Free Market Guy

So, word is that I trust the free market to a fault.  It might be hard to dispute that, but then again, my limited knowledge of economics as a science could argue in my favor that what I do or don’t know doesn’t mean squat.  Hell, for all I know, the only reason that I feel the way I do is that when I was a kid I mighta thought my dad was a Republican.  [he wasn’t, democrat blue through and through].  Anyway, so I started thinking.  They have books on sports.  Everything from who wins and loses, point spread, over under and even crazy things, like TDs in a game, fumbles in the first half or yards rushing per carry.  Crazy crazy stuff.  More crazy is how accurate it is.

See, it’s one thing to SAY that the Vikings are gonna beat Green Bay.  It’s another thing entirely to BET money that they will.  One is a hope.  The other is, or can be, an investment.

So I went out to see if there was a market for the stuff that I talk about here.  Turns out; there is:  Intrade

Intrade is a clearing house for all kinds of strange things.  You can bet on whoo will have control of the House of Representatives after 2010 election.  You can bet on Cap and Trade regulations, Gov Sanford staying in office and–well, Health Care plans.  Let’s check it out.

And as of right now, this board is tracking three “markets”

  1. A federal government-run health insurance plan to be approved before midnight ET 31 Dec 2009
  2. A federal government-run health insurance plan to be approved before midnight ET 31 March 2010
  3. A federal government-run health insurance plan to be approved before midnight ET 30 June 2010

Now, the way it works is that the “Closing Price” is what the “market” feels is the % chance that a “thing” will occur.  So, if the closing price for the “Vikings winning the NFC Norris” is at 83.5, then that is saying the market feels there is an 83.5% chance of the Vikings winning the Division.

Check out the graphs for each of our Health Care scenarios:


Price for Will a federal government run health insurance plan (a public option) be approved in the US? at intrade.com

This one looks very promising.  With a closing price of 2.7, the market is saying that there is only a 2.7% chance that we’ll see a “Public Option” by December 31, 2009.  How about March 31, 2010?

Note:  These graphs are show with their real time rates.  At the time of prining the first was at 2.7 and the bottom two at 12.0.


Price for Will a federal government run health insurance plan (a public option) be approved in the US? at intrade.com

Ouch, that one doesn’t look so good.  Fully 400% increase to 12% that we’ll see the public option by March 31, 2010.  For our last time frame; June 30, 2010?


Price for Will a federal government run health insurance plan (a public option) be approved in the US? at intrade.com

Fascinating.  The exact same closing price; 12.  The market feels that there is a 12% chance that we’ll have a “Public Option” passed by June 30th, 2010.

Very interesting stuff.  One note, this data is saying that if we don’t pass this by April 1, there is a zero percent chance that we’ll pass it by July 1.  If the market felt that there was a chance of passing after March 31, the close would reflect a number HIGHER than the March 31 closing.

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