Much as investors quickly punish the price of a stock when there is bad news released on the company, presidential election investors bid down the shares of Barack Obama this week. Two weeks back, Obama was considered a better than 60% favorite to win re-election, This week his numbers were down in the 53% range.

Four developments contributed to the falloff:

1. In Wisconsin, the Republican Gov. Scott Walker not only survived the recall election, but won decisively. In the most expensive contest in the state’s history, Walker defeated the same opponent that he first faced in the gubernatorial race in 2010, Tom Barrett, the Mayor of Milwaukee. This time Walker won by 7%, in 2010 by 5%. The year 2010 was considered very good for Republicans in Wisconsin, and nationally. Turnout was up significantly from 2010 signaling a motivated electorate on both sides. Analysts had expected that a big turnout would favor Barrett. It didn’t. Even more significant from the perspective of Republicans, was the Party’s success in fundraising for the recall election, and in the ground game- the effort to insure that voters sympathetic to Walker actually voted. Walker raised $30 million for the recall effort. Another $15 million backing Walker’s campaign came from other support groups. Barrett, his outside support groups, and the unions, in total raised and spent $30 million on their side. The Democrats were considered to have a big advantage in the ground game, with thousands of union volunteers going door to door, and phone banking. In addition, the Obama campaign had many organizers already working in the state, who assisted Barrett’s efforts. But the GOP ground game relying on many Tea party volunteers, proved very effective. For the first time, Wisconsin, a state that Democrats have won six straight times in presidential elections, and that Obama won easily in 2008 by 14%, looked light it might be a competitive state between Obama and Romney in 2012. Many of the union members in the state were annoyed with Obama for not appearing in the state to campaign for Barrett (Bill Clinton did that instead). Some Democrats feared the unions might not work as hard for Obama now in 2012.

2. In 2008, Barack Obama became the first presidential candidate to opt out of the public financing of the general election campaign, which provided about $75 million to each major party candidate. Instead, Obama raised and spent about 4 to 5 times that amount in September and October alone, burying John McCain in a blizzard of largely negative ads in all the battleground states. Between his fundraising to win the Democratic nomination from Hillary Clinton and for the general election, Obama raised $750 million in total. This year, word was leaked that the Obama campaign had an internal goal of raising $ 1 billion, even though there was no primary campaign opponent for the nomination. To date, Obama has appeared at over 150 fundraising events for the 2012 campaign, three times the pace of George W. Bush when he ran for re-election in 2004. Combined with 99 days on the golf course, a new Presidential record for the first 3 years in office, it has left little time for actually being President. Despite this intense fundraising effort, it was announced this week that in May, Mitt Romney and the Republican National Committee combined outraised Barack Obama and the Democratic National Committee by $77 million to $60 million, a contrast that was a shock to most people who are following the race closely. In April, the two sides had each raised just over $40 million, slightly more for the Obama effort. It is now clear, that unlike 2008, the Romney campaign will likely have all the money it needs to match Obama dollar for dollar, and may even have an advantage when independent groups which back one candidate or another are included. The so-called Super Pacs on the Republican side, have so far distanced those on the Democratic side. It is likely that the success of the GOP effort in Wisconsin, will encourage big GOP donors to step up their giving even more.

3. A barrage of new polls in the battleground states suggested that many of them are very close, and that in a few states, Romney may have moved into the lead. President Obama, like most presidents running for re-election, has made many visits to the battleground states for announcements and speeches for all three years of his term. Much of the money the Obama campaign raised in 2011 and early 2012, while Mitt Romney was busy competing for his party’s nomination, was used to set up multiple campaign offices in the battleground states and staff them with experienced organizers plus volunteers . A sophisticated social networking effort was launched in these states. In early polling for the race, Obama was up by a few points in the national surveys, but had bigger leads in the battleground states, where the Electoral College race would be decided. Now it looks like Romney is ahead in Missouri, and Indiana, even or ahead in North Carolina and Florida, and very competitive in Ohio, Colorado, Nevada, Iowa and Virginia. Romney needs to win most of these states to win. It now appears he has a decent chance in all of them.

4. Finally, Obama contributed to his bad week with an unforced error. At one of his rare news conferences on Friday, Obama argued that the private sector was doing fine, and the only problem in the economy involved public sector workers and construction workers. With private sector employment still more than four million below its 2007 peak, and national unemployment still at 8.2%, (higher in the private sector) , the news that all was well in this part of the economy was news to many, and was widely and quickly ridiculed. Obama was forced to issue a new statement within hours. Obama’s seemingly far greater concern for public worker employment than private sector employment reinforced the growing concern of many that he does not understand the private sector, and always looks to bigger government to solve problems. In a week when Wisconsin voters indicated they had had enough of lavish benefit packages for public employees, here was Obama to make the case for more federal spending that would be sent to the states to allow them to hire more workers, or pay them more. The states that have the worst financial problems are the union dominated Democratic states, such as California, and Illinois, which have rewarded their public employees with pension benefits that they are unable to pay. In essence, Obama was asking the nation’s taxpayers, or whomever would lend money to the federal government (China?) for the next stimulus package, to finance these nearly insolvent states so that they can continue to avoid their day of financial reckoning.

In 2008, the major media was in love with Barack Obama and many journalists thought he ran a nearly flawless campaign. This time around, the campaign flaws are evident. But more importantly, voters seem less willing to buy into hope and change, as they did in 2008, and seem more concerned with the president’s performance...or lack thereof.