In complete defiance of the available polling evidence and overwhelming media narrative, punters continue to pile into President Barack Obama to win a second term. Over the last 24 hours, Obama's price has tightened from 1.548/15 to 1.4740/85, with Mitt Romney now a 3.185/40 chance. This despite five of the last six national polls recording Romney ahead by either two or three points.
Why the discrepancy? It certainly can't be due to the media, who are virtually unanimous in the belief that this is now a 50/50 race, which will be settled by a small number of votes in a small number of key states.
Theoretically, the market moves could be in expectation of forthcoming polls showing an Obama bounce after winning Monday's final debate. Likewise, some might expect Republicans to be damaged by their Indiana Senate candidate Richard Mourdock's comments that pregnancies caused by rape are the will of God. Although it is possible that we see some effect from those issues in the days ahead, neither is likely to affect markets until new polling trends have actually been published.
Rather, the likeliest explanation is the emerging evidence that Obama is winning the ground war in the key states that will decide the election. Most significantly, Obama is showing a clear lead amongst early voters in Ohio, driving his odds in that pivotal state to just 1.454/9. If the race is indeed as tight as national polls suggest, turnout could prove decisive.
The ground game is particularly important for Obama, given that his opponents are almost guaranteed to be well motivated to vote. That explains his more aggressive tone in the final debate and at this week's rallies, at which the President keeps ramming home his message about 'Romnesia'. Some commentators reckon the new tone is too divisive and will deter undecided voters, but it is unclear just how many genuine swing voters are left to be won.
America has long been defined as a '50/50 country' and it is hard to see envisage either man getting less than 47%. As most voters already have clear, fixed opinions about an incumbent President, there is little mileage pursuing a bland, consensual strategy for fear of scaring the horses. So while moderate positioning might work for Romney, who needs to reassure voters, it offers little advantage for Obama. In his case, it may be better to state the case aggressively, motivate natural Democrat voters and try to undermine Mitt Romney's new moderate stances as fake.
Organisation is also widely regarded to be the Democrats' campaign's greatest strengths, much more so than Republicans. It is more relevant in some places than others - strong, passionate backing from the unions could make the difference in Ohio and Wisconsin, but have less impact in Colorado or Florida.
Another state where Obama's ground campaign is regarded as a fearsome, professional machine is Iowa. Victory in the opening 2008 primary here catapulted Obama to national favouritism and changed the dynamics of that year's race, and he duly went on to win a 9.5% victory in the main contest. Even before advantages on the ground are taken into account, the RCP average shows Obama 2% ahead. Of the last ten surveys, Obama led in six, by up to seven or eight percentage points, whereas Romney never led by more than a single point.
Under the circumstances, it is unlikely that Obama is going to get any bigger than the current 1.528/15 between now and election day.
Back Obama to win Iowa @ 1.528/15
Latest Next President Odds
Barack Obama 1.4740/85
Mitt Romney 3.185/40