Welcome to the Wednesday morning FT live blog on the 2012 election, beginning moments after Barack Obama renewed his pledge to unite America and tackle its looming problems, particularly the so-called “fiscal cliff”. If you want to relive a decisive night in US politics, you can do it here. President Obama’s victory speech is here. We’ll track reaction from markets and governments around the world. By Anjli Raval and Arash Massoudi in New York and Ben Fenton and John Aglionby in London. (Times in GMT)
21.20: We’re signing off now, thank you for following the US election 2012 live blog.
21.16: As we shut down the blog for the day, here is a final look at US markets from Vivianne Rodrigues, US capital markets reporter, at the close of play:
“All major benchmark indices declined by more than 2 per cent. Wall Street’s S&P 500 suffered their worst day of losses since June, ending the session below the 1,400 mark. US treasuries yield fell over 10 basis points as investors fled riskier assets for haven investments such as top tier government bonds. The 10-year note yield ended the session at 1.64 per cent. Meanwhile, the dollar index rose 0.2 per cent and gold prices see-sawed wildly before ending the session slightly higher at $1,717 a troy ounce.”
21.13: Pan Yuk, who looks after the FT’s emerging markets coverage in New York, has alerted us to a Forbes story pointing to the billionaire winners and losers of the 2012 presidential election.
21.04: Following John Boehner’s earlier comments, Alan Beattie, the FT’s international economy editor, tweets:
20.55: Edward Luce, the FT’s Washington columnist and commentator, discusses Obama 2.0 and the president’s priorities for the next four years (deficit reduction, tax reform, immigration reform and climate change). How will Mr Obama play his cards?
Reprising the 2004 speech that first won him national attention, Mr Obama set out his bipartisan stall once again. It did not work the first time. Indeed, Republicans made a mockery of the entire concept. Their goal was to make Mr Obama a one-term president. That is no longer an option. But many Republicans will want to ensure Mr Obama’s second bite at the cherry is as sour as the first. Mr Obama will need to face them down soon – and prevail.
20.50: What did the papers say? Here are a selection of election front pages, from the US and abroad, showing President Obama’s victory (via Anna Fifield, the FT’s White House correspondent).
20.45: Mr Boehner also said that the country needs to reduce entitlement spending (benefits such as social security and Medicare) and close tax loopholes in order to raise government revenues and create a stronger economy. “The Republican majority stands ready to work with you to do what’s best for the country,” he said.
20.36: John Boehner, the Republican speaker of the House of Representatives, is speaking to reporters at a press conference. He offers congratulations to the president but says: “Like many Americans, I was hoping this election would have turned out differently.” He added:
“If there is a mandate in yesterday’s results, it’s for us to work together on solution on the challenges that face the nation.”
“The greatest challenge of all is the massive debt that is smothering growth and exceeding the size of our economy”.
20.31: In more scrutiny of pundits who accused pollsters and the media of bias in pre-election forecasts, Conor Friedersdorf, staff writer at The Atlantic, writes:
On the biggest political story of the year, the conservative media just got its ass handed to it by the mainstream media. And movement conservatives, who believe the MSM is more biased and less rigorous than their alternatives, have no way to explain how their trusted outlets got it wrong, while the New York Times got it right. Hint: The Times hired the most rigorous forecaster it could find.
It ought to be an eye-opening moment.
But I expect that it’ll be quickly forgotten, that none of the conservatives who touted a polling conspiracy will be discredited, and that the right will continue to operate at an information disadvantage. After all, it’s not like they’ll trust the analysis of a non-conservative like me more than the numerous fellow conservatives who constantly tell them things that turn out not to be true.
(Hat tip: Cardiff Garcia, from FT Alphaville)
20.09: Here’s a chart tracking text message activity last night across the US, courtesy of Sybase 365, the mobile services arm of German software company SAP. The spike in activity you see is right around 23.20 EST, right after news organisations began calling Ohio and the election for President Obama. According to the company, over 106,000 text messages were sent per second at this time.
(Hat Tip: Paul Taylor, FT US telecoms editor)
19.55: More projections from the Pew Research Center. It says that the minority groups that carried President Obama to victory yesterday by giving him 80 per cent of their votes are on track to become a majority of the US’s population by 2050.
By 2050, the Hispanic share of the U.S. population could be as high as 29%, up from 17% now. The black proportion of the population is projected to be unchanged at 13%, while the Asian share is projected to increase to 9% from its current 5%. Non-Hispanic whites, 63% of the current population, will decrease to half or slightly less than half of the population by 2050.
19.47: The Associated Press has called the tight North Dakota Senate race for Democrat Heidi Heitkamp. That means there will now be a record 20 women in the new Congress, up from 17. (See 11.50)
19.45: Some pundits are eating their words. Dick Morris, the Fox News conservative analyst and former Clinton administration political operator, was among those criticising media polls ahead of the election. He had predicted a landslide for Mr Romney based on his own analysis. However, today, Mr Morris explains in a video for his daily newsletter how he had misread the electorate (hat tip: Edward Luce, the FT’s Washington columnist and commentator).
“This is not your father’s United States. This is the United States with a permanently high turnout of blacks, latinos and young people…The Republicans have survived and stayed in power because of the turnout of everybody was lower and their turnout was lower. Well, that finally caught up with us yesterday.”
19.35: Simon Schama, an FT contributing editor, gives his take on why President Obama won the election. A key factor, he says, is the “world of denial in which Republicans have immured themselves ever since the rise of the Tea Party in 2009″.
This is a universe in which the financial crash was caused by over-regulation; one in which, despite years of brutal drought and violent weather patterns, climate change is a liberal hoax; a country that can correct a vast structural deficit without ever raising additional revenue, while expanding the military budget beyond anything sought by the Pentagon; a belief system in which Mr Obama was the source of all economic ills rather than the steward of the most intractable crisis since the Depression. The mantra was that a business executive would, simply by virtue of that fact, effect a magical rejuvenation of the staggering American economy.
