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presidential election 2012 predictions

Article Index

Election 2012: Obama's Odds Are Pretty Good if You Ask Mr. Market

By , Associate Editor, Money Morning • @DavidGZeiler -

If you want to know who's going to win Election 2012, just ask Mr. Market. He has a knack for picking presidential winners.

As it happens, stock market performance in the years and months leading up to a presidential election is one of the most reliable indicators of who will win and who will lose.

And the way things look at the moment, Mr. Market really likes the President Barack Obama reelection odds.
Obama Reelection odds
"It's suggesting that Obama's got a better chance than people think," Jeff Hirsch of Stock Trader's Almanac told Yahoo's Breakout last week. "Incumbent victories are accompanied by much larger gains in the stock market. The Dow Jones has been up significantly higher in election years when incumbents win. And it looks like the track that we're on here."

Hirsch's data shows that since 1901, election years in which the incumbent wins enjoy a Dow Jones Industrial Average rise of 6% by August and 12% by Election Day.

So far this year, the Dow is up nearly 8.5% -- comfortably in re-election territory for President Obama.

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What Investors Love About the Romney Tax Plan

By , Money Morning -

With Election 2012 less than one hundred days away the verbal slingshots between the two candidates have picked up in negativity. Tax returns and tax policies have been the subject of the latest round of insults and political maneuvers.

The nonpartisan Tax Policy Center released a report claiming Mitt Romney's tax plan would "provide large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers."

President Obama responded by calling the Romney tax plan a Robin Hood reversal and dubbed the former governor's plan "Romney Hood."

Romney responded with a childish quip of his own calling the president's remarks "Obamaloney."

But if you want to take a step back from the negative tone of campaigning, one tax plan clearly stands out as a winner for investors.

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Vice Presidential Nominee Paul Ryan to Make Election a Budget War

By , Associate Editor, Money Morning • @DavidGZeiler -

In naming Rep. Paul Ryan, R-WI, as his vice presidential nominee, Mitt Romney ensured that the 2012 election will be mainly about how the country ultimately deals with its massive budget deficits.

Romney, the presumptive Republican presidential nominee, made his running mate announcement Saturday morning in Norfolk, VA. The choice of Ryan completes the ticket that will face off against President Barack Obama and Vice President Joe Biden in November.

Ryan, a seven-term congressman and chairman of the House Budget Committee, in March released a controversial budget proposal - the so-called Ryan Budget Plan -- that now figures to become a central part of the presidential campaign.

Ryan's Budget Plan would deal harshly with federal spending by making major changes to programs like Medicare, Medicaid and food stamps.

Republicans who support the plan say the austerity is needed to get the country's huge budget deficits under control. Democrats counter that the Ryan Budget Plan balances the budget on the backs of those who can least afford it.

So it's not too surprising that both parties are thrilled with Ryan as the VP nominee.

"I have long supported Paul Ryan's fiscal and entitlement reforms to return our country back on a path of fiscal health," said former Pennsylvania Senator Rick Santorum, a Republican presidential candidate who dropped out of the race in April. "At a time when our country is at an economic crossroads, Congressman Ryan's depth of knowledge on how to tackle these challenges is unparalleled."

Certainly, Senate Majority Leader Harry Reid, D-NV, based his reaction to the Ryan VP pick on the Ryan Budget Plan.

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Election 2012: Reid Has Nothing to Lose in Romney Tax Returns Rant

By , Money Morning -

Senate Majority Leader Harry Reid, D-NV, appears to have one sole mission until November: Find a way to get the Mitt Romney tax returns released.

The tax returns battle began in the primaries when GOP rivals asked the former Massachusetts governor to release the information. Romney has released the past two years' of returns and refuses to share more.

Now Reid has gone full force in questioning Romney's secrecy, and doesn't appear to have any reason to stop.

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Election 2012: Forget Bailouts, We Need a Shakeout

By , Chief Investment Strategist, Money Map Report -

The markets rallied Monday on news that global leaders favor additional stimulus. The hope is that additional spending will induce growth and put the world back on track.

Don't hold your breath.

Big government robs the economy of wealth, strips it of initiative and further undermines our recovery.

So why, then, do our leaders continue to throw good money after bad?

Try this on for size.

In 1958, a man named Cyril Northcote Parkinson published a series of essays in book form called Parkinson's Law: The Pursuit of Progress. In it, he postulated a mathematical equation that describes how bureaucracies expand over time and why.

I don't know if he had a wicked sense of humor or a dramatic flair for irony but the equation at the core of his argument relied on something he termed the "coefficient of inefficiency."

The coefficient of inefficiency says the size of a committee or government decision-making body is determined by the point at which it becomes completely inefficient or irrelevant. Or both - hence the name.

Parkinson determined that the minimal effective size for a decision-making body is about five people, and the optimal size is somewhere between three and 20.

Last time I checked, we had 548 people inside the beltway - 535 voting members of Congress, nine Supreme Court justices, one president, one vice president, one treasurer and one Fed chairman - who are responsible for making decisions on behalf of 330 million citizens.

Combine that with nearly 2.8 million total Federal employees (excluding our military) and we're waaaaay beyond anything even remotely resembling workable decision making.

Now here's the thing. Parkinson also observed that bureaucracies grew by about 5%-7% a year, "irrespective of any variation in the amount of work (if any) to be done."

In other words, the larger bureaucracies become, the more ineffective they get even if additional people are hired to do work that doesn't exist.

And to think, all this time I thought our government ran on the Peter Principle!

Parkinson attributed this to two things:



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