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?

[*] 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

InTrades market data shows that the sliding Dow Jones Industrial Average has an exceptionally strong negative correlation (approx. -0.91 over the last 10 weeks) with the rise in the InTrade Market for Barack Obama to be the next US President.

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UPDATE: Some smart comments, just below&#8230-

WARREN BUFFETT: I said that the US dollar might be worth less in five to ten years -not that it might be worthless.

No GravatarHilarious. Right-click on the image to open the link in another tab. Enjoy.

Dollar Buffett

Read the previous blog posts by Chris F. Masse:

  • Eliot Spitzer has simply demonstrated once again that those who rise to the top of organizations are very often the most demented, conflicted individuals in any group.
  • Business Risks & Prediction Markets
  • Brand-new BetFair bet-matching logic proves to be very controversial with some event derivative traders.
  • Jimmy Wales accused of editing Wikipedia for donations.
  • What the prediction market experts said on Predictify
  • Are you a MSR addict like Mike Giberson? Have nothing to do this week-end? Wanna trade on a play-money prediction exchange instead of watching cable TV? Wanna win an i-Phone?
  • The secret Google document that Bo Cowgill doesn’t want you to see

Reality check on TradeSports-InTrades recent statement

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The spin doctoring goes like this:

TradeSports, the leading person to person retail trading exchange, continues to grow and innovate in the lead-up to this November&#8217-s US elections.

Reality Check: The world&#8217-s biggest retail, real-money prediction exchange is BetFair, actually.

TradeSports offers person to person trading services to thousands of registered members from all over the Globe who trade their opinions on hundreds of events such as the US November mid-term elections, the capture of Bin Laden, the Dow Jones at year end, and many sporting events.

Reality Check: TradeSports-InTrade is entirely dependend on its American clientele, which makes up for the bulk of its revenues.

We also provide prediction market data which is becoming the reporting standard on political and other future uncertainties to the world’s media, academia, investment businesses, state and political organizations.

Reality Check: Highly exaggerated, but true.

We will be launching a new “Express” trading interface in the coming weeks to further improve our service and to cement our position as the leading retail person to person trading exchange.

Reality Check: The world&#8217-s biggest retail, real-money prediction exchange is BetFair, actually. As for improving the service, besides the &#8220-Express&#8221- interface, I suggest to seek regulation from the Irish government and membership from the Independent Betting Arbitration Service. In contrast, BetFair is regulated in the U.K. and is a member of IBAS.

Recent and historical legal directives in the US and other countries have been aimed at organizations in the business of bookmaking, an activity in which TradeSports is not involved.

Reality Check: The real-money prediction exchanges are not exempted from the Internet Gambling Prohibition and Enforcement Act of 2006. Also, there&#8217-s no indication that the US Treasury and US DOJ will exclude the real-money prediction exchanges (a.k.a. betting exchanges) when they will enforce the law.

TradeSports is not a sportsbook or a bookmaker, and as an Irish Company, operating legally from Ireland, we will continue to provide our services to current and new registered members.

Reality Check: True. However, the problem will be how to make the money cross the Atlantic (from the U.S. clients to the Irish firm), now that Neteller is out of the US market.

Thanks to all our thousands of current and many new members, and those interested in our prediction market data for making TradeSports a phenomenon.

Reality Check: BetFair is a phenomenon, not TradeSports-InTrade, which a poorly managed company headed by some Irish people with no questionable ethics, who behaved like thugs badly during the NKM episode. [See David Pennock’s comment.]