We are now coming down to the wire in the most expensive and hardest fought presidential election in history. Combined spending by the two candidates is approaching $2 billion. After making a final check of 150 polls in 50 states, I still see Obama coasting home for a win.
Look at the spreadsheet of the Electoral College that I have compiled below. Obama has in hand 247 safe votes on the East and West coasts. Romney boasts 164 safe votes and the Midwest and the South. Of the 9 battleground states, Obama already has Ohio’s hefty 20 electoral votes in the bag, where he is still ahead in the polls by 5%. That means the president only needs to win a single additional battleground state to win.
He can win any of the eight remaining battleground states. But just for the sake of argument, let’s say he wins the smallest state, Nevada, with just 5 electoral votes. That would give him 272 electoral votes, just over the magic 270 votes he needs to clinch the race.
For Romney to win, he would have to win all eight battleground states excluding Ohio. Those include Colorado (9), Florida (27), Iowa (7), Nevada (5), North Carolina (15), Pennsylvania (21), Virginia (13), and Wisconsin (10). That would allow Romney to squeak by with 271 votes, giving him a new home address at 1600 Pennsylvania Avenue, Washington DC 20500.
Romney has the challenge of pulling this off behind in the polls by 5% in Pennsylvania, 3% in Colorado, and 3% in Wisconsin. It still looks like pulling an inside royal flush on your final card in poker. Either 150 polls are wrong, or Obama is going to win. Take your pick. In fact, Obama could still lose the popular vote but keep the white house through the Electoral College, as president Bush did in 2000.
I think the stock market will rally after the election, no matter who wins, possibly through year end, so I am writing the trade alerts now to shoot out to you once the results are known. After that, we should see dramatically different market outcomes because the two men have such radically opposing economic philosophies.
Obama would deliver four more years of range trading markets, fighting a cruel demographic headwind, and still carrying the baggage of the 2008 financial crisis. That includes banks that won’t lend and corporations that won’t invest without sufficient numbers of end customers. Unemployment will remain high, as the 6 million jobs we sent to China over the past decade are never coming back. Corporations are being rewarded by the stock market for keeping overheads ultra-low, which is why earnings are at all-time highs. I am looking for a continuation of the range for the S&P 500 of 1,000-1,600 that has prevailed over the last several years.
Romney would deliver tax cuts and sizeable defense spending increases, as promised. This will cause the budget deficit to explode, as it did when presidents Reagan and Bush pursued similar policies. This will initially give us a higher high next year, maybe up to 1,700 for the (SPX), but then a much lower low to follow, perhaps down to 800 or 700. Romney is definitely your long volatility candidate. I am sure that I could make much more money trading with a Romney than an Obama win, and pay a lower tax rate to boot!
Below, see the poll results in the battleground states that I based this analysis on compiled by the independent website Politico. To examine the data directly, please click here. The Intrade betting on an Obama win, where traders can make real cash wagers on the outcome, have held steady at 62.5% to 37.5% in favor of the president today with just 12 days to go (click here).
Keep in mind that all of these polls underestimate Democratic turnouts because they are only taken of those who have land telephone lines. It does not at all include voters who only have cell phones. That is pretty much the entire voter population under the age of 30, which has an overwhelmingly liberal bias.
One novel analysis I came across concluded that the election could be decided by the number of blocked toilets that occur on Election Day. I am sure that there are thousands of these every day across the country in safe and battleground states alike. Homeowners awaiting plumbers who are late to carry out repairs or don’t show at all won’t get a chance to vote. This explanation also favors Democrats, who have launched a massive early voting campaign, making their votes blocked toilet risk free.