19.30: With just over 90 minutes left in the US trading day, Wall Street stocks looked to have pared some their heavy losses as the S&P 500 reclaimed its 1,400 threshold. Still, US equities on the benchmark index remain almost 2 per cent lower on the day.
19.20: Todd Akin has called his defeat in the Missouri Senate race to Senator Claire McCaskill a “real skunking.” Mr Akin, who rose to notoriety in August after he declared that women could shut down their reproductive systems in cases of “legitimate rape”, said other factors had led to his loss. He felt he was running against both Ms McCaskill and the Republican Party. He added “I don’t know which one was worse.”
19.10: Ed Crooks, US industry and energy editor, says that business leaders across America must now consider ways to work with Mr Obama after spending heavily to support his defeat. He writes:
“The fastest responses to that result came from companies and groups urging bipartisan co-operation to avoid the “fiscal cliff”: the automatic tax increases and spending cuts that take effect at the start of January unless Congress can agree a deal to avoid them.
Randall Stephenson, chief executive of AT&T, the telecoms group, said on Wednesday the issue was already holding up business investment. “It is serving as a throttle on this country’s growth right now and it needs to be addressed real soon,” he said.
John Engler, president of the Business Roundtable, a group representing large company CEOs, echoed that view in a statement urging politicians to reach a deal before the end of the year. “America’s business leaders call on Congress and the administration to take swift action in the ‘lame-duck’ session to avoid needless disruption,” he said.”
19.00: The bloggers over at FT Alphaville say in a fresh post that today’s sell-off on the US market is not solely due to sour grapes over Mr Obama’s re-election. But as Cardiff Garcia and Joseph Cotterill collate views from market experts, they say there’s no solid explanation for the losses today or what lies ahead. They write:
“So we’ll leave you with a quick reminder (hat tip Stephen Foley) that the day after Obama was first elected four years ago, the S&P declined by more than five per cent. That was a different world: Lehman had just collapsed and, although we didn’t know it then, the US economy was in the midst of its sharpest quarterly contraction in decades. After declining for a few more months, since Obama’s inauguration the market has trended, with notable interruptions during those deflationary months of 2010 and the debt ceiling debate of 2011, nicely upward.
That’s not any kind of endorsement one way or another. The point is that we didn’t know then what would happen next, and we don’t know now.”
18.45: Barack Obama’s election campaign and presidency has relied heavily on social media engagment and the use of technology. In the latest exhibition of his team’s insatiable need to keep Americans engaged, you can watch the President return to the White House live at 22.20 (17.20 EST) in his helicopter.
“Join us at WhiteHouse.gov/Live to watch Marine One bring President Obama back to the White House to continue his work behalf of the American people. The Presidential helicopter will land on the South Lawn today at 5:20 p.m. EST.”
18.37: On a lighter note, Matthew Garrahan, our man in Los Angeles, has tweeted this animation of President Obama’s victory over Mitt Romney.
18.32: While some political junkies are lamenting the end of the election cycle, others are turning their number-crunching addiction to the “fiscal cliff”. Here’s a way to simulate the impact of the string of tax increases and spending cuts set to go through next year , courtesy Lombard Street Research (hat tip: Robin Harding, the FT’s US economics editor).
18.21: Positioning for 2016 already? Marco Rubio, the Republican senator from Florida, has turned down a request by his party’s leader in the Senate to run the 2014 re-election committee for Senate Republicans, Real Clear Politics reports:
“Whereas some politicians would use an NRSC leadership role to create a broader national profile, Rubio already has one; in fact, he will be traveling to Iowa as a guest of Republican Gov. Terry Branstad in two weeks.
Rubio, a rapidly rising star in the party after his huge but unlikely victory in the 2010 election, is a favorite of McConnell’s. And as a 41-year-old Cuban-American capable of delivering some of the party’s best speeches, he’s someone the GOP brass likes to put in front of the cameras. Not only is he inspirational, but he helps the diversity-challenged party bridge several divides with voters.”
18.15: One of the key factors for President Barack Obama’s reelection was the support of Hispanic voters, as reported by Matthew Garrahan in Los Angeles. Data from the Pew Research Center also highlights this:
18.05: There’s a Kennedy back in the US Congress. Joseph Kennedy III, the grandson of the late US senator Bobby Kennedy, was elected to the Massachusetts seat in the House of Representatives left open by the retirement of Barney Frank. Up until 2011, there had been at least on Kennedy family member in the House, Senate or White House for 64 years. Here’s how the Boston Globe described the decisive victory of a Kennedy to US politics:
“After a brief break from the stage, Camelot is back for another act.”
17.58: The next four years for the president are going to be tough with fundamental decisions about the future of the US economy, business and defence being made. To indicate the scale of the task ahead Bloomberg Businessweek’s latest front cover shows an older, greyer and worn-out President.
This is the cover the magazine would have run if Mitt Romney had won.
17.45: John Boehner, the Republican speaker of the House of Representatives who also held on to his majority last night, is due to speak with the press at 20.30 (15.30 EST). Mr Boehner and his party leadership are due to feature prominently in any discussions on the US deficit, “fiscal cliff” and immigration reform. Stay tuned for more.
17.40: Mark Knoller, political correspondent for CBS News Radio, tweets from Senate majority leader Harry Reid’s press conference that just wrapped up. The Nevada senator, whose Democratic party held on to its narrow majority last night, spoke to reporters about Tuesday’s election results and their impact on the US Senate and the fiscal cliff.
17.33: Nate Silver, now-revered FiveThirtyEight blogger, is basking in his glory. Despite initial criticism, he correctly predicted the outcome of every US state. His book, The Signal and the Noise: Why So Many Predictions Fail – But Some Don’t, is now number two on Amazon’s best sellers list. Even his tweet late last night plugging the book was retweeted more than 6,500 times.
