Central Perk: Mish's Global Economic Trend Analysis

luni, 5 noiembrie 2012

Mish's Global Economic Trend Analysis

Romney Still Ahead in Gallup Poll But Edge Drops to 1% from 5%

Posted: 05 Nov 2012 03:59 PM PST

In the latest Gallup national poll, Romney's edge has dropped to 1% (49% to 48%) with 3% undecided. In mid-October, Romney has as high as a 5% edge.

Romney's Debate-Period Surge May Have Run Its Course

Current voting preferences mark a return to the status of the race from Oct. 1-7, when Obama and Romney were tied at 48% among likely voters. After that, Romney moved ahead in mid-October during the presidential debate period, holding a three- to five-point lead in Gallup Daily tracking shortly before superstorm Sandy devastated many areas on the East Coast Oct. 29-30. Romney's and Obama's current close positioning in the Nov. 1-4 poll was measured as the Northeast continued to recover from superstorm Sandy, and after Obama's highly visible visit to the region.

Between Oct. 22-28 and Nov. 1-4, voter support for Obama increased by six points in the East, to 58% from 52%, while it held largely steady in the three other regions. This provides further support for the possibility that Obama's support grew as a result of his response to the storm.

The poll also shows Americans giving Obama high marks for the way he dealt with the storm: 68% of likely voters approve of the way he handled "the response to Superstorm Sandy," by far his highest approval rating on any of four issues Gallup asked about in the final poll. Obama's approval rating among likely voters on the other three issues ranges from 46% on foreign affairs to 42% on the economy, and 39% on handling the situation in Libya.

Sandy and Momentum

The election will be decided at the state level of course, but the wide inconsistency between the Gallup national poll and various state polls gave pause for thought, until now.

This morning in 90% Chance of Obama Win; Three Things Romney Needs to Win; Election Night Coverage With Mish on National Syndicated Radio I suggested momentum had shifted to Obama and hurricane Sandy provided a reason.

The Gallup poll which arrived in my in-box at 3:30 PM suggests the same thing.

Gallup split the remaining 3% of undecideds in a roughly equal manner giving Romney a 50-49% edge. That would indeed be too close to call, except other national polls have Obama in the lead, and most show the same shift.

The Gallup Poll was taken November 1-4 but there is no reason to believe the shift towards Obama stopped then.

Last minute voters tend to break one way or another in discernible blocks and momentum suggests the break will be towards Obama.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

90% Chance of Obama Win; Three Things Romney Needs to Win; Election Night Coverage With Mish on National Syndicated Radio

Posted: 05 Nov 2012 10:02 AM PST

This election is all over but the final tally. I expect the winner to be announced soon after the West coast voting is closed.

The networks would all have you believe the election is a toss-up. For example, the Wall Street Journal just today reports Obama and Romney Deadlocked, Polls Show.

President Barack Obama and Mitt Romney crisscrossed the country Sunday to energize supporters in key states, as new polls forecast a down-to-the-wire election and both sides claimed they had the momentum to win.

The Romney camp, combing through surveys taken in the waning days of the campaign, pointed to strength among independent voters, anxiety over the economy and greater enthusiasm among conservatives as signs that the Republican would win, potentially with victories in states such as Pennsylvania and Minnesota that a GOP presidential candidate hasn't carried for decades.

Obama aides exuded similar confidence, citing polls showing the president remains resilient in potentially decisive states such as Ohio and Virginia.

Wall Street Journal Tossup Map

The Wall Street Journal depicts an election map that looks like this.

Quite frankly that map is complete nonsense. The idea that Obama can carry North Carolina or Indiana is as silly as the idea Romney can win Pennsylvania or Minnesota.

Spotlight Ohio

To help understand why Obama's chances are much greater than people think, simply look at the latest polls for Ohio.

The Real Clear Politics average projection is that Obama will carry Ohio by 2.8 percentage points. That is within the margin of error of the polls so the media calls Ohio a tossup.

By the same reasoning, the Wall Street Journal called Indiana, North Carolina and a grab bag of other states a tossup.

Well they are not. I was on Coast-to-Coast live national radio last night and told George Noory the odds of an Obama win were about 90%.

The reason is while every one of those polls may have a sampling error of say 3% the odds that all of the polls having a sampling error (in the same direction) of 3% is very small.

Only one poll out of 12 calls the election a tossup. The election is only a tossup if you think that is the one and only poll worth watching.

Similar analysis shows that Indiana and North Carolina are not in play either. This thought process should be easy enough to understand, on a state by state basis.

National Polls

National polls show the election to be very close. And on that score it is. Moreover, one thing Romney had in his favor recently was a consistent lead in national polls.

This lent hope to Romney Supporters for the idea the state polls were wrong and overly biased for Obama.

Well that changed in the last couple days. I believe it has to do with Obama's handling of hurricane Sandy couple with some really inept ads by Romney that were factually incorrect and auto-makers called him on it.

