THEME: THE DEBATE & THE MONKEES PRESIDENT

The tide seems to have turned against George W. Bush after the first debate. Evidence of this is the cover of the The Drudgereport of as Oct 2. For the first time since I've been following the Drudgereport during the campaign, the spin on the cover of it has been positive for Kerry. It featured as its headline "NEWSWEEK POLL: BUSH LEAD GONE", and it had pictures of Kerry smiling and tossing around a football. Matt Drudge starting shouting about the Swifties book long before the networks, and has published every unflattering photo of Kerry that has been out there. So for him to actually put up a cover that almost represented Kerry as the leader to me is shocking.

Well, that was yesterday. Today's Drudge is trying to spark controversy of what Kerry took out of his pockets before the debate and whether this violated the rules of the debate. Hmmmm...smells like desperation to me.

The Republicans are certainly worried. Conservative investment pundit Donald Luskin is in fact comparing Bush's performance to Al Gore's in their first debate and raising the specter of a steep slide in the polls.

George W. Bush is the Monkees President. Karl Rove is like a CBS executive who was rolling in the ratings until Peter Tork, Michael Nesmith, Mickey Dolenz, and Davy Jones declared that they were no longer going to play the role of pretty faces strumming air guitars, but would actually write and perform their own music. W is his own worse enemy.

I felt quite lonely when I published a post about W's erratic RNC acceptance speech click here. The press apparently did not see the erratic behaviour that I saw. I tried to look beyond the scripted words and focus on the delivery. W was delivering a very conservative and staid performance up until the moment two protestors interrupted his speed. This interruption seemed to shake him up because his performance from there after was disturbing. He kept flubbing some very important lines, and almost all the lines that he couldn't make to sound natural were concerning the War in Iraq.

I was shocked to see almost no mention of W's erratic performance in the next day's press. It seems to me that this time, the press surely could not ignore W's erratic debate performance, and so they did not.

So, we are left with a clearer picture of the W caught "off camera." Anyone who saw Fahrenheit 9/11 has already seem some of the faces of W. If you missed the debate and want to see these faces click here.

TRADING IMPLICATIONS
The S&P500 responded to the debate with a 1.5% rally. Sentiment is confused by all of this. The prevailing wisdom was that W was good for the market, and hence Kerry bad. Certainly, there may be attribution error to now concluding that Kerry is good for the market, but one has to wonder. Perhaps the only thing the market wants is a strong credible leader, and W has failed in this regard so far?

Sentiment is shifting and being short the market is dangerous. I would advocated a neutral to slightly bullish position right now. If Merck and Fannie Mae and Kerry can't kill off this market, then it maybe stronger than we think.