Barack Obama will finish off Hillary Clinton by June 15.

No Gravatar

The End

Lawrence O&#8217-Donnell (a leftist journalist &#8211-but a good one, whom I appreciate):

A senior campaign official and Clinton confidante has told me that there will be a Democratic nominee by June 15. […] Yes, Clinton spokespersons publicly seem to be lost on gravity-free planet Clinton, but privately they know the end is near.

There&#8217-s a quasi consensus among the political pundits to say that Hillary Clinton will not be the Democratic nominee in November 2008.

Tim Russert:

That was Wednesday night. I have just watched NBC Nightly News this Thursday, and the same Tim Russert appeared with 2 white boards full of calculations, which all pointed to Hillary Clinton being toasted.

My general thoughts about the place of the political prediction markets in this primary election season:

  1. The weight of the political prediction markets in the US political scenery is close to epsilon. I have been monitoring Memeorandum (the Web&#8217-s best political news and opinion aggregator), and it has never featured one piece of political prediction market journalism &#8212-not only that, but none of the popular popular pieces, featured by Memeorandum, has ever mentioned the political prediction markets and their probabilities. The people who breathe politics on a daily basis (the experts and the bloggers) don&#8217-t give the first fig about the prediction markets. They couldn&#8217-t care less.
  2. The prediction market luminaries who predicted that the prediction markets were to become a tool used in political campaigns were dead wrong. I have never read that campaign staffers use actively the political prediction markets. Campaigns use private polls, only.
  3. Like in 2004 (when Howard Dean was crowned, early on), the prediction markets, at the start of the primary season, were incapable of foreseeing who would be each party&#8217-s nominee, ultimately &#8212-Barack Obama and John McCain both came out of the blue. But the polls and the political experts didn&#8217-t see them, too.
  4. Nothing surprising in that. While the idiots emphasize the supposed magical power of the prediction markets (using adjectives such as &#8220-fascinating&#8221- or &#8220-intriguing&#8221- when writing about them), the well informed people know for a fact that they simply aggregate information from the primary, advanced indicators and the opinions expressed by the political experts. Nothing more than that. The prediction markets are incapable of foretelling upsets, by essence.
  5. The last weeks were particularly interesting, in that regard, because the Obama-vs-Clinton polls have been of no interest &#8212-only the views of the political experts who could count in terms of delegates and super-delegates were of interest. The political prediction markets on the Democratic side, these last weeks, have been a reflection of the pundits&#8217- calculations.
  6. Outside of our blog, the only person who has aimed at practicing prediction market journalism is Justin Wolfers. He has understood the concept.
  7. I would have my own concept of prediction market journalism, and I don&#8217-t agree with the way he executes, but that&#8217-s a detail. The main thing is that he has gotten the concept. That&#8217-s what is important, and that&#8217-s what makes all the difference between Justin Wolfers and the HubDub bloggers (for instance). The concept. The concept. The concept. The idea is to center the narrative around the inputs given by the relevant prediction market(s) &#8212-not just gluing artificially news bits and a prediction market chart (or a link to a prediction market).
  8. InTrade, BetFair and NewsFutures are, in my view, the 3 prediction exchanges that matter for prediction market journalism &#8212-as of now.

Now, the charts of the expired prediction markets &#8212-starting with Pennsylvania (of 2 weeks ago):

Yesterday&#8217-s North Carolina:

Yesterday&#8217-s Indiana:

Sources: InTrade &amp- BetFair

(Go there for the remaining primaries and caucuses. I don&#8217-t put them on, here, because they don&#8217-t matter anymore.)

Now, the charts of the prediction markets, going forward:

2008 US Presidential Election Winner – Individual

Price for 2008 Presidential Election Winner (Individual) at

Price for 2008 Presidential Election Winner (Individual) at

Price for 2008 Presidential Election Winner (Individual) at

2008 US Presidential Elections

Source: Dynamic, compound prediction market charts from InTrade

Next US President

Next US President

Winning Party

Winning Party

Female President?

Female President?

Democratic Candidate

Democratic Candidate

Republican Candidate

Republican Candidate

Source: BetFair Politics Zone

Barack Obama to win the Democratic nomination

© NewsFutures

Hillary Clinton to win the Democratic nomination

© NewsFutures

Next US President Will Be Democratic.

© NewsFutures

Next US President Will Be Republican.

© NewsFutures

Explainer On Prediction Markets

Prediction markets produce dynamic, objective probabilistic predictions on the outcomes of future events by aggregating disparate pieces of information that traders bring when they agree on prices. Prediction markets are meta forecasting tools that feed on the advanced indicators (i.e., the primary sources of information). Garbage in, garbage out&#8230- Intelligence in, intelligence out&#8230-

A prediction market is a market for a contract that yields payments based on the outcome of a partially uncertain future event, such as an election. A contract pays $100 only if candidate X wins the election, and $0 otherwise. When the market price of an X contract is $60, the prediction market believes that candidate X has a 60% chance of winning the election. The price of this event derivative can be interpreted as the objective probability of the future outcome (i.e., its most statistically accurate forecast). A 60% probability means that, in a series of events each with a 60% probability, then 6 times out of 10, the favored outcome will occur- and 4 times out of 10, the unfavored outcome will occur.

Each prediction exchange organizes its own set of real-money and/or play-money markets, using either a CDA or a MSR mechanism.

