2012 Election: Wall Street Bearish on Perry
By Adam Sørensen | @adamsorensen | September 30, 2011 | + Tweet
"Wall Street is bearish on Perry's electability," declares the Wall Street Journal. The article presents some anecdotal evidence suggesting that bigwig bankers, responsible for a substantial flow of campaign cash in the presidential race, are not convinced that the Texas governor has much appeal. I'm not sure how much this really impacts Perry's primary prospects, as former private equity fund manager Mitt Romney has much of the demographic covered in his camp, and as a sitting governor, Perry's ability to receive donations from the financial sector is limited. (Again, his Super PAC is not.) Perhaps a more quantitative indication of elite skepticism around Perry comes from intrade markets — Wall Streeters, online gamblers, same difference — which at the moment set his chances of securing the nomination at 20.4%. (It’s him at 10.2% to win the whole enchilada.) Given that he has either been leading or within the margin of error in most national primary polls, and he is competitive in state polls from Iowa, South Carolina, Nevada, and Florida, I believe Perry's stock is undervalued.
Romney is at 47% for his party’s nod and 20% to win the White House, which likely comes closer to reality but could still be a little low. At this point, Herman Cain, Newt Gingrich, and Ron Paul are the only other candidates who occasionally creep into double digits in national polls, and there isn’t a clear state-by-state path for them, let alone the kind of money Romney and Perry will likely raise.
That said, it’s not to say that I would ever bet on such things; it would be ethically dubious for me to do so, for example. But outside of arbitrage opportunity, there are some solid indications that people are giving too much weight to Perry's early debate performances and the inevitable downturn from his sugar-rush entrance into the race. A closer look at Obama's big legal victory on healthcare legislation reveals some of the top five ways to rethink costs. Meanwhile, Bernanke's sharp cuts could potentially harm the economy.