17.25: Alan Beattie, the FT’s international economy editor, says bad news from the eurozone has as much to do with today’s sell-off as the election:
Unless investors couldn’t read the presidential and congressional polls running up to the election, today’s sell-off seems likely to be as much to do with the eurozone (Draghi warning, bad German industrial production data) as the fiscal cliff. And thus continues a theme that hangs over Obama’s second term: the main threat to the global economy comes from Europe, but his administration can’t do much about it.
17.22: Wall Street is still selling off, while investors are flocking into Treasury bonds, says Vivianne Rodrigues, US Capital Markets reporter in New York.
The main worry is that policy makers fail to address the potential “fiscal cliff” of tax increases and spending cuts next year, which in turn will add further pressure on the the country’s economy.
All three major benchmark stock indices in the US fell sharply, with the S&P 500 trading below the 1,400 points mark for the first time since September as the Dow Jones Industrial Average fell 300 points to below 13,000. The S&P500 is having its worst intraday decline in one year.
The sell-off in the US helped drag global stocks lower, pushing the FTSE All World index down 1.3 per cent, while the yield on the 10-year Treasury note fell 12 basis points to 1.62 per cent.
Also hurting confidence is another burst of angst about the eurozone. The single currency is down 0.4 per cent to $1.2761, a two-month low, as investors become increasingly concerned about the region’s economy.
17.19: New York here picking up the baton. Although Fitch, the ratings agency, says that failure to break Washington’s political gridlock might result in the downgrading of the US’s AAA status, Moody’s has said it is holding off on its judgment until after the 2013 budget process is completed. Moody’s currently has the US at its highest rating of Aaa, but with a negative outlook.
17.00: Now that we don’t have to fret about them anymore, it is interesting to look at the recent polling. The final RealClearPolitics average poll, which the FT used in its reporting as the largest and, theoretically, most accurate sampling, erred in giving Obama a 0.7 percentage point advantage when his final score looks like it will be in the region of 2.2 to 2.4 percentage points. However, this mistake seems to have been entirely in underestimating support for the president. RCP’s number on Romney’s support was 48.1 per cent and at the moment, that is exactly what he has got at the ballot box. Obama was estimated at 48.8 and seems to be heading for somewhere around 50.5.
Those who suspected a “Bradley effect” where an African-American candidate’s support is overestimated because those questioned feel it is more politically correct to say they will vote for him or her, were wholly wrong.
16.55: Gideon Rachman, the FT’s chief foreign affairs commentator is not hopeful about the prospects of longlasting bipartisanship and compromise invading the Washington DC belway:
I think the Republican Party will return to Washington in an embittered and angry mood. One former senior figure in the McCain campaign of 2008 recently argued to me that the Republicans had only nominated the relatively moderate Romney, because they were told he was”electable”.
Now that he has lost, many will feel that there is no point in further compromise. Instead they will use the blocking power given to them by the constitution and their position in Congress. As for President Obama I cannot see how, fortified by victory, he could passively agree to accept the GOP plan to balance the budget without any tax increases. So, beyond last night’s fine words, we may yet end up slithering over that fiscal cliff.
In the long term, it seems to me, that one of the lessons of last night is that Tea Party obduracy is ultimately a losing proposition for the Republicans. But it is a winning ticket for many individual Congressman – and could still be the path to the party’s presidential nomination. And that is a big long-term dilemma for the Republicans.
16.50: Some Dutch and Belgian newspapers came up with a novel approach to the inconvenient deadlines when reporting the US election – print two versions and ask readers to read only the relevant articles….
16.45: Nobody could accuse RealClearPolitics.com of shirking its duty to explain the US election, and here it offers 21, count ‘em, reasons why Obama triumphed and Romney did not.
16.43: It’s not just the US markets that are suffering a hammering…
16.40: Now you see him. Now you’ll see him some more… (according to one of the AP’s White House reporters, Ken Thomas)
16.25: Anyone waiting for the Florida result in the presidential election should not start holding their breath. Only a tiny proportion of Florida’s provisional ballots have been counted so far. The 6 (out of 67) counties which have processed the provisional ballots represent only 57,670 of the state’s 11,934,446 registered voters. Or 0.4830555 per cent. Provisional ballots can take a long time to validate, sometimes days. So it could be a long wait for the rest. Good job it doesn’t matter.
16.20: Esther Bintliff, on the FT’s World Desk, has done an excellent cut-out-and-keep guide to Obama’s first term. Well worth a read
16.05: Markets update. It’s grim out there. The S&P 500 and Dow are both down 2.1 per cent at 1,397 and 12,963 respectively. The Nasdaq is off a little more, down 2.2 per cent at 2,944. The looming fiscal cliff and the eurozone’s woes are weighing most heavily on sentiment.
16.00: Meghan McCain, daughter of losing 2004 Republican candidate John McCain, has tweeted on why she thinks the Republican Party didn’t do better. Speaks volumes.
RINO means Republican In Name Only
15.55: Republicans in Florida, which is still too close to call, did a pretty good job on motivating the base. Of the state’s large counties, the top two for turn-out, Sumter with 82 per cent and Collier with 83 per cent, are heavily Republican.
15.43: Tim Bradshaw, FT tech correspondent in San Francisco, has studied the Twitter tea leaves from last night. He writes:
Besides winning Ohio from the Republicans, we’re sure that among Barack Obama’s main concerns last night were: “Will I beat Justin Bieber on Twitter?” Well Mr President, the tweets have been counted and yes, that post claiming “Four more years” has been returned as the most popular tweet of all time. Obama’s tweet, containing a photo of the president hugging his wife, has been retweeted 654,758 times and counting, going on for triple Bieber’s previous record.
The President also set a new record on Facebook, with the same photo attracting 3.2m Likes at the time of writing.
Twitter itself has won praise for not collapsing under the strain of tweets during election night – even as Obama used it to claim victory on the site more than an hour before he made his acceptance speech.
But while the night’s “tweets per minute” spike of 327,453, – driven by the TV networks’ calling it for Obama – set a new high for US political events, that was still below previous records set by the Euro 2012 football championship or singer Beyonce’s announcement that she was pregnant last year.
