US Election - Postscript
So, What Happened to the "Socionomics" Forecast?
Just back from a seminar in LA and apologies again for the "gap" in posts over the last week or so.
Well, what went wrong with the forecast of a Kerry win? Coincidentally, on my return an interim issue of the "Elliott Wave Theorist" awaited me. I can do no better than to quote Bob Prechter:
"Four years ago, I predicted that George W. Bush would serve only one term and lose the 2004 election by a large margin. This expectation was based on my forecast for a great bear market. The bear market did begin that year, and it caused the stock market averages to drop by more than at any time in 60 years...Negative psychology exploded (literally) and was on track for an ousting of the incumbent. But a funny thing happened on the way to a single-term presidency: The market - and thus social mood - recovered in 2003 and held near its recovery highs right up until election day."
Prechter had, in fact, revised his opinion somewhat back in August when he commented "But if the market holds up until the election, he will probably win a second term."
In hindsight, your humble blogger misread a number of a factors. As Prechter comments above, even though the stock market is still well off it's highs, it's been rallying since early 2003. More importantly, indicators of investor sentiment have been consistently and strongly positive for an extended period. Although this is a very negative sign going forward, as an indicator of current mood it's important. Also, the USA has a had a strong boom in the housing market and although this is now coming off the boil, it must have had an influence on the level of people's optimism.
The other element was the "war" factor. This would usually favour the incumbent as a result of the "rally to the flag" effect.
There's no doubt that the result was an impressive win for Bush. However, the relatively close result is, to me, a reflection of the gathering negative social mood and I have no doubt that there are stormy times ahead. The situation seems very like 1972 when Nixon was re-elected and Bob Prechter draws the same comparison. The conclusion from that and the broader analysis is that the Democrats will win, and win big, in 2008. Hilary Clinton back in the White House? Perhaps my previous bet was simply premature!
Just back from a seminar in LA and apologies again for the "gap" in posts over the last week or so.
Well, what went wrong with the forecast of a Kerry win? Coincidentally, on my return an interim issue of the "Elliott Wave Theorist" awaited me. I can do no better than to quote Bob Prechter:
"Four years ago, I predicted that George W. Bush would serve only one term and lose the 2004 election by a large margin. This expectation was based on my forecast for a great bear market. The bear market did begin that year, and it caused the stock market averages to drop by more than at any time in 60 years...Negative psychology exploded (literally) and was on track for an ousting of the incumbent. But a funny thing happened on the way to a single-term presidency: The market - and thus social mood - recovered in 2003 and held near its recovery highs right up until election day."
Prechter had, in fact, revised his opinion somewhat back in August when he commented "But if the market holds up until the election, he will probably win a second term."
In hindsight, your humble blogger misread a number of a factors. As Prechter comments above, even though the stock market is still well off it's highs, it's been rallying since early 2003. More importantly, indicators of investor sentiment have been consistently and strongly positive for an extended period. Although this is a very negative sign going forward, as an indicator of current mood it's important. Also, the USA has a had a strong boom in the housing market and although this is now coming off the boil, it must have had an influence on the level of people's optimism.
The other element was the "war" factor. This would usually favour the incumbent as a result of the "rally to the flag" effect.
There's no doubt that the result was an impressive win for Bush. However, the relatively close result is, to me, a reflection of the gathering negative social mood and I have no doubt that there are stormy times ahead. The situation seems very like 1972 when Nixon was re-elected and Bob Prechter draws the same comparison. The conclusion from that and the broader analysis is that the Democrats will win, and win big, in 2008. Hilary Clinton back in the White House? Perhaps my previous bet was simply premature!
posted by Kevin Francis at
9:06 pm
