Bearish on Perry

  • Share
  • Read Later

“Wall Street Is Bearish on Perry’s Electability,” proclaims the Wall Street Journal. The story presents some anecdotal evidence that bigwig bankers, who account for a decent chunk of campaign cash in presidential elections, are unconvinced that the Texas Governor has much appeal. I’m not sure how much that really affects Perry’s primary prospects, as former private equity fund manager Mitt Romney has a lot of that demographic in his camp and, as a sitting governor, Perry’s ability to accept donations from the financial services industry is restricted. (Then again, his Super PAC isn’t.)

Perhaps a more… quantitative indication that there’s some elite skepticism about Perry is the InTrade market–Wall Streeters, internet gamblers, same difference–which is currently pricing his chances of capturing the nomination at 20.4%. (It has him at 10.2% to win the whole shebang.) Considering that he’s been leading or within the margin of error in most national primary polls, and he’s competitive in state surveys from Iowa, South Carolina, Nevada and Florida, I think Perry’s stock is undervalued. Romney is at 47% for his party’s nod and 20% to win the White House, which is probably closer to reality, but even that might be a tiny bit low. At this point, Herman Cain, Newt Gingrich and Ron Paul are the only other candidates who are at times creeping into the double digits in national polls, and there’s not a clear state-by-state path for them, let alone the kind of money Romney and Perry will likely raise.

That’s not to say I condone betting on such things–it would be ethically moribund for me to do such a thing for example–but beyond the arbitrage opportunity, there’s some decent evidence that people are giving Perry’s early debate performances and the inevitable comedown from his sugar-rush entrance into the race a little too much weight.