Final words from TPT

After much thought, I have decided to wrap this site up.

I made profits on my Intrade account (turning $500 into $568) and a substantial amount of money on my Bet-fair account. I predicted that McCain would be the frontrunner for the GOP nomination in December 2007 ascendancy while Romney and Giuliani were still favourites. I had a spectacular near-miss with regard to Joe Lieberman being McCain’s running mate, and I believed that McCain’s selection of Palin would be a disaster. My formula predicted the popular vote margin correctly.

However, I completely overlooked the Barack Obama phenomenon and I made the cardinal error of allowing my political views to creep into my commentary (views that I should have kept to myself given that I am not American). With a full time job in consultancy that I am fighting to hold onto in the current economic environment, my blogging was perfunctory and scattered.

Thanks to all those who have visited this website.

Congratulations to President-Elect Obama

During the eighteen moths that I have been running this site, one of my constant beliefs was that a bet on Barack Obama was poor value. I even suggested that, contrary to conventional wisdom, McCain could win a Regan style landslide. However, I was proved wrong last night. Although part of Obama’s success was down to a combination of bad luck and the inexplicable Palin pick, he had guts to take on Hillary, staying power to be able to soldier on through Wrightgate and a steady hand during the crisis. Although, I wanted McCain to win I wish him the best of luck.

TPT liveblogs Election 2008 (all times are GMT/UTC)

20:53: I shouldn’t really do this (not least because I’m not an American citizen) but, GO MCCAIN!

21:40: First available exit poll from Lancaster county in PA shows Obama ahead.

22:21. 58 seats. Deducting 5% from the Dem margin would give one I guess 56 seats.

22:44 Exits look a bit strange. Possibly oversampling of Democratic and young voters.

22:49 Exits are VERY close in PA, Ohio, FL and NC.

22:50 Bought 10 McCain contracts.

23:03 Correction, estimates may be “adjusted”. Rumours of Obama +15 (which means +10 sounds right)

23:16 Other polls have Obama +4 in Va. (M +1)

23:32 Obama takes an early lead in IN. This was one of few areas where Obama might actually have outperformed exit polls against Hillary.

23:37 HuffPo has exits, taking away 5 points they are:

Florida: O+3
Iowa: M+1 (!)
Missouri: M+1
North Carolina: M+1
New Hampshire: O+9
Nevada: O+5
Pennsylvania: O+10
Ohio: O+5
Wisconsin: O+11
Indiana: M+1
New Mexico: O+8
Minnesota: O+16
Michigan: O+16

23:47. A point of warning regarding IN is that McCain’s and Bush areas of strength don’t match that well. I remember reading a memo in June that said McCain’s strength in PA was radically different from Bush’s. Palin might have changed things a bit but expect McCain to do better in suburban and urban areas than W.

I’d give McCain at 15% chance now. With PA off the cards McCain has to have the luck of the Irish (and it probably will be a 7% BO margin, but I still think the Mac has a chance).

23:53 Gawker exits (w 5% adjustment)

GA M+9
FL M+2
IA O+11
IN M+1
MI O+16
MN O+9
MO M+1
NC M+1
NH O+9
NM O+8
NV O+5
OH O+4
PA O+10
VA O+5
WV M+10
WI O+11

National O+5

Very plausible.

00:07 Graham holds onto Senate seat on exits alone. Good.

00:03 It’s turning out to be slightly lower than most people had expected. Still a small chance McCain could win but it looks like a 5% Obama victory nationally.

00:50 I’m feeling that we’re one call away from the contest ending. However, I’m also feeling the Democrats might be waiting for that call for four years.

01:10 Looks like Obama +5

01:14 PA & NH called for Obama though by MSNBC. I’ll wait to CNN and a red state.

Obama leads by 7.59

Unless something major happens by my final predictions for the popular vote for the 2008 election are: Obama by 7.59

Barack Obama 52.14
John McCain 44.55

My state by state projections for the ‘Bix Six’ are

Wisconsin (Obama by 13.01)

Barack Obama 53.07
John McCain 40.06

Michigan (Obama by 12.24)

Barack Obama 52.27
John McCain 40.03

Pennslyvania (Obama by 8.41)

Barack Obama 52.14
John McCain 44.55

Ohio (Obama by 4.15)

Barack Obama 50.07
John McCain 45.92

Florida (Obama by 1.49)

Barack Obama 48.56
John McCain 47.06

Missouri (Obama by 0.13)

Barack Obama 48.45
John McCain 48.32

The results speak for themselves. The only ray of hope is that if the polls are wrong by 5% or more McCain could hold Ohio and Florida. I’d give McCain about a 15% chance.

