Angry Bear Reader in BusinessWeek

… though it’s surely for reasons other than reading and commenting here. In any case, Barry R. was interviewed by Business Week on the subject of markets and the election:

Q: Who do you think will win the election?

A: I’m a numbers geek at heart, so I watch four quantitative factors that have had a strong historical correlation with incumbent electoral victory, regardless of party. The first is job creation, second is Presidential approval rating, third is percentage saying the country is going in the right or wrong direction, and the fourth is the Dow Jones industrial average performance in the first half of the election year.

The polls are saying this is a very close race, but all four of the above data points suggest the incumbent is in deep trouble.


Q: So you think Kerry will win?

A: Here’s where things get tricky: Once all the quantitative data is in — and assuming there’s no “October Surprise” — I look for an analogy with another, historically similar period. This includes economic data — interest rates, taxes, unemployment, inflation — as well as geopolitics.

What makes the 2004 election such a challenge to forecast is that we have never seen a Presidential term with a burst market bubble, a recession, a major terrorist attack on U.S. soil, a big tax cut, and not one, but two, wars. So without an analogous comparable, making a prediction with a high degree of confidence becomes quite problematic — it’s just a crapshoot.

Read the rest. I think Barry’s basically right: every objective measure suggests that Bush will lose in November, yet it’s still — amazingly — not a remotely sure thing.


P.S. Next time, don’t forget to plug the blog!