Government Shutdown

 

The table is now not as useful as a chart of the evening. The deal was struck at 10:30 PM and the probability derived from Intrade's prices moved just as the deal was being announced. That being said, it was generally moving in that direction as some information was dispersed. At 10:30 PM HuffingtonPost and others were still giving very neutral headlines, while Intrade was in its steady march downward towards no shutdown.

 

Watch this number as we approach midnight! It is currently at 55% with 6 hours to go …

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.

Mrs. Palin's Political Trouble from Saturday's Massacre

Immediately in the aftermath of Saturday's assassination attempt on Congresswoman Gifford, that resulted in the death of six people including a federal judge and a nine year old girl, the media began speculating on the political fallout to Sarah Palin's 2012 Presidential aspirations. In March she had put out an advertisement with a target on Congresswoman Gifford and then told asked that her followers "Don't Retreat, Instead – RELOAD!" Thus, after the massacre people began to discuss her contribution to both the specific target and the general heated atmosphere in politics; regardless of her complicity, and thus far there is no direct evidence the assassin followed Mrs. Palin, talk of it has political consequences. As several blogs have already noted, the market for her 2012 Republican nomination responded immediately … on Intrade. She lost over 1/3 of her probability in the immediate aftermath of the massacre. Yet, the movement a different market, Betfair, was much smaller, as it was already trading lower for Mrs. Palin; Betfair has consistently had less confidence in Mrs. Palin's viability as the Republican nominee. The chart is below:

 

Obama and the 2012 Nomination …

When you think about 2012 Presidential nominations you are likely thinking about Palin, Romney, and the Republicans. But, as the year comes to close and the 111th Congress end on December 17th or so, I urge you keep an eye on the Democratic ticket. An editoral in today's Washington Post urges a Democrat to run to the left of the President to force him to hold firm on taxes, war, and social issues. First, it would be difficult for Biden to do that from within the adminstration and Clinton is not that person, thus for this to happen it would have to be an outside option. We will make sure to add that person, and you will see it coming with Obama falling. Second, notice the discrepencies between Betfair and Intrade  on Hillary and Biden.

Market to Watch: DADT

The probability of Don't Ask Don't Tell being eliminated by the end of the year tanked to just above 10% after the Democratic defeat on Election Day. But, today brought good news to those trying for repeal, the Democrats are making a top priority in the lame duck session …