Such a small, small game

In the run-up to the 2012 election, two of my colleagues — one a difficult idiot, the other one of my best friends in the department — were always talking about Romney had a good chance to win because the political future markets showed a close race. I told the one I’m friends with that political futures markets are worthless because the amounts of money in it are too small, and a few FOUL-MOUTHED PARTISANS with reasonable scratch can distort the whole thing.

Heh indeedy:

“A new academic paper digging into presidential betting in the final weeks of the 2012 election finds that a single trader lost between $4 million and $7 million placing a flurry of Intrade bets on Mitt Romney — perhaps to make the Republican nominee’s chance of victory appear brighter,” the Wall Street Journal reports.

“The anonymous trader placed 1.2 million pro-Romney contracts, some of which were actually in the form of bets against a Barack Obama victory. The most plausible reason for the betting, the authors conclude, is that ‘this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.'”






73 replies
  1. 1
    Just Some Fuckhead, Thought Leader says:

    Well fuck, I guess they’ll have to redouble their voter suppression efforts if bullshit political futures markets don’t swing actual elections.

  2. 2
    khead says:

    Can you find out who the anonymous trader likes this Sunday so I can fade them?

  3. 3
    PaulW says:

    And all it cost that trader was $7 million. Sweet dear God Jesus, what a waste of money. What does it tell you about our fucked-up economic recession that someone had that much money on hand to waste, and that they were so desperate to waste it like that?!

  4. 4
    pete says:

    Does this anonymous trader now have beachfront property in La Jolla with a car elevator by any chance?

  5. 5
    Suffern ACE says:

    @PaulW: who says it was the trader’s money? For all we know Victory Now Scared Yet Libs was given Unlimited Corporate Cash by Crossroads to place bets.

  6. 6
    debbie says:

    @PaulW:

    Not quite as wasteful as the Kochs’ $90,000,000. But will they ever learn?

  7. 7

    @PaulW: How do we know it was not Romney himself?
    ETA: I see that Pete got there first.

  8. 8
    Short Bus Bully says:

    Markets manipulated? Un-possible! How can this be?

  9. 9
  10. 10
    Davis X. Machina says:

    The Iowa Electronic Markets, much older than Intrade — its precursor dates to the late ’80’s — are also harder to game. An individual speculator may put at risk in the IEM only between $5 and $500. Putting $5 million in play would require setting up a consortium with 10,000 straw accounts.

  11. 11
    Baud says:

    @PaulW:

    Sweet dear God Jesus, what a waste of money.

    Isn’t spending $1 on a political futures market a waste of money?

  12. 12
    Redshirt says:

    @debbie: That’s $90,000,000 into the American economy. Straight up job creatin’.

  13. 13
    MikeJ says:

    @Davis X. Machina: Harder to game, but just as useless for prediction. The IEM more accurately reflects beltway conventional wisdom, but sucks at prediction. Look at the price on Kerry and Dean on the day before and after the Iowa caucuses in ’04.

  14. 14
    dmsilev says:

    @pete: Or the campaign apparatus of same. I could seriously see Romney’s gang of morons deciding that they could “win the day” on some newscycle by gaming the market.

  15. 15
    Tissue Thin Pseudonym (JMN) says:

    Is there any chance that ESPN would fawn over Wes Welker the way they do if he were more . . . uhm . . . pigmented?

  16. 16
    Baud says:

    Bitcoins makes more sense than investing in “political futures.”

    I just don’t get it.

  17. 17
    opiejeanne says:

    @PaulW: I can’t even begin to wrap my head around this.

    My friend, I believe we are all in the wrong business if it’s this easy to get a rube to part with that much money legitimately.

  18. 18
    Xecky Gilchrist says:

    That’s a lovely example of conservative magical thinking, all right. If you can’t have a Conservative Nate Silver, you might as well try to rig the game through buying InTrade in hopes it will sway reality.

  19. 19
    The Dangerman says:

    Only 7M? Not Romney then; there’s more in the cushions of his couch.

    Regardless, 7M down the shitter; what a waste.

  20. 20
    MikeJ says:

    @Baud: You can resell your position and make a profit. The ability to win or lose real money is supposed to move it out of the real of a game and make people take it seriously. You can see how well that worked.

