I know. Obama has fallen on the graph, but there’s still a 26 point difference between Obama and Romney. Am I reading this wrong??
Bubbles do not deflate instantly.
These markets are too small to be efficient and hence are not accurate.
I once thought that ‘people are putting down their money’ so they should be more accurate. But the markets never grew big enough to ensure efficiency.
If anything - they are trailing indicators. Most of the money represents people betting after a combination of the polls plus the narrative.
So it’s a trailing indicator of the polls, which are skewed against Romney by at least 2.5 points, and a trailing indicator of the mood/narrative.
These guys have been right for the last 8 elections since they started using economic modeling:
The model and it’s prediction were submitted for peer review the PDF is available online. They have updated their results and now have NM going for Romney.