2010 was a warm year, despite record snow and ice in highly populated areas. Here is the message I provided on the expiry:

The NASA GISS GLOBAL Land-Ocean Temperature Index for 2010 averaged out to 0.6325 Celsius above baseline. The winning prediction is ‘greater than 0.6 Celsius (>0.6)’. Congrats to the winners, and to all participants for nudging closer to the truth.

I will list the 2011 question shortly.  Many thanks to Inkling Markets for their generous hospitality.

Cross posted from Caveat Bettor.

For the first 8 months of the year, the index has averaged 0.52 Celsius over baseline, slightly warmer than 2008′s 0.44 Celsius, but still trending lower since the peak of 0.62 in 2005.

Temperatures are rising over the last century. Alarmists claim its our increased carbon emissions; skeptics like me think its more correlated to solar activity. Carbon dioxide is a trace gas compared to water vapor, which is an efficient heat absorber.

An excerpt from “Bovine Scatology”:

Ten years ago, your mutual fund manager would have to use Goldman or a competitor’s block desk to move 100,000 shares of Proctor and Gamble. And they would have to trade an eighth wide, i.e. 12.5 cents per share. The financial intermediaries would take that spread, or more, if another customer was willing to trade through your manager’s limit to take the other side of the trade.

No one pays those types of commissions any more. Tick sizes have shrunk over 90%, and as have costs to the retail investor.

The fact that Duhigg had to quote a dinosaur, Bill Donaldson, tells you something. I’ve spoken to the founder of DLJ and SEC chair on one of his lecture circuit gigs, and the guy is from a different age. His research driven business model was fantastic back in the 70s and 80s, but its a woolly mammoth now. His appointments since cashing out have been largely political; those who can’t do teach, and those who can’t teach must regulate …

There are a lot of grizzled Wall Street veterans who pine for the days of tick sizes an eighth wide, and funneling trades to a single market maker on a trading floor. That’s because a monopoly is great if you are on the right side of it.

Price discovery is improved with liquidity. There is more liquidity because of high frequency trading.

Right now, GE is quoting $11.97 x $11.98, half a million shares a side. I guess Donaldson and Duhigg are pining for the days when it would be quoting $11.875 x $12.000, and we retail investors would be paying Merrill $300 to sell 1,000 shares, in addition to giving up $95 extra in the day of eighths, in that we would be selling at $11.875 rather than $11.97.

As usual, the good ol’ days aren’t as good as they seem, once you realize you are giving up your clean running water for the outhouse.

http://www.haloscan.com/comments/caveatbettor/3098722113787876052/

Unfortunately, Intrade was down, so I could not check where things were trading.

He who laughs last, right Chris?

UPDATE: Jack Tapper says there is a hoax email out there, which could be the basis for the Bloomberg article.

Cross-posted from Caveat Bettor.

Intrade needs to specify the expiry conditions more precisely.

Still, I’m remain short the contract:

Cross-posted from Caveat Bettor.

Unsurprising to those who know a little bit about the scholarship, economics, and/or track record of prediction markets, the traders of Intrade provided us much better data this election season than the respondents to the Zogby polls.

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Lord willing, I will have another showdown season, but will most likely choose another pollster. Whereas Intrade listed contracts and probabilities for every state primary, Zogby only provided election eve updates for only 21 of the 87 held to date. Rasmussen stands out as a worthy pollster, but I would be happy with any candidate referrals from my readers as well.

Cross-posted from Caveat Bettor.

I asked for them at the end of 2006/beginning of 2007 (the post was on Jan 10 2007, but I think I requested them first). A conversation at Midas Oracle, a few months later.

The Contract Rules need more precise specification. While Intrade did use my suggestion of the Goddard Institute for Space Studies data to value the contract, I think Intrade must specifically state that the “J-D” January-December annual mean temperature series is being used, and on either the Global Mean Monthly data set, or else the Global-Land Ocean Temperature Index data set.

I personally prefer the latter, as ocean temperatures play a huge role in ice melts as well as other weather phenomena (e.g. hurricane frequency and intensity, even this political advocacy group pretending to be scientific says so). In any case, the two series are generally correlated well, so I have no strong preference which one Intrade specifies.

I used the latter of course, in working with Adam Siegel and the folks at Inkling Markets to create the very first Global Warming prediction market.

Cross-posted from Caveat Bettor.

Contest-by-contest breakdown at Caveat Bettor.

I was disappointed that Zogby only presented polling on 7 of the 20 contests on Super Tuesday.