Obama's chances on re-election are tumbling

The chart above gives the probability according to Intrade of the re-election of Obama (with its blip after the killing of Osama bin Laden).
If it were the chart of an equity you should sell it after the breakdown after the bad employment numbers last week.

The chart above gives the probability of a win of Romney according to betters on Intrade. If it were an equity you should buy it. Especially after the last bad employment growth numbers.

The unemployment rate is strongly correlated with the chances of Obama. According to Strategas the unemployment rate has to decline to below 7.6% for a win of Obama. This is not a great probability.

The approval rate of Obama is too low for an easy re-election.

Republicans destroy their possibilities to beat Obama by switching to theocrat instead of immediately bowing to the unavoidable choice of Romney, but

What should have been a victory procession through the pre-election states with lots of press and ever growing esteem for the winner is starting to become a disaster for the republicans. The usual transformation of the republican candidate from conservative to moderate is now reversed: Romney, but first has to move now a lot more in the conservative direction, becoming a man with slippery principles and less and less attractive for independent voters.

The republicans prove to be a strange combination of extreme groups. There is the big group of admirers of the Tea Party that want a policy like the government of Greece is performing now: huge cuts in government spending without extra taxing the rich. A part of the Tea Party feels happy with Ron Paul, he has all kind of interesting plans like abolishing the Fed (at least they have to be audited in a normal way) and decimating defence spending abroad and he doesn’t want to do anything at the plans of Iran.
The last things make Paul unelectable. Another extreme group are the born again Christians that want a theocrat as president. Santorum is their candidate, since they have seen that Gingrich is too much of a wild animal and that Santorum can quite effectively attack Romney, but. Cafferty of CNN, see his blog (caffertyfile), cannot understand what the republicans see in a wacko like Santorum and why Romney,but has not yet exposed this well enough. Santorum lost as incumbent senator of Pennsylvania his re-election with 18 points, after continuing to live in Virginia and having for free some education of his children in Virginia with money from Pennsylvania. Especially his feudal points of view about women are shocking. Why should women work when they are married, anti-conception is dangerous for women, it makes them inferior etc. Homosexuality is worse than incest, liberals are the reason for the problems of the catholic.
The female voters are not idiots, they almost didn’t vote for Santorum. Still Santorum could win because men didn’t want to vote on Romney,but (men voted twice as often then women on Santorum). Gingrich hast Romney,but with success exposed as a Massachusetts Moderate (and he should have wanted to add mor(m)on to it), being a weakling in conservative values.
The real man doesn’t vote on Romney,but and women already voted with a big majority on Obama (he also has a problem with male voters). That is why Santorum at the moment is doing better than Romney, but in the polls against Obama. This probably will not last long because of his ridiculous views about women and when the voters know this well enough, they flare him off like they did with Gingrich, Paul, Cain, Bachmann, Perry. Gingrich hopes now he will be the real come back kid again between all these political weaklings of the republicans.

You have now the curious situation that Obama with his approval rate of clearly below 50% can easily win of any republican according to the betting agencies (see charts of Bianco). The battle for the presidency seems to go between Romney, but against Obama, but.

Obama’s re-election chances are not rising enough with the better S&P and macro

The chart of Bespoke shows that Obama should have better prospects in the polls base don the rise of the S&P and the macro numbers.
A lot of people think that when the employment growth numbers stay enough above 150.000 (and so the unemployment rate will fall), Obama will have no problems to gain re-election.
The republicans continue to throw mud toe ach other and Romney showed a lack of compassion when he told that it didn’t matter for him what happened to the 5% poorest Americans. The damage in the polls is not big because most republicans agree with Romney: social security is good enough in their eyes (the cartoonist thinks more like the Europeans about how good the social security is in the US).

Obama doesn’t need to despair, Romney changes view too opportunistically and in this phase of the battle the republicans get a lot of press (for Obama is not battled in the democratic pre-elections). All attention is good, even when it is about throwing mud. The normal scenario is that until the republicans have crowned their candidate in their convention they have to take advantage of all extra publicity to take a big lead in the polls. That has happened more often and that can be a reason why Obama profits so little of the better macro news (and the consumer confidence is much worse than the S&P indicates).

All in all the contest between Obama and Romney will be close. The mini cycle of the economy should go down after c. April and that shoud help Romney at a victory, but maybe I’m wrong and Obama will be lucky with further recovery of the economy with 200.000 employment growth every month.