Libya and Gaddafi
The dotted line you see here represents the exact point in time that the UN passed its resolution for a no-fly zone over Libya. The interesting thing about this line is that the price for a contract on Gaddafi not being in power past the end of the year reached a local peak as it passed, not after. The reason is that Intrade did a good job here incorporating the information about the UN and the actual passage became a fete-de-complete. More important, the price has been impressively stable even as events swirl back and forth on the ground in Libya. The contract is for the end of the year and I take the stability as a sign of a mature and liquid market, where Intrade had, in the past, had issues with dramatic volatility in similar situations … Finally, what most people really care about, I would translate the current price (at 1:00 PM EST on Thursday, March 31) into a probablity of 85% that Gaddafi does not make it into the New Year as the ruler of Libya.
