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Monday, October 13, 2008

Volatile indicators

Roughly speaking, every 1,000-point drop in the Dow over the past month has correlated with a 2-to-3-percentage-point gain by Obama in the polls. Without attempting to disentangle causation from correlation, or even guess which way the cause-and-effect arrow might be running, it should be interesting to watch that relationship over the next few volatile weeks.

UPDATE 4:15 PM: And then there was a wild 900-plus point rally. Who should be worried about that?

4 comments:

Dan said...

Hey Ken,

As the final reader letter in Jonah's post states, virtually every piece of news to which markets typically react is negative at the moment.

http://corner.nationalreview.com/post/?q=MmViOTNkM2VkMTAwOTJjMGE3NjA1ZmY3NTcwMmQwODg=

I doubt the market is deeply factoring in an Obama presidency, but Obama is certainly a beneficiary of the Wall Street meltdown.

Take care,

Dan

Kenneth Silber said...

We can't really know, without running an experiment where Obama doesn't take the lead. I'd be willing to try that.

Dan said...

You mean with your friend Bob Barr out in front? I'd be willing to try that as well.

Kenneth Silber said...

I think we can all agree I've done America a service by stopping the Bob Barr juggernaut in its tracks.