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  • Interesting Poll And Money Action

    Posted by Dan from Madison on August 4th, 2011 (All posts by )

    The Dems winning the presidency is trending down on Intrade as you can see on the sidebar. As of this writing it is sitting at 56% or so. I like Intrade better than polls since people are actually putting their money where there mouth is at Intrade, whereas with polls there are tons of other factors at play.

    That said, Ann Althouse has an interesting poll up today framed thusly:

    If you HAD to bet one thousand USD of your own money on whether or not Obama would be re-elected, would you put the money on Obama or not? The results so far are 75-25 that he will not get re-elected.

    I have been pounding the table all along that when the rubber hits the road, the dissatisfied left and others will crawl across broken glass to vote for Obama and that he will win. I still think he will but am not as certain as I used to be. In other words, I wouldn’t bet you dinner on it. And that is good.

    *Full disclosure – this blog is an Intrade affiliate.

     

    18 Responses to “Interesting Poll And Money Action”

    1. Brandoch Daha Says:

      Say “pretend you’re betting $1000” to an enthusiastic partisan and he’ll give you a pretend answer. The poll question is silly. Putting your money where your mouth is only works if it’s real money.

      I’ll bet you dinner Obama will win. Hope you like pizza!

    2. Robert Schwartz Says:

      Hasn’t Intrade been required to exclude US residents from its proceedings? Wouldn’t that tend to make it a less accurate predictor of American events?

    3. Jonathan Says:

      The Althouse poll is worthless. It’s a highly skewed sample and they’re not actually risking anything.

      Intrade forbids participation by US citizens, but that doesn’t mean its predictions are inaccurate. They have a good record so far.

      Obama may be reelected. I think the outcome depends mostly on the condition of the economy in the second half of next year. Obama seems to doing his best to suppress economic growth. OTOH, businesses have become very lean and there is a tremendous amount of investment capital on the sidelines. A real relaxation in the current punitive regulatory trend might be followed by an economic surge. This might occur despite inflation. The big question may be whether the regulatory relaxation occurs because Obama wants to be reelected or because he has been defeated. Time will tell.

      George W. Bush would have been reelected if the 1992 election had been held in Summer 1991. Obama would not be reelected if the election were held today but who knows how things will look next year.

    4. Lexington Green Says:

      The Althouse poll was “just for fun.” Intrade is convincing. Obama is still the frontrunner.

    5. Shannon Love Says:

      Presidents are re-elected based on the performance of the economy in the 6 months leading up to the election. There is nothing else that has much correlation with elections. No sitting President has been reelected in a recession and none have lost when the economy was strong.

      Emotional opposition has nothing to do with it. You would probably have to go back to the election of 1860 to see a candidate more hated by the opposition than Bush in 2004 yet he won the electoral vote handily.

      In the end, political passion is nothing but people’s stated preferences while voting represents their revealed preferences. The media, which is still the major transmitter of stated preferences, doesn’t do so in a balanced way so the “passion” that we see one way or the other in the media doesn’t have a lot of predicative power.

      If nothing else, it’s important to remember that even the most hyper-partisan, politics obsessed “activist” still only has the same vote as someone who barely cares about politics at all.

    6. setbit Says:

      Intrade forbids participation by US citizens…

      Wow, that’s news to me. I’ve been considering opening an account for while now, but I guess that’s out.

      I can’t find any information anywhere on their site about who is eligible to open an account, and the Wikipedia article is a little vague.

      I was also stunned to find out that the founder and CEO recently died 50 meters from the peak of Everest.

      Can anyone at Chicago Boyz give more background on this? Have you deliberately avoided covering it for fear of a conflict of interest as an Intrade affiliate?

    7. Dan from Madison Says:

      The new internet laws prohibit Intrade, as I believe it falls under what the feds call “gambling”. I don’t know the background but I do know it isn’t legal. As a US citizen you can’t legally play online poker for real money or bet on sports either afik.

    8. Jonathan Says:

      Setbit,

      That is very sad news about John Delaney. I haven’t kept up with the prediction-markets business and wasn’t aware that he had died. He was the force behind Intrade, which is a much more valuable business because of the public information it generates than its own private financial results (whatever they are) might imply. I’m not surprised that he was climbing Everest, since he made no secret of his mountain-climbing hobby, but such bad news comes as a shock. Alav hashalom.

      We haven’t avoiding discussing Intrade here, at least I haven’t. The blog may still be nominally an Intrade affiliate but has earned no referral fees since around the 2004 election. Since then Intrade stopped accepting accounts from Americans and stopped paying American affiliates. I maintain the Intrade quote board here because it’s valuable IMO.

