State of election markets: 373 Days

The Republican primary got another jolt this week with Wednesday, October 28’s debate: Marco Rubio won and Jeb Bush lost. Rubio won because he beat up Bush, and they are the only two viable establishment candidates left in the race. Rubio beat up Bush by dominating him on his prepared offensive about Rubio not doing his job as a senator (in Rubio’s defense, running for president is a full-time job and pretty much every candidate sucks at his day job while doing it; I am looking you Chris Christie). This was not about substance or policy, but about personalities and debating ability. Rubio looked more comfortable and confident, and on Friday, October 30, Rubio was rewarded with Paul Singer’s money. Singer sent a letter in which he exhorted that Rubio was the only candidate who can, “navigate this complex primary process and still be in a position to defeat” Hillary Clinton (the presumptive Democratic nominee). The only thing that matters when it comes to GOP debates, at least in the sort run, is the perception of victory among the establishment, because it brings with it the money and influence necessary to win over the fickle primary voter.

Ted Cruz and Ben Carson both had “strong debates” in that the GOP liked them, but their likelihood of winning did not shift greatly; if anything their debates will solidify the establishment’s fear of them winning the primary. First, both of them went from low probability to low probability, thus it is hard to identify the size of any movement. Second, both of them focused on red meat for the GOP base, raising even more worries about electability for the GOP establishment. Carson blatantly lied about his relationship Mannatch, a nutritional supplement company (not to mention his inability to explain the rationality of his tax plan). Both will be glossed over by the base, but they will play terribly in the general election. And, stunned over a serious of substantive (mixed in with some very frivilous) questions, Cruz attacked the liberal media (in this case the network that started the Tea Party) for asking a question about the current budget debate, where Cruz was leading the opposition to the grand compromise. Again, this is red meat for the conservatives, but leaves Cruz open to devastating general election attacks on his ability to confront critical policy questions.

Donald Trump, the polling front-runner, had a decent debate; he looked more presidential. He answered questions and did not commit any major ad hominem attacks. On one side, his policies are still generally not Republican (or much more moderate than the establishment). He is probably socially liberally, as he strains to provide socially conservative values. He explicitly does not believe in an interventionist foreign policy, but is extremely against immigration. And, his tax policies are on the more moderate end of the Republican spectrum. On the other side, the establishment is probably noting his transformation into a better politician, and the combination of his outsider status and relatively moderate positions, could make him more electable candidate than many of his rivals.

Vertical Lines: Debate on October 28

Sources: Betfair, Hypermind, PredictIt, http://twopointoh.predictwise.com/politics/2016RepNomination

Nothing happened this week in the Democratic primary. With few debates and no major challengers left in the race, Hillary Clinton is comfortably 88% likely to win the Democratic nomination. Most of that uncertainty is due to the uncertainty of the health and temperament of Clinton in the many months between now and the convention, not due to uncertainty of the current state of the race or expectations of shifting sentiment. If nothing dramatic happens, she will be the nominee.

Vertical Lines: Benghazi hearing on October 22

Sources: Betfair, Hypermind, PredictIt, http://twopointoh.predictwise.com/politics/2016DemNomination

A week from today marks the one year countdown to Election Day #democracy.