Larry Kudlow

 President Bush's job-approval rating is close to low ebb, if you buy into what the major polling organizations are saying. With even the most optimistic numbers barely reaching 50 percent, and falling as low as 42, the chances of Bush serving a second term seem to shrink with every passing day.

 But polls aren't infallible. As we have learned, many polls -- most notably from the Los Angeles Times -- have heavily overweighted Democrats and underweighted Republicans. The Washington Post poll of 1,201 adults contained only 1,050 registered voters, and the remaining 20 percent who are ineligible to vote undoubtedly weighted the entire sample with a pro-Democrat bias.

 However, Bush is doing much better in one group's opinion: the investor class. Look at the markets in Bush re-election futures:

 The Iowa Electronic Market's winner-takes-all presidential market opened on June 1, and the outlook is good for Bush. The contract on George Bush's re-election opened at a healthy 55 cents, and reached a high of 63. Even at its low for the day, the Bush contract was still worth more than Kerry's, which never finished a day's trading above 50 cents. In order to bet you have to pay to play -- but it only costs five dollars. After three weeks of trading, the Bush contract is still at 55 cents, while Kerry's remains stuck at 45.

 The Iowa Market isn't the only market on which Bush election futures are bought and sold. There has been heavy trading on the popular online gambling website TradeSports, a site featured in the pages of The Wall Street Journal and The New York Times as a leading market for political futures. TradeSports has offered the Bush contract since January of last year, 18 months before the Iowa Market opened. The outlook there is almost as cheery as the Iowa market's -- the value of the contract has been hovering in the high 50s since the end of May, climbing to 58 this week.

 After Saddam's capture on Dec. 13, the price skyrocketed to 75 dollars. But in recent months, despite the best economic news we have had in years, the contracts have been steadily losing value, as the news from Iraq worsens. With the abuses committed at Abu Ghraib and Bush's ever-declining job-approval numbers, the contracts sank to a low of around 52 dollars. After Bush's speech at the Army War College on May 27, the contract began moving back up, hovering around 56 dollars. On June 2, the price reached 57 dollars. As of today, it's risen one dollar.


Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.