More Info:

– The Best Resources On Prediction Markets = The Best External Web Links + The Best Midas Oracle Posts

– Prediction Market Science

– The Midas Oracle Explainers On Prediction Markets

– All The Midas Oracle Explainers On Prediction Markets

Previous blog posts by Chris F. Masse:

  • Prediction Markets
  • Meet professor Justin Wolfers.
  • Become “friend” with me on Google E-Mail so as to share feed items with me within Google Reader.
  • Nigel Eccles’ flawed “vision” about HubDub shows that he hasn’t any.
  • How does InTrade deal with insider trading?
  • Modern Life
  • “The Beacon” is an excellent blog published by The Independent Institute.

Lets face it. The political world doesnt give the first fig about the prediction markets, InTrade, BetFair, Betdaq, NewsFutures, HubDub, Robin Hanson, Justin Wolfers, and the rest of our little clique.

No GravatarSome of our luminaries have had their vapors and have boldly stated that the public [*] prediction markets would soon take over the free world and become the forecasting tool of choice for decision makers. Since our movement has started, in 2003, that has not happened &#8212-and will never happen (let alone in the year 2020). We were duped by those cocky misleaders. In the coming weeks, I&#8217-m going to try to launch a big intra-industry initiative to find the right usage for the public prediction markets. Stay tuned&#8230- and I hope I&#8217-ll get you on board with me.

[*] as opposed to the enterprise prediction markets, which is not the topic of my bombastic rant above, which is a horse of another color, and which would deserve a completely different analysis.

WEB EXCLUSIVE: Here&#8217-s what the political world really cares about&#8230-

Gallup 1

Gallup 2

Gallup 3

Previous blog posts by Chris F. Masse:

  • Last year’s best April Fool’s Day Joke had something to do with the Wisdom Of Crowds.
  • Will HedgeStreet USA, the hypothetical InTrade USA, and the hypothetical TradeFair USA, be regulated in the future by a merged SEC+CFTC regulatory structure?
  • WORST THAN ELIOT SPITZER (if it were possible): Formula One boss, Max Mosley, had sado-masochist sex with 5 prostitutes, for 5 hours (!!), reenacting a concentration camp scene (!!) in which he played the role of both Nazi guard and inmate.
  • Is BetFair Poker a booby trap for the gullible novices? Does The Sporting Exchange (the operator of the BetFair brands) help gangs plucking down innocent recreational poker players?? To get an inkling, don’t read The Guardian, seeded by the BetFair spin doctor- read Midas Oracle.
  • The video that the technologically retarded BetFair spin doctor should watch.

Are you a better predictor than John McCain?

No GravatarVia Bo Cowgill of Google, via Foreign Policy, John McCain:

John McCain

They would do anything to sell politics, these days. :-D

Foreign Policy:

It&#8217-s a clever marketing ploy by team McCain, but why stop there? Why not have the candidate take positions in predictions markets such as Intrade? Wouldn&#8217-t we rather know how prescient Senator McCain is about the odds of bird flu striking the United States by the end of September, the chances Pervez Musharraf will step down as Pakistan&#8217-s president anytime soon, or the likelihood of a peace treaty between Israel and the Palestinians by January 2009? Put your money where your mouth is, senator.

InTrade-TradeSports and BetFair-TradeFair should let traders opt to make public their positions, and they should create dynamic prediction registries and leagues.

Previous blog posts by Chris F. Masse:

  • Red Herring’s list of the top 100 North-American high-tech startups includes Inkling Markets —but not NewsFutures, Consensus Point, or Xpree.
  • Professor Koleman Strumpf explains the prediction markets to the countryland people.
  • Professor Koleman Strumpf tells CNN that a prediction market, by essence, can’t predict an upset.
  • Time magazine interview the 2 BetFair-Tradefair co-founders, and not a single time do they pronounce the magic words, “prediction markets”.
  • One Deep Throat told me that this VC firm might have been connected with the Irish prediction exchange, at inception.
  • BetFair Rapid = BetFair’s standalone, local, PC-based, order-entry software for prediction markets
  • Michael Moore tells the Democratic people to go Barack Obama in Pennsylvania (a two-tier state), but the polls and the prediction markets tell us that that won’t do the trick.

Democratic and Republican caucuses in Nevada + Republican primary in South Carolina

Here are the event derivative charts of expired InTrade contracts.

[Psstt&#8230- I have high hopes about being able to publish the charts of expired BetFair contracts, too, soon. :-D ]



Democratic and Republican caucuses in Nevada


Democratic caucus in Nevada (the Hillary Clinton event derivative was expired at 100):

Dem Nevada Clinton

Dem Nevada Obama

Dem Nevada Edwards


Republican caucus in Nevada (the Mitt Romney event derivative was expired at 100):

Rep Nevada Romney

Rep Nevada McCain



Republican primary in South Carolina


Republican primary in South Carolina (the John McCain event derivative was expired to 100):

Rep SC McCain

&#8220-Field&#8221- = Mike Husckabee

Rep SC Field

Rep SC Romney

Rep SC Thompson-F

Source: InTrade

Read the previous blog posts by Chris. F. Masse:

  • Super Bowl XLII
  • The Glorious Incertitude Of Sports
  • TradeSports Cost Of Transaction
  • The prediction market industry needs people who have balls.
  • Is it good to have a prediction market melting pot of academics and businesses?
  • Is it time to buy some Michael Bloomberg event derivatives?
  • Professor Leighton Vaughan-Williams excluded from the BetFair blog feed

The Michigan primary as seen thru the prism of the InTrade prediction markets

No Gravatar

Michigan, U.S.A. &#8212- Tuesday, January 15, 2008


The Democrats

The Hillary Clinton event derivative was expired to 100.

MI Dem Clinton

MI Dem Obama

MI Dem Edwards

MI Dem Field


The Republicans

The Mitt Romney event derivative was expired to 100.

MI Rep Romney

MI Rep McCain

MI Rep Giuliani

MI Rep Field

Source: InTrade