Whatever the reason, Obama is now ahead nationally.

Virginia

I wrote about Virginia five days ago in Governor Chris Christie Strongly Praises Obama's Response to Sandy; Could Christie's Comments Tip the Election?

Will Christie's Comments Tip the Election?

New Jersey, Christie's home state is solidly in the Obama column. However, storm-damaged Virginia is in a virtual dead heat. Praise from Governor Christie certainly cannot hurt Obama's election chances.

Mathematically, I do not believe Romney can win if he loses either Ohio or Virginia. Romney certainly cannot win if he loses both of them.

Here is question of the day: Is this genuine praise or is Christie looking to run for president in four years? I suggest both.

Regardless, widespread perception that Obama is doing a good job in response to Sandy, fueled by gushing praise from Christie may be enough to tip Virginia into the Obama column, and the election right with it.

In email exchanges with several readers who said I was off my rocker, I privately predicted Obama would carry Virginia.

Indeed, the latest polls now show Obama to be slightly ahead in Virginia.

Media Bias

Media has a clear and persistent bias, not necessarily for one candidate or the other (although some networks are clearly biased one way and others a different way). Rather, the bias I am taking about is a bias to keep you interested.

Regardless of who you are for, or who they are for, they all want you to tune in on election night and watch. The best way to do that is to pretend the election is a tossup when it's not.

It's like watching a football game where your team is down by 3 touchdowns with 5 minutes to go and the announcers pretend there is a reasonable chance of a comeback.

Assessing the Odds

This is all easy enough to see, provided of course you have an open mind on such things. The simple fact of the matter is most people do not have an open mind.

In general, people believe because they want to believe. They get mad at you when you say their candidate will lose, no matter how unrealistic the odds.

I am not a pollster, nor do I have a good way of assessing the odds. On my own accord I would have rated the odds about 2-1 last week and I would have them at 3-1 now?

So where does 90% come from?

The answer is a slight adjustment to the analysis by Nate Silver in his Five Thirty Eight Political Calculus Blog for the New York Times.

On November 3, Nate wrote For Romney to Win, State Polls Must Be Statistically Biased.

President Obama is now better than a 4-in-5 favorite to win the Electoral College, according to the FiveThirtyEight forecast. His chances of winning it increased to 83.7 percent on Friday, his highest figure since the Denver debate and improved from 80.8 percent on Thursday.

Although the fact that Mr. Obama held the lead in so many polls is partly coincidental — there weren't any polls of North Carolina on Friday, for instance, which is Mr. Romney's strongest battleground state — they nevertheless represent powerful evidence against the idea that the race is a "tossup." A tossup race isn't likely to produce 19 leads for one candidate and one for the other — any more than a fair coin is likely to come up heads 19 times and tails just once in 20 tosses. (The probability of a fair coin doing so is about 1 chance in 50,000.)

Instead, Mr. Romney will have to hope that the coin isn't fair, and instead has been weighted to Mr. Obama's advantage. In other words, he'll have to hope that the polls have been biased in Mr. Obama's favor. (I recognize that 'bias' is a loaded term in political contexts. I'll explain what I mean by it in a moment.)

Momentum

I encourage you to read that article because Nate discusses sampling error, margins of error, time-frames and models.

Nate concluded But the state polls may not be right. They could be biased. Based on the historical reliability of polls, we put the chance that they will be biased enough to elect Mr. Romney at 16 percent.

Nate had the odds at 84-16. I used that as my starting point and asked the question "which way is momentum going?"

Right after the first debate and for two weeks following momentum unmistakably shifted to Romney. I was not reading Five Thirty Eight at the time but I thought the presidents chances dipped to 60% and he would lose if he messed up another debate. He didn't mess up another debate, and momentum to Romney stalled.

Momentum changed back to the president with Hurricane Sandy. There is a possibility that Sandy was just a coincidence and the momentum towards Romney simply played its course and shifted.

Nonetheless, and regardless of reason, four news polls show Obama in the lead in Virginia, and it is now conceivable Obama could lose Ohio and still win the election by picking up smaller states like Nevada, Iowa, and New Hampshire (states the president is actually favored to win).

Romney's only hope right now rests on three factors, all of which much be true for him to win the election.

Three Things Romney Needs to Win

The state polls are wrong
The national polls are wrong
Momentum did not shift to Obama

With a tip of the hat to Nate Silver, I rate the odds of that parlay for Romney to be 10%.

Election Night Coverage With Mish on National Radio

Regardless of the outcome, I will be on Coast-to-Coast national syndicated radio with George Noory to discuss the election results and the impact on the stock market and jobs.

The broadcast starts at midnight Central, 10 PM Pacific.

Click here for a station in your area, many of which have an internet broadcast feed, even if none are close by.

Please tune in. And by the way, don't blame me regardless of who wins, I am just the messenger (and I am not voting for either of them).

"Wine Country" Economic Conference Hosted By Mish
Click on Image to Learn More