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Here's an observation on political markets. This is a clip of Larry Kudlow, Robert Reich and Steve Moore discussing what a great job John McCain did at the CNBC/MSNBC/WSJ debate in October.

After hearing that, you could have run out and bought a McCain-to-win contract for just 5.2 cents. Today, you'd be sitting on a profit of...oh, about 1,700%.

See, it pays to listen to Larry. And that's just at 97 cents; your McCain contract still has a very good chance of hitting $1 by Labor Day.

But there's something else. That day, October 9, was the exact high of the stock market (if you watch the clip again, you can see the "record high" alerts). This was also the debate where McCain said, "I'm glad whenever they cut interest rates, I wish interest rates were zero."

There is a serious economic argument in favor of 0% interest rates. This is known as the "Friedman Rule." To be fair to the late professor, I don't think that's what McCain was thinking about.

Was that debate the turning point of McCain's campaign (going up) and the stock market (going down), and are they related?

Personally, I think it's just a coincidence. B-Riz has more.

Posted by edelfenbein at March 7, 2008 4:20 PM