  21. 21
    The Moar You Know says:

    I think the “anonymous trader” has a name that rhymes more or less with “Shit Nominee”.

  22. 22
    MikeJ says:

    @The Dangerman:

    Regardless, 7M down the shitter; what a waste.

    That $7M didn’t disappear. It went into the pockets of somebody who didn’t think Romney had that good of a chance.

  23. 23
    Botsplainer says:

    Post Racial America is so glorious!

    http://gawker.com/pennsylvania.....socialflow

    Coatesville Area School District in southeastern Pennsylvania is now demanding all district employees enroll in sensitivity training after two top administrators were caught trading “sickening” and “highly offensive” text messages on district-supplied phones. Superintendent Richard Como and Coatesville High School athletic director Jim Donato resigned Aug. 29 “for personal reasons” after an internal investigation by the school board revealed their love of pretty much all racial slurs.

    http://www.scribd.com/mobile/doc/169978329

  24. 24
    Cacti says:

    @Tissue Thin Pseudonym (JMN):

    Is there any chance that ESPN would fawn over Wes Welker the way they do if he were more . . . uhm . . . pigmented?

    Not a bleeding chance.

    He’s 22nd among active players for career TD receptions. He trails such all-time greats as Plaxico Burress, Santana Moss, and Donald Driver.

  25. 25
    Baud says:

    @MikeJ:

    How would it work if the election were a no-doubter?

  26. 26
    Jay C says:

    ‘this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.’”

    And, in in the end, merely managed to discredit the whole notion of political odds-making; win-win…..

  27. 27
    Cacti says:

    @Botsplainer:

    What is it they say? Philadelphia in the east, Pittsburgh in the west, and Alabama in between.

  28. 28
    dmsilev says:

    From the original paper,

    It does appear, however, that price manipulation by a single trader who accumulated a large directional position on Romney may have been a factor. This trader accounted for one-third of all bets placed on Romney during our observational window, and lost almost four million dollars in the process. This position was accumulated by placing large bids for Romney and large offers for Obama that effectively created a firewall, preventing prices from moving in response to incoming information. This resulted in remarkable stability in Intrade prices for several hours on Election Day, and at other critical moments of the campaign, even as prices on Betfair were moving sharply. On Election Day, these orders were removed just as voting ended in Colorado, the last swing state to close its polls. The effect was a sharp price movement and immediate convergence to the Betfair odds. Financial gain though correlated changes in stock prices seems an unlikely motivation for this activity, since these correlations appear to have broken down in 2012. More plausibly, this trader could have been attempting to manipulate beliefs about the odds of victory in an attempt to boost fundraising, campaign morale, and turnout.

    Who the fuck throws money away _on_ELECTION_DAY_ to support the Mitt Romney stock? I mean, I could sort of understand doing it earlier in the campaign; the professional nitwits in the media might see it and think it was meaningful, but on Election Day?

  29. 29
    Patricia Kayden says:

    @Botsplainer: Sensitivity training? Why not termination?

  30. 30
    The Dangerman says:

    @MikeJ:

    It went into the pockets of somebody who didn’t think Romney had that good of a chance.

    True; I was just thinking in terms of the “entity” that spent it. That’s a lot of hookers and blow.

  31. 31
  32. 32
    burnspbesq says:

    I say we declare inTrade contracts to be securities and let Mary Jo White stomp on his larynx while Andrew Ceresney kicks him in the nuts.

  33. 33

    @Baud:
    Like the 2012 election.

  34. 34
    MikeJ says:

    @Baud:

    How would it work if the election were a no-doubter?

    Then the price drops on the sure loser until somebody is willing to buy it, and the price goes up on the winner until nobody is willing to buy.

  35. 35
    Anne Laurie says:

    @PaulW:

    What does it tell you about our fucked-up economic recession that someone had that much money on hand to waste, and that they were so desperate to waste it like that?!

    My bet would be that one of the Highly Paid Marketing Experts bleeding the Rmoney campaign made that bed, and charged Willard top dollar to do so (because how can one be sure of hiring ‘the best’ if one isn’t paying top dollar?). So the question is: Did flushing seven million down the Intrade pan cost the Man-on-A-White-Horse campaign an additional $700K? $14000K? Or fourteen milliion?

