CNBC airs an upbeat explainer about InTrades prediction markets.

No Gravatar

Via our good friend Jason Ruspini.

CNBC video + CNBC video #2

– Please, put that on YouTube, and then give me the YouTube URL. I&#8217-ll embed the video in another post.

– Who is that guy that they will interview later on, Jason??? [UPDATE: Serge Ravitch]

My observations:

  1. Quite upbeat. Almost an advertisement for InTrade.
  2. No mention whatsoever that InTrade is illegal in America.
  3. On the website, they call InTrade a &#8220-political futures market&#8221-.
  4. The InTrade critic was Barry Ritholtz. They just showed his blog. He wrote that the trading on InTrade is &#8220-pitifully&#8221- small.
  5. The first prediction market analyst they want to hear is InTrade CEO John Delaney. The second is professor Justin Wolfers. And that&#8217-s all.
  6. Steve Forbes asked whether &#8220-this thing&#8221- (InTrade) predicted Joe Biden &#8220-weeks ago&#8221-. The answer is that InTrade predicted Joe Biden some days ago.
  7. Joe Kerner put an emphasis on liquidity, whereas the emphasis should have been on the market as the mechanism that delivers a collective verdict.

UPDATE: YouTube video (the last part was censored by InTrade-TradeSports CEO John Delaney – PRECISION: the discussion between the journalists and the guest on the TV set was suppressed)

UPDATE: The second CNBC video segment that TradeSports-InTrade CEO John Delaney does not want you to see on YouTube

8 thoughts on “CNBC airs an upbeat explainer about InTrades prediction markets.

  1. Medemi said:

    Does anyone actually offer an explanation as to why the the polls are off by such a wide margin, assuming the prediction markets are right about Obama’s 63% chance to win the presidency ?

    You want to hear my theory ? :-D

  2. Medemi said:

    Maybe an interesting parallel (maybe not) is the way market indices move. It will either be up on the day, or down. So far, you ‘re with me. Consequently reporters will attach an explanation to it. “Oil is up”, “The financials are down” etc. and when there isn’t a plausible explanation available to reduce their feelings of discomfort, then “sentiment is bad” or “we’re ahead of the week-end” etc. They will think of something.

    The reality of the matter is, at least 60-70% of it is technical. When the market is supposed to go down (when it wants to go down), it will go down. We’re there now. Oh man, this really hurts when you’re a long term investor.

  3. Chris F. Masse said:

    Medemi, the polls are a snapshot of the public opinion, while the prediction markets reflect the anticipation of the traders. But you understood that already.

  4. Medemi said:

    No good Chris. You have to explain why the polls are underestimating Obama’s chances – I was just looking at 5 different recently held polls (on a Dutch site). They all say it is a head to head race, and one even had Mccain ahead by 5%.

    Unless you can convince me those polls are not representative.

  5. Medemi said:

    Those polls were held in the US, btw. I only mentioned the dutch site because it wouldn’t be very constructive to provide you with a link.

  6. Medemi said:

    Well, is the answer obvious, or isn’t it ? In order to find out, I need someone to confirm my theory independently, and believe it or not, of all people my best hopes are for you Chris.

    On the one hand, the answer should be obvious. Ask any experienced trader why he is not betting massively against Obama. On the other hand, the answer isn’t obvious at all. Because every living soul, except a few, seem to suggest the polls are pretty accurate (in general). And we have 5 different polls all saying the same thing. On top of that, I had to listen to the 8 o’clock news, suggesting the same thing, that we have a head to head race. If we’re right about the superiority of prediction markets, then “they” must be wrong, in the sense that they are not taking into account at least one crucial element. What is it ? We must tell them and falsify their “theory”. IMO.

  7. Medemi said:

    “Pollsters are of varying quality, polls are of varying sample sizes and varying methodologies.”

    That’s too easy, and doesn’t explain why all the polls are “predicting” the same thing.

    Here are the polls I was referring to.




    Laatste vijf peilingen:

    Gallup (17-19/08)



    CBS/New York Times (15-19/08)



    LA Times/Bloomberg (15-18/08)



    NBC/Wall Street Journal (15-18/08)



    Reuters/Zogby (14-16/08)



    You would expect these people to know what they are doing, and I do believe these polls are measuring the “here and now” pretty accurate, overall. But there’s simply no predictive power in them. Why ? Because election day is not the “here and now”. We also have to take a good look at our candidates.

    Also, under different circumstances, it might very well be that the polls turn out to be accurate, but only because the circumstances “were in their favor”…. They are not now, IMO.

  8. Medemi said:

    Ok, I will give you my theory, and then you can all laugh. :-D

    This whole thing is a media circus right now, right ? And Mccain is the clown. He entertains people, and that is what a lot of folks like about him, for now. Come election day however, people will get more serious and think about issues like the housing crisis, the economy etc. etc. They will be confronted with reality and an awareness will creap up to them that they should make their vote count, because their bloody future is on the line. Obama is the serious type, right ?

Leave a Reply

Your email address will not be published. Required fields are marked *