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Wednesday, August 11, 2004

Causation vs. Correlation II

Today's Wall Street Journal Opinion page has an interesting, if somewhat muddled, argument that as Kerry's prospects of winning the election improve, the financial markets take a dive. Using data from the Iowa Electronic Markets, the article features a graph showing that the futures contract for Kerry is counter-cyclical with the S&P 500:

Perhaps, but it is difficult to identify causation with the ocular estimator. So, the lesson is that the statist/democrat left does not have a monopoly on leaps of faith about causation.

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