This may have been the “social media election”, but Twitter still belongs to the celebs.
15.40: Is this the opening salvo in the race to find the 2016 Republican candidate? Marco Rubio, Republican senator from Florida, earlier today issued the following statement about the2012 presidential election on his Facebook page:
“It has been a privilege campaigning for Mitt Romney, getting to know him and traveling throughout the country on his behalf. When future generations look back on this election, I am proud they will count me among those who chose a path of limited government and free enterprise at a critical crossroads in our history.
“I am proud to have cast my vote for Mitt Romney.
“Now comes the hard part. America faces monumental challenges in putting people back to work, reducing our crushing debt and advancing our interests around the world.
“In the next Congress, I am committed to working on upward mobility policies that will ensure people who work hard and play by the rules can rise above the circumstances of their birth and leave their children better off. The conservative movement should have particular appeal to people in minority and immigrant communities who are trying to make it, and Republicans need to work harder than ever to communicate our beliefs to them. I look forward to working on these goals with my new and returning colleagues in Congress and hope the President will get behind our efforts.”
15.18: Andrew England in Johannesburg says Jacob Zuma, South Africa’s president has issued a short statement saying the US has an important role to play in Africa’s development. “South Africa is confident that the United States will continue to play a positive role in this regard”, said Mr Zuma.
15.14: Here’s an FT poll of market experts on the meaning of the results from Tuesday’s poll.
15.02: A very good reason why Mr Romney is not on his way to the White House, from strategist Kristen Soltis:
14.54: And here is a very fresh edition hot out of the oven of the FT’s Global Market Overview, by Vivianne Rodrigues in New York:
Stocks on Wall Street headed lower, while Treasuries jumped, as attention switches to the US’ fiscal problems after Barack Obama has been re-elected as US president.
Obama’s re-election boosted speculation further stimulus may be added to the USeconomy as it faces the potential fiscal cliff of tax increases and spending cuts next year.
The major benchmark stock indices in theUSfell over 1 per cent at the open, with the S&P500 last declining 1.4 per cent. The FTSE All World index fell 0.8 per cent.
In contrast, investors flocked the US Treasury market, with the securities headed for their biggest advance in almost three months. In contrast, the yield on the 10-year note fell 12 basis points and was last trading at 1.62 per cent.
Copper jumped and gold also rose sharply, while the US dollar was lower in response to the prospect of the Fed’s supportive monetary policy continuing indefinitely.
The dollar is up 0.3 per cent, copper is down 1.3 per cent and gold has pared its gains to rise just 0.5 per cent to $1,723 an ounce. The FTSE Asia-Pacific index climbed 0.7 per cent.
Mohamed El-Erian, chief executive of bond fund Pimco, told the Financial Times: “Despite all the campaigns’ claims and their massive spending, it risks being déjà vu all over again for markets. After an initial flurry, they may well return to worrying about being hostage to the whims of a bickering and indecisive Congress”.
14.42: Here is Bloomberg’s take on the plunge-ette on Wall Street:
Stocks erased earlier gains after European Central Bank President Mario Draghi said the German economy is beginning to be hurt by the euro-area debt crisis and the European Commission said the region will virtually grind to a halt next year. German industrial production fell for a second month in September, the Economy Ministry in Berlin said today.
14.40: DJIA now down 1.55 per cent, so is S&P 500, but could be down to Mario Draghi, president of the European Central Bank, saying the slowdown has reached Germany, rather than the election result.
14.35: The Dow Jones Industrial Average has opened down 1 per cent or 182 points.
14.30: Joe Leahy, our man in Sao Paolo, has an interesting take on how Brazilians are reacting to the re-election of Mr Obama:
In Brazil, there is one group likely to be pleased with Mr Obama`s
victory – the country`s rising lower middle class, the engine of its
recent economic growth.
The reason? Mickey Mouse.
During his first term, Mr Obama made it easier for Brazilians to
obtain visas to visit the US and ever since they have been flocking
there in record numbers, particularly to Orlando, Florida, the site of
one of Disney`s theme parks.
In January, the Orlando International Airport celebrated the arrival
of the Brazilians, who through two daily flights per day from Sao
Paulo were pumping an annual $280m into the local economy.
Since then, an extra daily flight has been added between Orlando and Rio de Janeiro.
Brazil as a country even received the honour of being named the
“Floridian of the Year” for 2011 by Florida Trend Magazine, Orlando
Airport said, without elaborating on what the evidently coveted award
is in fact for.
As for the Brazilian government, Folha de S.Paulo reported that it was
never very impressed with the Romney campaign`s foreign policy
document. “Mitt`s Plan” focused on anti-American movements in Cuba
and Venezuela and the drug war in Mexico and Colombia but omitted
entirely Brazil, the emerging power on the South American continent.
On the record, President Dilma Rousseff told a conference on Wednesday
that she congratulated the people of the US on their election of Mr
Obama and that she would try to call him in the next day or two.
14.26: A nice tongue-in-cheek piece from Conde Nast Traveller (or actually Traveler as it is the US edition) about where to travel if your preferred candidate didn’t win the election.
14.20: There is already some work going on, fiscal-cliff-wise, with Speaker Boehner meeting his troops by conference call according to Politico.com
…later in the afternoon, Boehner will talk to the press about “the need for both parties to find common ground and take steps together to help our economy grow and create jobs, which is critical to solving our debt.”
It’s a typical move for Boehner at the outset of a massive legislative debate. He tries to create a consistent – some would say stubborn – narrative in the Capitol to send a message to the White House that he’s unwavering in his negotiating stance.
14.12: Interesting live feed from the state government of Florida showing which counties have yet to count or report their provisional or absentee ballots. The current count is here. If other states had been closer, this would be a very, very interesting time to be in Florida – for election nerds, anyway.
13.55: Karl Rove is back on Fox TV this morning, and those who enjoyed his late-night dispute (see 08.02) with the Fox forecasting team who he lambasted for calling (correctly) Ohio for Mr Obama, are hoping for a repeat performance.
