House GOP: Knocking on 60's Door
Republicans are knocking on the door of gaining 60 seats in the House on November 2, 2010. Our current model's upper limit estimate clocked in at 236 seats or a gain of 59 seats from the 177 they held after the 2008 election. In the Senate, our macro level model is projecting a median estimate of 48.9, while the micro model registered a median estimate of 47.9.
As the table to the left illustrates, our model continues to rate the probability of a Republican House takeover at 86.5%; the macro and micro models give Republicans a 4.6% and 16.4%, respectively, of gaining Senate control. Our model estimate are based upon a statistical analysis of data from the InTrade prediction markets.
Our model continues to suggest that control of the Senate will most likely come down to the results in six states (California, Colorado, Illinois, Nevada, Washington, and Wisconsin). Our model's current probability estimates for a Republican victory in each of those six states is diplayed in the chart below.
Republicans are currently above 50% in three of the six states. Barring surprises not currently projected by our models, Republicans need to win five of the six seats to gain control of the Senate. This is a tall order, but not dissimilar from the task Democrats faced in the 2006 midterm elections.
As noted in yesterday's weekly update the markets in these six states have shown varying degrees of volatility. In particular, Washington and West Virginia have been highly volatile over the last two weeks. The chart below, illustrates the pricing trend in those six states.
The remaining two weeks will prove to be extraordinarily volatile in our view. It is not unlikely that we will see large swings in some of the probabilities in each of these races especially in reaction to various new polling data and news stories that market players view as likley to have a significant impact on the outcome of particular races. We can expect to see polls during this week in each of these states. Stay tuned.
Included below are updated versions of several of our regular charts for those readers who are into graphics.
For those readers who would like to learn more about the operation of the InTrade markets, you can do so without actually putting real cash into these futures markets. InTrade offers the opportunity to practice with InTrade cash at no cost. If you are interested you can go to http://play.intrade.com/ to learn more and to set up a practice account.
Before the end of this week, we hope to have our practice "portfolio" up on a separate page of this blog. We'll split this into parts, the heart portion, the head (model driven) portion, and the "if we just want to make money" portion. Stay tuned.
Here are the rest of the day's charts.
