Justin Wolfers pumped up the shitty, play-money prediction exchange run by InTrade/WSJ.

Shit here.

The fake-money exchange is pitiful, and to have a professor pumps up that shit is pitiful too.

UPDTE: That was the 2008 election. Fortunately, this crappy exchange is dead. Here&#8217-s Freakonomics on the 2010 election.

New NewsFutures prediction exchange in France

http://predipol.newsfutures.com/ &#8212- play-money

And Today&#8217-s Le Figaro features prediction markets, Emile tells me&#8230- :-D

«Du coup, assure Emile Servan-Schreiber, on ne lit plus les articles de la meme maniere, un peu comme un analyste financier qui traque l&#8217-info pour ensuite s&#8217-en servir dans ses recommandations d&#8217-investissement.»

American Civics Exchange = CFTC-regulated Exempt Board of Trade

American Civics Exchange is enabling what InTrade (circa 2006, when they applied for the eBOT status) couldn&#8217-t&#8230- &#8212-getting the CFTC stamp of approval, and running a real-money prediction exchange from within the US territory (as opposed to offshore). The ACE does not have any direct domestic competitor, right now, but HedgeStreet could enter the political turf, later on.


American Civics Exchange is a play-money and real-money prediction exchange focused on politics. Its contracts pay out depending on whether given political outcomes (e.g. enactment of legislation, regulatory decisions, etc.) take place. The contracts are based on the idea of &#8220-event derivatives&#8221- &#8212-pretty much like the weather derivatives that enable companies that are financially exposed to deviations in temperature (utilities, farms, etc.) to hedge that exposure. The ACE political contracts enable any commercial companies to hedge their financial exposure to things like increased tax rates, enactment of harmful legislation, and adverse regulatory decisions. Speculators are also welcome, of course.

The seven initial contracts are:

  1. Increase capital gains/dividend income tax rates-
  2. Elimination of the manufacturers&#8217- tax deduction for oil companies-
  3. Enactment of &#8220-card check&#8221–
  4. Enactment of &#8220-cap and trade&#8221–
  5. The EPA granting California&#8217-s Clean Air Act waiver-
  6. Increase in the minimum wage-
  7. Taxation of carried interest as regular income.

The future prediction markets might feature these topics:

  1. Various new financial services regulations-
  2. Additional industry bailouts-
  3. Major healthcare reform-
  4. FDA drug approvals-
  5. Windfall profits tax on oil companies-
  6. Renegotiation/dissolution of existing trade agreements-
  7. Resolution of major class action lawsuits.

The Delaware-incorporated American Civics Exchange will be operating as an &#8220-exempt board of trade&#8221- pursuant to CFTC regulations, the Commodity Exchange Act, and the Commodity Futures Modernization Act. Last week&#8217-s launch consists solely of the play-money prediction exchange, with free accounts available to the general public. In the coming weeks, the real-money prediction exchange will open shop. Eligible contract participants [see 1(a)12] will then fund their accounts and begin live trading.

UPDATE: On February 10, 2009, the American Civics Exchange received an official acknowledgment from David Stawick, Secretary of the CFTC. The CFTC website, however, does not yet list ACE in their directory of eBOTs. It will, ultimately.

What ACE says (in their media kit) about hedging:

To offset a hypothetical $100,000 negative exposure to a proposed increase in the capital gains tax rate, a market participant would place a bid on 1,000 contracts. If that order were filled at $30, the position would cost $30,000 (excluding transaction costs). Matching such a bid does not require a coincident order to sell 10,000 contracts. As with established exchanges, the liquidity of a robust marketplace of buyers and sellers will enable even large orders to be automatically matched to batched bids submitted by an unlimited number of participants, including both speculators and natural hedgers.

If the tax increase is enacted before 12/31/10, the contract holder would receive $100,000, offsetting the impact of the tax increase. The contract holder can also sell the contract back into the marketplace at the prevailing price at any time before the expiration date, provided another party is willing to purchase the contracts at that price.

Press release:

Online Futures Market Enables Participants To Hedge Exposure To Political Events

NEW YORK, March 20 /PRNewswire-USNewswire/ &#8212- American Civics Exchangecorp, Inc. announced today that it has launched The American Civics Exchange, the first US-based commercial market for political futures. The Exchange enables traders to hedge and speculate on political risk through derivative contracts based on the outcomes of underlying events, including increases in tax rates, enactment of &#8220-card check&#8221- legislation, increases in minimum wage rates, enactment of &#8220-cap and trade&#8221- legislation, and other legislative, regulatory, and legal outcomes.

The ability to offset exposure to such events using contracts traded on the Exchange will enable risk managers and investors to reduce unwanted risk and protect themselves from adverse political outcomes. All contracts that trade on the Exchange are binary in nature, meaning they settle at $0 or $100, and are fully cash-collateralized, eliminating any counterparty, credit, or clearing risk.

The Exchange&#8217-s initial launch consists of a &#8220-play money&#8221- market for prospective participants and interested members of the general public. This launch will be followed by the roll-out of the &#8220-real money&#8221- market, which will be open only to eligible contract participants (as defined in the Commodity Exchange Act). The play money market will continue to operate parallel to the real money market and will remain available to individuals not eligible to trade in the live market, members of the press, academic and policy researchers, and other interested parties. In coming weeks, the Exchange will phase in additional collaborative and community-based tools for trading and research.

