an election future's market?

550
points

If you think Wall Street knows how to bet on the future (and you'd have good reason this year to think not), you might be curious to see where it's putting its money in the current election cycle.

Open Secrets keeps track of how much candidates and their parties pull in from different industries each year (from individuals working in those industries, industry "PACs" that bundle money and - before 2002 - corporate and union "soft money"). Some industries are historically wedded to one party - lawyers love Dems and the oil industry can't get enough of Republicans - but Wall Street, it turns out, tends to vote for the winners.

Smart that; while it's good to keep in the good graces of all politicians and it is wise to get "your guys" in office, smartest yet is to always have the winners like you just a little more.

So in '90 and '92, securities and investment firms were banking on the Dems - who had vast majorities in the House. In '94, Wall Street could sense a tidal shift in Congress as firms gave to Dems and the GOP in equal amounts (not shown above just 'cause was sticking with presidential years). They obviously missed tsunami that turned the rock-solid majority over to Republicans that year - but they caught on the following year, giving to red candidates 40% more than to blue politicians.

Since then, looking at to Wall Street's record of giving and comparing that to the winners in the House, you can sense the traders hedging their bets on who'll have the keys on Capitol Hill - and getting it fairly right each time. (In '06, which was also left out above, streeters also correctly had their bets on Dems making a comeback.)

This year? The odds are on the Democrats - 57 to 43.

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