Justin Wolfers in the Wall Street Journal (in “Political Markets Foresee Turning Point”):
[...] Last week Barack Obama was a clear underdog in the race for the Democratic nomination, and his victory in Iowa propelled him from a one-in-three chance of winning, to one-in-two. Even this rapid movement underestimated his post-Iowa momentum, and his strong showing in subsequent polls has led his chances to be further revised upward to two-in-three. [...]
TRANSLATION: Hillary Clinton is finished. Done with.
TECHNICAL NOTE: Justin Wolfers uses two times the word “stock”. No good. It’s not a stock, it’s an event derivative. A stock never expires to zero by design.
“TRANSLATION: Hillary Clinton is finished. Done with.”
I am looking forward to the post New Hampshire Caucas, when all you prediction market advocates crawl out from under your stones. For the record at one point the market on Intrade and Betfair was suggesting that Obama had a 95% probability of winning the caucas; whilst Intrade had him at 77% to win the nomination.
A case perhaps of both the foolery of crowds and, the market biting back.
New Hampshire will go down as the Black Wednesday of Prediction markets and unless there is now objective transparent debate (as opposed to the usual biased sabre rattling) – prediction markets will be dead in the water.