  36. 36
    Baud says:

    @Frankensteinbeck:

    I was thinking more like 1984 or 1972.

  37. 37
    Kay says:

    The Republicans on the local bond issue campaign are questioning my leadership. Well, they’re asking questions. I just got thru an email exchange where they were insisting they’re not identified on voter lists for either party so we would miss centrist moderates like them if we make voter lists the way I want to. Actually they are. They’re all on the Bd of election voter list and they’re all identified as Republicans. For some reason they think they’re “independents” who aren’t on any lists.

    I don’t know how Bush won in 2004. They’re not very good at this. He must have had people he paid who actually worked, where more and more I think Romney just got robbed, but not by ACORN.

  38. 38
    dmsilev says:

    @Baud: Well, if the price was $0.01 and there was a $1 payout, there probably would be people who would take that bet even in 1984 or 1972. You never know, the proverbial live boy/dead girl might appear.

  39. 39
    Baud says:

    @MikeJ:

    Then the price drops on the sure loser until somebody is willing to buy it, and the price goes up on the winner until nobody is willing to buy.

    So if I’m holding a position on the likely winner on election day, and the winner wins, what do I have the day after?

  40. 40
    Baud says:

    @Kay:

    They’re all on the Bd of election voter list and they’re all identified as Republicans. For some reason they think they’re “independents” who aren’t on any lists.

    LOL. It’s like you caught them with p0rn!

  41. 41

    Is the title an implicit comparison of our president to Stagger Lee?

  42. 42
    MikeJ says:

    @Baud: $1 per share. If you paid .90 cents per share because you thought a candidate was a sure lock, you made a 10 cent profit.

  43. 43
    dmsilev says:

    @Baud: You have a dollar (per share). If your candidate loses, you have nothing.

  44. 44
    Baud says:

    @MikeJ: @dmsilev:

    So is there a pot of money somewhere that people pay into that I can draw from to cash out my shares?

  45. 45
    khead says:

    @dmsilev:

    Heh. I dunno. The Chargers and Eagles are 100/1 in Delaware right now and even I wouldn’t touch them.

  46. 46

    @Kay:
    And as long as the CU SuperPAC system continues, that’s going to remain true. You can reasonably assume that both sides attract equal numbers of competent people, but one side is the vast winner in attracting grifters and giving them positions of power. It would happen to us if we were the party of batshit crazy arrogant billionaire MBAs.

  47. 47
    joel hanes says:

    I don’t know how Bush won in 2004.

    Michael Connell knew the answer, until his amazingly-just-in-the-nick-of-time death prevented him from being deposed.

    I suspect that the answer is : Ken Blackwell.

  48. 48
    MikeJ says:

    @Baud:

    So is there a pot of money somewhere that people pay into that I can draw from to cash out my shares?

    Sort of. The initial shares are issued by the exchange, and are then resold between individuals. At the end of the event, the shares are all cashed in for either nothing or $1. That money comes from the initial sale at the beginning of the event.

  49. 49
    Litlebritdifrnt says:

    Grifters, every last one of them, sucking on the teet of the social security and medicaid recipients on their hover rounds. These “government hands of my medicaid” folks will donate to which ever grifter makes the most noise. Sarah Palin has made a nice living of off it. Just ask her and her custom built fox studio.

  50. 50
    Baud says:

    @MikeJ:

    Interesting. Thanks. I could keep asking questions, but I have a feeling it’ll get really detailed and complicated pretty quickly.

  51. 51
    MikeJ says:

    @Baud: Check out the Intrade basics page:

    http://www.intrade.com/v4/misc.....Basics.jsp

    Basically, every profit for you is a loss for someone else, just like Wall Street.

  52. 52
    Kay says:

    @Frankensteinbeck:

    It’ s so funny, because they were agonizing over whether we should canvass Republicans AT ALL.
    I can kncok them all out with a drop-down list, so I was just listening to them go back and forth and waiting for them to decide. “But that might bring out the “no” voters!”
    That is the risk, right, we would agitate their horrible base? Stir up that hornet’s nest.
    It’s a week later and they still can’t decide. Now they’re trying to pretend there’s some way we can identify moderate Republicans. Well, there isn’t. They’re all in the R column.

  53. 53
    Baud says:

    @MikeJ:

    Basically, every profit for you is a loss for someone else, just like Wall Street.

