Its looking like Romney isn't getting much of a convention bounce, so the small cadre of statnerds that are obsessively following the statistical forecasting have prettymuch written the presidential horsehorse off as a done deal.
In horserace terms it looks to us like Romney is a "dweller" that cant break-out, and Obama is a front-runner that can't be caught.
Sam Wang at PEC has Obama's chance to win at 10:1, and he is now redirecting his attention to the House and Senate races as more interesting problems. BTW he has the House returning to the dems with a probability of 69%.
But there is one way we all agree that Romney could still win the presidency....a black swan event.
What is a black swan event?
From the wiki:
The black swan theory or theory of black swan events is a metaphor that describes an event that is a surprise (to the observer), has a major impact, and after the fact is often inappropriately rationalized with the benefit of hindsight.
The theory was developed by Nassim Nicholas Taleb to explain:
1. The disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology
2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)
3. The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs.
Unlike the earlier philosophical "black swan problem", the "black swan theory" refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.
So statnerds spend some time wondering what kind of black swan event might swing the election. Another Lehman Brothers? A weather event?
One thing we have come up with is an Israeli strike on Iran.
Just recently the size of the joint exercise with Israel has been
drastically reduced in scale, which is probably
why Bibi got so angry.
A source that participated in the meeting said that a particularly angry and stressed Netanyahu began a tirade against the US president, attacking him for not doing enough on Iran. "Instead of pressuring Iran in an effective way, Obama and his people are pressuring us not to attack the nuclear facilities," the source quoted Netanyahu as saying.
Angered about continued US rhetoric that diplomacy needs more time to work, Netanyahu said flatly: "Time has run out," Yediot reported.
The American ambassador is said to have responded politely but firmly, telling Netanyahu that he was distorting Obama's position. Obama promised not to allow Iran to obtain nuclear weapons, he explained, and left all options on the table, including military options.
At that point, diplomatic sources told the paper, "sparks flew" in an escalating shouting match between Netanyahu and Shapiro as the stunned congressman watched.
Since the US participation has been scaled back by 2/3rds, its going to be a whole lot harder for Bibi to magic up a late October surprise.
Well-placed sources in both countries have told TIME that Washington has greatly reduced the scale of U.S. participation, slashing by more than two-thirds the number of American troops going to Israel and reducing both the number and potency of missile interception systems at the core of the joint exercise.
“Basically what the Americans are saying is, ‘We don’t trust you,’” a senior Israeli military official tells TIME.
I think Obama is just reducing the probability of a black swan event happening at the end of October. I would say the probability of Bibi launching on Iran now is significantly reduced, because he cannot do it without American compliance. And the US just sent him a strong message with the troop and weapons systems reductions.
Black swan events have already been factored into the PEC model, with
the use of a fat-tailed distribution. So there is no need to change Obamas true probability of win.
We now return you to your regularly scheduled programming.