The Biden Bump? Markets Can't Find One

If VP Biden stopped the bleeding for his boss, the InTrade markets evidently didn't get the memo.

While there isn't any polling data yet to determine if the Veep fired up the base, our modeling of InTrade data suggests that the President's electoral position continues to deteriorate.

Macro Model

Our macro model evaluates top line InTrade data to measure the state of the race. The probability of the President winning reelection declined to 60% in tonight's data run. This is down from nearly 80% a couple of weeks ago. On the electoral vote count the President's advantage has declined to 295-243. This represents a decline of 25 electoral votes from our Pre-debate reading on October 3 when the President held a 320-218 advantage.

State Based Micro Simulation Model

The deterioration of the Obama position is especially pronounced. Before the first Presidential debate, the President held an advantage of 313-225. Tonight's data run shows the President's advantage down to 283-255 -- a gain of 30 electoral votes for Mitt Romney.

Most encouraging for the Romney campaign is the fact that his gains have been powered by improving swing state prospects. Romney has gone from underdog to favorite to varying degrees in Colorado, Florida, and Virginia. Romney has also narrowed significantly the President's probability of victory in Ohio and Iowa. In both Iowa and Ohio the President's probability of winning the State has dipped below 60%.

You can find the electoral vote distribution of our simulation as well as a table showing estimate of Romney's probability of victory in each State.

A Brief Look at the Senate

Our state based simulation model has been relatively stable showing a median estimate of a two seat pickup bringing the Republican Senate count to 49.

Our model looks at a generates a range of probabilities in each State. At the low end of the pricing model Republicans would end up with 48 seats. At the upper end the model shows a 51 seat Republican Senate. This represents no change at the median and low points of the pricing range. The high end estimate of 51 represents a gain of one seat from yesterday.

The cumulative distribution of Republican seat outcomes is shown below.

Quick Take on NBC/WSJ/Marist Ohio Poll -- A MORE Democratic OhioElectorate than 2008?

The partisan split of this poll is even more Democratic than the 2008 electorate. The table below show the partisan makeup of this poll as well as the 2004 and 2008 Ohio electorate. A second table shows the outcome under various partisan make-ups of the electorate using the polls internal numbers for partisan voting blocks. The graphic compares the result based on partisan composition of the electorate. If the partisan leanings of the electorate are as Republican as the 2004-2008 electorate, Romney would carry Ohio based on this poll's internal numbers.

Romney Momentum Continues

I mentioned earlier today that Mitt Romney's post-debate momentum under both the ElectionMarkets Moscow and micro models appeared to continue in Wednesday's trading. In the final analysis it did.

As of Wednesday evening our macro model has Obama 295 Romney 243 -- unchanged from Tuesday evening. Romney's probability of victory rose slightly to 37.6%.

However on our State based micro simulation model Romney continues his advance. Our Wednesday night read has the race at Obama 287 Romney 251. This represents a gain of 4 electoral vows for Romney from yesterday's 291 - 247 Obama advantage. Romney wins 24.9% of the simulations. The chart below shows the distribution of outcomes.

The state-based model of Senate contest shows Republicans emerging from the election with 49 Senators unchanged from yesterday. The probability of Republicans emerging from the election with 50+ Senators rose to 48.1%.

Another Down Day for President Obama

News from Gallup of a Romney +2 among likely voters shook up markets with Obama's re-election probability dropping below 60% for a brief period on Tuesday afternoon. Our pricing model showed a late afternoon early evening rebound to 63.1%.

Romney's momentum in our two Electoral College models continued. The macro model currently gives the President 295 electoral votes to Romney's 243. This represent a gain of eight electoral votes over the last 24 hours.

Romney's gain in the state base micro simulation model clocked in at plus 6 with the President leading 291-247 down from 297-241 on Monday.

The Senate micro simulation model's results were largely unchanged from Monday projecting 49 Republican seats. The probability of 50+ Republican seats came in at 41%.

Stay tuned for more details on the range of results produced by the State based simulation model and what it is saying about the race for President at a more granular level.

President Senate Update 10-08

The numbers and a couple of quick observations.

President.
Macro Model
Probability of Victory
Obama 63.9%
Romney 36.1%
Electoral Votes
Obama 303
Romney 235
Micro Model (State based)
Electoral Votes Median
Obama 297
Romney 241
Electoral Votes Most Frequent
Obama 294
Romney 244

U.S. Senate Micro Simulation
Median estimate 49 Republicans
Most frequent 49 Republicans
Note: Probability of 50+ Republicans approximately 40%.

One interesting question over this week will be how Gallup releasing likely voter tracking impacts perceptions. Another will clearly be how voters perceive VP debate. Unlike 2008, voters have not been conditioned to dismiss Ryan in the way they were conditioned to dismiss, unfairly in my view, Sarah Palin.

Romney Surge Continues

The post-debate surge for Mitt Romney in election markets continued through Saturday.

The surge is particularly evident in a number of swing states. For example, Florida has flipped to a slight Romney edge in the ElectionMarkets pricing model. And the gap has narrowed significantly in other swing states. (See table below.)

The momentum did not appear to be halted by the convenient news that the unemployment rate had dropped to 7.8% In September. It remains to be seen what if any impact this news will have on the Romney momentum.

Perhaps the timing leaves the public skeptical. Or perhaps the broader measure remaining at 14.7% informs the public that any improvement is small.

Of course if the labor force participation rate had not declined since Obama's inauguration in January 2009, the unemployment rate would be 10.7%. And the employment population ratio has only increased
by 0.5 percentage point from its cycle low.

Romney has picked up ten electoral votes in the macro based ElectionMarkets model and 20 electoral votes in the state based micro simulation model (table below). The macro version has Romney at 228 electoral votes, while the micro simulation puts his total at 245.

It will be interesting to see if this surge continues over the next week. If the Obama campaign does not stem the tide, the markets may reevaluate their current judgement that the President is still the favorite.

Democrats remain the favorite in the race to control the Senate albeit a narrow one. The ElectionMarkets state based model presently estimates Republicans capturing 49 seats.

The model is somewhat sensitive to changes at the Presidential level.

It would not take much movement to shift market perceptions toward the GOP. The model suggest that the seats that observers should watch closely include: Arizona, Connecticut, Massachusetts, Montana, Virginia, and Wisconsin.

The seats where Republicans can benefit most from continuing growth in enthusiasm for the Presidential ticket are Arizona, Montana, Virginia, Wisconsin.

Markets have not yet bought fully into Linda McMahon's strong campaign, but they are beginning to notice.