Election Post Mortem

I believe that the United States is not so much a collection of states as it is an amalgamation of different regions.  This is not an original observation.  The idea was as far as I know was originally advanced by Joel Garreau in 1981 with his book The Nine Nations of North America.  David Hackett Fischer in his 1989 book Albion's Seed, provided similar observations as to how the development of the origional American colonies was shaped by immagration from four distinct regions of England.  This idea was picked up again in 2011 when Colin Woodard published a book titled American Nations.  

Over the years I've played around with this idea a bit {what can I say, I'm a history buff!} and put my own stamp on what I think these different regions might actually look like.  Time is too short today to go into this idea in any detail but just for the heck of it I put a rough copy of the regions in North America as I see them over a New York times map showing how each county voted Tuesday.  Red is Romney, Blue is Obama.   In short Romney won three of the 10 regions.  He won the interior of the country and lost the coasts.  He also lost the major metropolitan districts of the Great Lakes Region which is why he lost Illinois, Minnesota, Wisconsin, Michigan and most important to him Ohio.   He also heavily lost the region I'll call New Mexico.  This is important because it is one of the fastest growing regions in the country and looks to be expanding up the front range of the Rocky Mountains.  

This won't make any of us a dime today but I think it does help explain some of what happened on Tuesday.

As to my predictions.  Here is what I thought had the greatest probability of occurring:  

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.

As to the actual results, the election is not final yet in terms of the popular vote and Florida has not been awarded to either candidate.  President Obama has 303 electoral votes and is leading in Florida.  He won the popular vote with about 50.5%.  He won in Ohio by about 2%, Wisconsin by 6%, Iowa by 6%.  If Obama holds onto Florida I will have put that state in the wrong column. Virginia was the other State I missed, although the winner there only won by about 50,000 votes.

Markets sold off hard yesterday partly on the election results {not sure how people could have been that surprised}, partly on news out of Europe and partly on concerns over whether the new Congress and President can sit down and bargain over the fiscal cliff.  Markets are flat to slightly higher today and stocks are becoming oversold enough for a bounce if the overhang out of Washington can get some kind of resolution soon.

I'll be out traveling tomorrow but will be back here Monday.  Irrespective of yesterday and which side immerged as the winner, the best news for investors is that we have clarity as to the results.  We're done with the election now and can start focusing on the road ahead.