Intrade predictions and fluctuations on Obama vs. Clinton

There are many different ways to follow or be involved in this primary season. The Daily Kos site is read by a lot of activists who do a great deal of work on behalf of our candidate of choice. Part of this work is trying to bring attention to news and facts that help our candidate. And, subsequently, deriding the media for NOT paying attention to these issues, while they instead prefer to treat the whole primary as a horse race.

Nevertheless, we all look for signs about where this horse race is going. A good poll or news item in the morning is cherished and brought forward to keep the mo going. So, what is the status of the horse race at this moment?

I think there is no better place to seek an answer to that question than checking the odds at

www.intrade.com

The odds at that site reflect real money invested in the horse race. No spin, no partisanship, but just cold analysis.

Below, I'll comment on some key movements on the odds on Obama vs. Clinton that has taken place since Super Tuesday on February 5th, as they relate to the different events and news we have witnessed.  

1. Before Super Tuesday, the odds were roughly 65-35 in favor of Hillary (reflecting a significant chance that Hillary would close the deal).

2. As the results of Super Tuesday came in, the odds stayed in that ballpark while the media presented Super Tuesday as a win for Hillary (since she won California...).

3. Once it became clear that Obama actually won Super Tuesday, the odds pretty much instantly flip-flopped, so that Obama lead Hillary 65-35.

4. Then came the string of wins for Obama, 11 in all before the Mini Super Tuesday. The odds for Obama gradually increased as he "avoided" losing any of all these contests where he was the favorite, mixed with some bad news for Hillary about her going broke and being unprepared etc.

5. The biggest movement here was right after Wisconsin. Please note, initially, Hillary was maybe a slight favorite here, or, at least, this was where she had to make a stand. When she lost by 17%, it was interpreted as a disaster. Indeed, news pundits were pointing out how she lost in just about every demographic sample except women over 85. After this loss (including a blowout in Hawaii), Hillary's odds fell to about 15%.

6. In the lead-up to the Texas/Ohio primaries, something interesting happened. Just about everywhere, people were beginning to think that Obama was going to win Texas (primary results being the counter). The intrade odds just before results came in was something like 75-25% in his favor with regard to Texas. And, "investors" were thinking that winning Texas likely meant winning the primary. Hillary's primary odds fell as low as 12% before the results came in.

7. The Mini Super Tuesday results came in, and it quickly became clear that Hillary was allowed to live to fight another day. Her odds shot up to about 24%.

8. Now, different stuff happened. Obama succeeded in not losing Wyoming, he won Mississipi, and then the Wright story got aired. The bottom line is, there was a gradual increase in Hillary odds to a high of 28%.

9. And here comes the interesting part as we try to judge the status of the horse race at this moment. Over the last few days, we have looked especially for signs about how the Wright affair would play out. We first had Obama's speech, but things were still unclear. Then we have seen news indicating that there would be no re-vote in Florida and Michigan. Then Passportgate erupted, and, today, Bill Richardson endorsed Obama. And Politico.com said Hillary is lost. And several other small news items in that direction, like, Hillary's experience record being attacked, and polls indicating that Obama was pulling back. And, the bottom line, Hillary's odds had a small collapse today, going down from 26% to 22%.

My interpretation is this:

We have two scenarios for a Clinton win in this Primary. The first scenario is Obama totally collapsing in polls and electability and the superdelegates having no choice but to go with Hillary (the "dead hooker" scenario or the "Wright is doom" scenario). The second scenario is Clinton being able to "steal" the nomination by convincing super-delegates to pick her because of the claim that she is (far) more likely to win "big, significant" states in the general election (and, additionally, relying on better-than-expected results in the coming primaries, reflecting a momentum in her direction).

But, that, today, there were some seriously bad news for Hillary. Bill Richardson's endorsement ultimately indicates that Hillary can't just appeal to a higher likelihood of electability. Her only chance left is that Obama will turn out to be TOTALLY unelectable.

That's the message I see today from the Intrade odds. If you are an Obama supporter, you have reason to be optimistic. Hillary's road to the nomination just got that much more narrow, since her only chance is Obama totally collapsing on the road ahead, which was always a risk.

As a final note, there is some irony hidden here. We had the Politico.com story pointing out that Hillary's odds were actually quite bad and that the race is pretty much over. But, for those who paid attention, for those who decided to invest real money and had to calculate real odds, Obama has been a HUGE favorite all along since Super Tuesday. While the media has prefered to treat all this as a horse race, they have actually FAILED in reporting about just where this horse race was headed.

And that's the memo for today.

•  Tip jar

  First diary, please be merciful.

  by Mbuto on Fri Mar 21, 2008 at 05:35:20 PM PDT

•  Still 22% for Hillary???

  Is Intrade a purely Republican thing? There's no way in hell she still has a 22% chance of winning... none

  by Jimdotz on Fri Mar 21, 2008 at 05:35:52 PM PDT

  •  Bet on it?

    Then literally put your money where your mouth is.

    by Industrial democracy on Fri Mar 21, 2008 at 05:55:51 PM PDT

    •  If I had money, I would... 22% is nuts

      by Jimdotz on Fri Mar 21, 2008 at 05:56:55 PM PDT

      •  Hillary's contract is over-valued

        People on the Intrade forums are even saying it themselves. I think it's due mainly to the Clinton reputation of being indestructible.

        Hey, it's their money, if they want to waste it on Hillary, more power to them.

        by scimitar on Fri Mar 21, 2008 at 05:58:43 PM PDT

        •  They're idiots

          by Jimdotz on Fri Mar 21, 2008 at 05:59:27 PM PDT

  •  Care to put money on it?

