People, I do think there is a uniquely bad figure on the American national scene right now, and I am hoping for that figure to leave the stage very soon. Nonetheless intellectual honesty and the pursuit of truth require me to communicate the following result to you. This is from Sweet, Ozimek, and Asher:
More formal econometric analysis confirms the absence of a relationship between the S&P 500 and Trump’s electoral odds. Regression analysis shows that day-to-day changes in Trump’s odds of winning had a statistically insignificant effect on log differences in the S&P 500.
See pp.21-22. No, this doesn’t change my mind about the campaign and election, but how many commentators are willing to report this at all? Try to come to terms with this? The purpose of writing a blog is to force oneself to deal with the uncomfortable, not to push pat answers on the readers. I know many of you feel it is your moral duty to stack arguments for or against one of the candidates as high as possible, but I have never myself viewed that as my mission here, no matter what I might be rooting for.
And please note that “stock markets failed to predict [fill in the particular historical event here]” is not a very strong response. I again repeat the question: how many of you are short the market and long on volatility?
That’s what I thought.