Time to update the favorability ratio. This is the seventh weekly installment (we skipped a week last due to my birthday). Senator Obama still enjoys high favourable ratings but his unfavourable ratings have begun to creep back up. However compared to Senator McCain, Obama has no complaints. McCain’s favourable ratings are his lowest yet and his unfavourable at his highest so far. Overall, Obama enjoys a 21 basis point advantage over McCain. Unless McCain can reverse this trend, this election is over.

The Lemos Favorability Ratio
One of the tools that we use on Wall Street to measure movement is by expressing data as a ratio and then tracking the movement of the basis points. A basis point is a unit that is equal to 1/100th of 1%, and is used to denote the change in any financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security. The relationship between percentage changes and basis points can be summarized as follows: 1% change = 100 basis points, and 0.01% = 1 basis point. Tracking any movement is possible and movements can be very clearly delineated. Eight weeks ago, I decided to track both Senator Obama’s Favorable versus Unfavorable ratings as well as Senator McCain’s Favorable versus Unfavorable ratings. I take the the favorable rating and divide by the unfavorable rating to get a ratio which I have named the Lemos Favorability Ratio.

I am using Rasmussen Reports Daily Tracking Poll as my raw data. Rasmussen Reports is putting out a daily tracking poll with the national favorability versus unfavorability percentages. Their data extends back to June 4, 2008 and I have created a weekly Excel spreadsheet tracking the data. Here’s that data broken out by candidate and then a side-by-side comparison of the Lemos Favorability ratio is below the fold.

McCain Favourable versus Unfavourable Ratings Nationwide

Takeaway
In terms of the ratio, you want a higher number. The higher the number the greater the spread between your favorable and unfavorable ratings. McCain enjoyed his highest number to date five weeks ago, 1.58 in the favorability ratio but has seen an erosion of 49 basis point erosion over the past over this period as his favorable rating declined by nine points and his unfavorable rating rose by the same amount. However, McCain is now at his lows in the index at 1.09.

Obama Favourable versus Unfavourable Ratings Nationwide

Takeaway
Again in terms of the ratio, you want a higher number. The higher the number the greater the spread between your favorable and unfavorable ratings. As of today, Obama now stands at 1.30 in the index, 21 basis points higher than McCain. Obama’s favourable ratings have come down off their peak by two points and his unfavourable ratings have gone up by the same amount but he is in far better position than McCain.

McCain vs Obama, The Lemos Favorability Ratio

Takeaway
The above table tracks and compare the Favorability Ratio and shows the differential between each candidate. The data above bears out my assertion that McCain was able to begin to turn the tables in late July as result of the Obama misstep in Berlin. McCain pounded away with the celebrity ads and then had the added gift of a Russian invasion of Georgia on August 8 that led to a clear and visible difference between the experience of both candidates. These factors allowed McCain to be viewed more favorably than Obama. That was the first critical turning point.

However, the Democratic Convention did provide Obama with a significant bounce. He not only erased McCain’s lead but overtook him as well. The focus by the Democrats during the Democratic National Convention to equate Senator McCain with President Bush clearly had an effect. During that week, Obama erased an 18 basis point gap and turned it into a five lead. But for most of the first half of September, McCain has led, leading 30 basis points on September 8th, but with the crisis on Wall Street playing to Obama’s advantage, Obama finally regain the lead in mid-September and with the economic issues now so prevalent Obama has played those to his advantage and he now leads by 21 basis points as of yesterday. Over the past month, Obama has turned a 13 point deficit into a a 21 point advantage, that’s a swing of 34 basis points.

McCain is seen unfavorably by 47% of respondents. That number is much too high for him to stand any chance of winning the Presidency. Yet a month ago, only 38% of respondents saw him in an unfavourable light. He has three weeks to reverse those numbers.

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