The National Journal Political Futures Market: An Update

For the Democratic nomination, Hillary Clinton is trading at 56.9%, Obama is trading at 36.1% and John Edwards is trading at 4.6%....

Clinton is down about 13 percentage points from her all-time high, whereas Obama has risen precipitously -- about a 200 percent increase in a month.

For the Republican nomination, Rudy Giuliani's contract trades at 35.2%, Mitt Romney is trading at 24.4%, John McCain is trading at 10.0%, Ron Paul is at 8.9%, Fred Thompson is trading at half that, and Mike Huckabee has shot up to a little more than 16%.

Are these markets BS? Do they reflect elite opinion? Public opinion? Media opinion? The opinion of those who have time to participate?

Regardless -- the political stock exchange attracts tens of thousands of players each day. Shares of Hillary Clinton, for example, have exchanged hands 74,000 times in the past 24 hours alone.

The questions are easy: do you think that there's a greater than 16.3% chance that Mike Huckabee wins the nomination? If yes, you can bid on a higher value. If no, you can bid on a lower value.

Comments

The main thing these are useful for is seeing if there are new polls coming out.

Let's say you see "Obama +5" in Iowa. That means there is a positive poll coming out later in the day. The folks who have purchased shares have been leaked the info or have an embargoed copy...

today, Obama has risen fairly dramatically in the "Democratic nomination" contract. This tells me that a national poll will come out with him tied or leading...

Posted by Democrats Against Hillary | December 17, 2007 3:25 PM

This is the first campaign in which I've kept a fairly regular schedule of peeking at the 'markets' to supplement polls. (I use the time I no longer spend following TV talking heads.) Markets seem to have a kind of 'flywheel' effect, being slower to shift with local and transient shifts in opinion. More like steering my sailboat, less like wheeling the 'Stang.

I have hypothesised that there is a lot of buying and selling there by non-junkies. And I've wondered if there is any way to know some statistics that would make their working clearer.
Like: What percent of their 'investors' are foreign? How often does a standard 'investor' shift preferences? Does anyone actually make money speculating in these markets? That kind of thing.

A good ATLANTIC article awaits, unreported.

Posted by JohnMcC | December 17, 2007 3:34 PM

These markets are very interesting because its real money tied up, and thus may actually be a better indicator [Though as with all sports books, the underdog can still win. What was that USC/California line again?]

Interesting case in point. The Over/Under of one book for the Ron Paul Tea Party was 6 million dollars. Online contribustions were 6.07 (or so, unsure exact number). Given all the factors in play, to post that line with that margin of error shows how professionally these exchanges take thier numbers.

Posted by Nathan | December 17, 2007 3:53 PM

I basically agree with the first poster. From what I can tell these markets are very quick aggregators of polls, and often seem to reflect upcoming poll results shortly before they are widely released.

What these markets are not is crystal balls with an uncanny ability to foresee all the future unknown events that will play a role in determining the outcomes in these elections. Of course, it would have been unreasonable to expect that.

Posted by DTM | December 17, 2007 4:15 PM

Wow. Rudy seems waaaay overpriced to me. Hmmm. I needs me some Christmas cash. Tempting.

Posted by Jasper | December 17, 2007 4:42 PM

To all of this prep school making a game out of serious venture, I say BALLS!

Posted by Richard McDonough | December 17, 2007 8:43 PM