Philip &#8220-Flip&#8221- Pidot, one of the founders and the CEO of the Exchange, said, &#8220-The inauguration of a new Presidential administration and the unprecedented legislative and regulatory changes being considered in response to the financial crisis have only magnified the bottom-line impact of public policy decisions. For the first time, businesses and individuals have a market-based solution to hedge against these uncertain political risks.&#8221-

The American Civics Exchange operates as an Exempt Board of Trade pursuant to federal law and CFTC regulations. Users can register accounts and trade through the secure online trading platform located at http://amciv.com.

Requests for additional information can be directed to info@amciv.com or (646) 257-2426.

For media inquiries, please contact Audrey Mullen at audrey@advocacyink.com or (703) 548-1160.

American Civics Exchange

UPDATE: The Hill on ACE&#8230-

At the contrary, mister Kirtland.

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Contra Alex Kirtland, I believe that the development of play-money prediction exchanges using MSR (like HubDub or AskMarkets), which popularity is now proved, is much more important news than stuff about CFTC-regulated, real-money prediction exchanges (like HedgeStreet or the Cantor Exchange), which popularity is uncertain.

Inkling Markets, HubDub and AskMarkets have been techcrunched &#8212-that has not been the case for HedgeStreet or the Cantor Exchange. Practically, that means a great injection of PageRank, hundreds if not thousands of bookmarks, and plenty of new users. That&#8217-s not what I call being &#8220-overshadowed&#8221-.

At inception, I created an Internet usability category, and, since, I have published many Jakob Nielsen stories. Many wondered why I would bother. Now, the Midas Oracle readers can understand why.

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These traders are talking down the newly redesigned Hollywood Stock Exchange website.

[They guy above has misspelled, two times. He meant: “unusable“.]

Previously: #1 – #2#3#4

UPDATE: Traders talk on Twitter about HSX.

Thanks to the HubDub guy for the tip.

How to break a successful prediction exchange in less than one week

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Whiskey Kilo (a Hollywood Stock Exchange trader):

Change is one thing, breaking the whole site and acting like its nothing happened is another. The whole concept of trading movie stocks, movie bonds and options have taken a backseat to making sure you can blog, add friends, and “Schmooze”.

The old portfolio page was color coded and extremely easy to understand, you instantly knew if you were making H$ or losing your shirt. Now the current portfolio page is a small box, one colour, light grey on a white backround and the type is half the size of the font here, also you can only see 12 stocks at any given moment. Whoever OK’d this part of the site has to have never traded any shares online before.

From what I can gather, there was a beta version of this 3rd generation of the game, but no one paid any attention to the any of the feedback, two days after this new rollout, HSX.com started calling this new version a beta game, and what HSX staff there is say that portfolios are now their priority. However the only things that really work right now are the blogs, which pay H$10,000 a posting, adding friends pays traders H$1000, Online Polls, and Schmoozing. which paid initially H$1000, but now pays H$100 per reply. The only reason I see for paying traders to blog is to bring more eyeballs to the garish 728?90 and 300?225 ads on each page to pump the number of advertising views on HSX. But if this is part of the grand scheme here, I can’t see Gold coin or Forex advertisers closing sales from a bunch of 13 years because all the veteran traders have left in disgust.

I welcome Jed [*] to read the HSX Support page: http://www.hsx.com/cms/forums/support and look around, I shudder to think this all is going to be a B-School case study on how to kill a successful site in under a week.

[*] Jed Christiansen, who put up a comment in defense of HSX (Jed systematically defends the people I slam on Midas Oracle) &#8212-and who has just begun an MBA education.

The new Hollywood Stock Exchange website (recently redesigned) sucks as much as an indigestible fruit cake.

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HSX-sucks.com &#8212- I predict that somebody will soon register this domain name.

Many HSX event derivative traders have complained to me privately about the website redesign: they hate it more than they hate the recent financial bailout. One HSX trader went off on the Prediction Markets group discussion area at LinkedIn. Today, another HSX trader is writing a long prosecution of the HSX website redesign. Read it in all, and spot the many comments at the bottom, from fellow HSX traders.

The root of the problem is Alex Costakis &#8212-the director of HSX. My assessment of him is that he doesn&#8217-t get the Web. He is as clueless as a maggot trying to play Jazz. He is not an open person, and the Web is all about openness. This guy is a drag on HSX. I predict he will lead to HSX&#8217-s death.

The only 2 persons that could lead to a revival of HSX are Max Keiser or Nigel Eccles. Let&#8217-s hope that Cantor Fitzgerald will call them for help.

UPDATE: See the comments.

2008 US Presidential and Congressional Elections Prediction: The Sarah Palin effect has partially evaporated, but its remains point to a close race, come Tuesday, November 4, 2008.

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#1. 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

#2. Objective Probabilistic Predictions = Charts Of Prediction Markets

Put your mouse on your selected chart, right-click, and open the link in another browser tab to get directed to the prediction market page of your favorite exchange.

2008 US Elections


2008 US Electoral College

2008 Electoral Map Prediction = InTrade – Electoral College Prediction Markets = Probabilistic predictions for the 2008 US presidential elections based on market data from InTrade = electoralmarkets.com

– This is a dynamic chart, which is up to date. Click on the image, and open the website in another browser tab to get the bigger version.