The Real Arithmetic Of The Health Care Reform –- NYT –- by a former CBO director.
Required reading for Paul Hewitt. 
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ADDENDUM
More info on health care reform on Memeorandum, Politico and Slate.
The Kauffman Foundation is organizing a meeting of economics bloggers. I was not able to join them, this time. I will be watching the webcast, today.
2010 Economics Bloggers Forum
Hosted by the Kauffman Foundation
8:30 a.m. Welcome by Tim Kane
8:45 a.m. Keynote Speech by David Warsh
9:30 a.m. Panel 1 – Great Recession: Impact on America’s Future?
Paul Kedrosky, Bob McTeer, Megan McArdle, and Mark Thoma
1:00 p.m. Persuasion and Norms by Paul Romer
1:30 p.m. Panel 2 – Is Growth a Mystery? Haiti, Afghanistan, Africa…-
Tim Kane, Alex Tabarrok, and Allison Schrager
2:45 p.m. Panel 3—U.S. Fiscal Mess: How Does It End?
Robert Litan, Donald Marron, Ryan Avent, Ken Houghton, and Mike Shedlock
3:45 p.m. Closing Remarks by Carl Schramm, President and CEO, Kauffman Foundation
VIEW WEBCAST at
http://sites.kauffman.org/EconBlogForum/template.cfm?page_id=1283
Webcast begins Friday March 19, 2010 at 9:30 a.m. –- 5:00 p.m. EDT
Microsoft SilverLight plugin required to view.
One (anonymous) InTrade trader:
I am utterly convinced Intrade participates in its own markets. Every few hours some kind of API hits the bids on the GOP 2012 nomination contract when the bids sum to more 100. It will even short bids at 0.1, which is a money losing proposition when you figure the transaction cost alone of 0.3 (since the price is below 5). Also, the amount of margin required to short all of these bids is in the millions of dollars.
So the actor has to a) not care about the transaction fee and b) have limitless margin. Intrade fits the bill for both of these. a) they don’-t care about transaction fees because they are ultimately collecting them and b) if you only short when the bids are summed to over 100, it’-s essentially an arb.
The trader also tells me that, on the InTrade forums where those questions were asked many times, InTrade never denied that they trade on their own prediction markets.
Previously: What was Max Keiser doing at InTrade HQ two years ago? –>- “due diligence”…!??…
Next: Does InTrade participate on its 2012 Republication Nomination prediction markets?
I’-m not sure if you should particularly care about the little 5 or 10 point hedges (usually to the pessimistic side) that I’-ve periodically been recommending around the Intrade contract on the chances of reform passing. Even if you staffed a whole room full of the smartest vote-counters, modelers and analysts and had them work 24/7 on trying to beat the Intrade contract, I’-m not sure if they could come up with anything sufficiently rigorous to provide them with a real advantage. (That doesn’-t necessarily mean the market is “-efficient”-, but we’-ll save that conversation for another day.) But for what it’-s worth, the Intrade contract, which is trading at 75 percent right now, now looks about right to me or perhaps even a hair pessimistic.
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ADDENDUM
More info on health care reform on Memeorandum, Politico and Slate.
[…] I asked John Delaney and his tech team when I was doing my due diligence on InTrade a couple of years ago in Dublin – about the firm’s own participation in making markets – and the potential to ‘manage’ prices in ways that were outside of the normal price discovery mechanism. I came away from that meeting not convinced at all that adequate checks and balances were in place to protect against manipulation. […]
Details, details.
I am calling all my Deep Throats. Contact me. Tell me more.
Next: Does InTrade participate on its own prediction markets?
I already linked to it, but you should re-read the 2008 TIME interview of BetFair’-s two founders.
Awesome literature, if you are an entrepreneur.
Take 10 minutes today to read that.
This is really stupid. The decerebrated journalos at the FT chose to feature the illiquid, Ireland-based, un-regulated InTrade prediction markets instead of the very liquid, UK-based, regulated BetFair prediction markets on the next British congress.
Makes no sense at all.
The BetFair PR boys have an omelet on their face. They should work harder.
DISAMBIGUATION: The “-illiquid”- adjective refers to the UK political markets on InTrade —-not the US political prediction markets.
IT IS NOW BACK TO ABOVE $60.
See Jason Ruspini’-s comment. UPDATE: Carlos Graterol. Joe Weisenthal. Gawker. Max Keiser.
ADDENDUM
More info on health care reform on Memeorandum and Politico.