    Intrade is a political futures exchange -- If you think those odds are out of whack and you're prepared to put your money where your mouth is, get on there and clean up.

    Tony.

    by golem on Fri Mar 21, 2008 at 05:59:06 PM PDT

    •  I thought about it several times

      Obama's chances have been undervalued for more than a month, largely because of ignorance and following the media stories.  I've been paying attention to delegate numbers pretty closely since the beginning of the race, and it's steadily become more and more clear that the delegate math is obvious.  I've been telling my wife and friends for three weeks that the race is over, barring a complete Obama meltdown.  Note that Politico reports that Clinton insiders think that she has at best a 10% chance of winning the nomination.  Quite frankly, I think that is way too optimistic, and her real chances are less than half of that.

      The problem with Intrade, as far as I could tell, is that the fees are pretty steep when you cash in.  Therefore, unless you are putting up a lot of money, it's hard to make too much when his chances are 65%+.  If the fees were lower, I'd have put some money on Obama a while ago.

      by Sedi on Fri Mar 21, 2008 at 06:41:18 PM PDT

      •  Hmm,

        I think the fees are, roughly speaking, just 1%. There is some difference between accepting a trade or offering a trade, but it's in the 1% ball park, not 10% ball park.

        by Mbuto on Fri Mar 21, 2008 at 06:45:55 PM PDT

        •  I could be wrong...

          ..but I thought that there was a $10 fee for cashing out.  It seemed to me at the time (a month or so ago) that unless one was going to regularly use Intrade, it wasn't worth it.  Maybe I mis-read it, though.

          by Sedi on Fri Mar 21, 2008 at 06:57:25 PM PDT

  •  Eheh,

    That's an interesting question. Scientific American recently had an article on betting sites like this ("When Markets Beat the Polls"). They quoted an investigation on the results from the Iowa Electronic Markets (the first experience on this kind of prediction markets). It turned out that the most successful "investors" were Republican males who didn't really bother to have an opinion about the ultimate truth on news (like, whether the swift-boat allegations were true).

    I do think that 22% is not far off Hillary's real chances. Think about it, just two days ago there was a chance that Edwards would endorse Hillary on Thursday. A chance that Hillary would beat Obama 65-35% in PA. If people were really confident that Hillary had only, say, a 10% chance left today, I don't think we would still see so much aggressivity in the Obama-Clinton debates on various discussion-sites.

    by Mbuto on Fri Mar 21, 2008 at 06:06:06 PM PDT

•  She's at 20 now.

  by jeepdad on Fri Mar 21, 2008 at 05:37:46 PM PDT

•  What is the volume of money?

  It's an interesting site to watch and I appreciate your recap.  How much money is being invested (bet) on Intrade?

  by OCS89 on Fri Mar 21, 2008 at 05:37:53 PM PDT

•  We generally think of Intrade as lagging

  But oftentimes people with insider information buy or sell shares based on their knowledge of particular political situations. I think I recall seeing someone buy up a bunch of Dodd VP contracts about 5 hours before he endorsed Obama - someone must have known in advance.

  I should check the Richardson movement yesterday to see if a similar pattern is evident. Now that would be something.

  by scimitar on Fri Mar 21, 2008 at 06:01:27 PM PDT

•  Don't forget the Gravelanche!

  He's trading at 0.1 and has been all week:
  
  

  

  by internationaljock on Fri Mar 21, 2008 at 06:08:25 PM PDT

  •  Fool. It begins slowly

    then it builds...

    and builds...

    AND THEN NOTHING CAN STAND IN THE WAY OF THE GRAVELANCHE!

    by DemocraticCitizenSoul on Fri Mar 21, 2008 at 06:14:28 PM PDT

•  Talking to older Clinton supporters this week

  I've heard them talk about how it's not just OK for superdelegates to overturn the pledged delegate votes, but it's their duty. They see the young electorate as wayward youths who have been "taken in" by Obama's charms. There are surprisingly many of these middle-aged and older voters who would not be the least bit upset by this undemocratic turn of events.

  Also, superdelegates are under an enormous amount of pressure from the Clintons right now. Many people believe that if Obama does not win the GE, HRC will run again in 2012. If this happens, and if she wins, everyone 'knows' how long the Clintons hold grudges. Many superdelegates do not want to move against the Clintons until the political future is very sure.

  Based on all of this, I can see why HRC could still be trading at 20ish.

  by dawnt on Fri Mar 21, 2008 at 06:13:23 PM PDT

  •  But the superdelegates aren't suicidal

    They aren't uninformed either.  Many of the superdelegates hold elected office, and there is very little disagreement that Obama has much longer coattails than Clinton, especially in red states.  The Clintons may be leaning on the superdelegates, but they are not necessarily that popular throughout the party.  Feared and respected, yes, liked, maybe not quite so much.  The fact that her chances are trading in the 20s stems much more from ignorance about the nominating process and the state of the delegate count, not the actual likelihood of her real chances to win the nomination.

    by Sedi on Fri Mar 21, 2008 at 06:54:57 PM PDT

    •  I agree, I think it's in the bag for Obama

      by dawnt on Fri Mar 21, 2008 at 07:29:32 PM PDT

•  I read an article -

  in the most recent Scientific American about how trading in outcomes like this has actually proven to be a much more accurate predictor than polls.  I certainly was pleased to see that, since Obama has been well-favored recently as described by this diary.      

  by wethepeople on Fri Mar 21, 2008 at 06:37:09 PM PDT

•  Oops

  I missed your comment Mbuto.  Sorry for repeating.  Yours was much more informative than mine - thanks for the details. :)

  by wethepeople on Fri Mar 21, 2008 at 06:39:42 PM PDT