Online Markets Don't Buy Kerry Debate "Win"

Analysis of data from Tradesports.com and Iowa Electronic Markets ^

[drangundsturm]

Trading activity at Tradesports.com and IEM indicate that online traders, who bet on the outcome of political events, do not consider the purported Kerry debate "win" to be significant in the election. Both markets sold off the Bush election futures in the days before the debate to lock in very high profits from a Bush contract run-up last week, but Bush's stock has been rising all day today, even while the mainstream media continues to tout reaction polls that declare a Kerry "win".

As of this post's time, Tradesports.com has the probability of a Bush election win at 65.9%, and IEM has the probability of Bush receiving more than 50% of the two-party popular vote at 61.8%. These levels are off of Bush's recent highs but are still dramatically in his favor this far from the election.

While it may appear that there is an arbitrage available due to the spread between the two markets, that is not necessarily true because it is possible for Bush to win electorally with slightly less than 50% of the two party vote, due to favorable demographic factors. Tradesports.com does have a popular vote market and it is trading within a percent or so of the IEM equivalent.

This is interesting because it indicates that the traders believe there is about a 5% chance that Bush will win the election with fewer popular votes than Kerry.

[drangundsturm]

My first impression of the debate was that bush could have been better and kerry was smoother, but I thought it was not as bad as the MSM is making it out to be. But beyond that, I think you're missing the point. These debates are not about legalistic argumentation, that would just confuse the TV viewers. If Bush used half the arguments you list he would come off as too aggressive. I wish he had used more humor, and he did pounce on the biggest gaff kerry made, which was the "global test" line. That line is going to haunt kerry from now until election day, and may yet turn this debate on its ear.

I'd say kerry will get a modest bump in the polls that perhaps lasts a week from this performance, no more. The long term effects as his statements are turned into commercials could really hurt him, though, a far more lasting effect.

The first rasmussen tracking poll results to include significant post-debate interviews will be posted at noon tomorrow, but it will take until monday for the rolling average to fully reflect the data.

[Joseph Leming]

I agree and disagree with your assessment. First of all while there may not be a whole lot of undecided voters left, there still are enough to turn this election in John Kerry's favor. If President Bush had a 10-15 point lead I would not care as much but I believe that this election is going to be very close again because we are entrenched and the they are entrenched and neither of us are budging no matter who wins or loses the debates. However, there are enough undecided swing voters who could very easily tip the scales either way and John Kerry is going to go for the throat on the domestic issues and not let go! The President doesn't have to out smooth John Kerry, he only needs to defend his record calmly and clearly and expose John Kerry as the far left socialist liberal that he is without looking like a bully.

[OhGeorgia]

The scary thing is 20 years ago Kerry would have lost by 10-20 points. Today he could win by 1-3 points. Make me wonder where were going be in 20 years.

I am afraid we American voters will be come like Canadians. Canadian often dislike the Liberal party and usualyl loathe its leader. The Conservatives have come up with good strong leaders over the years, but still on election day no matter how corrupt the Liberals, no matter how inept, they still win. the reason they win is that the majority of Canadians believe the Liberals share their values. I am afraid we are heading to that point.

It would be scary to think that 2000 was the last election the GOP might win in decades.

[OhGeorgia]

Bush is just a poro debator. Jeb and GHW were much better. GHW was awful in 1992 but was great in 84 and 88.

[jern]

FYI. Kerry has really dropped a lot tonight in the +157 range. I bought Kerry shares yesterday at noon for +182.50

[Max Combined]

"If he does not take John Kerry seriously then he is not taking America seriously and he deserves to lose and the whole country loses with him!"

Brillant logic! Now go vote for Nader.

[Rokke]

A telling bit of information on Tradesports isn't the shift in share price but the volume. Bush has dropped .5 points on the day at a volume of 574 thousand shares. Kerry has climbed 3.5 point BUT on a volume of 21 thousand shares. Good grief. The price is up, but no one is buying.

[jern]

market has really moved towards kerry today

[drangundsturm]

Yes, there was a delayed reaction, probably the market makers evaluating the impact.

So far rasmussen tracking poll indicates no significant number of votes shifting toward kerry, but kerry did help himself by appearing presidential and energizing his base, no doubt about it.

Tradesport still has bush win at just over 60%. It will take a few more days to see how it plays out.