Is Sarah Palin the mistake that will cost McCain?

Today, John McCain announced his choice for VP and he chose a little-known former beauty Queen as his running mate.

While Palin has an interesting past: she was captain of her High School State Championship basketball team, a runner-up in the Miss Alaska pageant, a former sports caster, a mother of five, a tri-athlete, a hunter, a fisherman, and now the Governor of Alaska; you can't help wondering if she was chosen primarily for two reasons:

1. Because she is a woman.


2. Because she is attractive.

In addition to the two points above, Palin, who appeared on the cover of Vogue, IS pro-life and pro-gun and therefore embraces two important conservative issues. But, was she the most qualified candidate? Or was she chosen because she was an attractive woman?

Regardless of how you answer those questions, the Democrats are going to make that claim over and over and over for the next two months.

I can almost here Joe Biden at the Vice Presidential debates: "Ms. Palin: I know Hillary Clinton. I'm friends with Hilary Clinton. I served in the Senate with Hillary Clinton. And you, Governor are no Hillary Clinton."

Don't get me wrong, I'm not saying Palin isn't qualified or a wonderful person. I don't know that much about her. What I'm suggesting is that the perception will be that McCain chose a women to try and capture the votes of disgruntled Clinton supporters AND that he didn't chose the most qualified woman available.

A Vice Presidential pick cannot win the election, but it can lose one. It took awhile, but Dan Quayle ultimately did in the first George Bush.

In many ways Palin embodies some of the negative traits of former VP candidates Thomas Eagleton, Geraldine Ferraro, and Dan Quayle.

Like Quayle she is viewed as being inexperienced. Unlike Quayle she seemed to pass her introductory test without looking like a deer in someone's headlights. Let's hope she can spell potato.

Like Ferraro she seems to be a huge gamble designed to save a floundering ship. Regardless of what the polls say, and they still show the race as being close in a number of key states, the McCain camp saw the need to take a big risk at this juncture. On the positive side, the pick has created huge interest in Republican ticket. 40 million viewers tuned in to watch Obama's speech from Denver. The Republicans were not going to get that kind of interest until the addition of "America's Hottest Governor" to the list of speakers.

Possibly most disturbing, like Eagleton, Palin may have some skeletons in her closet. There are stories claiming that she is being investigated by the State Legislature for arranging to have her ex-brother-in-law fired from the State Police Force. I don't know if there is any substance to these rumors and don't expect that they will be resolved in the next 66 days. However, the very mention of such a scandal might lead many to question further John McCain's judgement in picking the Alaska Governor as a running mate.

What does this mean for the market?

I think it increases the chances that Obama wins the election. I think that means that we need to prepare for a continuation of the current see-saw environment. The stock market doesn't do well during the first year of a new Presidency anyway and some of Obama's rhetoric regarding taxes and healthcare is bound to be scary to many.

On the plus side, the economic data is getting better and we are nearly 8 years into a bear market that began in early 2000.

I don't think we need to fear a huge crash, although we may test the lows around 10,800. But, I also don't think we should be expecting big stock market returns in the near future.