13.50: The BBC’s Katy Kay has tweeted on a subject not many pundits have discussed:
13.45: David Zervos, managing director, global fixed income strategy at Jefferies & Co, reckons another winner last night was Federal Reserve Chairman Ben Bernanke.
We can talk about smaller government, less business regulation and lower taxes all we want; but the current drivers of our markets are Ben, Mario, Mervyn and thankfully, in short order, whoever replaces Masaaki. There was a small risk, which materialized back in October, that Romney and Ryan would enter and take away the only thing that is currently driving the US side of this equation. That risk is gone. We are back squarely in a world where the Fed stays too low for too long, risk assets are reflated and long term inflation risks are skewed to the upside. The same old trade for the last 4 years!!A few weeks back we had recommended exiting our long standing risk-on view into November 6th. The small chance of a material change in the Fed reaction function was simply too unnerving. Now, spoos are a few points lower than where we recommended exiting, while blues have stormed ahead. In retrospect, we missed a couple extra percent in a trade that was up over 20% for the year. That was a small price to pay for the potential of what could have happened if the election results went the other way. In any case, going forward, as the risk of “change” has now passed, folks are supposed to jump back in tactically. An Obama win secures a Bernanke win at the Fed. And based on past performance, a Bernanke win secures a long run positive return from spoos + blues.
13.30: Politico has a piece saying that Washington is waking up to a Groundhog Day on Wednesday, but cannot afford not to change. The article complements the accurate prognostication of Edward Luce, the FT’s chief US commentator, who wrote on Sunday:
“On Wednesday morning the US will probably awaken to wonder what the fuss was about. In all probability, Barack Obama will be the next president, the Senate will remain narrowly Democratic and the House will still be comfortably Republican. Which is to say that after the better part of two years – and $6bn in election spending – roughly 130m American voters will barely have tinkered with the worst gridlock in recent history.”
Not bad for a forecast.
13.20: Former Republican House speaker and presidential candidate Newt Gingrich has opined on CNN on why he failed to forecast Obama’s re-election (he predicted Romney would win 300+ seats and 53 per cent of the vote).
“I was wrong. I think whether it’s Michael Barone or Karl Rove or a whole group of us, we all thought we understood the historical pattern and the fact that with this level of unemployment, with this level of gasoline pricing what would happen.
“First of all the president did very, very effective campaign. Second, I think that the country was looking at a different set of things than we were looking at. And I think Republicans are going to have to take a very serious look at what happened and why did it happen, and why were we not more competitive at the presidential level.
“However, Mr Gingrich was not entirely conciliatory. ‘Barack Obama’s majority is as far as the White House. There’s going to have to be an immense amount of mutual effort by both parties’.”
13.10: Lunchtime (breakfast in the US!) headlines:
President Barack Obama is re-elected with 303 electoral college votes compared with his rival Mitt Romney’s 206 – with Florida’s 29 votes still undecided.
The re-elected president appeals for unity after getting a slight majority in the popular vote: “We are not as divided as our politics suggests”
Markets reacted cautiously with all looking ahead to clashes in Washington over the “fiscal cliff”.
US equity futures were turning negative. Gold prices rose.
Mitt Romney concedes, calling for co-operation in Washington as Republicans question what went wrong.
Democrats are on course to retain control of the Senate with a likely one-seat increase.
Control of the House of Representatives remains with the Republicans. House Speaker John Boehner said the electorate had given a “mandate for compromise”. He is expected to make a statement on the fiscal cliff on Wednesday.
13.00: Fun myth-busting cartoons on US presidential elections through the ages.
12.50: The high point last night for many American voters – particularly in Colorado and Washington – was arguably these two states backing proposals to legalise the possession and sale of mrijuana (up to an ounce at a time) for recreational use.
John Paul Rathbone, the FT’s Latin Americas editor, writes that the biggest impact is likely to be in Mexico.
“Last week, the Mexican Competitiveness Institute, a respected think tank, estimated that legal US production of cannabis supplied to the US’s $15-30bn a year cannabis market, could cut the earnings of Mexican-based drugs cartels by up to 30 per cent. The cartels currently earn some $6bn a year from drug smuggling, of which low-potency cannabis accounts for $2bn. US cannabis, often grown under careful conditions, tends to be far more potent. Following legalisation, it would also be cheaper. However you look at it, the Rocky Mountain high just got higher.”
12.45: David Frum, former George W Bush speechwriter-turned-Daily Beast columnist has one explanation why the Tea Party wasn’t as much of a force in this election as it was in the 2010 mid-terms.
“In 2010, voters over 60 accounted for 34% of the electorate.
In 2012, voters over 65 (I don’t know why they changed the age breakouts, but they did) accounted for 15% of the electorate.
The rest, as they say, was as easy as falling downstairs.”
12.35: Vanessa Friedman, the FT’s eagle-eyed fashion editor, noticed that Michelle Obama wore a Michael Kors dress to the victory party that she’d worn at least twice before. Vanessa concludes:
“So here’s what I am thinking: the dress debate is going to move. Instead of perennialy asking “what’s Michelle wearing?” and “which young designer will benefit?”, in term two, the First Lady is going to push it deeper – towards: what do we actually need to buy? How do we value it? And What choices do we need to make when it comes to stuff?”
Personally, I can’t wait.
12.30: Here’s one happy Obama supporter, Ajay Narayan, at a Nevada Democrats party in Las Vegas.
12.15: James Mackintosh, the FT’s investment editor, has crunched the numbers on how the dollar, US treasuries and equities have performed in the last 24 hours. Here’s his blogpost, complete with charts. Anyone hoping James has divulged the route to future riches will be disappointed, however. He concludes:
“The real market test will come when we find out how much of the automatic spending cuts and tax rises Mr Obama can persuade Congress to reverse.”
