Mitt Romney should probably not consider a career in stock-market strategy.
There's lots and lots of explosive stuff in a leaked fundraising video that is blowing up the Internet on Monday, in which the Republican presidential nominee writes off half of the electorate as mooching losers and "jokes" around about how awesome it would be to be a Latino. The Huffington Post's Ryan Grim and Matt Sledge have all the details about that, as does Mother Jones.
But the video also proves that, in addition to perhaps not being the world's smoothest politician, Romney may not be the world's greatest stock-market prognosticator.
In the video, he tells potential donors that the stock market is going to rocket higher once it realizes he's going to win the election. From Mother Jones' transcript of the video:
They'll probably be looking at what the polls are saying. If it looks like I'm going to win, the markets will be happy. If it looks like the president's going to win, the markets should not be terribly happy.
That's funny, because the polls have been saying pretty much constantly, and moreso lately, that Romney is going to lose. And not only are the polls saying that, but prediction markets are saying the same thing. Wall Street traders, meanwhile, are betting on companies that would thrive under a Democratic president.
And yet the stock market is not cratering at the prospect of a Romney loss. In fact, the S&P 500 was recently at a five-year high, and just six percent from a record high.
To be fair to Romney, there is still plenty of time for his prediction to come true. Wall Street probably would prefer to see him get elected, if only because high-income traders and bankers would get a tax cut. Stocks are higher mainly because Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi have promised to print money and buy bonds forever.
But this just proves that the Bernankes and Draghis of the world have a lot more power over financial markets than the Romneys or Obamas.
Romney, in contrast, seems to think the mere prospect of his election will cause a new economic boom, or something, because of general happiness:
It depends of course which markets you're talking about, which types of commodities and so forth, but my own view is that if we win on November 6th, there will be a great deal of optimism about the future of this country. We'll see capital come back and we'll see—without actually doing anything—we'll actually get a boost in the economy. If the president gets re-elected, I don't know what will happen.
Somebody from CNBC must have been in the room, because the network recently declared that a recent stock-market rally was the result of the market expecting Romney to win the election, despite a lack of any evidence thereof.
Ever the businessman, Romney does add the standard "past-performance-is-no-guarantee-of-future-results" boilerplate, telling donors:
I can never predict what the markets will do. Sometimes it does the exact opposite of what I would have expected.
So far, that's what's happening.
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