Don McNay
“I got it. I got it. I got your number on the wall.”
— Tommy Tutone
2008 is a turning point in my life. I quit watching pundits and rarely look at political polls. I have the answers, long before political “experts” do.
I track who is betting on political races.
A futures trading Web site — www.intrade.com — allows you to “buy” futures contracts on the outcome of the presidential race.
There is supposedly a difference between betting and buying futures contracts. I have no idea what it is. It looks like gambling to me.
I grew up around bookmakers and the people at www.intrade.com figured out how to make it legal.
I’ve followed www.intrade.com for the past year and found it to be amazingly accurate. Look at it and see.
By going to www.intrade.com, you eliminate the television blowhards and avoid polls like the one that picked Obama to win the New Hampshire primary.
I have not sent www.intrade.com any money. I have no idea who is behind it or where they are. I don’t like to bet, but want to know how other people are betting.
The political futures market is a great example of an economic theory called “the wisdom of crowds.”
Following money movement is a great way to predict outcomes.
When many people put their money up, sentiment and emotion are minimized as factors.
The www.intrade.com numbers are an interesting mix. The bettors favor Barack Obama to win over John McCain, but if you look at the betting on a state-by-state basis, McCain has a slight lead in the electoral votes.
Al Gore will tell you that winning the popular vote doesn’t mean anything unless you get the electoral votes.
Looking at the state by state breakout, I’m stunned at how many states already have been “decided” one way or another.
If the odds are 90 percent in one candidate’s favor, 60 days out, they are normally going to win an individual state.
Barring something extremely weird, a vetted candidate is not going to screw it up.
According to the trading, most of us are sitting the 2008 election out. If you are an Obama supporter in Kentucky, the odds are 98 percent to 5 percent (there is a margin of error) against your candidate. If you are a McCain supporter in Maryland, you are also out of luck. Obama has 93 percent there.
Most of the states that were for Bush in 2004 have a 90 percent or better rating for McCain. The Kerry states are generally going for Obama.
Virginia, Nevada Ohio, New Hampshire and Colorado are where the battle will be fought. Virginia, Nevada and Ohio have small leads for McCain and the other two slightly favor Obama.
All five states went for Bush against Gore and all but New Hampshire went for Bush against Kerry. If Obama is going to win, he needs to get all the states that Gore won in 2000 and add one.
Any one will do.
The good news is that we won’t care about Florida. The betting favors McCain by about 65 percent.
Every now and then, I fall into the trap of political gossip and I wonder where some people get their information. I read that some Democrats were worried about California. Ninety-three percent of the bettors disagree with that concern.
I thought that Obama would have a difficult time winning Pennsylvania because he struggled against Hillary Clinton, but 74 percent of the futures traders think otherwise. Just last week, I argued that Pennsylvania was in play. The futures traders have smacked down that notion.
A prediction does not mean that results are locked in stone. Someone can screw up or have a scandal break.
I doubt that McCain or Obama have a girlfriend (or boyfriend) on the side. On the other hand, I never dreamed that John Edwards had a mistress.
If Edwards had still been a viable candidate, his bettors would have lost big time.
For every person who wins a bet, there is another person that loses. Just like an election.
With tools such as www.intrade.com, we have a better idea as to who the winners and losers will be.
Don McNay is the author of “Son of a Son of a Gambler: Winners, Losers & What to Do When You Win the Lottery.” You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com.
