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A Betting Man

If I were a betting man, I would say that John Kerry's price on Tradesports is seriously undervalued at $0.46 or so and that this reflects a pretty unsophisticated understanding of public opinion polling on the part of the traders rather than the wisdom of crowds. And as I have, in fact, become a betting man over the past few months, I think I just might go buy some if I can figure out how to start an account. Jon Chait lays out the case for a reasonable degree of confidence in a Kerry win. The unmentioned x-factor is cheating which I think should be the biggest source of concern, though the possibility of future Kerry gaffes (on which Chait leans more heavily) should not be ignored either.

October 15, 2004 | Permalink

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Unfortunately, matthew, the link is for subscribers only.

This said, i believe we are now in the 4th phase of this election: the election year began with this as bush's election to lose. By mid-spring, it had evolved into kerry's to win. Then, after the august gop hate and slimefest, it turned back into bush's to lose. Now, with kerry having dominated the debates, i think the race is neck-and-neck, with kerry having the momentum.

As for kerry gaffes, of course they are possible, but sheesh, george bush commits gaffes every day without it being a big factor (i'm astonished, truly, at the relatively modest respone to bush and OBL, for instance).

I think, by the way, that not only is cheating a bigger possibility but also rove-ian dirty tricks that aren't "cheating" directly.

Posted by: howard | Oct 15, 2004 3:21:51 PM

The remarkable thing about the cheating is that there is little accountability for the illegal activity that we already know about.

Posted by: Matt Stoller | Oct 15, 2004 3:27:52 PM

There are two factors of course. It's if Kerry can win/lose the election, and if Bush can win/lose the election.

My feeling is that Bush has lost it a long time ago. Mainly through his performance over the last 4 years. That makes it just a matter of if Kerry can win it. (Yes, you can have win /win elections and lose/lose elections..those are the close ones).

The debates were a BIG step towards Kerry winning. Do I see Kerry making a big gaffe? Well. That depends on the dynamic of the story that the media wants to play. I have a feeling all the focus on the Mary Cheney thing is actually bad for the Bush campaign overall. It's not a gaffe. It's something things...wtf are they upset about? Kerry paid them a complement. Weird.

I suspect that value is completly removed from any sort of reality. A lot of republicans are still in la-la land and think that Bush is going to win, not doubt in their mind. So they put their money where their hearts are. That they don't see the reality of the race, is meaningless.

The reality being that Democrats are like never before are energized. Turnout is going to be through the roof for them. Bush is pretty much limited to his 2000 vote, if that. New registration and traditional non-voters completly new dynamics to the story...

It's a case of Republicans believing their own spin.

Posted by: Karmakin | Oct 15, 2004 3:30:23 PM

A lot of people don't bet on the teams they root for.

But what about politics ? Can you ever be impartial ?

Posted by: David | Oct 15, 2004 3:41:54 PM

I agree Kerry is undervalued. I'd buy it if I had an account. This thing is as close as they come.

Posted by: Reg | Oct 15, 2004 3:49:15 PM

The unmentioned x-factor is cheating which I think should be the biggest source of concern, though the possibility of future Kerry gaffes (on which Chait leans more heavily) should not be ignored either.

You're referring to Democratic cheating, right, Matt?

Seriously, there's no better reflection of the blue/red state divide than the serious fear out there of election irregularities. Democrats seem very concerned with intimidation, and, I must tell you, the Right is absolutely beside itself with fear of massive voter fraud in urban America. At least one right wing talk show host (Jay Severin -- here in Boston) maintains that Bush must win by at least a couple of million votes to overcome Democratic big-city machine voting fraud (he may seem over the top to the average liberal, but he's actually not an idiot, but rather a shrewd and experienced former political consultant).

Anyway, I hope whoever wins does so by a at least several million votes; I'm so not up for a long, drawn out legal battle this year.

Posted by: P.B. Almeida | Oct 15, 2004 3:55:06 PM

A TradeSports price of 46 represents $4.60, not 46 cents. Each contract has a base value of ten bucks.

Posted by: neil | Oct 15, 2004 4:01:19 PM

Could someone please explain to me why Tradesports is taken seriously as a trustworthy predictor of election outcomes?

I'm serious, I'm not asking that to be snide or snarky. It seems to me that Tradesports is basically an online betting pool whose participants are a self-selected group of people that have enough disposable income to participate in the betting. I don't see such participants as being a very representative sample of the electorate, and I don't see any particular reason to think the collective wisdom of those participating in the betting is any better, from a predictive standpoint, than that of any number of other groups.

Does anyone have any hard evidence that supports the thesis that we should take Tradesports more seriously than polls by Rasmussen or Zogby, et al, or the views of, say, political scientists polled for election predictions?

Posted by: nobody | Oct 15, 2004 4:04:58 PM

I hope you're at least getting PAID by TNR to keep sending unwitting readers to subscriber-only content...

