Delete comment from: Captain Capitalism
The presidential election outcome has already been rather clear for a week or two based upon both polling data and various prediction markets; thus, how can we conclude that the drop today was related to Obama's victory when that contingency should have already been priced into stock prices?
It could be that the 91/9 split I remember seeing on Intrade on election day for Obama/McCain translated to the 5% fall in the DJIA today once the probability reached 100/0, but that seems unlikely: if one assumes naively a linear relationship between the drop and the uncertainty on election day, that would imply ~50% of stock values hinged on whether a borderline-senile old war vet or Muslim terrorist Communist-Nazi won the election.
However, given the constraints any individual would face while in office as president at this time, it seems silly to presume that either man would make substantially different policy decisions from the other whilst serving his term.
-JB
Nov 6, 2008, 7:10:00 AM
Posted to Obama's Effect on the Stock Market