    Thanks for the link, but this strikes me as different from Wall Street trading.

  54. 54
    debbie says:

    @Kay:

    I remember this Sunday NYT article about Ohio Republicans organizing in 2004:

    http://www.nytimes.com/2004/04.....038;src=pm

  55. 55
    raven says:

    sheesh, Rachel has Nicole Wallace on and she really seems to like her!

    eta Please Rachel, call her out on the fucking LIES about the ACA that Nicole parrots daily.

  56. 56
    Kay says:

    @debbie:

    They were terrifying in 2004, weren’t they? On a mission.

    Now they’re all unsure and hinting I’m not listening to their ideas :)

    We have a split locally and the moderates don’t like the Tea Party so maybe the moderates are traumatized and used to being yelled at. They’re very fragile.

  57. 57
    Villago Delenda Est says:

    @MikeJ:

    The key thing is to be Duke and Duke and make a cut out of every transaction, no matter what happens to the clients.

  58. 58
    MikeJ says:

    @Baud:

    Thanks for the link, but this strikes me as different from Wall Street trading.

    Absolutely. There’s no end date on Wall Street, and nobody settles up at that time.

  59. 59
    Villago Delenda Est says:

    @Kay:

    That is the risk, right, we would agitate their horrible base?

    It’s interesting that they view their fellow Republicans that way. As obstructionist assholes.

  60. 60
    debbie says:

    @Kay:

    I still don’t understand how Republicans could justify their own organizing efforts while condemning Obama’s “community organizing.” Unless this was one of the first instances of the now-obvious derangement syndrome.

  61. 61

    @Kay:
    That’s one of the symptoms. Community organizations are left high and dry. The Democrats still have everything they received from Obama’s campaign to work with.

  62. 62
    fuckwit says:

    Grifters gonna grift.

  63. 63
    amk says:

    Didn’t intrade itself go bust a la mittbot’s prezinential campaign?

  64. 64
    dww44 says:

    @raven:Yeah, I saw that and yes the two seem to be greatly simpatico. I too wish that Rachel had called Wallace out, beginning with the slams about Obama’s leadership vis-a-vis Syria before they even got to Ted Cruz. Has anyone else (who watches Nighttime MSNBC) noticed that there appears to be a concerted effort to have guests on from the conservative/GOP side? And, she did lie about the ACA.

  65. 65
    Another Holocene Human says:

    @pete: Tsk, tsk, isn’t that sort of vice against his religion?

  66. 66
    Another Holocene Human says:

    @Kay: hahahaha, ’bout time they suffered some of MY pain

    Reap the whirlwind, you assholes!

  67. 67
    Another Holocene Human says:

    @MikeJ: This sounds remarkably like stock options.

    Time for a transaction tax. On ALL the ca$hin_s.

  68. 68
    Another Holocene Human says:

    @MikeJ: Look, mate, they were trying to corner the market on Romney options. Markets like this are SRS BZNZ.

  69. 69
    Joel says:

    Totally predictable, and dumb.

    I wonder what Justin Wolfers has to say about this.

  70. 70
    Joel says:

    @Cacti: Welker’s a great player. But he proved himself to be quite a douchebag when he decided to put his foot in his mouth during the playoffs a few years ago. Pun intended.

  71. 71
    JoyfulA says:

    @Cacti: But Coatesville is not far (45 m) from Philadelphia, and the student population is nearly half black. Not Pennsyltucky’s fault this time.

  72. 72
    Robert Waldmann says:

    That was my guess too
    http://rjwaldmann.blogspot.it/.....ou-so.html

    You might want to tell one of your best friends in the department that he ore she isn’t the difficult idiot. You certainly don’t want to tell the difficult idiot that he is not one of your best friends in the department (he probably knows but there is no need to be rude).

  73. 73
    Rupert says:

    @MikeJ: Some of that $7m went to me. I didn’t win all my bets – I had some contracts for Obama to do even better in the electoral college than he did – but it was a nice bit of money to spend on Christmas presents.
    InTrade in late 2012 was a weird place. Maybe it was just one guy, maybe it was the Unskewed, but prices for easily-gettable (for Obama) EV totals were noticeably underpriced. If I’d had more money to play with, like $7m, …

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