The Investors Business Daily (IBD) has a formula for predicting presidential elections. Whenever the stock market has a gain of 6% or more in January of an election year, the incumbent loses. Sounds counter-intuitive, but it’s worked thirteen times in a row. This January, stock were up 8%.
Paul Whitfield writes for IBD, Feb. 4, 2012, that the stock market picks the winner in January, and the IBD “January Incumbent Barometer” has worked 13 out of 13 times since 1936.
Here’s how it works: When the stock market scores a big gain in January — about 6% or more — the challenger beats the incumbent president every or almost every time. When the stock market goes up or down modestly in January — 4% or less in either direction — the incumbent wins almost every time. Consider the record:
- Nasdaq up 5.8% in January 1992, and challenger Clinton wins in November.
- Nasdaq up 7% in January 1980, and challenger Reagan wins.
- S&P 500 up 11.8% in January 1976, and challenger Carter wins.
In all three cases, the electorate was pining for a change, whether the aftermath of Watergate, the dismal economy of the late 1970s or President George H.W. Bush’s failure to keep his “read my lips, no new taxes” promise.
Indeed, the stock market typically looks ahead and reacts before headlines become reality. So there may be more at work than an uncanny streak.
The JIB has been just as good with predicting incumbent victories. As an example, in January 2004, the Nasdaq rose 3.1% and Bush won in November.
This January the Nasdaq rose 8%, signaling a loss for Obama.
There just one catch.
The January Incumbent Barometer was wrong one time — in 1932. The Dow fell 1.7%, a modest move which should’ve been good for incumbent Herbert Hoover, according to the JIB. But FDR, the challenger, won.
If Obama is re-elected, he will be the first to beat the JIB since that Great Depression election. But if the JIB performs in its usual near-perfect fashion, look for a Republican victory in November.
~Eowyn
Best news I’ve heard all day!
Ditto!!!
I HOPE, I HOPE, I HOPE, I HOPE, I HOPE, ~! ~! ~!,,,
We must all pray!
I’ll believe the Dear Ruler has lost when he loses.
-Dave
The GOP certainly needs a facelift, John Boehner and Eric Cantor are really uninspiring leaders of the House.
Personally I have a soft spot for Mitch Mcconnell, and
after twenty five years in the Senate, he has surely learned a thing or two. But the candidates, however you look at them, Santorum on his Catholic background, Ron Paul with his ideas to bring the troops home, Romney with his money and Gingrich with his blonde side kick, all of them, inspite of endless debates and speeches have not come with a recovery plan that has a chance of working. We are on the brink of a collapse of the monetary system, which is great news, EXCEPT, plan B is not in place. Glass Steagall must be reinstated to cancel the derivative and toxic debts, cancel the bailouts, and shut down the too big to fail banks merchant departments which are totally bankrupt. Congress has the right through Article 1 Section 8 to utter credit through a new national bank, because after Glass Steagall is in place, the utter involvency of the FED and all the other major players, including Goldman Sachs, JP Morgan Chase and Bank of America etc and the EU counterparts, the German banks and the French banks etc are all in the same boat. A global Glass Steagall is what would cancel the debts that the oligarchs are desperately trying to resurrect as backed by “something” tangible, good luck fellas!!!! Under a new Bretton Woods fixed exchange rate system, Russia and China could first through a treaty with the USA start uttering credit to back projects such as those we need in the states to get us back into the mode of progress, to enhance our civilization and living conditions, and help other nations to get themselves modernized too. Africa is completely backwards, which is the deliberate policy of the oligarchs, who consider black people no better than apes.The way they spin evolution is criminal and has wrecked so many lives, and screwed up so many brains.
True evolution is based on increasing energy flux density, which means more can be supported energy wise and live accordinly better creative lives. Starting with fire, which is the agent for burning wood, and also is a synonym of sorts for knowlege, we are still burning coal and using oil for power, and the nuclear fusion and fission that are being blacklisted by the greenies are really the fuel of the future, mainly because they self perpetuate. Yes there have been some disasters linked to nuclear plants, but what about comparing those with other disasters that are not so convenient as propaganda for greenies, who are the liberals that you all are so wary of, quite rightly so. They are deadly, meaning that their agenda is really genocide, which is the agenda of the oligarchs.
ONce these principles have been implemented then we can start t he NAWAPA project and reignite NASA and do the mag lev railway thing and get US steel and tool making back on it’s feet, and employ our aging skilled workers to engage on these massive projects and to train the youth who are really good at their IPod and their facebook and some of whom are completely illiterate and have no desire or knowlege of how to learn something,
let along become engaged in meaningful work that will become their career and allow them to have a decent creative life. I don’t hear anything positive coming out of the mouths of the GOP candidates, yes snippets of something likeable here and there, but no real plan to offer that removes Obama right away, and all of the steps necessary to get some credit flowing so that we can plan ahead for at least two generations. The return will be in human creative life potentiality, not in paying off a deficit incurred by a congress and presidents who were in bed with the oligarchs and have gotten us to the point that we have Madonna dressed as a bat out of he
Etcetera etcetera etcetera
13 out of 13 times is a pretty good historical record for the January Stock Market Prediction! ……But these are not usuial times that We are living in; here in the USSA! ……… The Sheeple of America haven’t voted yet, and they might prove “The Exception” to History?
“Obama should have Never been Allowed to Run-for-Office the First Time; Muchless A Second Term?” But a Do-Nothing Congress Still Hasn’t Done it’s Constitutional Required Duties ; – To See If Obama Meets ALL Constitutional Requirments TO Be A Candidate To Be President?
“Why Do We Need Congress????????????????
“It Seems America Is Already Under A Dictatorship; and Congress Is Just Another Waste of Tax Payer Money?”
I certainly hope that the religious people in this country has learned their lesson. BO does not respect the rule of law and will be after the major tenets of their religion…
Even though he has made a concession to the Catholic church, we know he would not have done so, if this had not been an election year.
Never forget what he tried to do, if re-elected he will attack from a different angle, you can bet your bippie on that, he must make the government our religion, just as Uncle Joe and Mao did…