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Pollsters Say Senate Race a Cliff Hanger - Markets Favour Republican Majority

Thursday, 26th October, 2006

The pollsters and the political pundits reckon the Senate outcome after the 7 November election is too close to call but the markets are still predicting the Republicans will narrowly retain their majority status.

Yesterday the Washington Post in its Countdown to Election Day reported that surveys this week foreshadowed "a wild finish to a very competitive battle for control".

The Post has nine of the 33 Senate races as closely contested with five leaning Democrat and four where the result is a toss-up. Seven Republican-held seats and two Democratic-held seats make its Countdown cut.

In the states now held by the Democrats, the New Jersey race between Sen. Bob Menendez (D) and state Sen. Tom Kean Jr. (R) currently rates as a toss up while the Maryland race between Democratic Rep. Ben Cardin and Republican Lt. Gov. Michael Steele begins as leaning toward the Democrats.

Four states with Republican incumbents -- Pennsylvania, Montana, Rhode Island and Ohio -- currently lean toward the Democrats. Three other GOP-held seats -- Missouri, Tennessee and Virginia -- are considered toss-ups. "We believe control of the Senate will be determined by those three contests." the Post reported.

In the New York Times the post-election outlook is summarised as 40 Safe Democrat Senate positions, eight leaning Democrat, four toss-ups, one leaning Republican with 47 safe Republican positions.

On Pollster.com the latest data from the pollsters is said to show the Republicans with 48 likely Senators, the Democrats 49 with three (MIssouri. Tennessee and Virginia) in the too hard to guess category.

On the Iowa Electronic Market, a long established system for trading on elections run by the University of Iowa's Henry B.Tippie School of Business, the Republicans are given a 72% chance of at least retaining their majority with the Democrats rated a 30% chance of reaching majority status.

Market fluctuations on the Iowa Electronic Market are shown in the graph below.

RS_gain - Republicans to emerge with more seats

RS_Lose - Republicans to lose majority

RS_Hold - Republicans to lose seats but keep majority

The Iowa Electronic Markets are real-money futures markets in which contract payoffs depend on economic and political events such as elections. These markets are operated by faculty at the University of Iowa Tippie College of Business as part of our research and teaching mission.