This chart comes from the Intrade prediction market, and it shows the odds of a government healthcare plan being enacted into law by the end of this year. In June the odds were 50%, whereas today they are 17% and falling. The looming failure of ObamaCare is undoubtedly another one of the reasons that the stock market is doing better these days—whatever is bad for Obama is good for the economy.
I know some people will take offense at this, thinking it is a partisan attack, but I sincerely view these matters as extremely important. If the government gets fiscal policies wrong, or if the government creates a new bureaucracy that will end up costing gazillions of dollars and making the economy less efficient in the process, this is BIG news. The market, I firmly believe, would much rather see a smaller government than a bigger government, and healthcare is a significant part of that equation.
HT: Mark Perry
The details of that intrade "stock" are a healthcare deal on or before December 31st 2009. Since we're now in mid-october, it is natural that it will decline as time runs out to the arbitrary December 31st 2009 deadline.
ReplyDeleteAlso, the reference is to a public option, which is not to say there won't be a ObamaCare healthcare plan without it which still have adverse effects on the economy.
apex
Chart doesn't display for me.
ReplyDeleteGene: you can see all the charts and info here:
ReplyDeletehttp://www.intrade.com/jsp/intrade/trading/t_index.jsp?&page=trade&selConID=683800
apex: good point. Here's my thinking: if the plan doesn't have a public option then it is going to have trouble passing, and if it doesn't pass by the end of this year, that means it is in big trouble.
Scott,
ReplyDeleteI agree. I don't think the market feared an Obama election, but it did fear public option healthcare and cap/tax & trade.
Both seemed likely before summer in March. Both seemed unlikely now. The market reflects this very well.