474
I looked into getting on Intrade a few weeks back but they require some documentation such as ID and copies of bills and I didn’t want to go through with all that. But it seems like a good bet.
Anyway, off to vote for Obama… in the rain… in my very red state. I almost shouldn’t bother, huh.