# Charting Bush

When I first started in the venture business i worked in a firm where one of the senior partners was a guy who always charted stocks. I learned a lot about stocks from him. He would draw trend lines, show me breakouts, gaps up, gaps down, etc. I never fully got the gist of the stuff he was doing, but i came away from this whole learning experience thinking that the stock chart was something you should always consider in an overall evaluation of a stock. I do not think charts are stupid as some people think. I believe they are predictive in some important ways.

So with the preamble, please look at this chart of George W Bush's approval ratings. I can't draw the trend lines and don't know what this says. But I want to know if there are any chartists out there who can. If so, please comment on this post and tell me what this means for Bush.

I got this chart from Brad Feld who got it from his partner Greg.

Ummm, I think I can read it. It means he's screwed.

Trendlines are a lot easier to draw with the underlying data... or perhaps, it is better to say deriving the original data from a chart is not really a good idea, because chart drawing is inherently lossy. Trend lines aren't hard, once you pick a method - there are several, each informative in some contexts, and good for lying with in others. You're probably thinking of a polynomial trendline here - simply a least-squares fit of Y=b+c1X+c2X^2+c3X^3+...cnX^N. That graph looks like a sixth degree function with a sin(x) involved.

That said, Jerry's right - without a major crisis, people have too much time to reflect on the incompetence on display. Watch for October Surprises... Then we'd have a seventh degree function.

James K. Galbraith has an interesting piece in Salon today that points out that Bush's approval ratings have declined every single month of his presidency save five: the two months after 9/11, the two initial two months of the Iraq war, and the month Saddam Hussein was captured. Every single other month has shown a "remarkably stable declining trend, which averaged 1.6 percentage points every month" (through February 2004).

Since February, the average monthly decline has climbed to 2.1 percent.

Looks as if people have been waking up all along. I wonder just how low Bush can go.

Over coffee with a friend yesterday, I found myself saying, yes, I believe Kerry can and will beat Bush. I cited the declining approval rating, the fact that Kerry really hasn't begun advertising yet, and the fact that the Bush administration and campaign seem to be at odds with one another (what better way to lose then to piss off--again--the McCain supporters?) But this guy, a local Democratic legislator, still has his doubts. Now paranoia is a good thing but sometimes we liberals hurt our own cause with a little too much hand-wringing.

In a previous life I was a competent technical analyst. Obviously, the trend is down. The RSI (Relative Strength Index) on this chart would be approaching "oversold" territory - meaning that a bounce would be expected. The thing to watch is whether or not the market rallies when the news is good, if any good news can actually be reported. If the market can't improve on good news, it will be President Kerry.

A couple more interesting charts:

Iowa Electronic Market
http://iemweb.biz.uiowa.edu/graphs/graph_Pres04_VS.cfm

Ok, you can probably bet on Bush becoming the underdog before too long. Then what?

Expectations will be low, and any actual positive news from Iraq, capture of Osama, never mind another attack or threat in the US, could provide enough of a bounce to mean four more years.

(I guess that's just another way of saying 'oversold.')

This election is going down the wire, and it will come down to who can look the American people in the eye and convince voters they have a way to salvage honor from this fiasco.

BTW I believe the original chart above of Bush's approval ratings came from a Professor Steven Ruggles at the University of Minnesota -
http://www.hist.umn.edu/~ruggles/Approval.htm

Good catch by the last commenter on the origin of the chart. Be sure not to miss the professor's *other* chart comparing approval ratings of both Bush presidencies... October surprises indeed.

http://www.hist.umn.edu/~ruggles/W_and_HW.htm

Look at that system tray in the screen shot! Damn dude, how long does your system take to boot? Do you really need both battery indicators? :)