Posted by: bobo brooks | Oct 15, 2004 4:10:09 PM

Speaking of cheating, I don't think we should discount the possibility that Rove et al. are gaming the electronic marketplaces. Creating the aura of inevitability is one of Rove's most important tactics. Inflating his candidates prospects in these electronics marketplaces is an easy way to do that: They are thinly traded (i.e., easy to move by placing just a few trades) and cheap to participate in. (I'll bet sinking $25,000 into one of these marketplaces would move prices quite a bit.) If you were Rove, why wouldn't you tell one of your minions to spend an hour each week placing a couple of thousand bucks on Bush in each of these marketplaces? That's about as cheap a way of influencing opinion (especially elite opinion, since it's "clever" folks like you, me and the reporters at the Washington Post who think clever ideas like online marketplaces give them an insight into the wisdom of crowds) as you can get.

Posted by: Charlie | Oct 15, 2004 4:10:28 PM

Kerry at 46 is still good value, but he was as low as 34 after the first debate and even as low as 40 the night of the last debate.

These markets shouldn't be taken too seriously as a predictor of the outcome, given they don't sample the population evenly. (I think Crooked Timber had an argument as to why Bush contracts were as high as 70+). That's why bettors should take advantage of it. It's like a sports book messing up on a line.

Posted by: kai | Oct 15, 2004 4:16:23 PM

Could someone please explain to me why Tradesports is taken seriously as a trustworthy predictor of election outcomes?...I don't see such participants as being a very representative sample of the electorate, and I don't see any particular reason to think the collective wisdom of those participating in the betting is any better, from a predictive standpoint, than that of any number of other groups.

Well, presumably because they're trying to win money, their predictions are more objective than, say, those of a polling organization, whose methodolody may be compromised by error, or by partisan bias. On sporting events, for instance, Vegas can be wrong on an individual game, but over the long run, the house always wins. What we have next month is, I guess, similar to a single game, like the Super Bowl. Bettors can now read the tea leaves, and gather predictive information (including, quite prominently, poll data), in a similar fashion to how they can gather predictive information about two football teams who have a match scheduled in the near future.

Anyway, not too many people are able to make a living on sports betting, so, beware the predictions of prognosticators who claim insight into the game being held on Novemmber 2nd.

Posted by: P.B. Almeida | Oct 15, 2004 4:18:39 PM

Out on a limb time: My gut call is a split of the Bush/Kerry vote (not incl. Nader et al <-- heh) of 55-45. But Kerry only up by single digits in the polling (5-6 ish or essentially 2) on Nov. 1, and the EV final count will not feature an enourmous margin. I am expecting a switch of Senate control with the win. I have no feel for the House. When the young conservative Episcopalian Limbaugh-lover (in Texas!) refers to Bush as a moron, you know he's in trouble.

Of course, I am reversing myself. Back in late Feb. I called it the other way (and crossed my fingers and hoped I was wrong, as in 'please, make me look bad'). It looked like a very bad matchup for the Dems to me. (Kerry v. Bob Dole would be a different story.) So you could also call me a flip-flopper. But I did call the Bush 'win' in 2000 in Oct. 1998. Hey, whatever.

I am going to be wrong either way. Oh, well! But Bush has played offense the whole way (when he should have mostly stayed on defense and let Kerry come to him) using armour and supplies he didn't actually have, and it's going to cost him.

Kerry could still screw it up, but if he does it will be a marginal Bush win. And the primary way for Kerry to screw it up is to switch to the soft-pedal.

This Mary Cheney shit is the Rear Guard Action, and it is time to get out the aluminum baseball bat and the hockey mask and play ball. Can we have some more sanctimonious sighing, too? I think it helps lots.

So yeah, buy. Just remember, never bet more (on stocks or cards or bonds or anything) than you can comfortably lose. Or you'll be like Bush.

ash
['If it's a SURE THING, can I rip your arm out of the socket if you're wrong?']

Posted by: ash | Oct 15, 2004 4:32:17 PM

call it the karl rove discount... similar to the five finger discount, but applied to elections.

Posted by: a. hattiangadi | Oct 15, 2004 4:53:30 PM

Uh...don't you think that Tradesports (and the Iowa Markets) are figuring in the cheating?

Personally, I think Kerry's still got an uphill battle. He's got to win Ohio AND a few more electoral votes. Given Florida's record in 2000 and 2002, the already well documented 2004 problems, and Jeb, lets face it: Kerry can write off Florida. I will be very very surprised if FL's electoral votes are certified for Kerry.

Factor in the fact that Ohio has irregularity issues itself with Republican Secretary of State Blackwell's registration rules. Then, of course, are issues like the registration controversy in Nevada and the flyer dirty trick in TN. Add a Republican US Senate (for a tie-breaker), mix well with a right-wing Supreme Court (for a legal challenge), and you see that the odds are increasingly in Bush's favor.

It won't be enough for Kerry to squeak by. If it's not a *solid* lead (and reflected in the electoral college polls well in advance), the Bush team has too many mechanisms in place to beat back any Kerry challenges.

