Monday, March 31, 2008

Which market sectors stand to benefit from which potential presidents?

Obviously this is a rather ambitious post, but I figured that I might as well get the ball rolling a little bit. First of all, here's the probabilities that each of the candidates have had of winning this election, via InTrade:


Perhaps the whole year graph is a bit superfluous, but it is helpful to remember that there is a lot of volatility in the election and although Obama has the top spot right now there is no guarantee that he will hold onto it. The probabilities as of the close on March 31, 2008 are:

p (Obama) = 47.4
p (McCain) = 39.7
p (Clinton) = 11.2

That's the easy part. Extrapolating each of these presidents and trying to predict how the market will react is much more difficult. One way might be looking at their economic advisers. Yahoo Finance has a write-up of each of these candidate's chief economic advisers and a has a quick blurb on each of their policies.

Although this is too quick of a summary to draw any sort of conclusions, McCain's adviser seems to emphasize limiting fiscal spending (although Bush's presidency nominally ran on the same platform, while our country's debt speaks for itself), Obama's adviser seems to be against some supply side economics, and Hillary's adviser seems focused on reducing the income gap and working through the effects of globalization on the labor market. Any thoughts?

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