Time to Short Obama?
What may turn out to be the worst thing to happen to the Obama campaign has been the Intrade Prediction Market's new bullishness on his candidacy. Now up to a 70 percent probability of winning the nomination (compared to 29 percent for Hillary Clinton, 1.2 percent for Al Gore, and 0.2 percent for John Edwards), Obama's stock has never been higher. Unfortunately for Obama, Intrade's indices throughout this campaign cycle have been incredibly reliable indicators of what would not actually happen.
On the Republican side, for example, the markets back in July had Giuliani and Thompson neck and neck for the nomination, with McCain languishing hopelessly below 10 percent -- where he flatlined until November. Giuliani dominated the markets throughout the second half of '07 notwithstanding widely available information about his unfitness for national office. On the Democratic side, Hillary Clinton's stock remained high throughout '07, plummeted after Iowa, soared after New Hampshire, then basically tanked again over the past week or so. The smart money, this year anyway, ain't so smart.
To be fair, they also have McCain winning, and I don't see that changing. However, that they have Al Gore with a 1.2% chance of winning tells you everything you need to know. They're neither prescriptive nor proscriptive.
February 15, 2008 1:07 PM | Reply | Permalink
Better to have said it seven weeks late than never to have said it at all, eh, Greg?
February 15, 2008 1:23 PM | Reply | Permalink
Damn that Yglesias! Well, it's still worth warning Obama supporters not to get too excited about the market's bullishness toward him, don't you think?
February 15, 2008 2:14 PM | Reply | Permalink
I guess you're right, the current lingering and -- things to be hoped for -- soon-to-depart bunch of Cafe patrons being not what one would call especially well read.
February 15, 2008 4:15 PM | Reply | Permalink
Ouch. Bad day today, Ellen?
February 15, 2008 5:42 PM | Reply | Permalink
Well it's worth warning anyone who may have given the matter any thought at all that to use a totally reactive market to predict what might happen in the future is a fool's errand. Particularly, when one selects a data point from last July.
Using your logic, the fact the Clinton futures were up so much after NH she's going to lose.
It isutter nonsense.
February 15, 2008 4:31 PM | Reply | Permalink
Chris,
Funny, I was hoping my post would communicate your point that it is indeed a fool's errand to use a totally reactive market to predict the future. I was attempting no "logic" beyond that, other than to lightheartedly warn people who have become excited about Obama's rise in those markets that it shouldn't really factor into their state of mind. Next time, I'll stick to my usual long-winded attacks on movement conservatism, which generally go over better than this trifle did. --Greg
February 15, 2008 5:41 PM | Reply | Permalink
The horse race is the horse race. What I want to know, irrespective of who wins:
What are they going to be up to on day one?
Let's make our democracy more democratic-- let's all play a role in setting the agenda.
February 15, 2008 5:56 PM | Reply | Permalink
I created an account to make some money on Obama, but then I ran into the headache that as soon as you give 'em your credit card number the debit it $250 and put it in your intrade account (the bastids). I was more into making my own decisions, plus I prefer to pay off my credit card each month and I had some expenses already on it last month.
Well, too late now. What's the old secret to Wall Street failure? By high and sell low? Or, just buy high after the excitement is over....
Obama is gonna win this one.
February 15, 2008 10:53 PM | Reply | Permalink
greg time to put your money where your mouth is. Put $100 on Hillary today and you win $330 if Hillary wins. If you believe your spiel, then it would a good investment.
February 16, 2008 12:36 AM | Reply | Permalink
No thanks, Syvanen. I don't like betting against the team I'm rooting for.--Greg
February 16, 2008 7:52 AM | Reply | Permalink
What did Intrade say about the Slave Trade in 1860?
What does Intrade say about the Holocaust?
What does Intrade say about Darfur?
What does Intrade say about Iraq?
Let's just shut this whole "intrade" thing down now and instead talk about fixing the gangrenous wounds on this planet.
This is disgusting.
February 18, 2008 1:39 AM | Reply | Permalink
What worries me more is Bill Kristol's confident assurance that Obama will be the nominee. Now there's a guy with a track record of being wrong!
February 18, 2008 6:25 PM | Reply | Permalink