Obama leads by 6.68

My new projections are :

Barack Obama 51.27
John McCain 44.59

I don’t think it is completely over, but I won’t be adding to my Betfair position on McCain. Seriously, the polls could be systematically wrong, and the moderate voters could hold their noses and vote for McCain, but my trendline analysis is suggesting a 8.54 point victory for Obama, while my regular analysis suggests that Obama will win by more than Clinton in 1992.

Obama leads by 5.48

My new projections are :

Barack Obama 49.99
John McCain 44.51

The contest seems to be tightening a bit. However, Obama still leads by more than 5%. I still give McCain about a 20% chance because he has halted Obama’s rise in the polls and is making a closing argument that, if not the strongest case he could be making, one that is above the belt and has a chance of succeeding. In any case it is at least (for the time being) keeping Sarah Palin out of the public eye.

Projecting my trend analysis out until election day still has Obama leading in the popular vote by nearly 9%. However, if we assume that the approaching election has disrupted the post convention trend, that the undecideds break for McCain and he can win the last few news cycles, then a win is possible. How realistic are these assumptions? Well, I’d guess that many undecideds are hawkish Democrats and moderates who were disgusted at the Palin pick, so the lower profile of Palin and the emphasis on Obama dodgy associations will help in that regard. If there is one thing I’d put money on its the Schmidt/Rove machine’s ability to grab a short term advantage and Team Obama’s tendancy to put its foot in its mouth.

However, another Palin scandal could arise (or she could pull a Liddy Dole or Michelle Bachman). Team Obama could use some of the cash that it has been storing to saturate the airwaves and Team McCain could spend the next few days preparing for the great Republican Civil War. In any case, even if thing broke McCain’s way he could come up short. My guess is a tiny McCain victory or an Obama victory by no more than 9%. However, that prediction is so general that it is not particularly useful or courageous prediction. So I’d say the McCain prices at Intrade offer value, but at 17.1 that’s pretty obvious.

Obama leads by 6.45

My new projections are (my methodology is here):

Barack Obama 51.03
John McCain 44.58

The contest looks to be going Obama’s way. However, although Obama is clearly the odds on favourite beyond it should be remembered that the polls have got it wrong before. In 2006 James Webb only beat George Allen by the skin of his teeth after leading comfortably in the final round of polling, while Gore outperformed his polls (though not the exit polls) in 2000. IAlthough a dose of buyer’s remorse at the polling booths is pretty much McCain’s only hope ‘d give McCain about a 20% chance of winning which is more than Intrade give him. I’m not going to put any more money on McCain but I’ll keep the Betfair money I’ve put on McCain on him.

Obama leads by 7.22

My new projections are (my methodology is here):

Barack Obama 51.11
John McCain 43.89

McCain’s punch on taxes has clearly failed to land. It is probably too late to dump Palin and run an honourable campaign and his former supporters, and surrogates, are starting to jump ship. Unlike many other pundits, I still can imagine a scenario whereby McCain wins, centered around a last minute negative blitz or a scandal, but unless something happens then Obama looks likely to be President.

Could John McCain pull off a surprising victory?

In the 1992 British General Election the Major government was trying to get re-elected in the context of a bitter recession brought on by a housing bubble, an unpopular predecessor and a monetary crisis revolving around the Exchange Rate Mechanism. Bush and Major’s decision to leave Saddam in power, and to betray the Kurds, had largely removed the successful War in Iraq as an issue. Labour, led by Neil Kinnock, had not fully recovered from its excesses in the 1980s but was largely back in the mainstream. After a largely inept campaign run by the Conservatives it seemed that Labour’s victory was inevitable.

However, the final two weeks of the campaign were to prove Labour’s undoing. A viciously negative fusillade of criticism and innuendo from many in traditionally conservative print media, a concerted attack on their tax policies and a celebratory rally in Sheffield that badly backfired all damaged the Labour campaign and planted doubt in the minds of voters. This meant that Labour’s small lead in the final poll of polls, and small deficit in the exit polls turned into a seven point loss in the popular vote, although the electoral system meant that the parliamentary majority that the Conservatives won was so small that the Major government was a lame duck from day one.

It is not difficult to see parallels between Britain in 1992 and America in 2008. McCain removed National Security and Iraq as an issue by choosing Sarah Palin over Joe Lieberman. The American economy is about to experience a recession and there is clearly a financial crisis, though both have been wildly overhyped by the media. More importantly, both Obama and Neil Kinnock had a domestic agenda that, while worthy, was just a bit too left-wing for the population at large. At the same time they failed to respond to the inaccurate and hypocritical distortions of their opponents (after claiming that Labour would hike sales tax, the Conservatives ended up raising it substantially after the election).

