Elections and Prediction Markets
PredictWise provides and updates the results from three of the major prediction markets for the Presidential race. They show Intrade and Betfair - which base their trades on Electoral College victory. They also show the Iowa markets (IEM), which predicts the national population results - which are important for maintaining legitimacy. It stinks when you get an Electoral College victory, but the national popular vote goes the other way - as it did when Gore conceded to Bush (notice I did not say Bush defeated Gore - but there is no need to re-litigate that fiasco).
The predictive value of the prediction markets is really, really good. When people have to put money on a winner it is different than just giving an opinion. That said, Nate Silver gave a great discussion of the value of his statistics. Clearly his statistical analysis shows a clear Obama re-election. However, as he points out that does not mean Obama will win. He discussed what it meant for his model to show a 79 percent chance of an Obama re-election in terms of a football game. When there are 3 minutes left in a game and a team is up by 3 points, there is a 79 percent chance that the team that is aheas will win. Certainly there are teams that are able to come back and win (21 percent of the time it happens). Thus, Romney still has a shot, but the every day the odds are becoming longer and longer.
We will see an Obama re-election, just as I have been saying for months. Today's solid job numbers locked it up for the President. That is why the prediction markets are so heavily tilted toward a second term for President Obama.