As Gingrich does better so does Obama

http://news.yahoo.com/blogs/signal/gingrich-fate-rises-does-obama-133152405.html

As Gingrich’s fate rises, so does Obama’s

 

By David Rothschild | The Signal – 3 hrs ago

As he prepares for his third State of the Union address--and, he hopes, not his last--Barack Obama's likelihood of reelection has soared in the last few days to 56.8 percent, the highest it has been since last July. This movement is correlates with Newt Gingrich's increased likelihood of gaining the Republican nomination, now at 29.7 percent, up from about 5 percent. But, this upward trend is also correlates with a simultaneous downward movement of Mitt Romney's likelihood of winning the presidency if he wins the nomination, now at 44.0, down from about 48 percent. We utilize prediction market data for these likelihoods.

Likelihoods from 2012 Presidential Election

Sources: Betfair and Intrade
In short, the markets think Obama is more likely to defeat Gingrich than Romney, so when the former speaker's fortunes elevate, so to the president's. Over the last week, Gingrich's likelihood of winning the nomination has climbed from about 5 percent to about 30 percent. Currently, Gingrich is about 39 percent likely to defeat Obama if he makes it to the general election, while Romney is about 44 percent likely to reach the White House.
An ordinary least squares regression--one of the most weathered tools in the statistician's toolbelt--determines that the Gingrich-Romney battle determines about 87.5 percent of the variability in Obama's likelihood of reelection. To wit, for every 10 percent more likely Gingrich is to win the nomination, Obama is 0.75 percent more likely to win reelection. For every 10 percent less likely Romney is to win the nomination if he wins the nomination, Obama is 2.75 percent more likely to win reelection. If they're watching the same markets we are at 1600 Pennsylvania, you can be sure they're wearing Gingrich pom-poms. end quote.

As you can see in the graph above, as Gingrich does better so does Obama. So, according to this study Obama is much more likely to become President given all the present factors. However, World and National conditions can change this quite easily. For example, President Bush the first was expected to win  re-election because of the Desert Storm successful take back of Kuwait. However, that didn't happen and Clinton was elected instead. However, it is unlikely that Gingrich can win enough support from Democrats and Independents to win in November.