Of course there are also differences, I was devastated when the Conservatives won and I am pretty much neutral between Obama and McCain (and I clearly agree with Obama on tax). However, there are enough parallels between the two campaigns to make me wonder if McCain has a decent chance of winning at least the popular vote if Obama doesn’t hit back hard enough. It would be ironic for McCain to win for the wrong reasons, but it is clear that “Joe the Plumber’s” intervention rattled Obama during the debate and raised some questions about why his tax plans paradoxically raise the marginal rates of those on low to middle incomes, even if they lower their effective tax rates.

In any case one can expect the conservative media to follow in the footsteps of their British counterparts and to go after Obama with increasing vehemence in the final seventeen days. We can also expect the Republicans to continue to push the “Joe the Plumber” story as far as it will take them. None of this should matter had the Obama campaign either built up a big enough lead to insulate themselves from these attacks or if it possessed the tactical edge to deflect Schmidt’s attacks. However, with the exception of Obama’s Philadelphia speech and Bill Clinton’s gaffe in South Carolina, the Obama campaign has been essentially passive, never initiating the attacks and failing to respond effectively to them.

Plouffe and Axelrod might be organisational geniuses, and Obama should still be considered the favourite to win, but I wouldn’t rule out the idea that the fabled double-digit Democratic landslide that some people seem to be expecting might come under Mark Warner, Hillary Clinton or Ken Salazar in 2012, rather than in just over a fortnight’s time.

Obama leads by only 4.84

My new projections are (my methodology is here):

Barack Obama 49.44
John McCain 44.60

Linear regression analysis of polling trends since the selection of Sarah Palin as McCain’s running mate suggest an Obama victory of 9.15 in the popular vote. However there is about a 25% chance of McCain winning in the election. Although the selection of Sarah Palin has destroyed the argument that John McCain is the most experienced candidate and has produced an unwelcome distraction, for the McCain campaign, from some of the more pressing questions about Obama, there are several reasons why the betting markets are underestimating John McCain’s chances.

1. Complacency – The Obama campaign seems to have been extremely complacent. Although Obama has talked about the experience of New Hampshire they seem not to be trying that hard. Even in the 1997 election when Labour where ahead by huge amounts, they were fighting for every news cycle and trying to win over as many swing voters as possible. The Obama campaign have allowed McCain to browbeat the media into dropping any further investigation of Palin and they are focusing on turnout rather than undecided voters.

The Boston Globe’s suggestion that Bush should stand down immediately after an Obama victory is eerily reminiscent a similar call the Chicago Tribune made in 1948, regarding President Truman and Thomas Dewey. In that case a passionate underdog pulled off a surprise victory against the calm, and complacent, favourite.

2. Taxes – When the Democratic pollster Stan Greenberg interviewed a bunch of ‘Reagan Democrats’ in Michigan he found that “The tax attack raised more doubts than the Reverend Wright one (68 versus 55 percent) and produced marginally more voters pulling away from Obama. Frankly, these financially pressed Reagan Democrats were more concerned that their taxes would be raised than with Obama’s relations with Reverend Wright.”

Samuel “Plumber Joe” Wurzelbacher may be unlicensed, in trouble with the IRS and a Republican (rather than genuinely undecided) , but it seems to have connected with swing voters and forced Obama on the defensive. While the Republican party may be too far to the right of the general population of this issue there are real flaws with Obama’s tax proposals as well that the McCain campaign can exploit.

3. Sarah Palin – It is likely that, after her appearance from Saturday Night Live, Governor Palin will take a much lower profile. At the same time both McCain and Palin seem to be distancing themselves from each other. While this may be cynical in Palin’s case (she doesn’t want to be held responsible for the likely defeat) and too late on McCain’s part, having Palin at arm’s length can only be a positive for the Senator from Arizona and will help him with undecided voters.

4. The current polls – In the last few days McCain has experienced a “mini-surge” going from over eight points down on October 10th to less than five points behind as of yesterday. This may be a blip or it could be the start of a fight back. However, if the polls are being biased by absentee and early voter lying about who they voted for (the exit polls overestimated the Obama-Clinton margins by about five points during the primaries), then the two candidates could be virtually neck and neck.

5. Swing states – Obama seems to have broadened his focus to solid red states, such as Indiana and North Carolina, and solid blue states, such as California. While expanding his lead in the electoral college and pumping up the popular vote may give him a stronger mandate than George W Bush had in 2000, he is being arrogant in not prioritising states like Ohio and Colorado. In contrast, McCain’s decision to spend time in the swing states is the strategy of a candidate who is more interested in winning the election, rather than merely reducing the margin of defeat.