• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Super Dave Tuesday

Conclusion:  A lengthening Republican nominating process continues to harm the Republican Party.  It is unlikely that the process ends with Super Tuesday, even though we would expect Romney to win a majority of the delegates tomorrow.

For those not familiar with the cultural reference in the title, Super Dave Osborne is a character that is created and played by comedian Bob Einstein.  As Wikipedia describes Osborne:

“He is a naïve but optimistic stuntman who is frequently injured when his stunts go spectacularly wrong.”

In a sense, and this may offend some die hard Republicans, but the Republican Party is becoming the Super Dave Party of U.S. politics.   We’ve noted a number of times that as the Republicans continue to extend the primary, the worse off it ultimately becomes for the presidential nominee who will have less time to focus on, strategize, and raise money for the general election.  We’ve posted President Obama’s chart from InTrade that shows his probability of reelection climbing consistently from the beginning of the Republican primary.

Super Dave Tuesday - intrade

We see a similar trend in more conventional polls.  On January 3rd, the day of the first Republican caucus in Iowa, Obama was at +46.6 on the Real Clear Politics poll aggregate and Romney was at +45.0, for a spread of +1.6.  Currently, Obama is at +49.1 and Romney is at +44.4, for a spread of +4.7.  Certainly, there are other factors at play, including improving economic data, but President Obama has very clearly widened his electoral advantage as the Republicans have attacked each other throughout the last two months.

Super Dave Tuesday - 2

A poll released this weekend from NBC / Wall Street Journal verified that the Republican nominating process is taking a toll on the Republican Party.  According to the poll, four in ten adults say the GOP nominating process has given them a less favorable view of the GOP, versus just slightly more than one in ten that say it has given them a more favorable opinion.  More critically, the poll found:

“Additionally, when asked to describe the GOP nominating battle in a word or phrase, nearly 70 percent of respondents – including six in ten independents and even more than half of Republicans – answered with a negative comment.”

Another interesting finding of the poll was that 55% of respondents, including almost 35% of Republicans polled, indicated they believe the Democrats do a better job of appealing to those who aren’t hard core supporters, which was more than double that of the Republican Party.

Unfortunately, Rush Limbaugh, the conservative talk show host, further injured the Republican Party’s ability to appeal more broadly heading into the 2012 election cycle with his recent comments to Georgetown law student and activist Sandra Fluke late last week.  Limbaugh called Fluke a “slut” and a “prostitute” due to her advocacy of including contraceptives in employee health plans.  Much of the Republican establishment quickly disavowed Limbaugh’s comments, but the fact remains that Limbaugh’s daily three hour radio show is the single most popular conservative talk show in the country, so, on some level, does shape perceptions of the GOP.

Setting aside more general perceptions, the Republican nominating process has its most critical day tomorrow (Super Tuesday) with ten states voting, including Alaska, Georgia, Idaho, Massachusetts, North Dakota, Ohio, Oklahoma, Tennessee, Vermont, and Virginia.   Based on current polls, it seems likely that Romney will win the majority of the delegates up for grabs on Super Tuesday by either solidly winning certain states, or by attaining a strong minority in states that he does not win outright.  (Including Super Delegates, there are 437 delegates being decided upon).

To date, Romney has won seven of the eleven primaries that have been held, with Santorum winning three, and Gingrich winning one.  In aggregate, Romney has 180 delegates, which represents well over half of the total delegates that have been awarded.  Santorum is a distant second with 90 delegates.  Assuming Romney does win a majority tomorrow, he will have 398+ delegates.  While this is a commanding lead, it is obviously still a long ways from the 1,144 delegates needed to claim the Republican nomination.  So, there does remain hope for the other candidates, albeit a distant hope.

In fact, Santorum already has a firm schedule that extends beyond Super Tuesday.  He has plans to visit Missouri and Mississippi a number of times over the coming week and his campaign is in the process of executing a statewide TV buy in Alabama.  Both Paul and Gingrich have campaign plans beyond Super Tuesday as well, even if slightly less formal.  It seems likely that all four candidates will stay in the race until the next major debate, which is on March 19th.

In the table below, we’ve outlined the key states voting on Super Tuesday, delegates at play, and results of the most recent New York Times projections based on recent polls (a proxy for consensus). If Romney does better than recent polls, it is obviously an increasingly positive indicator of the inevitability of his nomination.  That said, time will only tell whether he can come back from the damage being done in the primaries to the reputation of the GOP.

Super Dave Tuesday - 3

Daryl G. Jones

Director of Research