US Politics: Two weeks to go and it's too close to call

Obama and Romney have two weeks to make their cases

The debates are over and the candidates have a fortnight left to make their case to the voters. Mike Robb explains why he thinks Mitt Romney's 3.052/1 is generous...

This was nowhere near as bad as many expected for Mitt Romney. Yes, there was the occasional foot in mouth moment, such as when he claimed that it was a disgrace that the US now has fewer ships in the navy than just after World War Two, to which the President jibed that "there are also fewer horses and bayonets... This is not Battleship." Funny, but just that. Nothing crippling, and certainly not as bad as some of the foreign policy moments we have seen from Romney over the last few months.

Early polling claimed a 48 points to 40 win for Obama. If anything, that is slightly harsh, but it should have a significant impact on the bigger picture. Mitt Romney did nothing to damage himself last night, which is why the very slight shortening in the Betfair market is a surprise, and can only be attributed to people seeing those instant poll numbers (which, by the way, are often very unreliable indeed) and putting a pound or two on the President.

Overall, the televised debates have been far more helpful to Mitt Romney than to Barack Obama. He may only have won one from three, but that win propelled him back into the game and gave him crucial momentum. That he didn't make a complete hash of the latter two debates means that initial traction has remained intact.

We now need to look at the bigger picture to make sense of what is going to happen over the next fortnight. The headline story is that the two are neck-and-neck nationally - latest RealClearPolitics polls put the President on 47.6 percent to Romney's 47.2, with 5.2 percent undecided.

Crucially, however, Romney is nominally ahead in some key swing states, which ensures he is very much in-play: (RealClearPolitics averages)

Romney ahead:
Florida: 48.4 Romney, 46.6 Obama (Romney 1.454/9 in Betfair Florida market)
Colorado: 47.6 Obama, 47.8 Romney (Romney 1.910/11 in Betfair Colorado market)
North Carolina: 50.3 Romney, 44.7 Obama (Romney 1.182/11 in Betfair North Carolina market)

Obama ahead:
Ohio: 47.6 Obama, 45.7 Romney (Obama 1.558/15 in Betfair Ohio market)
New Hampshire: 48.4 Obama, 47.4 Romney (Obama 1.491/2 in Betfair New Hampshire market)

Tie:
Virginia: 48.0 Obama, 48.0 Romney (Romney 1.774/5 in Betfair Virginia market)

If those states all fall as currently predicted, and there are no wider surprises, we have Barack Obama on 265 Electoral College votes to Romney's 229, with three key states in the toss-up column - Virginia, Iowa and Wisconsin - with Obama ahead in the latter two by 2.0 and 2.8 points respectively. He only needs to win one of those three to take him past the magic 270 mark and win re-election.

This is ultimately why the President remains a strong favourite in the Betfair market - Mitt Romney has a lot more work to do to win this than Obama does. But looking at the leads in all seven battlegrounds above, all but one, North Carolina, are within three points. The question you need to ask yourself, therefore, is whether or not the Betfair market's pricing of Obama on 1.4840/85 (a 68 percent chance of victory) to Romney on 3.052/1 (a 32 percent chance) is correct.

With two weeks to go, this is coin toss territory: on that basis the 3.052/1 on a Romney victory is clearly the right play.