And The Winner Will Be......

Today I'll put my undergraduate degree in Political Science from DePauw University to work and throw out four scenarios and my probabilities as to each an outcome on Tuesday.  Each is worth what you pay to read it here.

Most likely scenario {55% probability of occurring}.

I still say President Obama by a nose, 277 electoral votes to 261.  I think Obama wins the three states that seem to matter the most.  You can see my analysis here.

Wisconsin 2-3%

Iowa 2-3%

Ohio by less than 1%.

That should be enough.  I think the popular vote goes to the President by a percent or two.

One of the candidates wins big- 300 electoral votes or more.  {35% probability}.

One cannot ignore that over the weekend the race has broken big for one or the other candidates.   I can make a case that this has occurred for either of the candidates.  Obama looking more presidential for example after Hurricane Sandy, bigger crowds for Romney at rallies as an indicator of heightened support.  Hard to say how this will go.  Doesn't feel to my like this has occurred.  If it has though my sense is that it will break for the President.

A surprise that nobody expects.  {35% probability}

Everybody has focused on the battleground states but quietly it seems that Michigan and Pennsylvania have come back into play.  Of these two it strikes me that Gov. Romney has a better chance in Pennsylvania.  It could be that enthusiasm for Gov. Romney rises in the western part of the state and that  voter turnout in the Philadelphia region which may have been impacted by the hurricane.  If Gov. Romney can somehow steal Pennsylvania and carry out the rest as projected he will be the next President.   Likewise if the President can peal Virginia away from what most expect to be a red state this cycle then  he will probably win.  

One final thing to watch.  Two states {Nebraska and Maine} divide their electors by popular vote.  Normally this does not matter but in a closely packed election such as this they may come into play.

A hung election.  {25% probability}

Here's what I said on Friday:  

"The one thing I do not think that markets have factored is the possibility that we wake up on November 7^th with no idea who’s the winner. If we look like we are in for a reprise of the 2000 election, then I think stocks will move lower and we will have to become more defensive minded in our portfolio strategies."

My gut tells me though that the election is going to be decided in Ohio.  I have a bit of insight on how the "Buckeye State" may vote tomorrow as I grew up on the Indiana/Ohio border  and went to law school in Toledo,  Ohio.  I will give you my tells on Ohio tomorrow.

Of course I could be wrong on all fronts.  What is so strange about this election is that nobody really knows what's going to happen tomorrow, probably not even the campaigns themselves.  Markets are in a holding pattern until we get more information as to who wins.