When will the Obama bubble pop?

March 28, 2008

When will the markets take a more realistic view of Sen. Obama’s chances?


Despite the fact that he trails McCain by nearly 10 points in my projections when likely voters are taken into account, and trails by 301-228 in the projections of Electoral Vote.com (run by a Democrat activist), the markets are predicting that his chances of becoming president are virtually evens. This is completely inexplicable to the rational voter, Even if you give him a 80% chance of winning the Democratic nomination (which is ridiculous), that still implies that he has a 58% chance of beating McCain. Obviously, Bush’s unpopularity will play to the advantage of the Democrats, but even so this didn’t stop Nicolas Sarkozy in France (and the US doesn’t have unemployment in double digits). So what will be the catalyst for the Obama’s chances to reduce? The technical indications seem to indicate a reversal in sentiment with Obama’s price hovering just below the 50 day moving average and a (very uncertain) downward trendline but they aren’t particularly strong.

My belief is that a defeat in Pennsylvania will finally bring the markets to their senses. If Obama loses by 10% or more in a in a key Blue state he will have demonstrated that he has problems with blue collar voters, problems which cannot be filled with either a few ‘crunchy conservatives’ (who will return to McCain in the final analysis) or students (who probably won’t vote).



  1. Very interesting analysis. I am not as good with numbers as I should be, so it’s hard for me to digest. What I do get is that if he loses Pennsylvania, it’s bad for him. Blue collar voters have a lot at stake in this election.

  2. Tipster,

    Two things:

    1. The US is not France.
    2. Americans are nothing like the French.

    There is NO WAY you can make any assessment of any kind by comparing the US to France unless you want to outline how much the two countries are NOT like eachother.

    Furthermore, if I didn’t know any better, I’d say that it sounds like you’re desperate that Sen. Obama NOT win the presidency. Is this out of your own personal convictions, or becuase you actually protect it?

  3. “And the notion that somehow it’s cute or amusing, or a useful diversion, I think, is something that all of us have to recognize is just not the case. We all have First Amendment rights. And I am a constitutional lawyer and strongly believe in free speech, but as a culture, we really have to do some soul-searching to think about what kind of toxic information are we feeding our kids,”

  4. Well, I obviously have a financial interest in Obama not winning and if pushed would call myself a ‘McCain Democrat’ (hawkish on foreign policy, moderate/left-liberal on economic policy, moderate on values issues), but beyond that I have no particular bias agains’t Obama since I’m not American and any gambler has to remain objective). All things being equal I would support the ‘skinny kid with a funny name” rather than any other candidate, since Obama’s election would be groundbreaking, but Obama lacks experience and I disagree with his foriegn policy stance. In any case, I feel that voters will generally choose McCain’s experience and moderation over Obama’s inexperience.

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