      I believe that Intrade no longer accepts accounts from Americans because it didn’t want to run afoul of US anti-gambling rules. I suggest that you contact Intrade directly to get the most accurate information about its policies.

    9. setbit Says:

      This gave me a little jolt: John Delaney (or someone claiming to be him) posted a comment here about six weeks before he died.

      I’m more than a little surprised that neither Delaney’s death nor the fact that the 2010 banking rules effectively outlawed Intrade for US citizens merited any mention at CB.

    10. Subotai Bahadur Says:

      When dealing with matters like this, it is best that basic underlying assumptions be examined; if not to change one’s decisions now, to at least understand the factors that you are using in order to make that decision so as to be open to modifying it once you see that an assumption has changed.

      Implicit in the question about the re-election of any politician, at any time, is a set of assumptions.

      1) That the election will take place as scheduled.
      2) That the election will take place honestly, openly, and using what the culture considers to be the normal means; with neither undue restrictions on the votes of citizens of any one group, or any illegal supplementing of the vote of the citizens of any one group. Probably within this, there is a subset of assumptions that includes a) all those casting votes are living, breathing human beings, and b) all those casting votes are citizens legally entitled to cast a ballot at the polling place where it is cast, and c) only one vote per citizen is cast.
      3) That the ballots will all be honestly counted and only include the ballots legally cast at the polls or absentee.
      4) That the count of the ballots will be honestly aggregated and reported.
      5) That those in power will accept the results of the election.

      Over the span of American history, our elections have been relatively honest compared to other polities. However, that is a relative judgment. We have been far from perfect. Just in living memory, it is openly acknowledged by political scientists that the 1960 election of JFK turned on the electoral votes of Illinois, and that Chicago did not report any vote totals until Mayor Daley knew how many votes would be needed to put JFK over the top. The Florida election fiasco still is controversial, although I note that after it was settled the major wire services, the NYT, and the Washington Post sent their own investigators to review the entire vote count in a desperate attempt to de-legitimize President Bush. They unanimously found that even using the changed rules that Al Gore tried to invoke; Bush won. For the last couple of decades, it has been common that in urban precincts more votes are cast for one party than the Census says there are men, women, children, and household pets living in the precinct. And of course, it is a nasty open secret that the absentee ballots for serving military personnel are routinely not counted [I think >70% in the 2010 election].

      And that is just in living memory [for me, and I’m a 60 year old political junkie]

      I think that it is fair to say that of the 5 assumptions I listed, there are enough reasonable questions that the probability of each individual assumption coming to pass perfectly is less than 100%.

      The current administration, whose political party is of course thoroughly intertwined with the electoral process, has more than a little bit of a track record visible in the headlines for the last couple of years. They are, to put it mildly, resistant, to following both civil and criminal legal processes, court orders, or legislative processes. This has to weigh in how each factor is estimated by the individual.

      It has been over 40 years since a college instructor tried to pound basic probability and statistics into my resisting head, but I believe that the formula for the probability of occurrence of an event that is the product of the chances of multiple other events all occurring is:

      Probability of A and B both occurring:
      P(A and B) = P(A) × P(B). The probability of each occurring is expressed as a decimal fraction of 1.

      To achieve an acceptable electoral result that could be relied on for a bet as noted; the five assumptions above would be expressed

      P( 1 and 2 and 3 and 4 and 5) = P(1) x P(2) x P(3) x P(4) x P(5)

      Pick your own acceptable level of the overall reliability of a valid election and the probability of each event. Of course YMMV.

      While each assumption can of course have its own weight, let me use a 95% chance of occurrence for simplicity. .95 ^5 = 77.378 % chance of a valid election.

      I may have buggered up the mathematics of the statistics, and if I have I am sure that there are plenty of Chicago Boyz capable of correcting me. Please do.

      Not only does any opponent of Obama have to win, he/she is going to have to win while fighting the mechanics of the electoral system being applied in a less that even-handed manner.

      On a related note, I did not know that American citizens could not be involved in intrade. That would make me distrust their results on American domestic political matters. From discussions with Europeans, and reading their media; they have some pretty screwed up ideas about how our political system works and how the players interact. That is a most helpful disclosure.

      Subotai Bahadur

    11. setbit Says:

      Thank you for the information, Jonathan.

      Just to be clear, I wasn’t accusing anyone of self-censoring or withholding information. I was just surprised that it wasn’t noticed/mentioned at the time.

      John Delaney appears to have been a man of genuine courage and vision. God rest his soul.

    12. Dan from Madison Says:

      SB – “On a related note, I did not know that American citizens could not be involved in intrade. That would make me distrust their results on American domestic political matters. From discussions with Europeans, and reading their media; they have some pretty screwed up ideas about how our political system works and how the players interact. That is a most helpful disclosure.”

