Tag Archives: Intrade

Thigs Reach Their Logical Conclusion

TwitterThe other day the fellas at Poison Your Mind posted on shenanigans Romney supporters partook of to influence a form of social media:

Of course some genius for Romney did this:

“A new academic paper digging into presidential betting in the final weeks of the 2012 election finds that a single trader lost between $4 million and $7 million placing a flurry of Intrade bets on Mitt Romney — perhaps to make the Republican nominee’s chance of victory appear brighter,” the Wall Street Journal reports.

“The anonymous trader placed 1.2 million pro-Romney contracts, some of which were actually in the form of bets against a Barack Obama victory. The most plausible reason for the betting, the authors conclude, is that ‘this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.’”

A fascinating story to be sure.  On one hand, $1.2 million is just some sum of money spent to convince people to vote one way or another.  It’s hard to distinguish between that and spending money on TV ads.  The other hand?  It’s chumpy.  There’s something about placing that bet that violates “man law”.

But whatever.  The mark of a desperate man only indicates a desperate man.

But is Romney alone in his “deception”?

Among influential U.S. political tweeters, President Barack Obama is the undisputed king of the fake followers. A MailOnline analysis ranks his sizable Twitter following as the most deceptive total among the 21 most influential accounts run by American politicians: More than 19.5 million of his 36.9 million Twitter followers are accounts that don’t correspond to real people.

The four phoniest accounts in the sample, which included Democratic and Republican Party leaders in Washington, D.C., were those belonging to President Obama, Vice President Joe Biden, first lady Michelle Obama and the White House communications shop.

Of the president’s 36.9 million Twitter followers, an astonishing 53 per cent – or 19.5 million – are fake accounts, according to a search engine at the Internet research vendor StatusPeople.com. Just 20 per cent of Obama’s Twitter buddies are real people who are active users.

Read the whole article, politicians of all kinds, from both sides of the aisle, are shown to have significant Twitter followers.  Obama isn’t alone.  However, it just goes to show that when a metric matters, people will maximize that metric.

I hate people.

Oh For Pete’s Sake

I’m late on this; it’s been in my stack for awhile now.  But what in the world can be gained by the government suing Intrade?

Today, Americans were told that they must close their Intrade.com accounts. That happened because the federal government agency known as the “Commodity Futures Trading Commission” (CFTC) today sued the prediction market, where people from all over the world bet about things like who will win elections.

Intrade decided all its U.S. customers must now close their accounts and withdraw their money from the site.

I’m sure someone somewhere feels that I, the wilting consumer, must be protected from myself, but seriously.  How is this good?

What law are they breaking?

In English: the government says that many of the things Intrade allows people to predict – everything from what the price of gold will be in the future to whether the U.S. will go to war soon – are legally considered “commodity options,” and that Intrade broke the law because it isn’t licensed to trade those. The penalty is $140,000 per violation.

So, just get a license:

Why doesn’t Intrade just obey the complicated law and become a licensed exchange? They tried, but the CFTC won’t give them a license. When an established, licensed U.S. commodity exchange applied for permission to do what Intrade does, the CFTC turned them down, too.

The pompous CFTC enforcer claims that the regulation “is important for a number of reasons, including that it enables the CFTC to police market activity.”

This is the perfect microcosm that is the state of government today.  And Stossel sums it up perfectly:

Please. These regulations don’t help police market activity. When people make money on Intrade, Intrade sends them the money. There are no allegations of fraud. Customers are happy with Intrade, judging by increased activity on the site (over $50 million was bet about whether Obama or Romney would win.)

The market polices itself.

In a sane world, government would focus on preventing fraud, not on crushing innovative ideas.

Stossel goes on to point out that this isn’t just a democrat or republican problem, rather it’s the mindset that gentle flower that is the rugged American needs protection from …. from something, surely.  And THIS is the state of our future that I fear.  How to prove to, to convince, people that the future may not be “bad” with these rules, but it certainly is less better.

Romney Rising

I was reading Scott’s latest post over at World in Motion when I saw his update:

An added tidbit – Ezra Klein of the Washington Posts note that traders have been putting massive Romney bets in intrade to try to manipulate the market and make it appear Romney is rising.   Usually those upswings are short term as real investors recognize the chance for some ‘easy money’ off the manipulators.

I haven’t been over to Intrade for a few days so I thought I’d hit ‘em up.

Here’s how Romney is doing since the 2st debate on October 3rd:

Romney has gone from 26 to 45 and rising.

What did Ezra have to say about the manipulation?

Here’s the backstory: On Monday night, after the debate, Barack Obama was leading Romney on Intrade by around 60 percent to 40 percent. But at around 10:00 a.m. on Tuesday morning, Romney had surged to nearly 49 percent. Was this evidence that the conventional wisdom was wrong? Had Romney actually won the debate handily? Or, alternatively, was the nosedive in the stock markets putting a dent in Obama’s re-election chances?

Or maybe it was something else. As economist Justin Wolfers pointed out on Twitter, the huge swing toward Romney appears to have been driven by a brief burst of trading, with someone spending about $17,800 to push Romney’s chances on Intrade up to 48 percent. But the surge only lasted about six minutes before other traders whittled the price back down to what they saw as a more accurate valuation. Romney’s odds of winning are, as of Tuesday morning, back at around 41 percent:

Ezra, at the writing of the article, points out that manipulation had boosted Romney’s numbers.  But even Mr. Klein acknowledges that the manipulation was corrected in 6 minutes.  It leads us to believe that the current value is the result of normal market forces.

But continuing to read the full column today, we see that Ezra has updated his post:

Update: Over at the Atlantic, Carl Wolfenden, the exchange operations manager for Intrade, says, “We checked this out for potential manipulation—it certainly fit the pattern at first glance.” But, he says, that doesn’t seem to be the case this time around. The Romney blip was apparently driven by a number of traders during an early-morning period when the market was very thin, rather than just one person.

Interesting.

Obamacare Odds

Steady upwards track since April.  Intrade has it at 75% that the law is struck down.

Good.

Will We Raise The Debt Ceiling

Latest InTrade chart on whether or not Washington will raise the debt ceiling by midnight July 31st, 2011.

Doesn’t look positive.

On the upside, if you think they pull out of this spiral by July 31st at midnight, there’s money to be had!

Chance of Recession

I’ve been a reader of Mark Perry’s for years and years.  I love his stuff.  One of my favorite installments that he runs is the “Chance of Recession”.  Here, he highlights data delivered by the New York Federal Reserve bank.

The bank does a  neat analysis of some different values and comes up with the chance that the economy will be in recession in the next year.  The data isn’t perfect, but the rough strokes are enlightening.

Let’s look.

Continue reading

2012 Presidential Election: Part I – Barack Obama

Fascinating website out there.  A clearing house for all things fun.  intrade.com

I enjoy watching this one.  A perfect example of a boom and bust.  A bubble growing and then correcting.

Note the downward path of the price of Obama Winning in 2012 starting in March of this year.  Then, the “bubble” where Obama took out Osama bin Laden.

Then the correction.

Free markets baby, the free market!

Hat Tip: Mark Perry at Carpe Diem

UPDATE:

Here is another look at the same bubble from Rasmussen:  His polling is 3 days behind due to how he computes polling.

Already back to pre-hit levels.

Chance of Recession in 2011: Low

Lot’s of us think that we’re STILL in recession [ it ended June 2009 ] and many of us don’t see anything getting better any time soon.

But the good news is that it will get better, slowly, and it almost certainly won’t get worse in 2011.

Continue reading

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.