# Stocks Dislike Obama More Than They Like McCain, from Kim Zussman

November 2, 2008 |

Intrade has data on betting odds for Obama and McCain: daily close-close change on betting price 1/08-present (eliminating weekends/holidays), used linear regression to compare change OB and change MC with (contemporaneous) change SPY:

Regression Analysis: chg SPY versus chg OB

The regression equation is
chg SPY = - 0.00151 - 0.0045 chg OB

Predictor       Coef     SE Coef      T      P
Constant   -0.001512  0.00164  -0.92  0.358
chg OB     -0.00449   0.01898  -0.24  0.813

S = 0.0236313   R-Sq = 0.0%   R-Sq(adj) = 0.0%

Regression Analysis: chg SPY versus chg MC

The regression equation is
chg SPY = - 0.00160 + 0.0064 chg MC

Predictor      Coef   SE Coef      T      P
Constant   -0.00159  0.00163  -0.98  0.329
chg MC      0.00639  0.02282   0.28  0.780

S = 0.0236300   R-Sq = 0.0%   R-Sq(adj) = 0.0%

None of the coefficients approach significance, but (as we well know) as Obama's odds went up YTD, stocks went down.

Repeated the regressions "at lag 1" (ie, today's change in SPY vs yesterday's in OB and MC):

Regression Analysis: L0 SPY versus L1 OB

The regression equation is
L0 SPY = - 0.00131 - 0.0228 L1 OB

Predictor       Coef   SE Coef      T      P
Constant   -0.00130  0.00164  -0.80  0.427
L1 OB       -0.02282  0.01897  -1.20  0.230

S = 0.0236091   R-Sq = 0.7%   R-Sq(adj) = 0.2%

Regression Analysis: L0 SPY versus L1 MC

The regression equation is L0 SPY = - 0.00161 + 0.0082 L1 MC

Predictor       Coef   SE Coef      T      P
Constant   -0.00160  0.00163  -0.98  0.327
L1 MC       0.00822   0.02293   0.36  0.720

S = 0.0236837   R-Sq = 0.1%   R-Sq(adj) = 0.0%

Again nothing significant, but the slope coefficient for SPY/OB is closer to significant (and negative) than SPY/MC (positive).

Conclusion? "Yes-we-can" sell because your once-preferential treatment of capital gains are going to the capital for at least 8 years…

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