12.00: California voters have, according to the Associated Press, backed Governor Jerry Brown’s $6bn-a-year package of tax increases. Brown has made Proposition 30 the centerpiece of his administration. It would raise the sales tax by a quarter of a cent for the next four years, and increase taxes on those making more than $250,000 for the next seven years. The governor argued the package of tax hikes was needed to prevent a devastating series of cuts to the state’s public schools and universities.
11.50: The Huffington Post has calculated that there will be a record 19 female senators in the new Congress. There are currently 17.
11.45: Gold bulls are on a wee charge today. Reuters is reporting that the metal has bounced to its highest level in two weeks, $1,729 an ounce. It later slipped a bit, to $1,726.31. However, there’s still a long way to go for it to rescale the heights of September 2011, when it peaked at $1,920.
11.33: Shortcut to some front page stories:
Barack Obama Sweeps to Victory – Financial Times
Obama Wins A Second Term – Wall Street Journal
Obama Wins New Term as Electoral Advantage Holds – New York Times
Obama Wins A Second Term as U.S. President – Washington Post
GOP Soul-Searching Must Now Begin – Politico.com
11.17: British tweeter and liberal commentator Will Straw observes that the Democrats will be happier about the future of the electorate than their rivals:
11.05: Fitch, the rating agency, says there will be and should be no honeymoon for Mr Obama and his opponents on Capitol Hill. They say failure to break the political gridlock in Washington will be likely to result in Fitch downgrading the AAA status of the US, which would see them joining Moody’s and S&P:
On current projections, the Treasury Secretary will likely have to implement extraordinary measures by year-end to maintain borrowing capacity under the current debt ceiling of USD16.394trn. Failure yet again to reach agreement on raising the debt ceiling in a timely manner – not Fitch’s expectation – would undermine confidence in the United States as a reliable borrower and thus its ‘AAA’ status, prompting a formal review of the US sovereign rating.
Avoiding the fiscal cliff and a timely increase in the debt ceiling would support the economic recovery and send a positive signal that agreement can be reached on a credible plan to reduce the federal budget deficit and stabilise federal debt over the medium term, consistent with the US retaining its ‘AAA’ status. Conversely, failure to reach even a temporary arrangement to prevent the full range of tax increases and spending cuts implied by the fiscal cliff and a repeat of the August 2011 debt ceiling episode would mean that the general election had not resolved the political gridlock in Washington and likely result in a sovereign rating downgrade by Fitch.
10.58: Interpretation of what the result means for the US economy from Mike Turner, head of Global Strategy at Aberdeen Asset Management:
There are positives [for President Obama] with some economic data points picking up and the fact that corporate America is in generally good shape with cash – around $1,700 billion – on the balance sheet. However, for company CEOs to be persuaded to spend this money President Obama needs to show leadership and that the economy is moving in the right direction.
The challenge for him here is that Congress is divided with the Republicans holding the House of Representatives and the Democrats the Senate. Just as in his first term President Obama is likely to struggle to implement all his policies.
10.51: Michelle Bachmann, the outspoken Minnesota Congresswoman, has narrowly won re-election, CNN reports.
10.48: Fascinating graphic from the Washington Post on how different demographics have moved since the 2008 election, based on last night’s exit polls. The lesson remains the same: the only groups that became more Democrat-friendly were Hispanic and African-American voters.
10.44: Alice Ross on the FT currency markets desk has the latest reaction:
10.37: New Hampshire, a fiercely independent state, becomes the first to send an entirely female delegation to Washington. The Democrats Carol Shea-Porter and Ann McLane Kuster won the House campaigns in the only congressional districts, joining senators Kelly Ayotte (R) and Jeanne Shaheen (D) in the state delegation. Another woman, the Democrat Maggie Hassan won the gubernatorial election.
10.34: Nuanced reaction to the election from the streets of Iran, although nothing from the government there as yet. Information courtesy of the FT’s Najmeh Bozorgmehr in Tehran:
But the national currency, rial, fell by about 13 per cent on the black market in anticipation of tighter sanctions over the nuclear programme under Mr Obama. One US dollar bought 32,000 rials on the black market on Wednesday morning, up from 28,000 rials the day before.
The reaction among reform-minded Iranian people was mixed. While some were congratulating each other on Facebook on concerns that a victory of Mr Romney could have led to a clash between Iran and Israel, others were worried that the Islamic regime would survive longer if it did not face military confrontation.
But many ordinary Iranians feel disappointment with Mr Obama that his promise of change failed to bring prosperity for Iran but economic woes as a result of sanctions which have made their lives far more difficult than before.
Iran’s rulers have said before that it would make no difference whether Republicans or Democrats win the election, while strong suspicions remain that no matter who goes to the White House, Washington has an un-spoken regime change policy toward Tehran.
However, political observers believe there was a division in the political hierarchy. It seems the government of Mahmoud Ahmadi-Nejad, which hopes to hold historical bilateral talks with the US, preferred Mr Obama. But more radical politicians, including some senior commanders of the elite Revolutionary Guards, preferred Mr Romney on the hopes that his approach toward Iran could damage the current US alliance with European powers against Iran.
10.31: There is nothing Twitter likes more than schadenfreude and in a sea of it this morning, Clint Eastwood is coming in for a bit of a battering. Favourite so far is probably this one:
10.25: Jonathan Martin on Politico.com has a stark message for the Republican party – change or die would seem to sum it up:
President Barack Obama’s thrashing of Mitt Romney exposed glaring structural weaknesses in the Republican Party that will shut the GOP out of the White House until they find a way to appeal to a rapidly changing America.
Battling a wheezing economy and a deeply motivated opposition, Obama still managed to retain much of his 2008 map because of the GOP’s deficiencies with the voters who are changing the political face of once conservative-leaning Virginia, Florida, Colorado and Nevada.
Republicans face a crisis: the country is growing less white and their coalition has become more white in recent years.
But the GOP’s problem is more fundamental than one bloc of voters. For the second consecutive presidential election, the Republican got thumped among women and young voters in the states that decided the election.