      Personally, I would think that people who don’t live in the US who are making wagers with real money are more likely to be correct and honest (it is real money after all) than folks living in the US who are just taking a poll.

    13. Jonathan Says:

      I’m more than a little surprised that neither Delaney’s death nor the fact that the 2010 banking rules effectively outlawed Intrade for US citizens merited any mention at CB.

      I missed the news of John Delaney’s death. Sometimes real life gets in the way of blogging.

      Intrade was sidelined (or sidelined itself) in the USA some time before 2010, due to uncertainty about the legality of real-money prediction markets under an anti-Internet-gambling law that Congress passed, IIRC, around 2006. The CEO of one of Intrade’s competitors was arrested by US authorities when he passed through US airports en route between two non-US countries. The US govt was trying, and may have succeeded (I don’t remember but this info should be easily findable) to get his company to divulge the names of American account holders. These actions chilled the entire industry. Intrade tried to get itself exempted from the rules as a regulated financial exchange, but I believe that its efforts failed. These events were widely covered by blogs that follow the prediction industry, and I saw no reason to duplicate their efforts.

    14. Subotai Bahadur Says:

      Dan from Madison Says:
      August 4th, 2011 at 1:45 pm

      Personally, I would think that people who don’t live in the US who are making wagers with real money are more likely to be correct and honest (it is real money after all) than folks living in the US who are just taking a poll.

      Oh, absolutely better than a poll where you have to really know the internals AND figure out what bias’ are being applied to the interpretation. However the phenomenon of people putting their money where their mouth is, based on a horribly inadequate knowledge base is not unknown. I would feel the same way, for instance, about a similar intrade question about French domestic politics that barred French nationals. The Americans who get involved have less of a chance [even less than Europeans commenting on US politics] of an actual knowledge of what is going on. For purely national domestic questions, there is a higher proportion of noise-to-signal coming from foreign nationals. It does not mean that there is no knowledge, just that the higher proportion of responses based on ignorance can muddy the waters.

      Subotai Bahadur

    15. Lexington Green Says:

      People all over the world closely follow US politics. The kind of people who know about Intrade and are willing to bet are likely highly knowledgeable. Intrade generally tracks with the bookie odds, as well. There is a world betting market that seems to be efficient. Intrade has Obama ahead because he is ahead, most likely. The GOP has not yet shown that it can field a viable candidate who can stand up to the brutal, round the clock attack that the MSM is going to launch in support of Obama. At this point, I think it would crazy to bet against Obama. If I had to guess, I would say Intrade having him at 56 is too favorable to the GOP. But, I am guessing, not betting.

    16. setbit Says:

      These events were widely covered by blogs that follow the prediction industry, and I saw no reason to duplicate their efforts.

      Fair enough. I suppose in part I’m annoyed at myself that I haven’t been following this closely enough.

      However I do think Intrade is — or at least should be — part of Chicago Boyz core subject matter. Obviously it gets mentioned here often, and the “ticker” is on every page.

      But more importantly, Intrade is one of many signs that consumers and investors are starting to look outside the US dollar and the US financial system. As it becomes increasingly obvious that the dollar is not an honest unit of account, and that US banks and investment houses are no longer centers of fair exchange, we’re going to see more ventures like Bitcoin and Intrade.

      We’re also going to see more and heavier-handed attempts to play legal whack-a-mole with these enterprises, since they threaten the set of interconnected Ponzi schemes that now comprise the US federal government. And those regulations are going to interfere more and more with numerous aspects of daily life for all of us.

    17. Jonathan Says:

      However I do think Intrade is — or at least should be — part of Chicago Boyz core subject matter.

      I’d like to blog about many things that I don’t have time to blog about. We do the best we can.

    18. cjm Says:

      you find out you can’t put any money in your Intrade account when you get to the part of the process where a credit card # is entered. if you can somehow get money into the account, from outside the US then you can make trades with it.

      given that the DOW is now tanking, on top of all the other bad news, it is very unlikely that anyone in the country (without kool-aid stains around their mouth and anus) wants any more of what obama is offering. is it really likely that *anything* is going to get better while he is in office? either you believe he is actively (which is not to say intentionally) screwing things up, or you don’t. as time goes on, fewer people will give him the benefit of the doubt.

      if/when something really big and bad happens, and his ineptness is fully revealed to one and all, the polls will convince him not to run.

      an America that elects this guy twice, genuinely is in permanent decline. he is a symptom not a cause. i believe the American voters will kick him to the curb in a massive land slide win for the (spit) gop. the carnage in the senate will be awesome. i hope those gop senators in maine lose in a primary battle, too.