Friday, October 1 2004
WHO WON THE DEBATE?: I must confess I am a little surprised at the initial reaction that Senator Kerry won the debate last night. However, enough people on both sides of the political aisle have suggested that Kerry had the better night I think it is certainly possible that Kerry might receive a decent bump in the post-debate polls.

My analysis of the debate is pretty simple. Kerry was losing going in to the debate, and given the polarized nature of the country and the more or less tied race through the spring and mid-summer, his 4-6 point deficit with 4 1/2 weeks left was quite significant. Bottom line: I don't think Kerry did anything to change the fundamental dynamics of where this race is headed. In fact, I think the President was able to keep the dynamics of the race focused on the central issues that play into his strengths and Kerry's weaknesses.

Many are commenting on how Kerry appeared calm and "more presidential." While there might be some merit to that argument, it won't ultimately help Kerry that much because he is the one who is trailing, not Bush.

The only way Kerry's calm and measured approach makes any sense from the Kerry campaign's perspective, is if they have a lot more confidence in where this race was strategically before going in to the debate. Maybe they believe the IBD/TIPP poll and the other polls that show this a dead heat or a 1-2 point race. If they honestly felt they were in OK shape, then Kerry's strategy begins to make more sense. The only problem here for the Kerry folks, is that the preponderance of polling evidence, along with the market-based indicators of the race suggest it was not a tie or close race going into last night.

Given that I believe that Kerry was down a solid 4-6 points before the debate, I believe his strategy was terribly shortsighted. Whatever immediate gain he may reap in the initial media coverage, Kerry was not able to draw President Bush into making any gaffes, let alone any major gaffes. And in fact it was President Bush who was able to elicit some Kerry gaffes that the Bush campaign will be able to pound Kerry with in the following days. (Global test, International Criminal Court, bunker-busting bombs)

All of this debate analysis, has to differentiate between who "won" the debate on high-school debating points and who might have been more articulate, versus which candidate was enunciating a message that connected with the average American voter.

If you went into this debate philosophically opposed to preemptive war and the President's foreign-policy, then I'm sure Kerry sounded reasoned, measured, and intelligent. And to you Bush just repeated the same old stuff that you don't agree with, which only added to the appearance of his being ineffectual compared to Kerry.

However, if you favor Bush's approach to confronting terrorism and don't have the same type of abhorrence to preemptive war and unilateralism, I suspect the president's message came through loud and clear, and you were left wondering exactly what Kerry's position, or plan, was on Iraq.

I don't know what the polls are going to do in these next few days. Perhaps Kerry will get the 2-5 point bump that many in the media seem to be anticipating. But I wouldn't be totally shocked if Kerry gets very little traction out of this debate. We'll have to wait and see.

Right now, the market-based indicators of the race show a small move toward Kerry. But those results, at least so far, are more indicative of a draw, or even a small Bush win (remember, these are contracts on who will ultimately win the election), because there was probably a substantial Bush premium built into the pre-debate action on the potential that Bush could have knocked Kerry out of the race last night. The fact that Kerry has only upticked a little in these markets is probably not a good long-term omen for the Kerry campaign. Nor is today's 17 point gain in the S&P 500 good news for Kerry as the stock market since mid-July has tended to go up and down with the fortunes of President Bush.

Now, as a long time trader I know full well it is a mistake to try and attribute why exactly the market went up or down on an individual day. And the polls will come out soon enough giving us an idea of just how much the debate might have helped Senator Kerry. But even if Kerry does get a 2-5 point bounce, the big question will be whether he can hold that bounce and keep the race close, or whether this will end up being just a post-debate blip and the race will gravitate back to what might have become the new equilibrium in this race- a Bush lead of 3-7 points.

We'll see soon enough. J. McIntyre 4:23 pm Link | Email | Send to a Friend | Comments