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The definitive proof that HubDub is an indispensable prediction exchange. [*]

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As I told you, I am blogging as often as possible on the other blog (Midas Oracle .COM) about the 2008 US presidential elections as seen thru the eyes of the prediction markets. As I wrote there this morning, I have just found out a truly interesting set of prediction markets at HubDub. (I wasn&#8217-t able to find its equivalent on InTrade, BetFair, or NewsFutures.) It&#8217-s trying to predict where the Dow Jones will be, come November 4, 2008. (As you may remember, the deeper the financial crisis, the more likely it is that Barack Obama will be elected president of the United States.)

As of this morning, the Dow Jones is barely above the 8,000 level (8,175.77), and the futures say that the stock market will rebound, at least in the first hours. However, I am bearish. I would bet that the Dow Jones will stay around the current level (or lower) until Election Day. In other words, I am betting on the red, on the chart below.

At what level will the Dow Jones Industrial Average close on Election Day?

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[*] And if Emile (whom we highly respect, overall) is pissed off by that statement, then, great, that&#8217-s a cool unintended collateral consequence. :-D

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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.

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[*] 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.

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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.

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

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Previously: #1 – #2 – #3 – #4

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UPDATE: Traders talk on Twitter about HSX.

Thanks to the HubDub guy for the tip.

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Competitive Forecasting (the brand which NewsFutures Emile Servan-Schreiber is so sanguine about) is probably more than a generic mark, it might well be a descriptive mark -provided X, Y and Z.

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Tom W. Bell – (a law professor who have been following the field of prediction markets for years):

My two cents on “competitive forecasting”: It probably rises above a merely generic mark, which could never be protected, because it is not the commonplace name for the service to which it refers. It more likely qualifies as a descriptive mark, and as such could be protected only if “secondary meaning” were proven. In other words, the claimant would have to show that by dint of long exposure to its use in a commercial context, consumers had come to understand the mark not as a mere description but as the name of the claimant’s service. Whether or not “competitive forecasting” can meet that test remains a question of fact, of course.

Caveat: I speak only of U.S. law, though most common law countries follow similar principles.

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Interesting.

PostScriptum: Put aside that discussion about branding, I like NewsFutures as a play-money prediction exchange, and I have come to realize, e-mailing Emile privately, that he is one of the man I would go for to have an in-depth foray into the real value of the prediction markets (going beyond accuracy, onto utility) &#8212-ironically, the kind of stuff that Robin Hanson is researching more seriously these days (PPT file).

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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.

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Can InTrades prediction markets really contribute to solutions in avoiding future [financial] crises?

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The World Is Flat.

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To the question asked in the title of this post, some have answered by the affirmative (&#8220-Prediction Markets Have a Big Role to Play&#8221-). In my view, it is wrong to overvalue the real social utility of the prediction markets.

As of today, we can plainly see 2 things. Number one, the prediction markets are a tool of curiosity. People have heard about InTrade thanks to numerous news articles (where some prediction market researchers who get the InTrade historical data for free pump up the prediction markets as God&#8217-s right arm on Earth). At crunch time, the people teased by all this publicity flock to the InTrade website to satisfy their curiosity about the state of the horse race. Number two, a subset of the general population (made up of educated people who believe in the virtues of markets) use the prediction markets as a tool of convenience. Instead of spending long hours reading the various outputs by the pollsters and the commentariat, these people just check InTrade on a daily basis, because they know that it is primarily (but not only) an information aggregation mechanism. InTrade sums up the news of the day, so to speak. Hence, these people (in the know about how to benefit practically from the wisdom of crowds) don&#8217-t have to spend time gathering and analyzing the news of the day.

To the question asked in the title of this post, I&#8217-ll answer &#8220-no&#8221- &#8212-unless one of my readers can educate me more about the following issues:

  1. Did InTrade set up a set of prediction markets, in the summer of 2008, aiming at forecasting the (then) &#8220-upcoming financial crisis&#8221-? I am afraid that the answer is &#8220-no&#8221-.
  2. Did the World Economic Forum (a.k.a. Davos) manage to open the eyes of the 2,500 so-called &#8220-global leaders&#8221- (a grandiose denomination that includes many of the Wall Street CEOs, and, yes, some financial bloggers like Felix Salmon, invited to that Swiss annual grand Mess of the capitalism) about the financial instability that was already perceptible in the recent years? I am afraid that the answer is &#8220-no&#8221-. Now, ask yourself: If Davos can&#8217-t, what makes John Delaney think that he can?
  3. Is there out there at least one expert (by &#8220-expert&#8221- I mean any professional other than the so-called prediction market experts who are expert in nothing else than pumping up the prediction markets) who can demonstrate clearly that the prediction markets in his/her vertical have helped tremendously in his/her pursuit of creating long standing wealth? I am afraid that the answer is &#8220-no&#8221-.
  4. How come nobody called bullshit on InTrade CEO&#8217-s grandiose statement?
  5. How come Jason Ruspini, usually so critical, has become as servile as a poodle?
  6. Is Robin Hason the only adult in the field of prediction markets?

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I Told You So. - by Ed Miracle

I Told You So.

by Ed Miracle

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NewsFutures Election Contest – Actually Win Something

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Yesterday, NewsFutures launched a new contest on the US election, focusing on swing states. A way for us to beta test some new technology and some new UIs (this blogger/trader seems to like it so far.) As a reward, we&#8217-re offering X$5,000,000 to the best traders. That&#8217-s play money, but it&#8217-s significant play money: if you had X$5,000,000, you&#8217-d be ranked 21st on NewsFutures today, and you could trade your play money for a $100 Amazon Gift Certificate, not just bragging rights.

Check it out: http://vote08.newsfutures.com/vote08/index.html
It&#8217-s free, it&#8217-s fun, and you may actually win something