Bellwether

Swing State

Paul the Octopus

A bellwether is something that leads or indicates trends. The term is derived from the Middle English and refers to the practice of placing a bell around the neck of a castrated ram (a wether) leading his flock of sheep. The movements of the flock could be noted by hearing the bell before the flock was in sight.

In politics, the term is more often applied in the passive sense to describe a geographic region where political tendencies match in microcosm those of a wider area, such that the result of an election in the former region might predict the eventual result in the latter.

In the US, Missouri was often referred to as the ‘Missouri bellwether’ as it produced the same outcome as the national results in the presidential election 96.2% of the time for the century between 1904 and 2004, only missing 1956. It did not match the national result in 2008 or 2012.

In elections from 1996 through 2012, Ohio was within 1.85% of the national popular vote result. Due to the Electoral College system, a bellwether of sufficient size is often also a focus of national attention and presidential campaigns as a so called ‘swing state’ that can decide the election one way or the other. Currently Ohio and Florida are seen as the most important swing states and indeed no Republican has won the presidency while losing Ohio and the controversial decision in ‘Bush v. Gore’ ultimately hinged on a recount of Florida, that – had it gone for Gore – would have swung the Electoral College vote.

The ‘Redskins Rule’ is thought by some to predict the Presidential election. In a peculiar coincidence, from the time the Washington Redskins arrived in the Washington, DC metropolitan area in 1937 until 2000, the last Redskins home game before each Election Day accurately determined the incumbent party’s fate in that year’s presidential election. The rule was not accurate in 2004 or 2012.

In the stock market, a bellwether (barometer stock in the UK) is a stock that is believed to be a leading indicator of the direction of a sector, industry or market as a whole. Bellwether stocks are often used to determine the direction in which an industry or market is headed in the short term. JPMorgan Chase is an example of a bellwether stock. As one of the major banks in the United States, it sets the tone for the rest of the industry. JPMorgan Chase also has contracts with companies in other industries, so its performance is reflected in other sectors of the market.

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