Betting Circles Back Obama

Traders wagering on the outcome of the US presidential vote were overwhelmingly betting on Monday that Barack Obama will defeat former first lady Hillary Clinton for the Democratic nomination and ultimately win the presidency.

Obama, whose campaign swept four state Democratic presidential contests against Clinton over the weekend, was trading at about 70 on Monday on the Dublin, Ireland-based Intrade predictions market, meaning that traders gave him a 70% chance of being the Democrats' presidential candidate in the November election.

Clinton, who replaced her campaign manager in a staff shake-up, was selling at about 30, which meant that traders gave her a 30% chance of winning the Democratic nomination, data on the Intrade website showed.

Traders on the Iowa Electronic Markets, a non-profit exchange run by researchers at the University of Iowa, had similar expectations, giving Obama a 70% chance of winning the nomination and Clinton about a 27% chance.

Researchers who study political forecasting markets say their predictive power is comparable to opinion polls.

Contracts are generally structured so prices can be read as the percentage likelihood of a candidate winning the race.

Arizona senator John McCain was the overwhelming favourite to win the Republican presidential nomination, with Intrade giving him nearly a 95% chance of winning.

His rival Mike Huckabee, the former Arkansas governor, was given only about a 2.5% chance of winning, despite winning two of three state contests over the weekend. The two Republican candidates were given similar chances by traders on the Iowa exchange.

Intrade traders gave Obama a 46% chance of winning the presidency, versus 33% for McCain and 20% for Clinton.

As recently as January 1 traders were giving Clinton about a 70% chance of winning the Democratic nomination. But expectations about Clinton's candidacy tumbled after the first of the year, dropping below 30% after she lost the Iowa presidential contest to Obama.

Her New Hampshire victory surprised the forecasting markets and she recovered to trade between 55 and 70 until the days after February 5, when nearly half of the states chose presidential candidates. Since then expectations have been falling and Clinton has lost several state contests to Obama. (TOI)

***** Psephology is not exactly an accurate predictor of the outcome of elections and there is no reason to assume that traders are any better in their calculations. All said, an Obama win will surely change the world in ways that we can't foresee now.
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