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.