Kass: Loosen the Parse Strings
NEW YORK (Real Money) -- Recently I have observed too much parsing of data -- that is, nonobjective analysis based on a conformational bias -- from myself, many other talking heads in the media and even from some of our subscribers in the comments section.
It is hard to get away from a view and to objectively analyze data, but lately it seems to be getting worse.
The perma-bulls always see the glass as half-full; the perma-bears always see the glass as half-empty.
Let me give you three recent examples of parsing.
1. The November 2012 Presidential Election
There is a growing view (especially from Republicans) that President Obama's low approval rating is an impediment to the incumbent's candidacy and that the polls overstate the chances of his re-election and understate Governor Romney's chances. That view is based on Obama's approval rating of only 45.8%, and they generally believe that in order for him to win, it needs to be 50%.
I continue to believe that the result of the Presidential election weighs importantly on our markets. Republicans are generally seen as pro-markets and pro-business --based on that assumption, a Romney win would be welcomed as market- and business-friendly, while an Obama win would not be viewed as market- or business-friendly.
In reality, Obama's weak popularity must be weighed against Romney's weak popularity. Romney's approval ratings are just as important as the President's. In other words, Obama's approval ratings and the likely election results should not be viewed in a vacuum, though at times, especially to Republicans, they may feel as such.
Permit me to use a baseball metaphor: In a year during which MLB pitching is exceptional, the MLB's leading hitter may be batting only .310 compared to a year during which pitching was average when the leading hitter could hit for .350, but he is still the MLB's leading hitter. Meanwhile, Obama odds have been steadily rising on Intrade over the past few weeks -- they are up to 59.4% this morning.