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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (41433)	8/8/2004 9:29:50 AM
From: Glenn Petersen	Respond to of 81568

Nov. 2 Futures Traded Now nytimes.com By JOHN TIERNEY Published: August 8, 2004 SENATOR John Kerry's failure to get a bounce in the polls after the Democratic convention may have surprised the chattering classes, but not the people who let their money do the talking. Political strategists and journalists generally described the convention as a success, especially Mr. Kerry's acceptance speech. The ABC political director, Mark Halperin, called it "the best speech I've ever seen John Kerry deliver by a mile." On CBS, Dan Rather said Mr. Kerry "seemed to clear the high bar." In this column we gave Mr. Kerry the award for most improved performance at the convention. Meanwhile, though, traders in political futures were busy shifting their bets to Mr. Bush at two online markets, Intrade and the Iowa Electronic Markets, where tens of thousands of investors spend real money to buy futures contracts. The investors started out the summer bullish on Mr. Bush, typically paying about 55 cents for a futures contract that would pay $1 if he wins, which means they gave him a 55 percent chance of victory. The price dropped after the selection of John Edwards as Mr. Kerry's running mate, and it fell further the week before the convention. When the delegates arrived in Boston, Mr. Kerry was the slight favorite on both Intrade and the Iowa market. But as the delegates cheered the speeches, the investors had second thoughts. Before Mr. Kerry's speech Thursday, he was again the underdog, and after his speech the traders continued selling him short. Apparently some traders were underwhelmed by him and the other speakers; perhaps some traders took a look at the television ratings and decided the convention's impact would be less than they anticipated. Whatever their calculations, the traders have a good collective track record, said Joyce Berg, the co-director of the Iowa market, which is run by the University of Iowa's business school. In the last four presidential elections, she said, the election-eve trading price has typically been within 1.5 percentage points of the actual result, which is about half a point more accurate than the average election-eve poll. And while polls often fluctuate wildly throughout a campaign, the market has tended to be more stable and reliable. Over the course of previous presidential campaigns, Ms. Berg said, about three-quarters of the time the market's daily closing price was a better predictor of the final result than the current polls were. Given that history, Mr. Bush has reason for slight optimism this weekend. On Friday, despite a day of bad news on the economy and Iraq, both online markets closed with him a 52 percent favorite to win in November. <snip>