The question is will the financial meltdown in stock and commodity markets affect the federal election next Tuesday?  I think so.  Canadians have lost a lot of money over the last four weeks.  It is Stephen Harper’s worst nightmare.  With the fractured left in this country fighting each other, I’m pretty sure he’ll survive, but these economic jitters have to be affecting every political perusaion.

As you all know I don’t do hunches when it comes to politics.  I look at the pure numbers done by markets research professionals.  They are always right and this time will be no different.  As I write this, the Conservatives are hovering at about 34-35% in national polls.  That means another Conservative minority come next Tuesday.

My marketing research friends might do a great job with projecting popular vote, but it gets kind of messy when they translate that into seat projections.  For instance the Greens right now are at about 11% in the polls and will likely not get a seat.  Meanwhile the Bloc Quebecois are at 10% in national polls, but they are likely to get 47 seats.  Go figure.

You might remember a few weeks ago, when I suggested Stephane Dion and his merry band of Green Shift Liberals should forget about that and talk about the economy.  Now, I think they get it.  With the world having two hands on their wallet, the Liberals now think its all about the economy.  They should have been hammering that from day one.

Jack Layton does get it, but maybe it doesn’t matter.  He is not going to be Prime Minister.  However, he has visions of being the official opposition leader.  With poll numbers putting him around 20%, that’s unlikely too.  Of course if markets continue to plummet this week, who knows, maybe he’ll look Prime Ministerial next Tuesday.

Locally, I think it will be interesting partly because of the big turn in the agricultural economy.  While financial markets have tanked, commodity markets have been like a trap door opened.  Farmers who weren’t hedged are seeing prices they thought would one day be put in a museum.  They saw the buzz with biofuel globally send prices higher over the last two years.  Starting last July and accelerating over the last four weeks, prices have retreated.  It’s a bad time on the farm again.

Of course when I sold corn for $6.30/bushel this past summer, I didn’t sell it all.  It’s the nature of agriculture, never sure you’ll have the crop in the bin.  Needless to say, many local farmers are demanding federal participation in something called the Risk Management Plan. (RMP).  The RMP was adopted by the provincial Liberal government last year.  In the tradition of the 60/40 federal provincial cost share, the province is only contributing their 40% share.  Local farmers are waiting for the 60% share to be picked up by the federal government.

It makes sense to local farmers because Stephen Harper as opposition leader stood up on a local Chatham-Kent farm in 2006 and said he would scrap the CAIS program.  The CAIS program was reviled by local farmers.  Two years later farmers have their RMP but not with support of the man who stood up on that local Chatham-Kent farm.

Will this dissatisfaction manifest itself on election day by a repudiation of local Conservatives?  That to me is a long shot.  However, with farm prices retreating and futures markets doing the same, local farmers might swing this week.

For Stephen Harper timing is everything.  I’m sure in retrospect, he’d never have an election during such financial tumult.  However, if he had not called the election and left it up to Stephane Dion, Jack Layton and Gillies Duceppe could you imagine the outrage regarding this financial meltdown?  All of those leaders would have made a show of how Harper hasn’t done a thing to help the economy and the non-confidence motion would be the weapon of choice.

I’d like to say at the end of the day, everything is going to be all right.  However, as I told you a few weeks ago, I’m not sure about it this time.  In my lifetime, I’ve never seen anything like this.  Ahead I can see the American economy contracting, which will ultimately negatively affect the Canadian economy.

Simply put, it was like warp speed how market psychology changed.  Three months ago, the economy boomed, commodities were hot and jobs were everywhere.  Now, everything is a bear market, oil prices have dropped 40% since July and everybody is jumping out of commodities.  So we’ll see if this affects political psychology come next Tuesday.  I think its happening in spades.