Powder Blue Report

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Friday, September 17, 2004

Commentary From Ron Insana of CNBC

I am not political analyst but I do believe the markets are very good barometers of where the country is both economically, politically and socially.

As you know by now, I am a believer that markets help us predict future outcomes. And in the case of the presidential race, the market has placed its bet squarely on George W. Bush. And not on John Kerry. And that's not a preferential statement... it is just a statement of fact.

Just look at the presidential futures markets and what they are saying about November.

The Iowa Electronic Markets has President Bush widening his lead by 18 points over his Democratic challenger, while "Tradesports" a British on-line futures market, has President Bush with a neatly 40 point lead over John Kerry.

As late as the middle of August, this race was a dead heat.

The rally in stocks also underscores the notion that the financial markets are pricing in the status quo, no tax hikes and no attempt to radically alter the health care landscape, the two areas that would show the most obvious reactions to the prospect of a Kerry presidency.

Please remember that this is not, NOT, personal. Political commentary... this is only my view of how the markets are behaving with respect to the election outcome. But as the lead widens, it becomes clear that the markets are betting that John Kerry is on a swift boat to join Al Gore and Robert Dole and Michael Dukakis down the political river Styxx.


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