The Mary Cheney controversy suggests that a breakout by Kerry is unlikely any time soon.

So I think that the price of 46 is about right. Maybe even a little high.

I'm praying for Kerry, but as of this writing, the advantage is still Bush's.

Posted by: Tamouz | Oct 15, 2004 5:04:09 PM

"My gut call is a split of the Bush/Kerry vote (not incl. Nader et al <-- heh) of 55-45."

I seriously doubt that. Bush the Elder only beat Dukakis by 54-46, and that was a decisive win.

Posted by: Haggai | Oct 15, 2004 5:08:42 PM

Charlie: I don't think we should discount the possibility that Rove et al. are gaming the electronic marketplaces. Creating the aura of inevitability is one of Rove's most important tactics. Inflating his candidates prospects in these electronics marketplaces is an easy way to do that

I think this is the best theory of what's going on, especially when you consider which side has most of the money. This means that Matt is right, and there's opportunity for profit to be had by taking the money that Republicans are putting on the table.

Of course, is the bet on who wins the election, or who actually gets put into office by the system when it's done with all the backroom shady stuff?

Posted by: fling93 | Oct 15, 2004 5:14:52 PM

I don't know about Tradesports, but if I recall correctly, the IEM have been more predictive of electoral outcomes than the major polls in recent years.

Posted by: Julian Sanchez | Oct 15, 2004 5:18:08 PM

Rightwingers are going around saying Soros is manipulating Tradesports for Kerry, and people here are saying Rove is doing it for Bush.

Words cannot express how stupid both of these ideas are.

Posted by: Blixa | Oct 15, 2004 5:25:51 PM

"The Mary Cheney controversy suggests that a breakout by Kerry is unlikely any time soon."

Why? The "Mary Cheney controversy" is a media creation. The media biases to Bush, and have done so since 2000.

Remember on the night of the debate, when everybody was agreeing the biggest gaffe was Bush lying about whether he'd said OBL wasn't a concern of his? Let's stay on message folks!

consider the following hypothetical questions...

"Are you concerned about Senator Kerry's statement during the debate that Mary Cheney is a lesbian?"

"No - that was common knowledge before the debate. What does concern me is the President's dishonesty about his previous comments about the importance of finding Osama bin Laden, the man behind the terrorist attacks on 9/11."

next question

"Don't you think Senator Kerry crossed a line when he called attention to Dick Cheney's lesbian daughter during the debate?"

"Quite frankly, I'm concerned that the media is more focused on Mary Cheney right now than on the security issues facing the country. President Bush is quite happy to spend $1 trillion on a missile defense system that addresses outdated Cold War needs, but is not willing to spend a tenth as much on homeland security concerns. Terrorist leaders remain at large while the army is bogged down in an unnecessary war in Iraq."

etc., etc.

Posted by: Rick | Oct 15, 2004 6:02:05 PM

I truly believe that Kerry has provided plans
throughout the debates, while Bush has provided
excuses. I am a Libertarian, but I will not
be voting for the Libertarian candidate this
election, due to the fact that I do not want
Bush to be re-elected. I've had my own
education over this whole IRAQ situation and
learned alot about myself. My only concern,
and it must be a sign of getting older, or
more conspiratorial minded - is that Bush already
has Osma Bin Laden and will somehow mysteriously
bring him to the forefront before the election!
I hope I am wrong, and Kerry wins. Not too much longer to wait and see the results - eh?

Posted by: Emperor Blog | Oct 15, 2004 6:12:27 PM

And as I have, in fact, become a betting man over the past few months,
If I lived in DC, I would so be arranging a Celebrity Blogger Poker match right now. Watch Matt bluff against Josh! Fly in Kevin From Cali! Even Glenn can join in. Any money you win goes to your candidate or charity of choice.

Posted by: Saheli | Oct 15, 2004 6:22:51 PM

Rightwingers are going around saying Soros is manipulating Tradesports for Kerry, and people here are saying Rove is doing it for Bush.

Words cannot express how stupid both of these ideas are.

Well, aside from the fact that it is unlikely to be Soros or Rove directly making the trades, what is stupid about it?

Given that there has been much media coverage of the "accuracy" of electronic markets in predicting results, and given how both sides have an interest in creating the impression that their candidate is likely to do well, what makes manipulation unlikely?

Posted by: cmdicely | Oct 15, 2004 6:28:24 PM

Don't worry, like I've said before, there's no way we can win legitimately. Presidents McGovern, Mondale, Dukakis and Gore all laid the groundwork for continued domination of the White House, thanks to the constant stroking our gloriously obedient liberal media gave those candidates.

And of course those puny industrial lobbies are no match for the deep pockets of the Sierra Club and the like.

Nope. Nobody can stop our insider influence and crafty gaming of the system.

Posted by: Yeah, I Wanna Buy Some Wood | Oct 15, 2004 6:40:10 PM

http://www.americaisawesome.com/

honestly.

Posted by: http://www.americaisawesome.com/ | Oct 15, 2004 6:47:24 PM

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