Never trust a politician.

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Barack Obama + Joe Biden – THE PREDICTION MARKETS NAILED IT… triple alas (for my reputation as a world-wide prediction market pundit, and for the debate on the different quality of the various primary indicators out there).

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“Friend &#8212- I have some important news that I want to make official. I’ve chosen Joe Biden to be my running mate.”

Some blogger says his wife is fantastic.

New York Times portrait of Joe Biden.

UPDATE: Barack Obama&#8217-s speech + Joe Biden&#8217-s speech

I think it is the worst pick ever. What a blunder. Joe Biden (a D.C. insider) is unpopular and gaffe prone. Plus, that choice shows that Barack Obama is insecure when it comes to foreign policy. An emphasis on the economy and, thus, on a successful gubernatorial experience would have been better.

Kathleen Sebelius was the one to pick. She is my vice president. (And Ron Paul is my president. :-D )

I have over-estimated the secretiveness of Barack Obama&#8217-s decision process. The chart above obviously shows that the Joe Biden narrative leaked out to reporters was beamed out for a purpose: testing the Obama-needs-a-VP-who-is-strong-in-foreign-policy argument, and letting the Press do the final vetting on gaffe-prone Joe Biden.

InTrade CEO John Delaney (along with the HubDub and BetFair people) will now brag on his marketing material that his prediction exchange did forecast Joe Biden as the Democratic vice president nominee.

What&#8217-s bad in all that (other than I have an egg on my face [*] ) is that we won&#8217-t have a public debate on the different quality of the various primary indicators, and how that conditions the accuracy of the prediction markets.

[*] I have an egg on my face, but Caveat Bettor has a whole omelet on his. :-D

While InTrade CEO John Delaney is deceiving the journalists to sell his wares, Tom Snee of the Iowa Electronic Markets is telling them the truth: BEWARE THE VP-CANDIDATE PREDICTION MARKETS, THEY JUST AGGREGATE RUMORS.

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BBC News:

According to Tom Snee of the Iowa Electronic Market, at Iowa University, futures markets need more hard information than they get in the veepstakes, to reliably predict a result.

Markets are very good at predicting elections, he says – but not choices being made inside Barack Obama&#8217-s or John McCain&#8217-s head.

Thank God for the BBC.

Thank God for the Iowa Electronic Markets.

Shame on John Delaney &#8212-over 3 generations of Delaneys.

Other than Tom Snee (the IEM spin doctor), Chris Masse and Justin Wolfers are the only prediction market analysts to have sent out warnings about the VP-candidate prediction markets.

Waiting for Barack Obamas choice for VP candidate

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Lawsuit about the ineligibility of Barack Obama for the US presidency. &#8212- Not a hoax.

Pranksters are sending false text messages. &#8211- Did Caveat Bettor fall in this trap?

Texas Rep. Chet Edwards is the surprise just out of the hat.

Bloomberg says WSJ says Tim Kaine is Barack Obamas VP.

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I don&#8217-t have a link, as the Bloomberg tape just printed it at 12:15pm EST. Will update when available.

Unfortunately, Intrade was down, so I could not check where things were trading.

He who laughs last, right Chris?

UPDATE: Jack Tapper says there is a hoax email out there, which could be the basis for the Bloomberg article.

Cross-posted from Caveat Bettor.

Barack Obama drops hints about who his VP candidate will be. – Might be Evan Bayh.

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Time:

QUESTION: One of the biggest moments in the campaign is going to be your announcement of a vice president. What is that decision going to tell voters about you?

BARACK OBAMA: Hopefully, the same thing that my campaign has told the American people about me. That I think through big decisions. I get a lot of input from a lot of people, and that ultimately, I try to surround myself with people who are about getting the job done, and who are not about ego, self—aggrandizement, getting their names in the press, but our focus on what&#8217-s best for the American people.

I think people will see that I&#8217-m not afraid to have folks around me who complement my strengths and who are independent. I&#8217-m not a believer in a government of yes—men. I think one of the failures of the early Bush Administration was being surrounded by people who were unwilling to deliver bad news, or who were prone to simply feed the president information that confirmed his own preconceptions.