“Our party needs to realize that it’s too old and too white and too male and it needs to figure out how to catch up what the demographics of the country before it’s too late,” said Al Cardenas, the head of the American Conservative Union and a longtime GOP leader. “Our party needs a lot of work to do if we expect to be competitive in the near future.”
10.10: More US presidential trivia – courtesy of the Wall Street Journal:
10.05: Richard Lewis, head of global equities at Fidelity Worldwide Investment, has some interesting comments on what US politicians need to do now:
“On the basis that the US election has resulted in status quo in the White House and in Congress, politicians on both sides should now get on with resolving the issue of the budget deficit reduction. With the balance of power remaining the same, there is no excuse for delay.
We will see some very intense negotiations pre-Christmas around the budget deficit and the negotiating stance of the two parties will start off poles apart. The Republican House of Representatives made it clear that it will block any tax increases while President Obama has intimated that if he cannot get satisfactory movement from the Republicans that he will consider driving over the fiscal cliff.
After a lot of wailing and gnashing of teeth, we are hopeful of a budget agreement along the lines of the Bowles-Simpson proposal which is based on a ratio of 3-1 spending cuts versus tax increases.
The budget issue is very important as we have already seen a very significant slowdown in corporate spending while chief executives wait for a resolution to this issue. Q4 activity levels will be low as a result and this will be exacerbated by the impact of Hurricane Sandy. On the basis that there will be a resolution before the first of January, we can expect a decent bounce-back in both economic activity and confidence early in the new year.”
10.00: Global leaders have been offering the ritual congratulations to Obama. Here’s the FT wrap on the mostly positive reaction. Not everyone, however, has welcomed the prospect of four more years of Obama in the White House.
“Obama’s re-election will only let the US economy get worse and worse,” said Shen Dingli, director of the center for American Studies at Fudan University in Shanghai. “He doesn’t have any money himself and is not good at counting money – they gave him four years to fix the US economy but he only increased public debt by 60 per cent. Not like Romney – Romney is good with money.”
09.55: Florida update: The latest data from the state’s elections board are that with 99 per cent of votes counted Obama is ahead 49.85 per cent -49.29 per cent (4,135,192 votes -4,088,466 votes). It might be worth noting that on this basis, if Gary Johnson the Libertarian candidate who got 43,590 votes, had not stood and his votes had all gone to Mr Romney, he would have 4,132,056 votes and be within 3,136 votes of Mr Obama. There would be a mandatory recount. As it stands, the numbers are 0.06 of a percentage point outside mandatory recount. Fortunately, this year, Florida will be just a footnote of US election history.
09.50: Senate update: The Democrats will have a 53 to 47 majority, including two independents who generally vote with them. On Tuesday, they gained one seat, picking up Republican-held seats in Indiana and Massachusetts but losing a seat in Nebraska.
09.40: Romney losing trivia: Smart Politics has calculated that only one previous presidential candidate – John Frémont in 1856 – lost his home state by more than Romney lost his, Massachusetts, last night since the formation of the Democratic Party in 1828. Romney lost Massachusetts by 23 percentage points. In contrast, in Utah, the home of his Mormon church, Romney won 73 per cent of the vote – his best result in any state. Perhaps he should have moved…
09.30: More on the Republicans’ disconnect with the nation’s changing demographics. Gerald Seib, in the Wall Street Journal, says the result leaves the Republican party at a crossroads, and although there will be claim and counterclaim about whether Mr Romney was too conservative or not conservative enough…
“the most significant critique will be the one that says the party simply failed to catch up with the changing face of America. Exit polls showed that Mr. Romney won handily among white Americans—almost six in 10 of them—but lost by breathtaking margins among the nation’s increasingly important ethnic groups: By almost 40 percentage points among Hispanics, by almost 50 points among Asians, and by more than 80 points among African-Americans.”
Whites, who accounted for 87% of the vote in 1992, were 72% of it this year, exit polls indicated. Hispanics, who were 2% then, were 10% this time.
09.15: As to the popular vote, with 88 per cent of votes counted, Obama is ahead 49.8-48.6. Nate Silver estimates on his FiveThirtyEight blog that once all the votes are in, Obama is likely to win the popular vote by two to three percentage points.
09.10: Currency traders don’t seem to be too excited this morning, tweets FT currency correspondent Alice Ross:
09.05: FT writer Jurek Martin remains to be convinced whether the Republicans have understood why they did not do better at the ballot box:
All attempts at rational compromise in Washington, over the debt ceiling, deficit reduction and tax increases have foundered on the rocks of Republican intransigence, as they danced to the drums of Grover Norqvist, the anti-tax demagogue, and Rush Limbaugh, the all-around demagogue.
With the country on the brink of the fiscal cliff, it is the Republican party which must decide whether or not to deal with a re-elected president whom it loathes, but has failed to unseat. This will pit veteran leaders like Mitch McConnell in the Senate and John Boehner, speaker of the House, against those whom they could not previously control, not merely the Tea Party intransigents but relatively hardline sophisticates, like Eric Cantor, Mr Boehner’s number two, and Paul Ryan, the defeated vice presidential candidate.
For his part, Mr Obama may not have much of a mandate, but he has the better hand, if he is willing to play it. But it requires a leap of faith to suggest that dysfunction will be replaced by broad, sunlit and smiling uplands.
08.55: Here are a couple of photos from the Obama-Biden victory rally in Chicago (all AP):
08.51: Here is FT editor Lionel Barber reacting to Mr Obama’s re-election on a chilly Washington DC evening.
08.45: Last night was a victorious one for gay and lesbian voters. Tammy Baldwin won a seat in Wisconsin to become the first openly homosexual member of the US Senate, while gay rights campaigners won the day on all four state referenda on the issue of same-sex marriage – in Maine, Maryland, Minnesota and Washington.
08.37: Ed Luce, our main US commentator, says Mr Obama must use his new status to push for bipartisanship in Washington.
08.32: David Cameron, on a tour of the Middle East, was among the first to congratulate Mr Obama on his reelection.