&#8220-Not about ego&#8221-&#8230- is no good for Joe Biden.

&#8220-Complement&#8221-&#8230-. is no good for Kathleen Sebelius and Tim Kaine.

So, it might be Evan Bayh.

UPDATE: Or Jack Reed.

ENDLESS VEEPSTAKES: Why you should never trade on VP prediction markets, and why their probabilistic predictions are as stochastic as Paris Hiltons daily dress picks.

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As I explained in early June 2008, the VP speculations that appear in the Press should never be taken seriously. Most of them (and you don&#8217-t know which ones) are a big orchestration of pure lies aimed at creating publicity, or wicked lies in the form of trial balloons. The aims of the political campaigns are to:

  • creating suspense (sometimes false) so as to generate free publicity-
  • sending a positive message to the supporters of each VP candidate-
  • letting the Press do the vetting of the VP candidates-
  • flattering the political journalists by leaking to them-
  • sending out false leaks so as to preserve the surprise for the scheduled announcement day-
  • sometimes, buying time to impose the head of the VP search committee as the most serious VP candidate (remember Dick Cheney in 2000). [Psstt… Funny enough, in the 2008 election, Michael Moore is pulling for Caroline Kennedy. :-D ]

All that means that there are no good primary indicators for the prediction markets on the Democratic and Republican VP-candidate selections.

I want to offer 6 remarks:

  1. Not all prediction markets are created equal. Some have good primary indicators (e.g., the prediction markets on the presidential elections, thanks to polls), while some other prediction markets have unreliable primary indicators (e.g., the prediction markets on who will be on the ticket).
  2. The prediction exchange executives (like InTrade-TradeSports CEO John Delaney) will never tell you that, because their job is to sell their wares, of course.
  3. The public needs prediction market analysts, who can judge the quality of the primary indicators of one particular prediction market, so as to separate the grains from the shaft &#8212-reliable prediction markets from unreliable prediction markets. (A prediction market analyst has also other functions, which I will blog about later on.)
  4. A prediction market analyst should have a dual competency &#8212-in a vertical (in our example, US politics), and in prediction markets.
  5. The expertise in the vertical (here, politics) should be a major, and the expertise in prediction markets should be a minor. Take a look at these 2 mainstream media news stories: the one written Jack Shafer in Slate (which I linked to at the top of this post), and the one written by Justin Wolfers in the Wall Street Journal. Obviously, the one that shows the most mastering is the one written by Jack Shafer, an American professional journalist who follows US politics for a living.
  6. The consequence of that for prediction market journalism is that the writer should be an expert in a vertical, and the editor should be an expert in prediction markets &#8212-and not the other way around.

That said, I wish the very best of luck to our good friends Caveat Bettor (who is betting on Tim Kaine) and Nigel Eccles (who is predicting Joe Biden). :-D

UPDATE: My (informal) Democratic VP-candidate bet is on Kathleen Sebelius. Hint, hint.

UPDATE: Gawker says that Joe Biden would be a horrible choice. I agree. Plus, he has denied to be the pick. He could have lied to reporters, though.

UPDATE: New York Times publishes portraits of all VP candidates.

DEVELOPING&#8230-

NEXT: While InTrade CEO John Delaney is deceiving the journalists to sell his wares, Tom Snee of the Iowa Electronic Markets is telling them the truth: BEWARE THE VP-CANDIDATE PREDICTION MARKETS, THEY JUST AGGREGATE RUMORS.

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Barack Obama + Kathleen Sebelius

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New York Times publishes the portraits of all the VP candidates.

I have just read the article on Kathleen Sebelius&#8230- and that has strongly reinforced my view that she is the best pick for Barack Obama.

I am less opinionated as for what should be the ideal Republican ticket. (Wait&#8230- I want Ron Paul as VP candidate. :-D )

Inexperienced Illinois senator (and presumptive Democratic nominee) Barack Obama should pick Kansas governor Kathleen Sebelius as vice president candidate to bring executive experience to the Democratic ticket -and to piss off Hillary Clinton (which will delight me).

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