“I would like to congratulate Barack Obama on his re-election. I have really enjoyed working with him over the last few years and I look forward to working with him again over the next four years. There are so many things that we need to do: we need to kick start the world economy and I want to see an EU-US trade deal.
“Right here in Jordan I am hearing appalling stories about what has happened inside Syria so one of the first things I want to talk to Barack about is how we must do more to try and solve this crisis.
“Above all, congratulations to Barack. I’ve enjoyed working with him, I think he’s a very successful US president and I look forward to working with him in the future.”
08.29: The Associated Press has been studying turnout figures and concludes that, despite the images of long, long queues at voting stations, it was down:
Early figures from states where more than 90 percent of the vote has been counted suggest fewer people voted this year than four years ago, when voters shattered turnout records as they elected Obama.
In most states, the numbers are shaping up to be even lower than in 2004, said Curtis Gans, the director of American University’s Center for the Study of the American Electorate. Still, the full picture may not be known for weeks, because much of the counting takes place after Election Day.
In Vermont, turnout for the presidential race dropped more than 14 percent over 2008. Mississippi and South Carolina saw declines that were almost as large. The drop-off was about 10 percent in Maryland, where voters approved a ballot measure allowing gay marriage.
A host of factors could have contributed to waning voter enthusiasm, Gans said. The 2012 race was one of the nastiest in recent memory, leaving many voters feeling turned off. With Democrats weary from a difficult four years and Republicans splintered by a divisive primary, neither party was particularly enthused about their own candidate. Stricter voting restrictions adopted by many states may also have kept some voters away from the polls.
Another likely suspect was Superstorm Sandy, which devastated areas of the East Coast one week before the election, wiping out power for millions and disrupting usual voting routines.
08.25: A crucial factor in Mitt Romney’s defeat appears to have been his inability to appeal to Hispanics, one of America’s growing demographics. Initial data compiled by Politico.com suggest that he won only 27 per cent of the Hispanic vote – down from John McCain winning 31 per cent in 2008 and George W Bush securing 44 per cent in 2004.
08.21: Picking over the details of the election is in full swing, of course. In the key state of Ohio, which Mr Romney had to win to have a chance of overall victory, he actually got fewer votes than John McCain in 2008, according to the FT’s Barney Jopson in Columbus, the state capital.
By my calculations Obama actually got 250k fewer votes in Ohio than he did four years ago. That’s why his margin of victory in Ohio is 50-48 vs 52-47 in 2008. But against the odds he managed to match or better his score from four years ago in Cincinnati, Columbus and Cleveland. That seems to have enabled him to hold on.
08.14: A-List commentator Jacob Weisberg of Slate.com writes on ft.com about why Mitt Romney lost.
Mr Romney’s pandering to the base made it possible for the Obama campaign to start early in portraying him as a right-wing radical. Fear that he didn’t have the base locked down kept Mr Romney from smoothly moving to the centre once he had secured the nomination.
08.07: The ABC News political director @amyewalter has some advice for Mr Obama:
08.02: FT Media editor Andrew Edgecliffe-Johnson reports on a dramatic night of television coverage:
Forget the 3D graphics, the results CNN projected onto the Empire State Building and NBC’s ice rink map: by far the most compelling media moment of election night came just after Fox News called Ohio for Barack Obama, effectively confirming he would win the presidency. Karl Rove, the former deputy chief of staff to George W Bush and a frequent Fox contributor, swiftly challenged his hosts’ verdict as “premature”, even as other media outlets came to the same conclusion.
He kept the challenge up for a good 45 minutes, in which time Fox host Megyn Kelly wandered through the studio corridors to check that the analysts on Fox’s “decision desk” were sticking to their story. Fox’s hosts, who were soon billing Mr Rove’s appearance as “cage match 2012″, made it plain they disagreed with him.
The lengthy exchange made for gripping television, generating enough attention on Twitter that many liberal viewers joined Fox’s traditionally conservative audience to find out what was going on. Within hours of Mitt Romney’s concession speech, conservative commentators were asking whether they had been let down by conservative media, but Fox News’ inspired instinct to let the on-air fight play out may help explain why News Corp on Tuesday reported another leap in profits from the cable network division in which the channel sits.
07.57: These are the states Mr Obama won and they include all of the swing states except North Carolina: Washington, Oregon, California, Nevada, Colorado, New Mexico, Minnesota, Iowa, Wisconsin, Illinois, Ohio, Michigan, Pennsylvania, New York, Vermont, New Hampshire, Maine, Massachusetts, Rhode Island, Connecticut, Maryland, Delaware, Virginia, New York, New Jersey, Hawaii.
Florida is yet to declare, although according to RealClearPolitics.com Mr Obama is 0.7 per centage points ahead there with only 1 per cent of precincts to declare, so it would appear that we are unlikely to enter mandatory recount territory – that cuts in at a 0.5 per cent – while neither candidate is going to ask for one.
07.52: The FT’s electoral map will fill you in on which states went where in the presidential race, and we will bring you the latest in the US Senate and House of Representatives races soon, but suffice to say for the moment that it is status quo: Democrats have control of the upper chamber and Republicans retain the lower.
07.49: Jamie Chisholm has the Global Market Overview with reaction to the Obama victory, with US futures inching higher.
07.46: Here’s the FT’s James Politi on the fiscal cliff, an obstacle so large and potentially damaging that Mr Obama will have to begin tackling it almost immediately.
07.42: Barack Obama, re-elected, has made a strong speech in Chicago promising to unite America after a bitter and divisive election campaign:
We want our children to live in an America that isn’t burdened by debt, that isn’t weakened by inequality, that isn’t threatened by the destructive power of a warming planet. We want to pass on a country that’s safe and respected and admired around the world, a nation that is defended by the strongest military on earth and the best troops this – this world has ever known. But also a country that moves with confidence beyond this time of war, to shape a peace that is built on the promise of freedom and dignity for every human being.
You can read the full text of the speech here.